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COVID-19 Corporate Update Corporations Canada Extends Periods Under CNCA and CCA To better assist federally incorporated not-for-profits and provide some flexibility with certain aspects of corporate maintenance, the Time Limits and Other Periods Act (COVID-19) was enacted on July 21, 2020, when Bill C-20 received Royal Assent. As discussed in COVID-19 Resource for Charities & NFPs: Bill C-20 Enacts Time Limits And Other Periods Act (COVID-19), Bill C-20 replaced the federal government’s previous Bill C-17, which did not progress beyond first reading at the House of Commons, and contains identical provisions to those in Bill C-17 with respect to the Time Limits and Other Periods Act (COVID-19). The new Act allows the Minister under various Acts, including the Canada Not-for-profit Corporations Act (“CNCA”) and Canada Cooperatives Act (“CCA”), to make orders to extend or suspend time limits retroactive to March 13, 2020 for: (i) calling and providing notice of meetings of members; (ii) placing annual financial statements before members at annual meetings, and (iii) providing copies of annual financial statements to members and directors. The Minister may also further extend a suspension or extension, as long as the total suspension or extension does not exceed six months. However, the powers of the Minister cannot be exercised after September 30, 2020, and suspensions or extensions cannot continue after December 31, 2020. In this regard, on August 5, 2020, the Minister of Innovation, Science and Industry issued an order on July 31, 2020 (retroactive to March 13, 2020) to extend the deadlines for calling annual general meetings (“AGMs”) and presenting financial statements for CNCA and CCA corporations to the shorter of (i) 21 months after the previous AGM and no more than 12 months after the last financial year-end; or (ii) December 31, 2020. Prior to the issuance of the order, all CNCA corporations that wished to delay calling an AGM had to apply to Corporations Canada individually to obtain permission to do so. The application had to be made at least 30 business days before the date the corporation would send the notice calling its AGM under normal circumstances. However, by the time the order was announced by Corporations Canada on August 5, 2020, the majority of CNCA corporations with December 31 year ends which were not able to hold the AGM by the December 31 deadline would have already applied for permission to delay their AGMs. Nevertheless, the power of the Minister now being able to grant relief for all CNCA corporations without the need for each of them to apply for relief is a welcome step. CNCA corporations that are not able to call an AGM within the required timeframe under the CNCA may apply to Corporations Canada to extend the time for calling an AGM if members will not be prejudiced under Corporations Canada’s normal polices are met. Update on Provincial Emergency Relief for AGM and Annual Return Filing Deadlines As discussed in the April 2020 Charity & NFP Law Update, various governments have implemented temporary emergency relief measures to assist and provide some flexibility with timing for annual general meetings (“AGM”) and reporting deadlines. These relief measures are constantly in a state of flux, and are subject to change. The following update is current as of August 29, 2020. Temporary measures in Alberta providing relief under COVID-19 were previously in place suspending the deadline to hold AGMs and file annual returns. Filing deadlines were reinstated on August 15, 2020, 60 days after the province’s termination of its state of public health emergency. AGMs must now be held after August 14, 2020, depending on when the organization’s AGM was scheduled prior to the COVID-19 pandemic. Annual return filing timelines have also been reinstated as of August 15, 2020, and filing must be done after the AGM. In British Columbia, societies may now delay their AGMs beyond March 31, 2021, to a date approved by the Registrar of Companies, though no later than November 1 of the calendar year immediately following the calendar year in which an AGM would otherwise be required to be held under the Societies Act. Societies may also hold virtual or hybrid directors’ and members’ meetings, even where their bylaws, incorporating legislation, and regulations state otherwise. In Manitoba, AGMs that are required to be held on or after March 31, 2020, and before September 1, 2020, are now required to be held no later than September 30, 2020, and may be held electronically, even where the corporation’s by-laws do not allow. In Newfoundland and Labrador, the deadline to hold AGMs under the Corporations Act has been extended by six months for AGMS that were to be held between May 8, 2020 and October 31, 2020. The deadline to file corporate annual returns has also been extended by six months for corporations with anniversary dates of incorporation between May 8, 2020 and October 31, 2020. In Nova Scotia, where an AGM cannot be held in person during the declared state of emergency, it may instead be held electronically, even where the corporation’s by-laws do not allow. Alternatively, AGMs may be deferred for a period of up to 90 days after the end of the declared state of emergency, provided that notice of such meeting is provided at least 7 days in advance. In Ontario, the declared emergency was terminated pursuant to Bill 195 as of July 24, 2020, as discussed in the Legislation Update. Corporations may hold members’ meetings during the COVID-19 pandemic electronically despite any provision in the letters patent, supplementary letters patent or by-laws that provides otherwise. As well, they may delay holding their 2020 AGMs during the now-terminated state of emergency. If the AGM was originally required to be held during the state of emergency in Ontario (i.e. March 17, 2020 to July 24, 2020), the AGM can be delayed until no later than the 90th day after the day the state of emergency is terminated (i.e. October 22, 2020). If the AGM was originally required to be held within 30 days after the state of emergency is terminated (i.e. after July 24, 2020), the AGM can be delayed to no later than the 120th day after the day the emergency is terminated (i.e. November 21, 2020). Annual returns must be filed with tax/information returns with the CRA (whether or not they are filed with the returns with CRA or filed separately with the ministry). As such, their filing deadline is delayed until the time when they file their tax/information returns with the CRA. In Québec corporations will have the flexibility to hold their AGMs through electronic means or means that enable all members to communicate with each other immediately. In Saskatchewan, AGMs may be held by electronic means, provided that their articles or bylaws do not prohibit electronic meetings, and further provided that participants are able to adequately communicate with each other during the meeting. In the Yukon, societies may hold their AGMs partially or entirely by telephone or electronic means, despite their by-laws not permitting electronic meetings, between March 17, 2020 and the day that is 90 days after the end of the state of emergency in the Yukon (which is currently set to terminate on September 10, 2020, unless otherwise extended). Societies may file their annual reports up to 90 days after the end of the state of emergency. |
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