On Tuesday last week, we had our Blumbergs’ Canadian Charity Law Institute. We had a very good presentation by two Ontario government lawyers dealing with recent changes to ONCA in Bill 91. During questions, there was a question about how the ONCA transition is going. One of the Ontario government lawyers said they had checked with the Service Ontario on the number of filings of articles of amendment and she was told that approximately 992 articles of amendment had been filed under ONCA’s since ONCA came into force almost two years ago.
992 might sound like a lot. But in 2013, we managed to get a list of Ontario corporations, and back then, there were about 59,000 corporations. Now, the Ontario government has confirmed that there are 61,000 active ONCA corporations. In the end, approximately 2% of Ontario non-profit corporations may have brought themselves into compliance with 67% of the 3-year time period gone.
Let us break that down. Admittedly, the math is more complicated than that. On the plus side, presumably, some of those are new incorporations, and they don’t have to bring themselves into compliance with ONCA. Also on the plus side, some Ontario corporations might have left and continued under the Canada Not-for-profit Corporations Act (“CNCA”) in which case they would not be filing articles of amendment at all. Also, filing the articles of amendment is near the end of the process – there might be some organizations who have started the process but have not had their AGM or have had their AGM but have not filed the documents.
But on the minus side, presumably, some of those 992 articles of amendment are not even bringing a group into compliance with ONCA – they may have just been a name change or object change, etc.
Existing non-profit corporations incorporated under Part III of the Corporations Act (Ontario), which is the vast majority of Ontario non-profits, will have a 3-year transition period during which to bring their constating documents (i.e. letters patent, by-laws, etc.) into conformity with the new ONCA. The 3-year transition period will end on October 19, 2024. Therefore Ontario non-profits only have one year to bring their organizations into compliance with ONCA.
Another alternative would be to move to the Canada Not-for-profit Corporations Act (the “CNCA”), which is a modern act and preferable for some organizations.
What are the takeaways?
- Very few organizations in Ontario that are under ONCA have made the changes necessary to bring them into alignment with the requirements of ONCA.
- The Ontario non-profit and charity sector is really important. You can see Blumbergs’ Snapshot of the Ontario Charity Sector 2021. Just the registered charity part of such sector has expenditures of $118 billion, including spending $67.2 billion on salaries and compensation. Not every charity in Ontario is an Ontario non-profit, but most are, and any disruption or problems in the governance of these organizations can be costly.
- We have a free webinar on October 18, 2023, on the ONCA changes for those who are interested. The Ontario Not-for-Profit Corporations Act (“ONCA”) – unfortunately there is only one year left for about 50,000 Ontario non-profits to make this important corporate change
- If you cannot wait till October 18, 2023, then we have a course you can buy on ONCA. Ontario not-for-profit corporations and dealing with ONCA
- As we have discussed in a recent article, the timelines may be quite tight for some groups: “Ontario Not-for-Profit Corporations Act (“ONCA”) – only a little more than one year for groups to make changes and for some this may not be enough time“.
- Non-profits and charities have a lot on their plate. Raising funds, running programs, dealing with so many stakeholders. Presumably, some are procrastinating. But it may be very difficult next year to get the assistance that is needed, and for registered charities, especially the CRA Client Assistance has already slowed down, so typically, waiting times for object reviews are now six months.
- We feel bad for volunteers working with non-profits in Ontario. There is so little support for them. Many of the non-profits and charities, including some large organizations, are spending hundreds of hours trying to do the transition themselves. We have been approached by many groups who have prepared documents and expended a lot of time, and unfortunately, they did not understand what was needed and all the rules around these changes, so the effort was a complete waste of their time. Very unfortunate. This is a once-in-a-120-year change! Get legal advice from a lawyer knowledgeable about non-profit corporate law, and if you are a charity, then a lawyer who is also knowledgeable about charity law.