Does a union contract automatically carry over when a business is sold?

Often, yes, but it isn't purely a contract question you can control through your purchase agreement wording. Ontario labour relations law includes successor-rights protections designed to stop a union's bargaining rights and an existing collective agreement from simply disappearing because a business changes hands, particularly where the buyer continues operating substantially the same business. Whether it applies to your specific deal depends on the facts — how much of the business transfers, whether operations continue in a recognizably similar way, and the specific circumstances of the sale — and this is ultimately something the Ontario Labour Relations Board can be asked to determine if the parties disagree.

This is a meaningfully different question from ESA continuity of employment, and don't assume a clean asset purchase automatically avoids it the way it can avoid other employee-related liabilities, since labour relations successor provisions operate on their own separate test.

If the business you're buying has any unionized employees, get this assessed specifically before closing, since it affects staffing costs, flexibility, and your operating plans from day one. A Treadstone business lawyer can help evaluate whether successor obligations are likely to apply to your deal.