How to buy a vending machine business in Canada

A vending route looks simple: machines, locations and a collection round. The legal side is less simple, because food rules, tobacco rules and sales-tax treatment all attach to the machines and to the way cash comes out of them. Those rules differ by province, and some depend on what the machines sell. This guide covers the type-specific points to check before you commit to a route, and it uses the rules of Ontario, Alberta and Quebec as examples. Other provinces run their own regimes, so confirm yours with the local authority. For the general process, see how to buy a business in Canada.

Start with the health authority, not the seller

In Ontario, the Health Protection and Promotion Act defines a food premise as a premises where food is, among other things, sold or offered for sale. It also says every person who intends to commence to operate a food premise must give notice of that intention to the medical officer of health of the health unit in which the premise will be located. Whether a given machine or route is treated that way is a question for the local health unit, so ask it directly. Then ask the seller what notice was given, to which health unit, and for which locations.

Machine-level rules in Ontario

Ontario’s food premises regulation has a section on vending machines. A vending machine in a food premise that automatically mixes water to create a product must be provided with a potable water supply piped into the machine under pressure. The name and telephone number of the operator must be prominently displayed on or near a vending machine if an employee of the operator is not in full-time attendance. Walk the route and look at every machine, not a sample. If a label is missing or a water-mixing machine has no piped supply, raise it with the seller before you sign.

Alberta: do not assume the permit comes with the sale

Alberta’s Food Regulation says it does not apply to food handling for the purpose of operating a vending machine that dispenses pre-packaged food, or food supplied by a commissary or depot that warehouses food for vending machines and which is identified on a food handling permit. Despite that exemption, no food handling is exempt if, in the opinion of the regional health authority, the exemption would or is likely to create a nuisance. The same regulation says that, subject to section 7(3), a permit is not transferable. If the route relies on the seller’s commissary or depot permit, ask how the machines would be covered after the sale and who would hold the permit. Do not assume it comes with the business, and ask the health authority before closing rather than after.

Tobacco and vapour products are a red flag

Ontario’s Smoke-Free Ontario Act, 2017 says no owner or occupier of a place shall have a vending machine for selling or dispensing tobacco products, vapour products or a prescribed product or substance in any part of the place. Among the Act’s exceptions is a machine that is only operable by a retailer or an employee of a retailer. Alberta’s Tobacco, Smoking and Vaping Reduction Act (s. 7.3(f)) says no person shall sell tobacco products or vaping products, or offer them for sale, from a vending machine. If a route lists these products, ask the seller how each machine complies in its province, and treat an unclear answer as a reason to pause.

GST/HST and the cash trail

The Canada Revenue Agency says goods, services or a right to use a machine sold through vending machines or coin-operated machines are generally subject to GST/HST. It also says you are considered to have collected the GST/HST when you remove the money from the machine. The same guide says the GST/HST is equal to zero on a supply made through a coin-operated machine designed to accept only a single coin of a stated amount or less as the total payable. Ask for the seller’s GST/HST registration, returns and cash-collection logs, and compare them with what the seller says each machine earns. Gaps between the two are worth understanding before you rely on any earnings figure.

Meat products in Quebec

Quebec’s Regulation respecting food says all meat products held or kept in a mobile canteen or dispensed by an automatic vending machine must have been prepared and packed in a plant operated in conformity with that regulation and serving only for that purpose. If a route sells such products in Quebec, ask where they come from and request the supplier’s paperwork. When you are ready to compare routes, browse the vending businesses for sale with these questions in hand.

• Confirm with the local health unit what applies to the machines, and what notice or permit the seller holds.
• Check the operator name and telephone number on each unattended machine in Ontario.
• Ask whether any permit, such as an Alberta commissary or depot permit, can be used after the sale.
• Check that no machine sells tobacco or vapour products contrary to the province’s law.
• Request GST/HST returns and cash-collection records for every machine.