Changes in Legislation

Carters update indicates that after 10 months, Ontario Bill 85, Companies Statute Law Amendment Act, 2014 (ONCA) which received First Reading on June 5, 2013, was finally debated at Second Reading on April 10, 2014. Bill 85 contains key amendments to the Ontario Not-for-Profit Corporations Act (“ONCA”) that must be passed before the ONCA can be proclaimed. The debate was deemed to be adjourned on April 10, 2014, and was scheduled to continue at Second Reading on April 28, 2014, but has since been delayed. As it is not known how quickly Bill 85 will proceed through the Legislature, it is possible that proclamation of the ONCA may not happen before the first half of 2015. The not-for-profit sector in Ontario will have to wait until an official announcement is made by the Ministry to gain greater insight.
Carters100x60The presentations made at the Carters charity and not-for-profit law seminar in Ottawa on February 13, 2014 are now available. About 300 professionals attended the seminar.  Designed to assist charities and not-for-profit organizations in understanding and complying with recent developments in the law, the related Church & Charity Law seminar has been held annually in Toronto since 1994, with the Ottawa seminar first added in 2008,
The key presentations, from a curling club point of view, included:
Carters most recent update is available here. Theresa L.M. Man's paper on the status of the legislation can be found here.
In summary, while the proclamation date for the Ontaio Not-For Profit Corporations Act (ONCA) continues to be delayed, not-for-profit corporations should be preparing for transition. Having been enacted for more than three years, it is anticipated that the ONCA will at last be proclaimed sometime in 2014. . At this point in time, it would appear that most clubs will have about three years to gain approval from the Province for all the changes that need to be incorporated into new Letters Patent and club bylaws. OVCA will be attending Carters charity and not-for-profit law seminar in Ottawa on February 13, 2014. For more information on the seminar, go here.

By way of background, the Ontario Corporations Act (OCA) has not been substantively amended since 1953. The new ONCA received Royal Assent on October 25, 2010, but it is not yet in force. Once proclaimed into force, it will apply to all non-share capital corporations incorporated under Part III of the OCA. The ONCA was originally anticipated to be proclaimed on July 1, 2013. In March 2013, the Ministry of Consumer Services announced that proclamation will be delayed to January 2014 at the earliest. Following the announcement, new amendments to the ONCA were embodied in Bill 85, which received first reading on June 5, 2013. These proposed changes to the ONCA will have significant impact on the application of the ONCA. The Ministry announced that proclamation of the ONCA cannot proceed without these amendments. In September 2013, the Ministry announced that Bill 85 was anticipated to be debated in the Legislature in fall 2013. Once Bill 85 is enacted, the ONCA is anticipated to come into force no earlier than six months afterwards in order to ensure adequate time for the sector to prepare for transition. As of the adjournment of Ontario Legislature on December 12, 2013, Bill 85 had not progressed beyond first reading. The Ontario Legislature is scheduled to reconvene on February 18, 2014.

At the OCA Zone 3 meeting at the Huntley Curling Club, OCA's Doug Bakes provided the following (in atddtion to the earlier article on the Ontario Not-for-Profit Corporations Act):


The articles referenced on this webpage are opinions - they don't constitute legal advice and besides, the framework in which they were written is evolving rather rapidly, so each one is current only as of the date of publication. And that's why they're included here.
Carter's November/December newsletter has a number of articles that might be of interest to curling club board members - a key one of these articles, written by Terrance S. Carter and Jacqueline M. Demczur, provides a legal risk management checklist for not-for-profit organizations. Carter's have provided an excellent outline of the kinds of risks boards and executive staff face in the operation of not-for-profit organzations.  And remember, the articles themselves don't constitute legal advice and are current only as of the date of publication. Not only is it no longer a simple world, it evolves continually. With regards to the transition process to the new Ontario legislation, check out Carter's Ontario Not-for-profit Corporations Act webpage. Carters have advised that they will be hosting a full day Charity and Not-for-Profit Seminar on Thursday, February 13, 2013 at the Centurion Centre in Ottawa. Registration information will be available later this December here
Carters has posted a handout prepared for their October 4th seminar in Ottawa on the Ontario Not-for-Profit Corporations Act - A PDF copy of the handout is available on the Carters website or here.
Carter's Charity Law Update for June 2013 has two articles of relevance to curling clubs:
  • The Ontario Government has released Bill 85 which is intended to amend the current unproclaimed legislation. The net result is that the the proclamation cannot go proceed without these legislative amendments. For more information, go to Carter's Charity Law Bulletin #315. 
  • The Canadian Revenue Agency's views regarding interest income. See page 9 of Carter's Charity Law Update.




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"          

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.

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.

The Sport Law and Strategy Group update can be accessed here. The amendments are currently being debated and if passed, will become law in early 2014.