Last week, Ontario's Ministry of Consumer Services (the Ministry) announced a further delay in the proclamation of the Not-for-Profit Corporations Act (Ontario) (ONCA). The projected target date for proclamation, which was previously postponed to July 1, 2013, is now expected to be no earlier than January 2014.
The Ministry has indicated that it will be reviewing provisions of the ONCA that enhance members’ voting rights, which have been an issue of particular concern for Ontario’s not-for-profit sector in the lead up to proclamation. At a minimum, the Minister will recommend that certain provisions extending voting rights to non-voting members not be proclaimed in force until at least the end of the ONCA’s three-year transition period.
The Ministry has also confirmed that, following proclamation, it will consider other amendments proposed by sector stakeholders that are aimed at improving the ONCA based on their practical experiences in working with the Act.
For many in the sector who were concerned about the fast approaching proclamation date, the delay will offer a reprieve and additional time to prepare. The delay will likewise give the government more time to finalize the transition tools it is developing, including a plain language guide to the ONCA, a default by-law and an electronic toolkit.
The Ministry has also announced that, together with support from the Ministry of Citizenship and Immigration and the Ministry of Tourism, Culture and Sport, it will be providing funding to Community Legal Education Ontario (CLEO) to develop and deliver an accompanying education and support program to assist not-for-profits throughout the transition.
At this stage, it is not clear what amendments, if any, will result from the Ministry’s review of the ONCA’s provisions relating to enhanced member voting rights. If those provisions are amended, not-for-profits will have another important difference to consider in deciding whether to incorporate federally or provincially. Though not identical in all respects, the ONCA borrows heavily from the new Canada Not-for-profit Corporations Act (CNCA) and enhanced member voting rights are also a key feature of the CNCA. The distinction would similarly be relevant for existing not for profit corporations considering continuing from one jurisdiction to another.