For Ontario non-profit corporations the next few years will be challenging from a corporate law point of view. Here is our article "Fed up with ONCA yet? Consider skipping it altogether and moving to the Federal CNCA".
A notice from Corporations Canada of Innovation, Science and Economic Development Canada (formerly Industry Canada) entitled "Last chance for not-for-profits to transition" has been sent out reminding non-profits that if they are still under the old Canada Corporations Act that they need to transition to the Canada Not-for-profit Corporations Act or they will be dissolved. The final final deadline is July 31, 2017 to have completed the process.
For some the mention of ONCA causes anxiety or anger. Never fear - help is here! Here are "20 Ways We May Be Able To Help You With ONCA as We Go Into 2017".
We are proud to present the Blumbergs’ Snapshot of the Ontario Charity Sector 2014. The data subset used is the CRA's 2014 T3010 data but only for registered charities based in Ontario.
The Liberal Government has made some noises about modernizing charity law. Who could be opposed to modernization? As there is no idea as to what "modernization" means, it has opened up all sorts of calls for changes to charity law in Canada - many of the ideas would be expensive, counterproductive, stifling, or ultimately destroy the positive reputation of the charity sector. Wikipedia defines a Pandora's box as "a process that generates many complicated problems as the result of unwise interference in something." Although only time will tell, it appears that "modernizing charity law" has a small upside and a very large downside.
Blumbergs has just released a new website with over 10 years T3010 information for each Canadian registered charity. The site is a beta being tested but if you are interested you can visit the website at www.charitydata.ca It is free and hopefully useful. If you have any feedback just let us know.
Here is an agenda for the Blumbergs' Charity Law Institute 2015. You can register here.
Ontario not-for-profit corporations will have 3 years from the date ONCA comes into force to make any necessary changes to their governing documents. At end of the 3 years, the not-for-profit corporations’ letters patent, by-laws and special resolutions will be deemed to be amended to comply with ONCA’s requirements. ONCA has not been brought into force and probably will not be until around 2018.
To determine whether your corporation is an Ontario corporation you should check the corporation’s Letters Patent and any Supplementary Letters Patent. If you are unable to locate them, you may wish to check our list of Ontario corporations to see if your corporation is included. You can also request microfiche copies of your governing documents from the Ontario Ministry of Government and Consumer Services’ Central Production and Verification Services Branch.
Over the last few years we have helped many Ontario non-profit corporations obtain copies of their governing documents. If you wish to do it yourself you can request microfiche copies of your governing documents from the Ontario Ministry of Government and Consumer Services’ Central Production and Verification Branch.
Since ONCA has not come into force yet and no regulations have been released, it is a bit premature to prepare ONCA compliant by-laws now. ONCA compliant by-laws may not necessarily be compliant with the Ontario Corporations Act (“OCA”), which currently governs not-for-profit corporations in Ontario. The Ontario Government has said that it will provide the sector with at least two years notice of ONCA coming into force so it is unlikely that ONCA will come into force until about 2018.
ONCA will apply to most not-for-profit corporations in Ontario, including special or private act corporations. There are about 59,000 of these corporations. However, it will not apply to not-for-profit corporations that are incorporated under special or private acts where there is a conflict between ONCA or one of its regulations and another act or its regulations that applies to a corporation without share capital. In this case the other act or its regulations prevail over ONCA.
As we noted earlier ONCA has been indefinitely delayed. The government has said that certain implementing legislation has to be passed and certain technological systems put in place before ONCA comes into force. The Ontario government said they would provide the sector with 2 years notice before ONCA would be brought into force.
As many know the Ontario Not-for-Profit Corporations Act (ONCA) was passed in 2010 and was supposed to be brought in by January 2013. There are ostensibly 59,000 Ontario non-profits, although many may be dormant. The Ontario government announced today "The government is fully committed to bringing ONCA into force at the earliest opportunity and will provide the sector with at least 24 months’ notice before proclamation". This probably means that ONCA will not come into force until probably 2018 or later. This will be very disappointing for non-profits under the Ontario Corporations Act who will have waited over 8 years for the change.
Political activities and charities has been a hot button issue over the last few years. With Prime Minister Harper launching the 2015 election today it is important for Canadian charities to be aware of their legal obligations and to comply with them. Here are excerpts from the comments by Cathy Hawara, Director General of the Charities Directorate of the Canada Revenue Agency, on political activities and compliance in a May 2015 speech that CRA released on Friday.
The Bottom Line recently published an article entitled Ontario non-profits await new legislation by Mark Blumberg. The article discusses options for Ontario non-profits including waiting for ONCA or moving forward to the new CNCA and skipping ONCA altogether.
Here is my article 20 Ways We May Be Able To Help You With ONCA. It sets out some of the items that our law firm can assist Ontario non-profit corporations with when preparing for ONCA.
We are now in February of 2015. ONCA has not moved forward since the Ontario election last year. It looks like ONCA may not even come into force until mid-2016 and perhaps 2017. It is difficult to know what will happen but the microfiche based record system for Ontario corporations and very outdated technology that Ontario currently uses will likely make the transition challenging. There are 59,000 Ontario non-profit corporation listed on the Ontario government database. If even 30,000 are active and need to make changes I am not confident that the Ontario system is going to work well. The easy and quick solution for many Ontario corporations that are not interested in waiting any longer is to move to the Federal CNCA. Skip the line up and anxiety of ONCA and move to the CNCA. Here is an article our firm wrote on the subject entitled "Ontario Corporations Don't Need to Wait for the ONCA - Continuing from the OCA to Federal Jurisdiction" for the Ontario Bar Association.
I recently filed a submission with the Ontario government entitled "Enhancing the ONCA Transition for Ontario non-profit corporations that are registered charities by reducing redundant regulatory review"
Here is a recent article from Mark Blumberg and Kate Robertson entitled Ontario Corporations Don't Need to Wait for the ONCA - Continuing from the OCA to Federal Jurisdiction. For many Ontario corporations who don't want to wait for the ONCA which may or may not come into force in 2016, or want to carry out governance changes now, a continuance from Ontario to Federal may be an appealing option.
The Ontario Ministry has provided an update on their website with respect to the Not-for-Profit Corporations Act, 2010 ("ONCA") under 'ONCA: Frequently Asked Questions" which indicates that the ONCA is not expected to come into force before 2016. Initially there were discussions that the ONCA may come into force in 2015 but it appears that this is no longer the case.
I have received some very positive feedback on the disclosure of the list of Ontario non-profit corporations. Here is the list.
Here is a list of the Ontario non-profit corporations under the Ontario Corporations Act. There are 59,605 Ontario corporations on the list. The list is 1084 pages long. Some of the Ontario corporations are active and some are inactive. We think that it is important for organizations to be able to have a public list so that they can easily determine whether or not they are an Ontario corporation.
It looks like the new Ontario Not-for-Profit Corporations Act, 2010 (“ONCA”) will not come into force until July 2014 or perhaps in 2015. If one is considering establishing a new charity today and you are based in Ontario we would strongly encourage you to use a Federal corporation under the Canada Not-for-profit Corporations Act (CNCA) and avoid using the old Ontario Corporations Act (OCA). Otherwise, you will establish an Ontario corporation and you will probably have to make changes to bring it into compliance with the new ONCA in a year or two or three. For most, save the aggravation and double work and start off Federal.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.