Two different provincial sales tax problems get treated as one, and the federal HST election covers neither.
Short answer
Sometimes, and it is two separate risks, not one. In bulk-sale provinces like Saskatchewan and Manitoba, failing to get a provincial clearance certificate before closing makes you liable for the seller's own pre-existing sales-tax arrears, regardless of price or your own knowledge. Separately, in any PST province, buying tangible personal property creates your own new PST bill on the purchase, and the federal GST/HST going-concern election does nothing to relieve either one, because provincial sales tax is a wholly separate statute.
Saskatchewan's Revenue and Financial Services Act s.51 (“Sales in bulk”) puts the risk on the buyer by default: “If a purchaser fails to obtain a copy of the certificate… the purchaser is liable for the seller's tax debt as at the date of the sale in bulk, including any liability for taxes arising on or after that date with respect to transactions that occurred before the date of the sale in bulk.” Manitoba's Tax Administration and Miscellaneous Taxes Act s.45 is the comparable mechanic. Price, fairness and good faith are irrelevant to the test — only the certificate is.
That is a debt the seller already owed. A second, unrelated PST exposure is the buyer's own: British Columbia's Provincial Sales Tax Act s.37(1) provides that “a purchaser who purchases tangible personal property at a sale in British Columbia must pay to the government tax at the applicable rate under section 34” — on the equipment, tools and fixtures in an ordinary asset deal, independent of anything the seller owes.
Ontario, Alberta and Atlantic Canada have no equivalent tax on tangible personal property, so this second risk is a BC/SK/MB-and-similar-province problem, not a national one. And filing the federal Excise Tax Act s.167(1) going-concern election — which many deal teams treat as covering “sales tax” generally — does nothing for either exposure: it is a GST/HST election under a federal statute, and provincial sales tax is a separate statute the federal election never mentions.
A 30-minute call is enough to tell you which of these facts applies to your deal.
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