From the desk of:

Carrie Ritchie

Carrie Ritchie

Update on the Ontario Not-for-Profit Corporations Act (2010)

It has been ten years since the Ontario Not-for-Profit Corporations Act (2010) (ONCA) received Royal Assent and it has yet to be proclaimed into force. Below is some of the history of the statute and what we can expect once it is (finally) proclaimed into force.

2010 – The ONCA received Royal Assent in the Ontario legislature on October 25, 2010. Following its passing, the consultation period with the public began.

2013 – An “implementation steering committee” was established, including the Ministry of Community Services, and various not-for-profit organizations, such as the Ontario Nonprofit Network, and the YMCA.

2017– In 2017, with the passing of Bill 154 Cutting Unnecessary Red Tape Act (2017), the ONCA was amended, hopefully paving the way for proclamation into force, as early as late 2019/early 2020.

2020 – If legislation is not proclaimed into force within ten years of the originally passing, it is to be repealed, pursuant to Legislation Act, 2006. Because of this law, Ontario filed Motion #89 which was passed on September 21, 2020 to ensure the ONCA was not repealed.  It is important to note that not all sections of the ONCA were included in this reviving motion. The exclusion of these sections from the motion had the effect of cancelling those sections. Sections that were not revived primarily dealing with the granting of voting rights to non-voting members/groups in the event of amalgamations, continuance in other jurisdictions, authorization of the sale/lease/exchange of property, and the establishment of new classes of memberships.

2021 – In February 2021, the Ministry held a consultation period with respect to the COVID-19 Response and Reforms to Modernize Ontario Act, 2020. Within the consultation documents the Ministry emphasizes that the ONCA is still not yet in force and that they are working to bring it into force as soon as possible. This consultation asks for input on electronic or teleconference attendance, as well as electronic storage of corporate records and notice provisions.

Updates on when the legislation is to be claimed into force can be found on the website containing the rules for not-for-profit and charitable corporations website. This website has not been updated since December 2019, even though the Ontario government has confirmed that they are working to bring the legislation into force as soon as possible. The delay has been attributed to technical challenges in the implementation of the online registration system, and due to the COVID-19 pandemic.

The goal of the ONCA was to streamline the not-for-profit incorporation process in Ontario. This would allow for not-for-profit corporations to incorporate through an online registry, similar to how Ontario business corporations are incorporated today. Currently, the method of incorporation for a not-for-profit is through the issuance of letters patent from the Director under Part III of the Ontario Business Corporations Act (1990) (OBCA), by a paper application.

If your not-for-profit is looking to update its articles and by-laws in preparation for the ONCA coming into force, our not-for-profit team at MSM would be pleased to assist. For more information, please contact Carrie Ritchie.

This article is not intended to serve as a comprehensive treatment of the topic and is not legal advice. All legal matters are dealt with pursuant to their specific facts and circumstance. Nothing replaces retaining a qualified, competent lawyer.