Charity & NFP Law Bulletin No. 379, February 25, 2016
As a result of the repeated delay in the proclamation of the Ontario Not-for-Profit Corporations Act, 2010 (“ONCA”), some Ontario not-for-profit corporations under Part III of the Corporations Act (“OCA”) are considering whether to give up waiting for the proclamation of the ONCA by continuing under the federal Canada Not-for-Profit Corporations Act (“CNCA”). The CNCA was enacted in 2009 and proclaimed on October 17, 2011. Is it suitable for an OCA corporation to do so?
Ever since the enactment of the ONCA in 2010, OCA corporations have been waiting for the proclamation of the ONCA. The Ontario Ministry of Government and Consumer Services announced on September 17, 2015, that the ONCA will not come into effect for at least another two years until two things have happened: (a) the Legislature has passed technical amendments to the ONCA and related legislation; and (b) technology at the Ministry is upgraded to support these changes and improve service delivery. Once the ONCA is proclaimed, existing OCA corporations will have three years to transition under the ONCA.
Ontario not-for-profit corporations have been left in corporate limbo for six years since 2010, having to make the difficult decision whether to update their objects and by-laws to further their mission or to wait for the proclamation of the ONCA before making those changes. The problem with waiting is that they do not know how long the wait might be. On the other hand, the problem with updating the objects and by-laws first is that those updates would have to be made under the rules in the OCA and they may have to be updated again after proclamation to comply with the new rules in the ONCA. The question is whether continuing into the CNCA is a suitable solution to avoid these difficulties.
Another issue to consider is whether it would be desirable for OCA corporations to move into the federal jurisdiction for other reasons. This question is worth asking since this option was not available under the Canada Corporations Act, the predecessor to the CNCA, which did not permit corporations from another jurisdiction to continue under the Act.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 379.