Law Times

Page 12 July 8, 2013 Law Times • FOCUS Charity law complicated by new Ontario legislation BY MICHAEL McKIERNAN For Law Times T erry Carter got involved in charity work the same way most people do. "My interest was based upon a sense of giving back to the community," he says. "I was very much involved in my church and as a young lawyer after my call in 1980, I was often called upon to provide services for churches and charities. During the first seven years, it was a matter of volunteer work, setting up charities, and in the process learning the ropes." But as his expertise deepened and the demands on his time increased, a change in approach was in order. "By the late 1980s, it became clear to me that there were more needs there than could be IN DEFENCE OF GENIUS When your IP rights are threatened, rely on Bereskin & Parr LLP to safeguard your assets. From mediation to going to trial – you can be confident in our proven litigation experience. www.bereskinparr.com 1.888.364.7311 Toronto | Mississauga | Waterloo | Montréal Untitled-5 1 serviced on a voluntary basis. When I started then to work with charities on a fee basis, it wasn't the norm at the time. But I thought with all the complexities that came with it, I needed to do it carefully or not at all," says Carter. In the intervening decades, he helped found provincial and national practice sections for charity and not-for-profit law and started his own firm, Carters Professional Corp. He also serves as counsel to the Toronto office of Fasken Martineau DuMoulin LLP. Despite his pioneering status in the field, Carter had to wait until 2010 to witness the first significant changes to the provincial law governing the sector when the Ontario Not-for-Profit Corporations Act received royal assent. The bill was originally on tap to come into force in January of this year. But it has twice been subject to delay with the province currently aiming for early 2014 for proclamation. When it finally does come into force, the law will likely shake up the sector since it will affect 54,000 non-profit organizations incorporated under the old Ontario Corporations Act, a piece of legislation that had gone without major revision since 1953. In a recent statement, Tracy MacCharles, Ontario's minister of consumer services, said it was still a priority of hers. "A thriving, modern not-forprofit sector is depending on us to fulfil the commitment we made with [the new act] to unleash the creativity and energy of this sector," she said. "I'm less concerned about the final date than I am about the 13-07-03 9:59 AM CLE EVENTS DESIGNED FOR CORPORATE COUNSEL AND CORPORATE LEGAL TEAMS West LegalEdcenter® is the leading provider of CLE events for corporate legal departments. Below you'll find upcoming live conferences that might be of interest to you and your team. 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"The new legislation certainly provides more accountability and clearer rules, which is going to be great for raising the level of trust between the community and charities." The act simplifies and speeds up the incorporation process for new non-profit organizations, allows them to pursue commercial activities in order to plough revenues into non-profit activities, boosts member rights, and enshrines a statutory duty of care for directors. However, the Ontario Nonprofit Network has expressed concerns about the adequacy of the three-year transition period provided by the new act and suggests the enhanced powers for members could result in divisive proxy battles. The province responded by promising to review the organization's proposed amendments and announced funding for a transition support project led by Community Legal Education Ontario. However, charity lawyer Mark Blumberg of Blumberg Segal LLP remains skeptical about the prospects of a smooth transition for the 54,000 corporations affected by the new act. He says the vast majority of organizations are incapable of dealing with the practicalities of the transition and calls CLEO's $250,000 grant a "drop in the bucket" compared with what's necessary to get them up to speed. "Many Ontario corporations don't have their letters patent, they don't have any copies of their bylaws. Some don't even know whether they are an Ontario corporation or a federal corporation. Some others don't realize they've never actually been incorporated. I'm concerned about the amount of time, energy, and effort that volunteers are going to have to waste on this stuff," says Blumberg. "I think it's going to be a very steep learning curve for many organizations and more needs to be done to help them so they don't have to do it one-on-one with a lawyer charging them a lot of money." Blumberg says the government could help by publishing a searchable database of incorporated organizations with basic information about their legal names and date of incorporation. In the meantime, he says he has started helping some Ontario non-profit clients switch to the federal system in order to avoid the upheaval. LT

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