I have been asking the Ontario government for months for an update on whether ONCA is coming into force and when. On September 25, 2019 I received a short note from the Policy and Business Law Unit of the Ministry of Government and Consumer Services (MGCS). They noted “Thank you for your inquiry to the ministry regarding the Ontario Not-For-Profit Corporations Act (ONCA). The ministry is working to bring ONCA into force as early as possible.” In January 2019 they noted “The ministry is continuing to work to bring the ONCA into force as early as possible with a target of early 2020“. [my emphasis] Note they seem to be omitting the part about targeting early 2020. I guess we are supposed to read the tea leaves – does that mean that it will be coming in early 2020, some other time or not coming in at all. Your guess is as good as anyone.
They then go on to note “The ministry’s website will be updated as further information becomes available at: https://www.ontario.ca/page/rules-not-profit-and-charitable-corporations.” The problem with that is that the website has not been updated since February 2019 – almost 7 months now – and this new act could be coming in in just over 3 months time.
While they note that Community Legal Education Ontario (CLEO) has resources available on their website (which also have not been updated since February 2019) they then end with a very helpful “We would encourage you to continue checking the ministry’s website for updates and making use of the resources being provided by CLEO.”
So I guess I will spend the next few months checking the Ontario government website every day to see if there is a change. This is unfortunate. In light of the large number of groups, and hundreds of thousands of volunteers in Ontario involved with those groups that are affected by the transition from the OCA to ONCA, the gaps in information available, the lengthy delay so far (since 2013), the limited time until ONCA is supposed to come into force, it would therefore be very helpful if further information can be provided.
Here is a short summary of the situation:
- ONCA which was passed in 2010 was supposed to come into effect in 2013.
- It still has not come into effect and may come into effect in 2020 or may never come into effect. If it is coming in next year it would probably be January 2020 (very unlikely) or June 30, 2020. Apparently, under the Legislation Act, there is a 10-year deemed repeal and if ONCA is not brought in or some resolution passed by the assembly by the end of 2020 then ONCA will be repealed. (see below)
- To avoid uncertainty, wasted board time and significant legal costs if you are establishing a new non-profit in Ontario you are almost always better to establish a Federal corporation under the Canada Not-for-profit Corporations Act (“CNCA”). (see article) This is especially important for those who want to be registered charities as it can delay your application by 6 months or more if you have to make changes to your letters patent.
- If you are currently under the Ontario Corporations Act (“OCA”) and wanting to make changes to your letters patent or by-law (and in some cases delaying those changes for many years waiting for ONCA to come in) you are in most cases better off “continuing” or “moving” from the OCA to the Federal CNCA. (see article) The alternative is making changes now that will have to be redone in the next few years. The current backlog at the Ontario government for corporate changes – sometimes ranging between 4-6 months, is likely to get significantly worse.
- Also keep in mind that for Ontario corporations that are registered charities may have to, as part of the ONCA change their objects. You might find our article Objects of registered charities in Canada are sometimes not charitable worth reading. CRA has not said whether they would grandfather object clauses from the OCA move to ONCA. Even if CRA will grandfather them, those objects may be inadequate for the activities that the charity is carrying out and/or wishes to carry out in the future. Some groups should be writing to CRA now to find out whether new objects they would like to have are appropriate and receive CRA approval for a potential change.
- At a minimum make sure that you have your documents in order and that your membership structure makes sense for your organization. Have all copies of letters patent, supplementary letters patent, by-laws etc and update your ONBIS information on directors and officers so it is accurate. Look closely at your membership structure if you have memberships available to those who are not board members or if you have multiple membership classes.
Part of the frustration that I have with how the Ontario government has dealt with this matter is the secrecy, part of it is the tremendous delay and another part is that certain basic steps to ameliorate the negative effects of this delay have not taken place. I have encouraged the Ontario government to more prominently let groups know that ONCA will replace the OCA and groups should consider establishing themselves under the Federal CNCA.
If you are considering making significant changes (eg. changes to objects, new by-laws or to implement a merger etc) it is a good idea to obtain legal advice as soon as possible.
On the potential repeal of ONCA:
Ontario has codified a process for the repeal of legislation that remains unproclaimed for nine years or more. Since 2011, the Legislation Act, 2006 has required the Attorney General to annually table in the Legislature a report listing all unproclaimed Acts and provisions that were enacted nine years or more before December 31 of the preceding calendar year and which remain unproclaimed on that date. An Act or provision listed in this report is automatically repealed on December 31 of the calendar year in which the report is tabled unless it comes into force on or before December 31 of that calendar year; or during that calendar year, the Assembly adopts a resolution that it not be repealed.
Here is a list of many of the acts that have been repealed because of that provision. https://www.ontario.ca/laws/public-statute-provisions-repealed-under-section-101-legislation-act-2006
By Mark Blumberg, Blumbergs
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