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Ontario Not-for-profit Corporations Act delayed

I’ve lost count of the coming-into-force dates the government and others have suggested for the Ontario Not-for-profit Corporations Act (ONCA) to take effect, but this time at least it seems there’s a clear reason to delay. The previous estimate for the law to come into force was July of this year; the new estimated date is “no earlier than” January 2014.

Some expect the delay is intended to give the government time to clarify the rules with respect to making the transition from the current Ontario Corporations Act regime to the new one. Specifically, the Ministry of Consumer Services has released statements clarifying that an organization’s existing incorporation documents, letters patent, bylaws and special resolutions will remain valid throughout the three-year transition period. This is the intent of the law as written, but it is not entirely clear.

At the end of the three-year transition period, the government will consider any provisions of these documents that violate the new law to have been amended to comply; in other words, non-compliant provisions will no longer have any effect. Obviously, the government recommends all affected organizations review and update as necessary their documents to conform to the ONCA before the end of the transition period.

A version of that ministry statement from earlier this month also mentioned the rights of non-voting members, about which the current text of the law is also unclear:

It is important to note that, under ONCA, non-voting members will have some limited voting rights. However, it is the government’s intent that if an existing corporation provides for non-voting members in its letters patent, any supplementary letters patent, bylaws and special resolutions, the non-voting members remain non-voting for the three-year transition period. This will occur unless the corporation amends its bylaws, letters patent, supplementary letters patent or special resolutions to conform with ONCA during this period.

This statement does clarify organizations’ obligations with respect to non-voting members, but it’s not clear why the statement was removed.

Another possible reason for the delay is simply that it is taking the ministry longer than expected to prepare the regulations to go along with the Act, but, as I’ve said now several times before, we’ll just have to wait and see.

Adam Gorley
First Reference Editor

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Adam Gorley

Editor at First Reference
Adam Gorley, B.A. (Phil.), is a researcher, content provider and editor. He contributes regularly to First Reference Talks and Internal Control blogs, HRinfodesk and other First Reference publications. His areas of focus include broad human resources issues, corporate social responsibility, corporate governance and government policies, information technology and labour market trends.Read more
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