Corporations Canada has changed their database such that when you are ordering documents from Corporations Canada on a Canada Not-for-profit Corporations Act (“CNCA”) corporation, you can order financial statements in addition to other governance and filings of CNCA corporations. Here is where you can do the search.
Previously, Corporations Canada had a separate process for financial statements, which required that you contact them separately and would also have to pay $5 per financial statement. While seemingly not a big deal, the $5 charge, or $50 if you’re ordering 10 financial statements, meant that you also have to speak to a Corporations Canada representative and provide them with a credit card, etc. If you were trying to look at say the operations of 20 different non-profit corporations, these seemingly small charges can add up and the amount of time spent connecting with Corporations Canada was significant.
Now, you just need to click the search button on the Corporations Canada website and provide some basic information such as your email address and Corporations Canada will send you all the documents within a minute or two with no charge whatsoever including now the financial statements
What does this mean? Many of the largest nonprofits and charities in Canada are under the CNCA. Some of them are registered charities in which case you can obtain some information about them on the Charities Listing from CRA and their T3010 filings. But many of these organizations are not necessarily registered charities and unless they are transparent and provide five or 10 years’ worth of financials on their own website, it may be very hard or impossible to obtain financial statements on these organizations. If these CNCA corporations are soliciting corporations, which is when they receive over $10,000 in public funds, then they need to provide Corporations Canada with financial statements every year, and now those financial statements are easily available and free.
This will make the job of some journalists, parliamentarians, funders and members of the public much easier.
It is amazing when one looks at the Corporations Canada system and you compare it for example, to the new Ontario Business Registry/ONCA system, how the Corporations Canada system is so much better than the Ontario system. The Ontario system provides almost no information on an Ontario nonprofit or charity.
Well, financial statements are by no means the most important part of transparency, but they do in some cases provide some useful information about a nonprofit or charity and its operations. Personally, I find the T3010 information to be more useful in most cases. Hence, that is why we created the CharityData.ca website. However, I do realize that that level of transparency is only with respect to registered charities and not the approximately 100,000 nonprofits that are not registered charities in Canada.
As we have blogged about often, it is very important for organizations to be transparent. One of the ways that an organization can be transparent is to post, say the last five or so years of financial statements on their website. These are the complete financial statements, not a summary or excerpt from the financial statements. We would think that the Hockey Canada and Canada Soccer Association scandals would impress upon charities and nonprofits the importance of providing financial statements to the public but I still see many large CNCA nonprofit corporations that are soliciting corporations, not placing these financial statements on the website, and also not filing them with Corporations Canada, even though it’s a mandatory legal requirement.
I know many board members don’t like to be involved in operational matters, but failing to be a transparent charity, and operating illegally, can result in the organization that you care about losing a tremendous amount of revenue, and having its reputation destroyed. In addition, your reputation as a board member may be severely impacted. This is not just a little operational detail -such as what colour should the new chairs in the boardroom be? It is an extremely important issue that you don’t want to have the Toronto Star or the Vancouver Sun writing to you about. At that point might be too late.
If you are a soliciting corporation under the CNCA and have not been filing your financial statements with Corporations Canada, then you should arrange to have them filed. In addition, you should place them on your website for easy access by donors, funders, and others. It takes less than half an hour to upload five financial statements to Corporations Canada’s Online Filing Centre website, and it probably doesn’t take any more time to upload it to your own website.