Workers’ compensation assessment (WSIB / WCB)

Employers pay into a provincial workers’ compensation system, and boards speak of premiums: WorkSafeBC also refers to a firm’s assessment remittance requirements, and Ontario’s WSIB to premiums and other amounts owing. A buyer meets the term in diligence, because an unpaid balance can follow the business. A related Ontario document, the WSIB clearance certificate, relieves a principal of liability for payment obligations a contractor may incur.

What the boards say

• Ontario: for a sale of a business’s assets, the WSIB says it may hold the purchaser liable for all amounts the vendor owed up to the date of sale if the buyer does not get a valid purchase certificate, and that the request must be made before the date of sale. It also says a share sale creates no new legal entity, so no purchase certificate is required.
• British Columbia: WorkSafeBC says to contact it before buying any assets from a firm, because if the seller owes unpaid insurance premiums, the firm’s assets may be subject to a lien in favour of WorkSafeBC, and that a clearance letter protects against such liens.
• Alberta: the WCB says a buyer has a responsibility to get a clearance when buying a business, its stock or equipment, and that if an employer has defaulted on its premiums, the WCB has priority on the property and/or the proceeds of property used in connection with the business.

What to ask

This entry cites only Ontario, British Columbia and Alberta. Ask which board covers the business, whether the account is current, and whether a certificate or clearance letter has been requested before closing. See also what a WSIB clearance certificate is.