Canada: Taxation Law @ Gowlings - August 23, 2010

Last Updated: August 25 2010
Article by David C.K. Tang


  • Ontario's Bill 65 - Not-For-Profit Corporations Act 2010
  • Taxand

Ontario's Bill 65, the Not-For-Profit Corporations Act, 2010 (the "New Act" or the "Bill") was recently introduced, less than one year after the Canada Not-For-Profit Corporations Act, 2009 (the "Federal Act") was given Royal Assent. A summary of the Canada Not-for-Profit Corporations Act was featured in our September 1, 2009 issue, of Taxation Law @ Gowlings - Volume 9, Issue 27. Bill 65 received second reading on May 17, 2010 and has been referred to a Standing Committee for review. The New Act is designed to apply to most of the corporations that are governed by the Ontario Corporations Act (the "Current Act").

In its press release1, the Ministry of Consumer Services indicated that the legislation's mandate is four-fold:

  1. Enhance corporate governance and accountability;
  2. Simplify the incorporation process;
  3. Give more rights to members; and
  4. Better protect directors and officers from personal liability.

The Explanatory Notes to Bill 65, which provide a good summary of the Bill's provision, can be downloaded at:

Gowlings has prepared a lengthier and more detailed analysis of the New Act which can be found at:


The New Act is a comprehensive update of corporate law for not-for-profit corporations in the Province of Ontario. It implements an as of right and speedy incorporation process, replacing the current system of letters patent. The New Act also introduces provisions which provide a reasonable balance between efficient governance by the directors of the corporation, and their protection from personal liability. One way it does that is by explicitly setting out the standard of care required of directors and officers, while clearly making available a due diligence defence.

Some of the developments in good corporate governance which are already being implemented by forward thinking organizations are incorporated into the New Act. For example, the New Act recognizes the prevalence of audit committees, and regulates the composition and responsibilities of audit committees where they exist, but does not make them mandatory.

The New Act also provides members with some significant rights and remedies. Not only are members given the right to bring actions on behalf of the corporation (derivative actions), and seek court ordered investigations, even the rights of non-voting members are augmented by providing them with votes when certain organizational changes are proposed.

Of potentially greater impact to the day to day operation of corporations, notice provisions, quorum requirements, electronic meetings, and other matters, are either simplified, made more liberal or clarified. Overall, the New Act provides a great deal more guidance and clarity for corporations without share capital about various corporate matters relative to the Current Act.

Categories of Not-For-Profit Corporations

The New Act introduces distinctions between: (i) charitable and non-charitable corporations; (ii) public benefit and non-public benefit corporations; and (iii) religious corporations and other charitable corporations. These categories are important in a number of ways, including differing rules for the audits and review engagements or their waiver.

The New Act further segregates the types of corporations by providing varied transition provisions for corporations with objects of a social nature.


Corporations which are continued under this New Act will be required to bring their Letters Patent, Supplementary Letters Patent, by-laws, and any special resolutions into conformity with the New Act, and may do so by filing Articles of Amendment, or by amending their by-laws, once the New Act is in force. The New Act specifically provides that any provision that is not amended to conform with the New Act, is deemed after three years to be amended to the extent necessary to conform. In essence, the New Act's provisions will always supersede a corporation's existing Letters Patent, Supplementary Letters Patent or by-laws. Relying upon this provision could be highly problematic. Doing so would leave potentially large inconsistencies between the corporation's Letters Patent and by-laws - documents the directors, members and staff are most likely to go to for guidance or to work with - and the requirements of the New Act. It is likely that actions which contravene the New Act will be taken because they appear to comply with the existing corporate documents. Furthermore, the New Act imposes new requirements, which are likely to go unnoticed and unfulfilled if they are not incorporated into the documents which are supposed to govern a corporation's activities.

The New Act specifically provides for the ability of a corporation to restate its articles so that the corporation's Letters Patent, Supplementary Letters Patent and by-laws are clearly in compliance with the New Act. A corporation may not restate its articles unless those articles are in complete conformity with the Act, necessitating the amendment of its articles. It is recommended that all corporations amend their letters patent, supplementary letters patent and by-laws to conform with the New Act, so as not to unintentionally create confusion and questions about whether the letters patent, supplementary letters patent and by-laws can be relied upon.

Gowlings will continue to monitor the New Act and its regulations, and provide further bulletins on Bill 65.



The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.