What Ontario rules matter when selling an auto body shop?

Owners who search for how to sell a body shop business in Ontario need the general rules for repair shops and a few that belong to body shops. This page covers three that are worth checking before a sale: the environmental registration for spray booths, the compulsory trade for collision repair, and the repair rules in the Consumer Protection Act, 2002. It covers Ontario only. If your shop is in another province, check that province’s rules. Licensing, workplace insurance and the general sale process are covered in the Ontario auto repair guide linked below.

The spray-booth registration

Under section 20.21 of Ontario’s Environmental Protection Act, and subject to exceptions in subsections (2) to (4), no person may engage in an activity that the regulations prescribe at a site unless conditions are met, including that the person has registered the activity in the Registry and the Director has provided a confirmation of registration. O. Reg. 347/12 prescribes activities at an automotive refinishing facility, which section 1 defines as a facility where automotive refinishing is done: the application of coating on, or the repair or customization of, a motor vehicle body or parts of one, and the repair or customization of a vehicle’s interior. Subject to subsections 2(3) and (4), the activities section 2(1) prescribes include using, operating, constructing, altering, extending or replacing equipment used there for automotive refinishing that may discharge a contaminant into the natural environment other than water, but only at a facility that meets the criteria in section 2(2). Those criteria include the number of spray booths, a limit on the facility-wide coating application rate, and set distances from the property boundary. Read the regulation for the figures.

Which shops fall outside it

Section 2(4) of O. Reg. 347/12 says section 2 does not apply in respect of activities engaged in at a facility that meets any of several criteria. They include a facility that manufactures motor vehicles or parts, a mobile refinishing facility, a facility primarily engaged in glass replacement and repair, a facility primarily engaged in repairing the mechanical or electrical components of motor vehicles, and a facility that controls spray-booth emissions using water wash filtration. Section 3(1) also exempts a person from clauses 20.21(1)(a) and (b) of the Act, registering the activity and receiving a confirmation, where the person has previously registered a prescribed activity at that facility and that registration is not suspended and has not been removed from the Registry. Whether a particular shop is in or out is a question for the regulation’s text, not for a listing description.

What registration carries with it

The Ontario government’s page on the Environmental Activity and Sector Registry says there are no fees for registering and that, once registered, you must follow the activity requirements and record keeping requirements for that activity. For a person who engages in a prescribed activity, section 4(1) of O. Reg. 347/12 sets requirements that include applying coatings only within a spray booth and using, operating and maintaining the spray booths, filtration systems and coating equipment in a manner that satisfies the manufacturers’ recommendations. Section 5(1) of O. Reg. 347/12 also requires records, such as of coating applications, of inspections, maintenance and repairs, and of complaints that relate to the natural environment, to be retained for five years from the day each is created. Under section 5(2), certain records about an item used in the facility, such as its spray booths, are kept for as long as the item is used as part of the facility. If a person who engages in a registered activity becomes aware that information filed in the Registry is no longer complete or accurate, section 3(1) of O. Reg. 245/11 requires the person to ensure that complete and accurate information is filed within 30 days after the day the person becomes aware of it.

What to settle on a sale

Under section 20.21(1) of the Environmental Protection Act, the registration is made by the person who engages in the activity. The Ontario government’s registry page says EASR registrations are non-transferable: if a facility or equipment is sold or otherwise transferred to a new owner, the registration does not transfer with the sale, and the new owner will need to complete their own registration for the activity. Plan the buyer’s registration before closing, confirm the current process with the ministry responsible for the registry, and set the timing out in the agreement. Also agree who keeps the records O. Reg. 347/12 requires to be retained after closing and how the buyer gets access to them, and ask the seller to produce the registration details and the maintenance records.

The collision repair trade

Skilled Trades Ontario states that Auto Body and Collision Damage Repairer is a compulsory trade. It says that to practise a compulsory trade legally in Ontario, a person must hold a Registered Training Agreement, a Provisional Certificate of Qualification or a Certificate of Qualification, and appear on the Skilled Trades Ontario Public Register. A buyer who plans to do the repair work personally should check their own status there. A buyer who plans to employ others should ask how the shop’s current staff are registered.

Repair estimates under the Consumer Protection Act

For its part on repairs, section 55 of the Consumer Protection Act, 2002 defines a repairer as a supplier who works on or repairs vehicles or other prescribed goods. Section 56(1) says no repairer shall charge a consumer for any work or repairs unless the repairer first gives the consumer an estimate that meets the prescribed requirements. Section 56(2) lets a repairer charge without giving an estimate if the repairer offers an estimate and the consumer declines it, the consumer specifically authorizes the maximum amount they will pay, and the cost charged does not exceed that maximum. Ask the seller how estimates are written and kept, and read the Act for the other repair rules. The buyer’s guide for Ontario repair shops goes into them further.

• Whether the shop meets the O. Reg. 347/12 criteria or falls under an exclusion in section 2(4).
• The seller’s registration details, and when the buyer will complete its own registration.
• The coating, inspection, maintenance and complaint records O. Reg. 347/12 requires, and who holds them after closing.
• How each person doing collision repair appears on the Skilled Trades Ontario Public Register.
• How repair estimates are prepared and kept.

For a wider view of selling a collision shop, including how it is presented to buyers, read selling an auto body and collision repair shop in Canada. For licensing, workplace insurance and the Ontario sale process generally, see selling an auto repair business in Ontario.