When I moved into my house I noticed an electrical box with two switches on it that connected to thermal safety switch for my hot water heater and heater for the house (forced hot water). I have posted a picture below. My question is what exactly is this? Is this a type of manual transfer switch that I can attach a portable generator to? Thanks in advance for your responses.
Disclaimer: my answer is based of off the Ontario Electrical Safety Code (26th Edition/ 2015) Current Edition. I would advise calling a licensed electrical contractor in your area and have them see if this complies with your local rules and regulations.
It does appear to be a very crude and illegal generator transfer switch. I would look on the outside of your house or the shed (if applicable) for a empty area with a dead end box (if it was hardwired) or a generator inlet box (if it was a plugin style) this will be where the generator was previously.
I would also suggest that you take a good look at anything else that looks like it was added by the previous owner as this is not the proper method of isolation for a transfer switch and was likely done without a permit which means the it and other homeowners additions may not be safe. Call a electrical contractor and ask them to inspect this and see if it is safe.