I am not sure how many people are aware but the Ontario government is doing a consultation on the Ontario Corporations Act and ONCA. The deadline for responding is February 8, 2021.  Ostensibly the title sounds like it is focused on virtual meetings: Potential Permanent Changes to Enable Digital and Virtual Processes under the Corporations Act and the Unproclaimed Not-for-Profit Corporations Act but the scope of the questions are broader than that.

 

We provided our feedback on notices and electronic meetings but also suggested:

 

We think that when an organization is an ONCA corporation and it is a registered charity with the Charities Directorate of CRA, and only when it is registered, it should have the ability to change articles including objects, without requiring the consent of the OPGT. Requiring OPGT consent to changes to corporate documents is a huge bureaucratic problem especially for smaller Ontario charities. Why do so many Ontario corporations go for decades without changing their basic documents? The harder you make it to make changes, just means groups don’t make the changes and operate ineffectively or perhaps worse just ignore their corporate documents. The PGT still serves an important function dealing with charitable property in Ontario including cy-pres, investigating groups for illegal behaviour, etc. and this would allow them to focus more resources on those issues which are important as opposed to working on approvals of corporate documents.

In the event that by-laws do not need to be filed with the Director under ONCA, we think that it makes a lot of sense, especially for smaller organizations who may be all volunteer and have significant turnover, that a requirement be put in place, similar to the CNCA that all by-laws that are passed need to be filed with the government within 1 year of being passed. Many organizations have lost their by-laws and there is no simple fix if it is not available. In the alternative, and far less preferable, by-laws could be provided on a voluntary basis and available to the public.

When ONCA comes into force all basic information of the corporation and public documents should be available for free to the public.

The COVID pandemic has highlighted the importance of ONCA coming into force quickly. Many organizations would have completed their governance transformation a long time before COVID if ONCA was brought in in 2013 or even 2017. It is vital that it be brought in as soon as possible and if any of the changes that we or other people proposed would in any way delay ONCA coming into force we would suggest not adopting those proposals at this point in time.

Also after dealing with hundreds of Federal continuances we are very concerned that the average Ontario non-profit does not understand basic corporate governance (ie. it is at a lower standard than comparable federal corporations) and the Ontario government should be doing far more capacity building to ensure that the transition happens as smoothly as possible. Such capacity building would need to be at a very basic level and not responding to some of the esoteric issues that some practitioners focus on.

 

Here is the summary of the proposal from the Ontario government:

 

Summary of Proposal:
On May 12, 2020, the Legislature passed the COVID-19 Response and Reforms to Modernize Ontario Act, 2020 which, among other things, included temporary legislative amendments to the Corporations Act (CA), the Business Corporations Act (OBCA), the Co-operative Corporations Act (CCA), and the Condominium Act, 1998 (Condo Act) to allow for virtual meetings and the deferral of annual meetings in some circumstances in response to the COVID-19 pandemic. The application of the temporary legislative amendments allowing for virtual meetings can be extended by regulation.

On October 1, 2020, new regulations made under the CA, OBCA, CCA and Condo Act came into force extending the application of the temporary legislative amendments permitting corporations to call and hold meetings through electronic and telephonic means, as applicable, notwithstanding certain requirements, until May 31, 2021, subject to further extension.

The Ministry of Government and Consumer Services (the Ministry) is now seeking public and stakeholder input on whether potential permanent changes or further temporary changes should be proposed to the various business law statutes and to the Condo Act, in relation to virtual processes to help corporations adapt to new ways of doing business that are more digital/virtual allowing for broader participation.

The Ministry has developed a Feedback Form for each impacted sector that consists of targeted questions intended to solicit feedback on potential permanent amendments under various corporate and condo statutes regarding (1) virtual meetings, (2) electronic delivery of notices and documents, and (3) storage/examination of records through electronic means. Public input can be provided on the attached Feedback Forms. There has been a feedback form developed for each impacted sector including: A. Business Corporations, PPSA, LPA, PA Feedback Form, B. Corporations and Not-for-profit Corporations Feedback Form, C. Co-operative Corporations Feedback Form, D. Condominium Corporations Feedback Form.

This posting will close on February 8, 2021.