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New Not-for-Profit Act fills our plate

 

Sometimes I think our government believes we just don’t have enough to do. As if the constant challenges to our freedom to fly weren’t enough to deal with we now have a new Canada Not-for-Profit Corporations Act (NFPA) to wrestle with. This new Act became law in October 2011 and we have been given until October 2014 to become compliant.

The Act establishes a new set of rules for all federally incorporated not-for-profit (NFP) organizations. It replaces the 100-year old Canada Corporations Act (Part 2) under which federally incorporated NFPs were established, and there is a huge number of them.

It affects our three organizations: COPA, the COPA Special Action Fund Inc., and the COPA Flight Safety Foundation. Not that I am against updating a regulation that is a century old of course. I’m all for being current but it requires a good deal of work.

The Governance Committee of the Board, Chaired by Ray Hawco, is just starting on the task with the assistance of COPA’s Office Manager, Shelley Goertzen. It involves more than just filling out a few forms. Corporations Canada has kindly provided a 40-page transition guide to help us navigate the process.

Under the old Act NFPs were incorporated with Letters Patent which primarily only established the objectives of the organization. The rest was left to the by-laws. Which is why many large organizations, like COPA, have extensive by-laws.

In our case we have three sets. Under the new Act a NFP is incorporated with Articles of Incorporation which include the objectives of the organization, a clear definition of the classes of members, restrictions on activities if any, how assets are to be distributed on dissolution, and then come the by-laws.

This doesn’t sound too terrible but the new Act contains a large number default rules which previously had to be written into the by-laws. This makes it much easier for a new NFP to incorporate going forward but for an existing NFP it means the by-laws require a detailed review to make sure everything is compliant with the new Act.

If we had lots of money we could just give it to a lawyer to do, but not too many NFP organizations have spare cash for things like this. So our Governance Committee will be doing most of the work.

We already know quite a few areas of our by-laws will need amending and who knows what else we will find in the details. Once all that is done the documentation for the COPA Flight Safety Foundation has to be approved by Revenue Canada Agency because it is a registered charity.

Then we will have the whole package reviewed by our lawyer for dotting i’s and crossing t’s. The plan is for this to be completed and ready for approval by our members at the Annual General Meeting in June 2013. That’s a year ahead of the deadline but we want to get it out of the way sooner than later.

In the end there should only be a few changes to the way we do things, although we know there will have to be a few additions to what we do at AGMs. As I see it the new Act will make the Board’s job more difficult because the process of governance will have to follow all the default rules of the Act as well as the bylaws of the association.

The position of Parliamentarian on the Board will become even more valuable than it is today.

If you’ve managed to stay awake this far, enough for now. We’ll get back to you on this next year. Meanwhile, keep your prop spinning!