The update on the CNCA is that there is no update. On February 16, 2011 Marcie Girouard, Director General of Corporations Canada, and Coleen Kirby, Manager of the Policy Section, spoke in Toronto about the Canada Not-for-profit Corporations (CNCA). Coleen advised that it was expected that the CNCA would come into effect in late Spring but if there was an election that her estimate is that it would take about another 3 extra months. She made it clear that it was up to the cabinet, and not her as to timing. If the end of Spring is late May, then late August is the best guess at that point as to when the CNCA would come into force.
At that meeting I asked a question about whether there would be a heads up about the date of the new legislation or would it come into effect immediately - the response was that Industry Canada does not know what the government will do about giving advance warning. The exact date will have little effect on most charities as they will have 3 years to “continue” under the new act and file necessary paper work.
However, the date of coming into force will have an impact on people trying to incorporate under the current/old Canada Corporations Act. From the time draft documents are prepared and signed, especially if the incorporators are in a number of different countries and the content of the application is complicated, it can take in some cases weeks or months for documents to be finalized, signed and submitted to Industry Canada. As well, in many cases organizations applying to CRA for charitable registration will put in draft corporate materials so that if CRA requests a change, for example to the objects, it is easier to change a draft rather than obtaining supplementary letters patent under the current/old act. It is not clear if any notice and advance warning will be given to people that their documents will not be accepted after a certain date.
My suggestion to Industry Canada is that it would be best if there is at least a 1-2 month lead time before the CNCA comes into effect and this will give organizations that are in the process of assembling documents the time to get the documents in.
Another interesting piece that came from the Industry Canada presentation was that Industry Canada will have a “by-law builder” which will help charities assemble by-laws that have have some flexibility in them and they can be customized to the needs of the charity.
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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.