Does a municipal tax deed give me the same legal protections as a normal property transfer in Ontario?

Not entirely, and the differences run in both directions. On one hand, a completed tax sale is generally intended to give the purchaser title that is largely free of the prior mortgages and financial liens that were registered against the property, which can actually be an advantage compared with some other distressed purchases where existing encumbrances have to be separately cleared. In that specific sense, the outcome can look stronger than an ordinary transfer.

On the other hand, a tax deed does not come with the kind of vendor representations and warranties that accompany a normal Agreement of Purchase and Sale - there is no seller confirming the property's condition, no promise of vacant possession, and no negotiated conditions like financing or inspection along the way. So the protection you get is narrower in scope even though it can be broader in one specific respect regarding financial encumbrances.

Think of a tax deed as protecting you differently, not necessarily less, than a normal transfer - and have a lawyer confirm exactly what it does and does not cover for the specific property you are buying.