Corporate Update
June 2021 Charity & NFP Law Update
Published on June 24, 2021

By Theresa L.M. Man

Public Consultation on CNCA Launched

As part of review of the Canada Not-for-profit Corporations Act (“CNCA”), the Minister of Innovation, Science and Industry (the “Minister”) launched a public consultation on the CNCA (the “Consultation”) on June 18, 2021. The CNCA requires the Minister to provide a report to Parliament on the provisions and operation of the CNCA and any recommendations for amendments ten years after it came into force. This report would then be referred to a Senate committee, the House of Commons, or both for study and report. The Consultation will allow the government to assess whether the CNCA is currently meeting its objectives of ensuring transparency, accountability and good governance standards, and is intended to provide a framework for public consultations that will contribute to the Minister’s report.

The consultation paper indicates that the statutory review follows the 2019 Report of Senate Special Committee on the Charitable Sector, “Catalyst for Change: A Roadmap to a Stronger Charitable Sector”, which provided 42 recommendations as discussed in Charity & NFP Law Bulletin No. 451, but refrained from making corporate law recommendations, noting the upcoming statutory review of the CNCA.

The Consultation’s primary focus is on the merits of amending the CNCA, and is divided into sections discussing issues identified by stakeholders or that have emerged since 2011. These include issues related to audit and financial reporting obligations; boards of directors; hybrid and virtual decision-making; classes of membership; members’ rights; permitted distribution of assets; and recent developments in business corporations legislation. Each section concludes with a question that stakeholders are invited to comment on. Stakeholders are also invited to comment on other matters not directly addressed in the Consultation, including whether and how other modifications to the CNCA may be warranted.

Stakeholders may provide written comments by July 30, 2021, with submissions provided electronically in plain text or in a Word document emailed to: ic.nfpactreview-examenloibnl.ic@canada.ca

Ontario Prepares for ONCA Implementation through New Regulations and Business Registry

Two regulations supporting the implementation of the Ontario Not-for-Profit Corporations Act, 2010 (“ONCA”) and 12 regulations supporting the upcoming launch of the Ontario Business Registry were filed on June 3, 2021.

Ontario Regulation 395/21, General and Ontario Regulation 396/21, Corporations Sole – Application of Act and Regulations, both under the ONCA, were initially released as draft regulations in June 2020, as discussed in the June 2020 Charity & NFP Law Update. Ontario Regulation 395/21 contains provisions related to technical matters under the ONCA, and Ontario Regulation 396/21 lists provisions under the ONCA that apply to corporations sole. The two filed regulations generally remain unchanged from their draft forms, with changes to Ontario Regulation 395/21 including amendments to provisions concerning authorization of representatives, proxies, and notice by electronic means. The two regulations will come into force after certain sections of both the ONCA and Bill 154, Cutting Unnecessary Red Tape Act, 2017 come into force.

As well, Ontario Regulation 394/21, Names and Filings under the ONCA is among the 12 regulations supporting the upcoming launch of the Ontario Business Registry, together with regulations under various Ontario corporate statutes, including the Ontario Corporations Act, Corporations Information Act, Extra-Provincial Corporations Act, and Business Names Act. Draft forms of these regulations (except Ontario Regulation 405/21, General under the Business Regulation Reform Act, 1994) were previously released in June 2020 for consultation. Broadly speaking, the regulations will come into force after certain sections of Bill 154, Cutting Unnecessary Red Tape Act, 2017 come into force.

The filing of these regulations will facilitate the launch of the digital Ontario Business Registry, which the Government of Ontario anticipates will launch later this year. The proclamation of the ONCA is contingent on the launch of the Ontario Business Registry. The Ontario Business Registry is a new online platform that will provide digital solutions for Ontario not-for-profits and other entities that are registered, incorporated or licensed to carry on business in Ontario. It allows these entities to complete registrations and other filings online.

Ontario Bill 276 Receives Royal Assent

After considerable debate and consideration by the Standing Committee on General Government, Ontario’s Bill 276, Supporting Recovery and Competitiveness Act, 2021 received Royal Assent on June 3, 2021. As discussed in the April 2021 Charity & NFP Law Update, Bill 276 provides temporary relief to corporations under the Ontario Not-for-Profit Corporations Act (“ONCA”) during the COVID-19 pandemic. Corporations are permitted to carry on electronic meetings during the “temporary suspension period”, which currently ends on December 31, 2021, despite any provision in their constating documents that provide otherwise.

In addition to this temporary relief, Bill 276 makes various ‘housekeeping’ amendments to the ONCA and the Ontario Corporations Act, including amendments to give effect to the removal of class voting and non-voting members’ rights under the ONCA as a result of Motion 89. As discussed in the September 2020 Charity & NFP Law Update, Motion 89 extended the proclamation period of the ONCA by one year until December 31, 2021, but did not extend ONCA provisions dealing with class voting and non-voting members’ rights.

Read the June 2021 Charity & NFP Law Update