New Resources to Help Ontario Non-Profits
By Joel Secter
As corporations incorporated under Part II of the Canada Corporations Act (CCA) come to within one year of the October 17, 2014 deadline to continue under the new Canada Not-for-Profit Corporations Act (CNCA), amendments to Ontario’s new Not-for-Profit Corporations Act, 2010 (ONCA) are still to be debated in the legislature. These amendments were introduced in June in the form of Bill 85, which proposes to amend not only the ONCA but also 79 other statutes consequential to it. If the amendments are passed, the ONCA is anticipated to come into force in 2014.
Minister of Consumer Services Tracy MacCharles has described the changes embodied in Bill 85 as “minor, non-contentious, technical amendments,” but a number of them would make a notable difference for existing corporations that need to transition. For example, the ONCA currently provides that members of a corporation may vote on certain matters, such as amendments to rights attached to a class or group of members, whether or not those members carry the right to vote. Bill 85 provides that these provisions will not come into effect until the third anniversary of the day that the ONCA comes into force. In other words, non-voting classes of members would not get a separate class vote on fundamental changes until after the expiration of the three-year transition period.
This amendment addresses one of the Ontario Nonprofit Network’s (ONN) main concerns: ensuring that non-voting members remain non-voting. According to the ONN, “our sector’s longstanding practices should be respected and the sector should not have to face costly and complex restructuring to accommodate a provision imported from the business sector, where non-voting members have a financial interest in the corporation.” We can attest to the fact that giving non-voting members a separate class vote in certain circumstances has emerged as one of the major challenges facing corporations continuing under the federal CNCA. Many CCA Part II corporations have cancelled their non-voting membership classes before continuing under the CNCA in order to avoid giving non-voting members a de facto veto right over fundamental changes. In our experience, this facet of the new law is having the unintended consequence of expunging entire groups of members in community-based organizations.
Other notable amendments will affect a corporation’s need to file documents during the transition process. As before, existing corporations will have three years to make any necessary changes to their incorporating and other documents to bring them into conformity with the ONCA. However, amending the letters patent, or supplementary letters patent as the case may be, will effectively be required by virtue of Bill 85, which provides that any provision in a corporation’s by-laws that is required by the ONCA to be contained in the corporation’s articles must be contained in the articles before the third anniversary of the day the ONCA comes into force, failing which they will become invalid when the transition period ends. Considering that the conditions of membership will be relocated from the by-laws to the letters patent, all existing corporations will be required to file articles of amendment at some point during the three-year transition period. In addition, Bill 85 explicitly states that a corporation may only amend its letters patent, supplementary letters patent and by-laws during the three-year transition period if it makes all of the changes necessary to bring its constating documents into conformity with the ONCA.
The upside to the delay in adopting the ONCA is that it has given the Ministry of Government Services the opportunity to develop resources to help existing corporations make the transition. Recently, it made available a toolkit that can be used to explain the ONCA to members and other stakeholders. It includes, among other things, newsletter articles, presentation slides and speaking points. Corporations are encouraged to request an electronic toolkit by emailing ONCAtools@ontario.ca.
The Government has also given a grant to Community Legal Education Ontario to launch the “Get Ready for the ONCA” project, in support of Ontario’s non-profits as they prepare for the transition. Project Manager Brenda Doner is connecting with organizations about their transition needs, finding and sharing existing materials, and planning outreach initiatives. She can be reached at email@example.com. For general inquiries about the project, please email firstname.lastname@example.org.
As the wrinkles in the ONCA get ironed out, we will keep our readers informed of new developments and the proclamation date.
 Bill 85, An Act to amend various companies statutes and to amend other statutes consequential to the Not-for-Profit Corporations Act, 2010, 2nd Sess., 40th Leg., Ontario, 2013, online:
 Ontario, Legislative Assembly, Hansard, No. 50 (5 June 2013) at 2550 (Hon. Tracy MacCharles), online: <http://www.ontla.on.ca/house-proceedings/transcripts/files_pdf/05-JUN-2013_L050.pdf>.
 Ontario Nonprofit Network, online: <http://www.theonn.ca/the-ontario-not-for-profit-corporations-act-bill-65-a-brief-summary/>.
 See Bill 85, supra note 1, subsection 207(6).
 See Bill 85, supra note 1, subsection 207(2).