Food premises permits on a change of owner in the Northwest Territories

Buying a restaurant, café, caterer or other food business in the Northwest Territories raises a permit question before it raises a price question. The territory regulates food establishments under the Public Health Act and the Food Establishment Safety Regulations, and the permit that lets the current owner trade is not something the seller can hand over. The buyer needs a permit of their own, issued by the Chief Public Health Officer, and the closing date has to be planned around that. This guide sets out what the regulations and the Department of Health and Social Services say about the permit, the approvals that sit beside it, and what to ask before you commit.

The seller’s permit does not pass to you

Section 7 of the Food Establishment Safety Regulations says a person shall not operate a food establishment unless the person holds a valid food establishment permit. Section 10(2) then says a food establishment permit is not transferable. Read together, a signed purchase agreement does not carry the seller’s permit across. The Department of Health and Social Services states the same rule in plainer words: all food establishments in the territory must have a valid permit posted in order to operate. If your closing date arrives before your own permit does, ask your lawyer how the business can lawfully trade in the gap, and do not assume a short interim arrangement is allowed.

What applying for your own permit involves

Under section 8.1 an application goes to the Chief Public Health Officer in a form that officer approves, with the applicable fee from the Schedule to the regulations. The Chief Public Health Officer may ask for more information. Under section 9 the officer may issue a permit to a person who complies with the Act and the regulations, may attach terms and conditions, and may refuse a person who, in the officer’s opinion, has demonstrated that they are not capable of operating a food establishment in accordance with them. The Department adds that a permit is obtained by application, payment of the fee and a satisfactory inspection by an Environmental Health Officer. Apply early enough that the inspection can happen before you intend to open under your name.

Permit classes, durations and renewal

Section 8 of the Food Establishment Safety Regulations creates two classes, for-profit and not-for-profit, and three durations: temporary for less than three weeks, seasonal for three weeks or more but less than four months, and annual for four months up to one year. Ask which class and duration your own permit should have, because section 11 provides for renewing an annual permit. Under section 11 of the Food Establishment Safety Regulations an application to renew an annual permit may be made before the previous permit expires or up to 30 days after, and a late application carries a late fee. An operator who misses that window may apply under section 8.1 for a new permit instead. Check how close the seller’s permit expiry date sits to your closing, since that permit cannot pass to you.

Alterations need approved specifications

If you plan to renovate after closing, section 5 says a person shall not construct or make alterations to a food establishment unless the food establishment specifications have been submitted to and approved by the Chief Public Health Officer and the approval remains in effect. Section 17 adds that a person shall not operate a food establishment unless the specifications are approved and it is built and maintained in accordance with the approval, though that requirement does not apply to an establishment that was already operating before the regulations came into force. Section 18 requires certain standards to be met before operation begins, or begins again after an alteration. Get the seller’s existing approvals and any conditions on them.

Training, posting and inspection results

Section 37 provides that an operator shall not operate a permanent food establishment, meaning one that operates, or is required to operate, under an annual permit, unless the operator has successfully completed a food safety program acceptable to the Chief Public Health Officer, and that at least one operator or worker who has completed such a program is present during operating hours. The definition of operator includes an owner, so ask the Chief Public Health Officer’s office who must hold the certificate. Section 10(3) requires the permit, or a clear copy, to be posted in a conspicuous place. The Department posts inspection results as they are completed, notes that they represent the conditions found at the date and time of the inspection, and says the Chief Public Health Officer sets inspection frequency using risk-based criteria, so read the premises’ posted results before signing.

• Ask the seller for the current permit, its expiry date and every term and condition attached to it, since section 14 forbids contravening those terms.
• Read the posted inspection results for the premises and ask what the seller did about each finding.
• Ask for any approval of food establishment specifications and whether renovations since then were approved.
• Confirm in writing with the Chief Public Health Officer’s office what a share purchase, as opposed to an asset purchase, needs, because the regulations do not answer that.
• If you trade under a name that is not your own, the Partnership and Business Names Act requires you to register it with Corporate Registries.
• If you buy assets, search the Personal Property Registry, which lets people considering buying personal property check whether any registered interests could become their responsibility.
• Make closing conditional on your own permit being issued, and have your lawyer draft how the business is run until then.

If the answer is no

Section 15 lets the Chief Public Health Officer set new terms, or suspend or cancel a permit, if an operator contravenes the Act, the regulations or a permit condition. Section 16 lets a person appeal in writing to the Chief Public Health Officer a failure or refusal by a public health officer to issue a permit, or a suspension or cancellation, and a decision of the Chief Public Health Officer under that section is final and not subject to further appeal. If a public health officer refuses your application, that appeal is the route the regulations provide, so ask the Chief Public Health Officer’s office who would decide yours and settle the permit risk before you remove conditions, not after. See the guide to restaurant licences and transfers for other approvals that may follow the business.