Can I still buy a business if it's mid-way through a proposal to its creditors instead of full bankruptcy?

Yes. A business can be sold while it's part-way through a formal proposal to its creditors under the federal Bankruptcy and Insolvency Act — a proposal is a distinct process from a full bankruptcy, and like all insolvency law in Canada, it's federal rather than something Ontario legislates separately — and in some cases a sale is actually part of how the proposal is meant to be funded and creditors repaid. Buying into a proposal scenario is different from buying from a receiver or a fully bankrupt estate — the company, often with court and creditor oversight, may still be operating and negotiating in a relatively normal way, though a sale of a significant part of its business may still need creditor or court approval depending on how the proposal is structured.

Because what's permitted depends on the specific proposal's terms and any court orders already in place, have both the proposal documents and the debtor's actual authority to sell reviewed carefully before treating this as a straightforward private purchase — the process and approvals involved can look quite different from either an ordinary sale or a full bankruptcy liquidation.