The Ontario government is moving to pass the Cutting Unnecessary Red Tape Act, 2017. The Act does many things but importantly for Ontario non-profits "The proposed amendments would enable the future proclamation of the Not-for-Profit Corporations Act (ONCA). The proposed amendments to the Corporations Act would enable Ontario not-for-profit corporations to benefit from some of the ONCA features prior to its proclamation, such as allowing notice of members' meetings to be sent electronically and members' meetings to be held electronically. These proposed amendments would increase flexibility, encourage participation in meetings, provide clarity and reduce burdens and costs for not-for-profit corporations."
The Act is currently in second reading. The Ontario government has said that it will provide Ontario non-profits with at least two years notice of ONCA coming into force. Therefore, even if the Act is passed indicates that ONCA will come into force we can expect a 2-4 year wait for ONCA to come into force. Lets hope the Liberals break that promise and move more quickly or ONCA may be delayed many years. The fact that the Ontario government thought it was necessary to make certain changes to the OCA in the interim is an indication that we might have a long wait! Hopefully I will be wrong.
As we have discussed elsewhere if you are establishing a new non-profit in Ontario it is almost always better to use the Federal Canada Not-for-profit Corporations Act ("CNCA") rather than the current/old Ontario Corporations Act ("OCA"). If you incorporate under the OCA you are going to have to redo everything in 2-4 years when ONCA comes into force. If you are a registered charity it will be particularly painful with needing further approvals to make those changes from both the Ontario Public Guardian and Trustee as well as the CRA.
Also with Ontario corporations already existing under the OCA we are encouraging those who have to make changes to their letters patent or by-law to consider moving to Federal jurisdiction.
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.