A critical update from the provincial government with respect to the Ontario Not-For-Profit Corporations Act (“ONCA”) – the period to adopt the new not-for-profit legislation has been extended to December 31, 2021. This means that the government now has until the end of next year for ONCA to come into force.
Had the government not extended the adoption period, the not-for-profit legislation, which was passed in 2010, would have been cancelled at the end of this year. This provides the more than 58,000 corporations in the not-for-profit sector in Ontario with reassurance that the government is still planning on bringing ONCA into force very soon.
The extension does, however, come with the caveat that certain provisions will be excluded from ONCA if it fails to be enforced by the end of 2020 – which is likely. The excluded sections include allowing voting by membership class and the right of non-voting members to vote on fundamental changes to a not-for-profit corporation, such as changes to the conditions of membership; the amalgamation with other corporations; the continuance of the corporation to another jurisdiction; and the sale, lease or exchange of property of the corporation.
The excluded provisions from ONCA come as a relief to many not-for-profit corporations, including the Ontario Nonprofit Network (“ONN”), who have been advocating for their removal. Not-for-profit corporations would still have the option to include similar provisions in their by-laws.
When introducing the motion to extend the legislation, the Minister of Government and Consumer Services, Lisa Thompson, stated that the implementation of ONCA is tied to the launch of a new provincial business registry which would enable electronic filings for not-for-profit corporations. The Minister said that the government is “saving this important piece of legislation and bringing it into force as soon as possible so Ontario’s not-for-profit corporations can benefit from enhanced and modernized legislation.”
As always, once ONCA comes into force, not-for-profit corporations will have three years to transition to the new legislation. We would, however, encourage corporations to review their governing documents now to ensure ONCA compliance.
PooranLaw will continue to monitor developments related to ONCA and provide updates on our website. For more on ONCA, visit www.pooranlaw.com/onca. If you require legal assistance, we encourage you to reach out to your regular PooranLaw lawyer, or any member of our team.
In addition, be sure to check out our dedicated COVID-19 Resource Centre here, to find information and resources on key issues facing not-for-profit employers.
Note: This article provides general information only and does not constitute, and should not be relied upon as, legal advice or opinion. PooranLaw Professional Corporation holds the copyright to this article and the article and its contents may not be copied or reproduced in any form, in whole or in part, without the express permission of PooranLaw Professional Corporation