Canada: Not-For-Profit Law In Canada: What To Expect In 2014

Given the increasingly important role that the not-for-profit and charitable sector plays in Canada's social and economic fabric, it is not surprising that lawmakers have paid particular attention to this sector in recent years with more changes to the legislative and regulatory framework governing not-for-profit corporations ("NFPs") expected in 2014. This bulletin provides such organizations with an overview of what to expect next year and how to be prepared.

The Clock is Ticking for CNCA Compliance

NFPs incorporated under Part II of the federal Canada Corporations Act are now on the clock as the transition period to the new Canada Not-for-Profit Corporations Act (the "CNCA") officially ends on October 17, 2014. As a result of the many significant changes brought about by the CNCA, which provides NFPs with more modern governance tools and gives enhanced rights to NFP members, federal NFPs will likely need to make a number of changes to their governing documents. In order to continue under the new regime, a federal NFP should:

  • Review its current governing documents to determine amendments required to comply with the CNCA and any other amendments that it may wish to make;
  • Prepare Articles of Continuance and new by-laws that conform with the CNCA (note: new by-laws must also be registered with Industry Canada within 12 months of filing the Articles of Continuance);
  • Obtain director and member approval, as applicable, of the Articles of Continuance and by-laws;
  • If the federal NFP is also a registered charity, it may need to also obtain CRA approval of its new documents (depending on the changes being implemented in connection with the continuance); and
  • Draft and file the new Articles of Continuance by October 17, 2014.

See here for more information on the CNCA and transition requirements. Given the potential for complexity or delays in any CNCA transition, we recommend retaining legal counsel as soon as possible for assistance. Members of Davis' Charities and Not-for-Profit Practice Group have extensive experience in this area.

The ONCA Remains in a Holding Pattern

Following implementation of the CNCA, Ontario passed its own Not-for-profit Corporations Act ("ONCA"), which institutes a similar framework to the CNCA by modernizing the governance of provincially-registered NFPs to give them similar rights and obligations as for-profit corporations. However, unlike the federal statute, Ontario has yet to proclaim the ONCA in force. Rather, the provincial government has introduced Bill 85 to amend other legislation consequential to the enactment of the ONCA and provide additional regulatory detail. Bill 85 contemplates proclamation for the ONCA within six months of its passage and then a three-year transition period to the new framework. Yet despite tacit support for the bill at first reading in June, the minority governing Liberals have not yet re-introduced the Bill for second or third reading and this may be unlikely to happen before the 2014 provincial budget and election that could soon follow it. Therefore, it remains unclear when the ONCA will be proclaimed even though the legislation was passed in 2010 and the regulatory framework remains somewhat clear. For more background on the ONCA, please see here.

Despite the delays in proclamation, the ONCA is still a very important act for NFPs to consider. For example, any NFPs contemplating incorporation in Ontario or revisions to articles or bylaws for existing NFPs in Ontario would be well-served to work with their legal counsel to ensure such constating documents are made as compliant with the ONCA as possible. This will save time and cost in the future when the ONCA is finally proclaimed. Ontario-incorporated NFPs may also wish to consider making any changes to their membership (i.e. voting rights) before the ONCA is proclaimed, as doing so after will require a more fulsome membership vote rather than the current right to simply file amended articles or bylaws.

In addition, federal NFPs may wish to consider continuing under the old Ontario Corporations Act (the precursor to the ONCA) with ONCA-compliant articles if there is a particular CNCA provision it is resistant to, which is not part of the proposed Ontario framework, such as the permissibility of ex-officio directors in Ontario that are strictly prohibited under the CNCA. To help decide which Act may be best for your NFP please see this chart that compares both.

Legislative Developments in British Columbia?

The British Columbia (B.C.) provincial government has been engaged in a review of the B.C. Society Act since 2009 in order to identify possible directions for the reform of not-for-profit legislation in B.C. Most recently, feedback on a discussion paper which addressed the governance of B.C. societies was sought earlier this year with legislation to amend or replace the Society Act targeted for 2014 at the earliest.

Ongoing Rules and Guidance from the CRA

In addition to changes in the governance frameworks established by legislation, we also expect to see more rules and guidance on the operation of not-for-profit organizations, whether from Income Tax Act amendments or changes in CRA policy. In the 2013 federal budget, the Canadian government introduced the so-called "First Time Donor's Super Credit" to encourage charitable donations whereby, until 2017, a donor that had not given a donation in the past five years is entitled to an one-time additional tax credit (subject to certain limits). Since NFP lobbying groups are hoping to build on this credit to introduce a "stretch credit" in the 2014 federal budget, keep an eye on this space for important updates.

There may also be additional commentary on the involvement of 'ineligible individuals' with charities and on the ability of registered charities (including private foundations) to carry on business activities. In addition, the CRA may provide further guidance on the tax implications of crowd-funding for NFPs as this is becoming a popular and effective fundraising strategy and has already caught the attention of the CRA and other regulators in the for-profit sector. See here for more on a recent crowd-funding decision by the Ontario Securities Commission and look for more analysis from the CRA in this area in the near future.

Davis to Launch Charities & Not-for-Profit Law Blog in 2014

Finally, in order to help keep NFPs on top of the many developments to come in 2014 and beyond, Davis is pleased to announce the launch of a new blog dedicated to the law for NFPs in early 2014. The blog will cover key transition points and updates for the CNCA and ONCA but also other governance matters along with coverage of current events and legal developments relevant to NFPs. Upcoming topics being considered include:

  • Compliance tips for NFPs under new revisions to anti-corruption legislation in Canada;
  • Tax-appropriate use of crowd-funding for fundraising;
  • Impact of anti-spam and do-not-call legislation on fundraising by NFPs;
  • Tax implications and how to deal with surpluses/profits when you're a non-profit;
  • CRA guidance for drafting charitable purposes;
  • Pitfalls and strategies for political advocacy by NFPs;
  • How to deal with naming rights granted to, or requested by, donors;
  • Impact of the Wills, Estates and Succession Act (B.C.) on charities; and
  • Reform of Not-for-Profit Legislation (B.C.).

Keep an eye on this space in the new year for the blog's launch and do not hesitate to contact your Davis lawyer or any member of the Charities and Not-for-Profit Practice Group if you have any questions regarding your not-for-profit organization.

This publication is intended to provide our general comments on developments in the law. It is not intended to be a comprehensive review nor is it intended to provide legal advice. Readers should not act on information in the publication without first seeking specific advice on the particular matter. The firm will be pleased to provide additional details or discuss how this information is relevant to a specific situation.

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.

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
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 you may opt out by clicking here

    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.

    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.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    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.

    By clicking Register you state you have read and agree to our Terms and Conditions