The Ontario government has passed new legislation to address situations where a charity or other not-for-profit corporation dissolves without having properly disposed of all of its assets. On December 10, 2015, Bill 144, the Budget Measures Act, 2015 (“Bill 144”), received Royal Assent and it will enact five new statutes, including the Forfeited Corporate Property Act, 2015 and the Escheats Act, 2015.
The Forfeited Corporate Property Act, 2015 and Escheats Act, 2015 will come into force on December 10, 2016, and will address how forfeited property is dealt with in Ontario, as well as implementing changes to the role of the Public Guardian and Trustee in dealing with forfeited property. The acts will also make changes in the law relating to the availability of forfeited corporate property to reviving corporations and creditors. As well, the new legislation will introduce changes in the processes by which claimants are able to recover forfeited corporate property.
In a press release dated November 18, 2015, the Ontario Ministry of Finance stated that the combined effect of these two Acts will be to reduce the number of corporate properties which will forfeit to the Crown, to mitigate taxpayer risk arising from the forfeiture of property owned by dissolved corporations and to return forfeited property to productive use more efficiently. With the introduction of the Acts, the provincial legislature is also seeking to increase corporate accountability for associated costs of forfeited corporate property, as well as transparency with regard to its management.