ONCA Compliance: Step-by-Step Implementation Guide for Ontario Nonprofits
If you're running a nonprofit or charity in Ontario, you've likely heard about the Ontario Not-for-Profit Corporations Act (ONCA). This legislation represents the biggest change to the nonprofit sector in decades, and navigating compliance can feel overwhelming. I've helped dozens of organizations through this transition, and I can tell you that with the right approach, it's entirely manageable.
In this comprehensive guide, I'll walk you through each step of ONCA compliance, from understanding the basic requirements to implementing specific changes to your governance structure. Whether you're just starting the process or trying to finish up your compliance efforts, this resource will help you navigate the path forward.
Understanding the Ontario Not-for-Profit Corporations Act (ONCA)
Before diving into compliance steps, it's essential to understand what ONCA is and why it matters.
Overview and Purpose of ONCA
The Ontario Not-for-Profit Corporations Act (ONCA) is modern legislation designed to:
Replace the outdated Corporations Act (OCA) that previously governed Ontario nonprofits
Provide more flexibility and simplicity for nonprofit operations
Enhance corporate governance and accountability
Increase membership rights and remedies
Better protect directors and officers from liability
Simplify the incorporation process
ONCA finally came into force on October 19, 2021, after nearly a decade of delays. It aims to create a more modern legal framework that addresses the unique needs of Ontario's diverse nonprofit sector.
Key Changes from Previous Legislation
ONCA introduces several significant changes from the previous Corporations Act:
Enhanced member rights: Members gain more rights, including access to financial statements, proposal rights, and remedies for issues like oppression
Simplified incorporation: The process requires only one incorporator rather than three and uses articles of incorporation instead of letters patent
Public Benefit Corporation designation: Creates a special category for charities and organizations receiving more than $10,000 in public funding or donations
Updated director and officer provisions: More clarity on duties, liabilities, and conflict of interest rules
Modern voting and participation: Allows electronic meetings and voting in most cases
Clearer corporate record requirements: Specific requirements for maintaining corporate records
Default by-law provisions: If bylaws aren't filed within 60 days of incorporation or don't address required matters, default rules apply
These changes aim to bring nonprofit governance into the 21st century while creating more consistency and clarity.
Who Needs to Comply with ONCA
ONCA applies to:
All nonprofit corporations incorporated under Ontario law
Social clubs, professional associations, charities, service organizations, and more
Both existing organizations and newly formed nonprofits
ONCA does NOT apply to:
Federally incorporated nonprofits (governed by the Canada Not-for-profit Corporations Act)
For-profit corporations (governed by the Ontario Business Corporations Act)
Insurance corporations under Part V of the Corporations Act
Nonprofits incorporated in other provinces or territories
If you're incorporated under Ontario law and operate as a nonprofit, ONCA compliance is mandatory.
Ontario Nonprofit ONCA Compliance Timeline
Understanding the compliance timeline helps you plan your transition process effectively.
Current Deadlines for Compliance
ONCA came into effect on October 19, 2021, with the following timeline:
October 19, 2021: ONCA officially in force
October 19, 2024: Deadline for existing nonprofits to transition and file Articles of Amendment
Until transition: Existing organizations continue under OCA with their current letters patent and by-laws, except where specific ONCA provisions automatically apply
The three-year transition period gives organizations time to review their governing documents and make necessary changes.
Extension Possibilities
Currently, there are no announced plans to extend the October 19, 2024 deadline. However, based on past practice with similar legislation:
The government might consider extensions if significant numbers of organizations are struggling to comply
Individual extensions are unlikely to be granted
Organizations should plan to meet the current deadline rather than counting on potential extensions
Monitor the Ontario government's announcements for any changes to compliance deadlines.
Consequences of Non-compliance
Failing to transition by the deadline has significant consequences:
Your organization will not be dissolved automatically
Your documents will be deemed to comply with ONCA, potentially creating internal governance conflicts
The government may later require your organization to update documents
You may face challenges when filing other changes with the government
Banks, funders, and partners may question your compliance status
Legal issues could arise from unclear governance provisions
It's far better to proactively comply than to deal with these potential complications.
If you're navigating ONCA compliance and need a quick refresher on the responsibilities of nonprofit officers in Ontario, check outONCA 101: Rules for Officers of Ontario Nonprofits — a clear and concise video guide to help you stay compliant.
Step 1: Gathering Your Current Governance Documents for ONCA Review
The first practical step in ONCA compliance is collecting all your current governance documents.
Required Organizational Documents
You'll need to gather:
Letters Patent (your incorporation document)
Supplementary Letters Patent (if any)
All current bylaws and amendments
Governance policies
Board structure documentation
Membership rules and procedures
Organizational chart
Minutes documenting bylaw changes
These documents form the foundation of your current governance structure and will need to be assessed against ONCA requirements.
How to Locate Missing Documents
If you're missing key documents:
Letters Patent: Request copies from the Ontario Ministry (Services Ontario)
Bylaws: Check board minute books, past secretary records, lawyer files
Board policies: Review past board minutes and policy manuals
Annual revenue up to $100,000: Members may waive audit/review by extraordinary resolution (80%)
Annual revenue $100,001 to $500,000: May waive audit but must have review engagement (extraordinary resolution)
Annual revenue over $500,000: Must have audit
Other Corporations:
Annual revenue up to $500,000: Members may waive audit/review by extraordinary resolution (80%)
Annual revenue over $500,000: May waive audit but must have review engagement (extraordinary resolution)
Financial review planning should be incorporated into your annual budget and governance cycle.
Special ONCA Considerations for Ontario Charities
Registered charities face additional requirements when transitioning to ONCA.
Coordination with CRA Requirements
Ontario charities must balance ONCA and CRA requirements:
Charitable purposes must meet both ONCA and CRA standards
Any purpose changes require CRA approval
Public Benefit Corporation provisions align with charity requirements
Director remuneration restrictions are more stringent for charities
Articles should include appropriate dissolution clauses for charities
Ensure your ONCA changes don't create CRA compliance issues. For more guidance, see our article on Canadian charity registration.
Additional Reporting Obligations
Charities have layered reporting requirements:
ONCA corporate filings
T3010 annual charity return
Public disclosure requirements
Fundraising reporting in some cases
Grant reporting to funders
Municipal reporting for property tax exemptions
Create a comprehensive compliance calendar to track all obligations.
Ensuring Dual Compliance
To maintain both ONCA and charity compliance:
Review all documents from both ONCA and charity perspectives
Consider having CRA review proposed purpose changes before filing
Ensure bylaws address both corporate and charity requirements
Maintain clear separation of duties for officers and directors
Follow more stringent requirements when ONCA and CRA differ
Keep detailed records of compliance with both regimes
When in doubt, the more restrictive requirement typically applies. For more on the distinction between charities and foundations, see our guide on private foundations vs. public charities.
Ready to bring your Ontario nonprofit into ONCA compliance? Work with B.I.G. Charity Law Group for expert guidance through every step of the transition process, ensuring your organization meets all requirements while maintaining effective governance.