Buying a Dry Cleaner in Ontario: Perc Rules, Equipment, Licences and the Environmental Question

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 29 September 2026 · 12 min read — plant versus depot, the federal tetrachloroethylene regulations, what Ontario dropped in 2020, waste and reporting, Toronto licensing, staff, HST and the documents to ask for.

Plant, depot or both

The first question is what the shop actually does on site. A plant has cleaning machines and chemicals. A depot takes in and hands back garments that are cleaned somewhere else. Many operators run one plant feeding several depots.

The difference changes almost everything that follows. A depot has no solvent, no hazardous waste and a much smaller environmental question. A plant carries the federal equipment rules, waste obligations and, if it ever used perc, a history that follows the property. The Ontario Association of Architects’ guide to Building Code occupancies also lists dry cleaning plants among industrial occupancies, while only self-service dry cleaning that does not use flammable or explosive solvents appears in the commercial group. Ask the seller for a list of every location, what happens at each, and which solvent each machine uses.

The federal perc rules you inherit

The Tetrachloroethylene (Use in Dry Cleaning and Reporting Requirements) Regulations, SOR/2003-79, made under the Canadian Environmental Protection Act, apply to anyone who uses perc for dry cleaning. The key requirements:

• The machine must use the same drum for washing, extraction, drying and aeration; have an integral refrigerated condenser; prevent venting perc vapour during the cycles; have an integral perc-water separator; and have a manufacturer’s design rating of no more than 10 kg or 6.2 L of perc per 1,000 kg of clothing, or have been installed before 1 August 2003 (section 5).
• Secondary containment must sit under each machine, tank or container holding perc, waste water or residue, capable of holding at least 110 percent of the largest container, with perc-resistant plugs ready for floor drains.
• Closed containers for perc, waste water and residue (section 4), and a closed direct-coupled system when perc is transferred into the machine (section 10).
• No perc spotting agents (section 3), and no perc in self-service machines (section 7).
• Waste: waste water to a waste management facility at least every 12 months or treated on site with the specified equipment (section 8); all residue at least every 12 months (section 9).
• Reporting: the owner or operator files a separate report for each facility by April 30 of the following year (section 14) and keeps books, records and shipping documents for five years (section 16).

A machine installed before August 2003 may be grandfathered on its design rating but is old. Price its replacement into your offer.

What Ontario changed in 2020

Ontario used to require dry cleaners to employ a trained person under O. Reg. 323/94. The province revoked that regulation in January 2020, saying federal regulations and inspections since 2003 had made provincial training unnecessary. The revocation notice is clear that dry cleaners remain subject to federal requirements, Ontario’s waste management regulation (O. Reg. 347), the Occupational Health and Safety Act, and municipal rules such as Toronto’s reporting on toxic substances.

In practice that means two registrations to check. Ontario’s hazardous waste generators register through the Resource Productivity and Recovery Authority’s Hazardous Waste Program Registry; ask whether the plant is registered and see the manifests. In Toronto, the ChemTRAC program under the Environmental Reporting and Disclosure Bylaw (Municipal Code Chapter 423) covers 25 priority chemicals, and dry cleaners are one of the sectors that report. Ask for the last filings.

The environmental question under the floor

This is where dry cleaner deals go wrong. Under Ontario’s Record of Site Condition regulation (O. Reg. 153/04), a phase two environmental site assessment is required before a record of site condition can be filed for any property that “is used, or has ever been used, in whole or in part” for the operation of dry cleaning equipment. A future owner who wants to redevelop the site for residential use will need that record, and cleanup costs can exceed the price of the business.

If you are buying only the business and leasing, the soil is the landlord’s problem until your lease makes it yours. Read the environmental clauses carefully. If you are buying the building too, read dry cleaner environmental due diligence first. The approach is similar to fuel sites, covered in gas station environmental due diligence.

Licensing and the name on the door

Toronto’s licensing chapter requires a licence for “every person who owns or operates a laundry,” with a separate licence for each premises where laundry work is done. The chapter does not define laundry or mention dry cleaning, so confirm with Municipal Licensing and Standards whether your plant or depots need one. Toronto licences are not transferable in any case; the buyer applies in their own name.

Outside Toronto, check the municipal licensing by-law of each location. The perc report under federal law is filed by the owner or operator, so after closing the reporting obligation is yours; get the seller’s last reports so you know what you are continuing.

Staff, HST and the lease

Staff. Pressers and counter staff who stay with you keep their service under section 9 of the Employment Standards Act, 2000, unless you hire them more than 13 weeks after the earlier of their last day and the sale date. Skilled pressers and spotters are hard to replace, so find out who is essential.

HST. Section 167 of the Excise Tax Act allows a joint election so no GST/HST applies to the business sale, if you acquire all or substantially all of the property needed to run it; it is not available where the seller is registered and the buyer is not, and it does not cover property supplied by lease. The election is on CRA Form GST44.

Lease. Look for an environmental indemnity, a restoration clause at the end of the term, and whether the landlord will consent to the assignment. A clause making the tenant responsible for all contamination “whenever caused” is a clause to negotiate, not sign.

Documents to demand before you sign

No Canadian regulator, statistics agency or industry body publishes sale prices or price multiples for these businesses, so I will not quote one, and you should be wary of anyone who does. What you can do is test the asking price against documents.

• A list of every location, whether it is a plant or depot, and the solvent used by each machine.
• Machine make, model, year of installation and design rating, with service records.
• Federal perc reports for each facility for the last five years, with purchase records and waste shipping documents.
• Hazardous waste registration and manifests.
• Toronto ChemTRAC filings, and any municipal licences.
• Any phase one or phase two environmental site assessment, and any spill or inspection record.
• Three years of sales by location, and route or commercial accounts (hotels, uniforms) with their contracts.
• The lease, with environmental, restoration and assignment clauses.
• Employee list with start dates and pay.

For another storefront service business with a different set of rules, compare buying a hair salon or barbershop.

Where I fit

I help buyers look at the property side of a dry cleaner: the lease, the environmental history of the site and, if the building is for sale, what it is worth with that history. The AI retail store value estimator below gives a range for the storefront. When you have it, book a call or phone 833-330-1925.

Frequently asked questions

Sources

• Tetrachloroethylene (Use in Dry Cleaning and Reporting Requirements) Regulations, SOR/2003-79 — machine, containment, waste and reporting rules
• Environmental Registry of Ontario — Notice 019-0716 — O. Reg. 323/94 (Dry Cleaners) revoked, January 2020
• O. Reg. 153/04, Records of Site Condition — e-Laws — phase two ESA where dry cleaning equipment was ever operated
• Government of Ontario — Hazardous waste management: business and industry — RPRA Hazardous Waste Program Registry
• City of Toronto — About ChemTRAC — 25 priority chemicals; dry cleaners report
• City of Toronto — Municipal Code Chapter 545, Licensing — licences are not transferable; licence categories
• Ontario Association of Architects — Guide to Occupancies — Building Code occupancy examples
• Employment Standards Act, 2000 — e-Laws — s. 9 sale of a business, 13-week rule
• Excise Tax Act, section 167 — Justice Laws Website — joint GST/HST election on the sale of a business
• Canada Revenue Agency — Form GST44 — election concerning the acquisition of a business

Related reading

• Dry cleaner environmental due diligence in Ontario
• Gas station environmental due diligence
• Buying an auto repair shop in Ontario
• Buying a hair salon or barbershop in Ontario
• Asset sale vs share sale
• AI retail store value estimator