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

Anyone looking at how to buy a gas station in New Brunswick is buying two things at once: a retail business and a regulated fuel storage tank system. The tank system is licensed by the Minister under the Petroleum Product Storage and Handling Regulation, made under the Clean Environment Act; the regulation directs notices to the Department of Environment and Local Government. Fuel pricing is a separate matter, handled by the New Brunswick Energy and Utilities Board under the Petroleum Products Pricing Act. What follows covers New Brunswick’s rules only. For the national picture, start with how to buy a gas station in Canada.

Who regulates the tanks in New Brunswick

Under New Brunswick’s Petroleum Product Storage and Handling Regulation, and subject to its section 30, the owner of a storage tank system of the regulated capacity must apply to the Minister, on a form the Minister provides, for a licence. The regulation lists licence classes, and they include retail outlet classes for a business enterprise whose system is there for the primary purpose of operating as a retail outlet. It defines a retail outlet as a place where petroleum products are kept or stored to be sold directly to the user, including a self-service outlet and a service station.

Who may hold the licence

Subject to subsection 6(4), the regulation bars an owner or operator from placing or keeping petroleum product in a system unless the owner has obtained the appropriate licence, valid for that system, for the specific location, for the activities to be undertaken, and for the owner and operator shown on the licence. That wording matters to a buyer. A licence that names the seller as owner does not cover a new owner simply because the sale has closed. Ask the seller for a copy of the current licence and read who and what it names before you rely on it.

What transfers on a sale, and what does not

The regulation says a licence is issued in the name of the owner of the system and is not transferrable except in accordance with section 21. Section 21 is the route for a change in the name of the owner or operator, or in the nature of the activities at the system. So the licence is not something a purchase agreement can hand over by itself. Whether your deal is a purchase of assets or of shares, ask your lawyer how the owner or operator named on the licence will change, and whether the regulation treats that change as one needing notice.

Notice to the Minister before closing

Under section 21, the licence holder must notify the Minister in writing not less than thirty days before the change takes effect. The notice gives the licence number and describes the change. The Minister may have an inspector inspect the system, and after considering any inspection report the Minister must, within a reasonable time, either issue a new licence subject to any terms and conditions the Minister requires, or refuse to issue one, setting out in writing either the terms and conditions to be met or the reasons. Ask your lawyer how the thirty-day notice fits your closing timetable, and ask the seller to confirm who files the notice and when.

The Board and retail prices

New Brunswick’s Petroleum Products Pricing Act gives the New Brunswick Energy and Utilities Board the authority to set, and requires it to set, the maximum wholesale and retail prices that a wholesaler and a retailer may charge for petroleum products, and the maximum margin between the wholesale price to the retailer and the retail price to the consumer. The Act defines a retailer as a person who sells a petroleum product or keeps it for sale directly to consumers. The Act bars a retailer from charging more for heating fuel or motor fuel than the maximum price set by the Minister or the Board, as the case may be. Ask your accountant how those maximums bear on the past fuel results you are shown.

Leaks, federal rules and what to ask for

Federal storage tank regulations apply separately, but only to the systems listed in their section 2, such as a system on federal land or aboriginal land, or one operated by a federal department or a Crown corporation, and subject to the exclusions in subsection 2(2). Where they apply, they require the owner or operator of a system that leaks a liquid to temporarily withdraw the leaking component, or the system, from service without delay, subject to subsections 3(2) to 3(4). New Brunswick’s contaminated sites program also publishes ministerial protocols, including one on limited impact releases of petroleum hydrocarbons or other contaminants. If you plan to buy the business and its gas stations for sale listing mentions an older tank system, ask for these records:

• The current New Brunswick storage licence, showing the owner, the location and the activities it covers.
• The licence class and any terms and conditions the Minister attached to it.
• Any inspection reports and any correspondence with the Minister about the system.
• Records of past leaks or petroleum releases, and any contaminated sites file with the Department of Environment and Local Government.
• The certificate of public liability insurance submitted with the licence application.