On Thursday, September 17, 2015, the Ontario Ministry of
Government and Consumer Services (the
"Ministry") released new information on
its website that confirms another delay for Ontario's
Not-for-Profit Corporations Act (the
"ONCA"). The Ministry advised that it
will now provide the not-for-profit sector with at least
two-years' notice before the proclamation of the ONCA. The
Ministry also publicized that the ONCA will not take effect until
the Legislative Assembly passes technical amendments to the ONCA
and its related acts, and the Ministry upgrades its technology to
support the changes and improve service delivery.
Once the ONCA is proclaimed, there will be a three-year
transition period, during which time, existing Ontario
not-for-profit corporations incorporated under the current
Corporations Act (Ontario) (the "Current
Act") will have three years to amend their governing
documents, if they choose to do so. Unlike the federal Canada
Not-for-profit Corporations Act (the
"CNCA") which came into effect a few
years ago and which required federal not-for-profit corporations to
file articles of continuance or otherwise face dissolution, the
ONCA will not require Ontario not-for-profit corporations to file
articles of continuance, but instead will automatically apply to
existing corporations without share capital incorporated under the
Current Act. For these Ontario not-for-profit corporations, any
provisions in their governing documents that are inconsistent with
the ONCA will continue to apply to them during the transition
period. However, when the transition period is over, any provisions
in their governing documents that are inconsistent with the ONCA
will be deemed to have been amended to comply with the ONCA. This
automatic application may be problematic for not-for-profit
corporations that do not amend their documents as they may not
recognize those provisions, and ensuing actions, that violate the
ONCA. To avoid such noncompliance, Ontario not-for-profit
corporations will need to review and amend their governing
documents, such as their by-laws and letters patent, during the
three-year transition period to ensure that all documents will be
in full compliance with the ONCA once the transition period is
Although the ONCA's proclamation date is still unknown, we
have now learned that it will certainly not occur before October
2017 at the earliest. We will continue to update our clients about
any new developments with the ONCA. Until the ONCA's
proclamation, the Current Act (described above) will continue to
govern Ontario not-for-profit corporations.
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.
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