Corporate Update

January 2020 Charity & NFP Law Update

Theresa L.M. Man

ONCA Coming into Force Delayed

As most recently reported in the May 2019 Charity & NFP Law Update, the Ontario Ministry of Government and Consumer Services had been targeting “early” 2020 for the Ontario Not-for-Profit Corporations Act, 2010 (“ONCA”) to be brought into force. An update from the Ministry on December 31, 2019, indicates that the launch date is now expected to move “beyond early 2020,” with no specific timeframe announced. It indicates that the Ministry is upgrading technology to support changes introduced through the ONCA and to improve service delivery. The Ministry will provide further details closer to when the ONCA comes into force. Once the ONCA is in force, Ontario not-for-profit corporations will have three-years to transition into the ONCA by amending their governing documents as may be necessary to comply with the new legislation.

Updated Policies on Corrections of Articles or a Certificate for Business and Not-for-Profit Corporations

In an announcement on December 12, 2019, Corporations Canada indicated that it had updated its policy on corrections of articles or a certificate for corporations governed by the Canada Not-for-profit Corporations Act (“CNCA”). Policy revisions include: (1) providing new templates for submitting requests for correction, with model statements for applicants to select or modify as needed, and a declaration for signature (it is no longer necessary to include a statement explaining the error or an accompanying statutory declaration); (2) permitting the corporation’s professional representative to sign the declaration where the error is an obvious one; and (3) providing simplified policy language with examples to explain what is meant by obvious errors, non-obvious errors, and errors attributable to Corporations Canada. The requirements for corrections remain the same, meaning that corrections must reflect the original intent and cannot prejudice members or creditors.

Corporations Canada Makes Changes for Online Services to Not-for-Profits

In an effort to encourage the use of digital services, Corporations Canada has adopted a “digital-first approach” to its forms for CNCA corporations. In this regard, for online filing services offered by Corporations Canada, PDF forms will no longer be available for download on their website so that only online forms may be used, including Form 4001 ‒ Articles of Incorporation, Form 4003 ‒ Change of Registered Office Address, Form 4004 ‒ Articles of Amendment, Form 4006 ‒ Changes Regarding Directors, and Form 4022 ‒ Annual Return. However, the PDF forms will be available upon request. Where online filings services are not available, the PDF forms will continue to be available on Corporations Canada’s website.

On the same date, Corporations Canada also introduced new service fees and service standards for CNCA corporations and federal cooperatives. While certain service fees have risen, the fees are lower for online services for the annual return. As well, the following online services are now free of charge: (a) amendments to a corporation’s minimum and maximum number of directors, (b) amendments to the province of a registered office address, and (c) uncertified copies of documents are now free of charge. Corporations Canada’s service standards (i.e. the timeframe for expected delivery of services) have also generally increased, except service for cancelled or corrected certificates. Lastly, express service at an additional cost of $100 is now available for (i) online incorporations and amendments within 4 business hours, and (ii) same day services for amalgamations, continuances, letters of satisfaction and revivals by email or mail.

Certain Amendments to Ontario’s Co-operative Corporations Act in Force

Ontario’s Budget Bill 138, Plan to Build Ontario Together Act, 2019, received Royal Assent on December 10, 2019. As reported in the November 2019 Charity & NFP Law Update, Bill 138 amends the Co-operative Corporations Act by removing certain restrictions concerning conducting business with non-members; amending the conditions for exemption from certain audit provisions; repealing filing debt obligations and financial statement and auditors’ report filing obligations; and adding new membership requirements for co-operative corporations whose primary object is to provide employment to its members. While Bill 138 contains various amendments to the Co-operative Corporations Act that will come into force on proclamation, many of a technical nature, the above-noted provisions were brought into force when Bill 138 received Royal Assent.

New Brunswick’s Cooperatives Act Proclaimed in Force

New Brunswick’s Bill 35, Cooperatives Act, which received Royal Assent on June 14, 2019, was proclaimed into force on January 1, 2020 pursuant to Order in Council 2019-247. New Brunswick’s new Cooperatives Act replaces the province’s Co-operative Associations Act and associated regulations, all of which had not undergone any substantial updates since its introduction in 1978. As previously reported in the September 2019 Charity & NFP Law Update, the new Cooperatives Act modernizes New Brunswick’s cooperatives regime to bring it in line with the modern corporate law approach and best practices in other Canadian jurisdictions. It also modernizes the cooperatives administrative processes, reduces administrative red tape, and enhances cooperatives’ access to capital. There is no formal continuance process for cooperatives in New Brunswick. All existing co-operative associations that were incorporated or continued under the previous Co-operative Associations Act are automatically deemed to be continued as a cooperative under the new Act. Their letters of incorporation, directors and by-laws in force on January 1, 2020 have also automatically been deemed as valid articles of incorporation, directors and by-laws in force under the new Act, despite any inconstancies with the new Act’s provisions. However, continued cooperatives will need to file articles of amendment for the articles of incorporation and by-laws within 18 months of the cooperative’s deemed continuance (i.e. by June 30, 2021) to ensure that those documents are in compliance with the new Act and its regulations. Failure to do so may result in the dissolution of the cooperative.

Read the January 2020 Issue

The CRA's Guidance on Journalism: Clarifying Tax Credits, QCJOs and RJOs
Advisory Committee on the Charitable Sector Holds December Meetings
Legislation Update
-   Provisions of Budget Implementation Act No. 1, 2019 Now In Force
-   Proposed Changes to Employee Stock Option Regime Delayed
-   2020 Budget Consultations in Ontario
-   Ontario Regulations under the Connecting Care Act, 2019
-   Alberta Senate Election Act
-   Nova Scotia's Plastic Bags Reduction Act
-   Yukon's New Liquor Act
Corporate Update
-   ONCA Coming into Force Delayed
-   Updated Policies on Corrections of Articles or a Certificate for Business and Not-for-Profit Corporations
-   Corporations Canada Makes Changes for Online Services to Not-for-Profits
-   Certain Amendments to Ontario's Co-operative Corporations Act in Force
-   New Brunswick's Cooperatives Act Proclaimed in Force
Voluntary Association's Constitution and By-Laws Found to be Contractual
Tax Court Decision on Split Receipting and Donative Intent Upheld on Appeal
Federal Court of Appeal Holds that Atheism is not a Religion
CRA Technical Interpretation Regarding Loanbacks by a Qualified Donee
CRA Technical Interpretation on Prescribed Rates and Undue Benefits
Termination Clause Found to be Void and Unenforceable by the Court of Appeal
The Federal Court Establishes the Test for a Site-blocking Order
Alberta Court of Appeal Rules that Charter Applies to Freedom of Expression by Students on University Campus
Anti-Terrorism/Money Laundering Update
-   Global Fragility Act of 2019
-   EU Renews its Terrorist List
-   OSFI Ceases Publishing Lists of Designated Persons
Charities Legislation & Commentary, 2020 Edition Now Available