The Ontario Ministry of Government and Consumer Service’s Director of Policy and Governance formally advised today that the implementation of the Ontario Not-For-Profit Corporations Act, 2010, S.O. 2010 (“ONCA”) will be delayed beyond “early 2020”.
The ONCA was passed in 2010 and has been subject to amendments and a number of projected implementation dates since it was first passed. The Ministry has for some time now indicated that the ONCA would come into force in “early 2020”. We have advised that we anticipated, notwithstanding the Province’s formal position, that the Province would not be ready to do that early this year.
The Province’s latest communication indicates that the Ministry is continuing with “upgrading [its] technology to support these changes [introduced by the Cutting Unnecessary Red Tape Act, 2017] and improve service delivery”. The focus on “a technology solution that provides the best possible support for stakeholders” will result in the launch date moving beyond early 2020.
In the first few years of the last decade, our advice was that waiting until the ONCA and its regulations were finalized was probably prudent. Waiting remains reasonable since the ONCA was amended by Bill 85 to make it clear that existing not-for-profit corporations governed by the current Corporations Act, RSO 1990 will have three years once the statute comes into force to change its by-laws or letters patent/articles. In addition, the most debated change – the granting of rights to all members, including those without votes will – pursuant to those same amendments clearly not take effect until at least three years from the date the ONCA comes into force. There will be a reasonable period for corporations to consider their affairs and address the impact of the new statute.
Because it is now likely that the ONCA will not be further amended significantly, corporations that need to amend their documents to address current governance protocols may wish to proceed with updating their documents to conform to the pending statute, where doing so would not conflict with the current Corporations Act (Ontario). While those changes may need some tweaking within three years of the ONCA coming into force, Miller Thomson’s Social Impact Group can advise now on how to create a reasonable long term structure as we are able to anticipate whether or not such structures would be sustainable in the long term.
Once the ONCA is in force, it will be important for existing Ontario not-for-profit corporations to consider their by-laws and letters patent because the ONCA will automatically apply to most of these corporations. Fortunately, none of these corporations will cease to exist for not actively continuing under the new ONCA. However, their by-laws will be deemed to conform to the ONCA once the transition period is over. A corporation’s failure to update its charter documents will likely cause confusion because they will no longer be able to rely with certainty upon those documents.