Changes in Legislation

Not-for-Profit Corporations Act update

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OCA's Doug Bakes, in his presentation at the May 2, 2013 Zone 3 meeting held at Huntley, provided an update on the status of the Not-for-Profit Corporations Act as well as a significant amount of overview and advice gleaned from those specializing in this area of work. As Doug noted, it would be worthwhile reviewing the information available, ensuring that clubs have their charter and by-laws in hand prior to consulting with their legal counsel. However, given that the Minister has agreed to revisit the legislation relating to the limitations inherent in limiting kinds of members, it would seem appropriate to invest time on other changes contemplated by the legislation and leave the member's area until the Minister clarifies the Government's approach. The documents that Doug Bakes provided include:
           "About the Not-for-Profit Corporations Act"          

Ontario's New Not-For Profit Corporation Act - and implications

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In Ontario, Bill 65, the Ontario Not-for-Profit Corporation Act (ONCA) received royal assent on October 25, 2010 and was to be proclaimed in effect on July 1, 2013. However, the proclamation date has been moved to January 1, 2014, pending Ministerial review of the section relating to members (the Act only allows one class of members). A copy this Bill can be found here. This legislation governs non-share capital corporations and removes them from jurisdiction of the Ontario Corporations Act (OCA). It is estimated that it will affect 50,000 Ontario Corporations Act non-profit corporations. Compliance with new ONCA is required within 3 years of proclamation – probably in 2017. Ontario will be releasing draft default by-law, regulations, commentary and tools such as "The Plain Language Guide". ONCA implementation may require that NFP corporations develop fresh by-laws by using ONCA's default by-law template and adapting them to current provisions. Alternately, if very recently updated, simply changing them to track with the default set or with the specific differences in the new Act would seem possible.

A rough comparison of the changes involved  are summarized here. As well, a couple of interesting analyses of Bill 65 and its implications can be found here and here. Readers might wish to note that these last two documents both suggest that the legislation allows NFP corporations to engage in commercial activities where the revenues are reinvested in the corporation's not-for-profit purposes.

Federal Review of Not For Profit Corporations

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The Federal Government's review may have been triggered by Not-For-Profit organizations operating outside the intent of the Federal legislation. One consequence is that the Canadian Revenue Agency has been in contact with a number of NFP organizations in their quest to clarify and update their existing regulations regarding just what NFP means. The current legislation, which was proclaimed October 17, 2011,  affects 19,000 federally registered non-profit corporations incorporated under the new Canada Corporations Act (CCA). All existing federally incorporated not-for-profit corporations must take action to make the transition to the new Act.  This 'continuance' must be completed by October 17, 2014 in order to remain in good standing with CRA. A copy of the current Canada Not-for-Profit Corporations Act (CNCA) (Charity Act) can be found here.

A rough comparison of the changes involved  are summarized here.