How do I sell a home care business in Ontario?

Selling a home care business in Ontario turns on one fact you can check in your own files: does any of your revenue come from a funded agreement with the province’s health system, or is every client paying privately? If it does, the funder may have its own process for a sale: Ontario Health atHome publishes one for service providers. If every client pays privately, ask your lawyer which Ontario rules still apply to the sale. This page covers that Ontario fork, then the two things that apply either way: your staff and your close-out with the Canada Revenue Agency. For the general preparation steps that apply across Canada, see Selling a home care agency in Canada.

Find out whether you hold a funded agreement at all

Under Ontario’s Connecting Care Act, 2019, the Agency (Ontario Health) may provide funding to a health service provider or an Ontario Health Team for the health services it provides. Where the Agency proposes to fund a delivery organization, the two must enter a service accountability agreement. The Act’s definition of a health service provider includes a not-for-profit entity that provides home and community care services. Whether your own business is funded, and under which agreement, is something to confirm from your contracts and correspondence. Do not assume it from the fact that you deliver home care.

If you are funded, ask Ontario Health atHome first

Ontario Health atHome publishes a page titled “Service Providers Sale of Business Process”, which lists a document titled “Guidelines Service Providers Sale of Business”. Deavo does not summarize it here, because its steps and forms are the funder’s to set and can change. Get the current version directly, and read it before you sign a letter of intent or an agreement of purchase and sale. Then ask the funder in writing what it needs from you and from the buyer, and whether your agreement can move to the buyer, be replaced or end.

Check how funded and private fees fit together

The Connecting Care Act says that a health service provider or Ontario Health Team that provides a home and community care service to an individual shall not require payment from the individual for it, and shall not accept payment made by or on behalf of the individual, except as provided for in the regulations. A separate subsection applies where a health service provider or Ontario Health Team purchases a home and community care service from a person or entity: that person or entity shall not require or accept payment for the service from anyone other than the provider or Team, although it may collect payments on the provider’s or Team’s behalf in accordance with the regulations. If your business mixes funded and private-pay care, ask your lawyer how your private fees sit with that rule. Have that review done against the regulations before you put the numbers in front of a buyer.

Plan for your employees as part of the sale

Ontario’s Guide to the Employment Standards Act explains that when a business is sold and an employee of the seller is hired by the purchaser, the employee does not start as a new employee for the ESA entitlements that depend on length of employment. The employee gets credit for past employment, and that earned time counts toward any rights based on length of employment. The guide also sets out an exception: past employment is not credited to the purchaser if the employee is hired more than 13 weeks after their last day of employment with the seller or the day of the sale, whichever is earlier. Tell your buyer which caregivers you expect to move, and ask your lawyer to confirm the dates.

Close out your accounts with the CRA

The Canada Revenue Agency says that if the business you are selling has a business number, you should contact your tax services office, because you might have to cancel it. If the business has employees, you must close your payroll account. If it has a GST/HST account, you must contact your tax services office to close it. CRA also says you may be able to make a joint election with the purchaser so that no GST/HST is payable on the sale, if the conditions it lists are met. It also says this election cannot be made if you sell only one or more assets of your business, or if you are a registrant and the purchaser is not. Ask your accountant to confirm each step.

• Which contracts, if any, are with Ontario Health or another funder, and what does each say about a change of ownership?
• Whether the funder’s current sale of business process has been requested in writing, and the date it was received.
• How funded and private-pay revenue are separated in your records, and what your lawyer says about the payment rule in the Act.
• Which caregivers the buyer intends to hire, with the dates their employment would transfer.
• Which CRA accounts the business holds (business number, payroll, GST/HST) and who will close each one.