In your situation, I think alot depends on why the dog isn't housebroken. Did they honestly try to teach the dog or were they half-hearted about it? If they really tried then perhaps something is going on with this dog that will make housebreaking unlikely.
In any case, it will take a tremendous commitment on your part of both time and effort to housebreak this pup.
I would think that pee pads would not be a good choice for a pup who already thinks that it's okay to go in the house. However, I see you live in Canada...
It would be a good idea to find out how his previous owners have responded to inappropriate pottying.
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