Buying a fuel delivery company in Canada

If you are evaluating a fuel delivery company, the question to put first is not whether the numbers look good but whether you can lawfully run it on the day you own it. Heating oil and propane distribution is regulated for safety, and in Ontario that regulator is TSSA. The sections below cover what you must qualify for personally, what a good company looks like from the outside, and the things a seller may not raise. Other provinces have their own bodies and rules, so treat the Ontario details as an example of the kind of check you will need to repeat locally.

What you must qualify for yourself

TSSA’s change-of-ownership page states that licences are not transferable and that the new owner must apply for a new licence. Its fuel oil page says a licence is required to distribute fuel oil through a central oil-distribution system or facility, and that a licence is valid for 12 months and must be renewed before it expires. Ask TSSA what the application involves for your structure, and how long it takes, before you sign a binding agreement. A purchase that closes before the licence question is answered leaves you owning trucks and a depot you may not be allowed to use.

Certified people are part of the asset

TSSA states that all contractors working on fuel oil equipment, such as underground tanks, must be registered with it, and that people repairing, installing, removing and servicing underground fuel oil tanks must also be trained and certified as a Petroleum Equipment Mechanic 2. If the company performs equipment work, ask who holds each credential, when it was issued and what happens to your service capacity if one of those people leaves after closing. Your own plans may differ from the seller’s, so decide whether you intend to keep, expand or drop the service side.

What to ask to see

Ask for current records, not tidy summaries: delivery history by customer across several winters, tank registrations that match what is in the field, and a depot with documented inspections. Look at how the company handles the unglamorous work, such as keeping tank paperwork up to date. Note how readily the seller can produce them.

What a seller may not volunteer

Ask directly about spills, leaks, regulator orders and audits. TSSA says it introduced a Fuel Oil Distributor Audit Program in 2020 and that, if a field verification finds non-compliances, orders will be issued, including orders addressed to a person who supplies fuel. Ask whether the company has received any. Ask about customers who have moved to other heating sources, drivers who hold the key relationships, and any company-owned tanks sitting on customer property under informal arrangements. Some of these may not be hidden on purpose, so ask the questions plainly and ask for the records that answer them.

Who stays, and what you inherit

Decide early whether you are buying shares or assets, and ask your lawyer how that choice changes which liabilities come with you. Ontario’s Environmental Protection Act extends Part X references to an owner or person having control of a pollutant to a successor or assignee, other than in section 92, so ask your lawyer how that could reach you. See also our answer on whether contracts and leases transfer in an asset purchase before assuming customer and depot agreements move across.

Test the plan against the market you will serve

A purchase is a bet on a territory, so look at yours. Ask the seller for customer counts and delivery volumes by area over several winters, and ask what the seller knows about customers leaving for other heating sources. Then check that against what you can learn independently, such as local energy conversions or competing distributors you can observe. Be wary of any story that lives only in the seller’s head. If the past trend and the seller’s forecast disagree, ask for the records that explain why before you decide whose picture to use.

Plan the first year

Think through the first winter before you sign. Who will take calls, dispatch trucks and handle after-hours emergencies on day one? Which customers have dealt only with the seller? Is there any gap between closing and licence approval, and who operates the business in that gap, under what authority? Put the answers into the agreement as obligations, such as a seller transition period or a condition tied to the licence, rather than relying on goodwill.

• Ask TSSA what you must file as a new owner and how long approval takes
• List every certification the business relies on and who personally holds it
• Request the full history of regulator audits, orders and tank registrations
• Walk the depot and a sample of customer sites with a qualified contractor
• Confirm in writing which tanks the company owns and where they sit