How to buy a gas station in Manitoba: licences, ownership rules and what transfers

The fuel tanks are the part of a Manitoba gas station that changes hands under its own rules. Manitoba’s Storage and Handling of Petroleum Products and Allied Products Regulation, M.R. 188/2001, made under The Dangerous Goods Handling and Transportation Act, puts the operating permit in the hands of a director, and it says what a buyer of the land does and does not receive. This guide covers the permit, the transfer rules, what the seller must hand over and what to ask. For the national picture, read how to buy a gas station in Canada.

Who decides in Manitoba

The regulation gives the decisions to the director. The director issues operating permits, may attach further conditions to a permit, and may refuse to issue one, or suspend or cancel one, on the grounds the regulation sets out. Those grounds include the director’s opinion that the owner is or will be in contravention of the regulation if the permit is issued, that the owner has knowingly misrepresented or failed to disclose relevant information in the application, or that operating the system will or may cause a significant adverse effect on an area of the environment. An owner who is in breach of the Act, the regulation or a permit condition can also face suspension or cancellation.

The operating permit

Under section 25, no person may operate or permit the operation of a storage tank system except under an operating permit issued by the director. Under section 26, the owner of the system may apply. The application must be made in a form the director approves, and accompanied by a site sensitivity report in a form the director approves and by the fee the regulations require. Section 26(2) removes the report requirement if a report in the approved form was submitted within the two years immediately before the application. Ask the seller for the permit itself and any conditions written into it.

A property transfer does not carry the permit

Section 42 deals directly with a sale. A transfer of real property does not entitle the transferee to operate any storage tank system on the property unless the operating permit has been validly transferred in accordance with section 36 of the Act, which is The Dangerous Goods Handling and Transportation Act. Section 36(2) of that Act says no person shall, without the prior written approval of the director, transfer or assign, or acquire by way of a transfer or assignment, a licence or permit issued under the Act or the regulations. Under section 36(3), the director may impose terms or conditions on the transferee or the transferor in approving a transfer. The regulation read for this guide does not say how a sale of shares is treated, so ask the director in writing how your structure, whether shares or assets, is handled before you close.

What the seller must hand over

When a permit to operate a storage tank system is transferred, section 44 requires the transferor to give the transferee, at the time of the transfer, three things. The first is the inventory records required under Part 6 for the previous two years. The second is a record of the tests, inspections and corrections required under Part 11 that have been performed on the system. The third is copies of any outstanding orders issued under the Act or the regulation in respect of the system. Part 11 also requires the owner to ensure tests and inspections are performed as Part 6 of the Code of Practice prescribes, and the director or an environment officer can request additional tests in writing.

Tanks that are out of service

Subject to section 49, section 45 requires the owner to notify an environment officer or the director in writing when a system has not been used to convey petroleum products for 30 days. Section 47(1) requires the owner to remove a system that has not been used for one year, in a manner the director approves; under section 48, the director or an environment officer may extend that period on the owner’s written request. Section 43 ties these rules to a sale. Before transferring ownership of real property with a system to which section 45 or 46 or subsection 47(1) applies, the owner must take the action Part 9 requires, unless the transferee undertakes in writing to the director, in a form the director accepts, that the transferee assumes responsibility and liability for any further action Part 9 requires. Read the full section before relying on it.

Federal rules that also apply

Some rules are federal, not Manitoba’s. The federal Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations apply to a system in the cases section 2(1) lists, including one located on federal land or aboriginal land, subject to the exclusions in section 2(2). Measurement Canada, a federal agency, approves and inspects measuring devices including gas pumps. Ask whether the site has any federal-land connection, and whether the pumps carry current inspection documents. The Manitoba rules above apply on their own terms, and a buyer should confirm which regime governs each tank.

• The current operating permit for each storage tank system, with its conditions and any correspondence with the director.
• The most recent site sensitivity report, with the date it was submitted, so you can see whether section 26(2) could apply.
• The inventory records for the previous two years and the record of tests, inspections and corrections the transferor must supply.
• Copies of any outstanding orders under the Act or the regulation, and proof of how earlier orders were closed.
• Notices of any out-of-service system, and the written undertaking to the director if section 43 is being used.