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Ontario Health Teams Expected to Form New Not-For-Profit Corporations

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Health Bulletin

In 2019, the Ontario government introduced the Ontario Health Team (“OHT”) model with the enactment of the Connecting Care Act, 2019 (the “CCA”). On November 30, 2022, the Ministry of Health (the “Ministry”) released a new publication, Ontario Health Teams – The Path Forward [PDF] (the “New Plan”), which describes next steps for OHTs.

To date, subject to a few requirements, OHTs have been able to self-organize and design their own governance models. The stated purpose of the New Plan is to present a standard model for OHTs. Among other features, the Ministry has identified that each OHT should include a new not-for-profit corporation (“NFP Corporation”) “for the purpose of managing and coordinating the OHT’s activities”.  The New Plan states that the NFP Corporations will “be responsible for OHT initiatives to design and deliver integrated care”.

The New Plan clarifies that the NFP Corporations “will support integrated accountability and funding”, while members of the OHT would remain intact. To this point, the New Plan emphasizes that the NFP Corporations will be distinct from the members of the OHT (meaning that members of OHTs will not be the subject of any mergers or restructurings in meeting this expectation).

The New Plan indicates that further details and expectations will be provided by the Ministry. It advises OHTs to wait for further Ministry and Ontario Health input prior to proceeding to establish their NFP Corporation. The New Plan also advises OHTs that the Ministry and Ontario Health will work with them to determine a timeline, based on their readiness. In the meantime, as OHTs get thinking about this new direction, this bulletin provides a high level overview of the process to incorporate and organize a not-for-profit corporation under the Not-for-Profit Corporations Act, 2010 (the “ONCA”).[1] We note that the New Plan is broader than the expectation regarding new NFP Corporations, but this bulletin is focused on that feature. 

Incorporating the NFP Corporation

In preparing the following summary, we largely relied on, and many of these matters are discussed in detail in, the Not-for-Profit Incorporator's Handbook prepared by the Ministry of Government and Consumer Services (now Ministry of Public and Business Service Delivery), ServiceOntario and the Office of the Public Guardian and Trustee for Ontario, Charitable Property Program of the Ministry of the Attorney General.

The following is a summary of steps and considerations for incorporation pursuant to the ONCA:

  • determine the purposes of the NFP Corporation, which will be influenced by whether the NFP Corporation will seek to become registered as a charity;[2]
  • conduct a name search (ON NUANS search) to determine availability of the proposed name;
  • seek necessary consents, if any, in connection with the corporate name (as determined by the results of the ON NUANS search);
  • determine the minimum and maximum number of directors;
  • determine the registered office (which must be in Ontario);
  • identify three (or more) individuals who will be the first directors (their full names and address for service (not a P.O. Box) will be required);
  • determine whether there will be more than one class of members. If so, determine the rights of each class; and
  • prepare and file the Articles of Incorporation.

The NFP Corporation may at any time after incorporation, with the passage of appropriate authorizing resolutions, amend its Articles of Incorporation by filing Articles of Amendment.

By-law Development and Organizational Steps

Following incorporation, the NFP Corporation must take organizational steps, including developing and approving a by-law. Organizational matters include:

  • the adoption of a by-law (to govern various matters, such as conditions of membership, quorum, notice and conduct of meetings);
  • the appointment of auditors or a person to conduct a review engagement of the corporation (if an audit exemption will be relied on); and
  • the appointment of officers (under the ONCA, a director must be appointed as chair of the board of directors; other officers may be appointed in accordance with the articles and the by-law).

Under the ONCA, if the directors do not pass an organizational by-law within 60 days after the date of incorporation, the NFP Corporation is deemed to have passed the standard organizational by-laws approved by the Ministry of Government and Consumer Services (now Ministry of Public and Business Service Delivery), which reflect default rules under the ONCA that can be amended through the by-law passed by the NFP Corporation. If a NFP Corporation is deemed to have passed the standard organizational by-laws, it may amend or repeal and replace them at any time. 

This bulletin provides general information and is necessarily summary in nature. In organizing the NFP Corporation, consideration will likely be given in particular to the membership of the NFP Corporation and the composition of the board. OHTs will need to consider other legal issues related to the NFP Corporation, including those in respect of tax and privacy. Fasken will continue to follow developments for OHTs as additional information is made available.

[1] The logical jurisdiction for incorporation of the NFP Corporation will likely be Ontario, with the result that they will be subject to the ONCA. That said, subject to future guidelines from the Ministry, it may be possible to incorporate under the Canada Not-for-profit Corporations Act (“CNCA”), the federal legislation governing federal not-for-profit corporations. This bulletin assumes that NFP Corporations will be incorporated pursuant to ONCA. If it is ultimately the case that NFP Corporations are able to be CNCA corporations, then similar (but distinct) processes will apply.

[2] The current guidance does not specify whether OHTs are required to apply to Canada Revenue Agency and obtain charitable status.

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