What Is ONCA and How Does It Affect Ontario Nonprofits and Charities?

If you run a nonprofit or charity in Ontario, you’ve probably heard of ONCA. But what exactly is it, and what does it mean for your organization?

In this blog post, we’ll explain:

• What does ONCA stand for
• What it means for nonprofits and charities
• The difference between ONCA and CNCA
• What has changed under ONCA
• What to do if you missed the October 2024 compliance deadline

What Does ONCA Mean?

ONCA stands for the Ontario Not-for-Profit Corporations Act. It’s the law that governs most nonprofit organizations and charities incorporated in Ontario.

ONCA came into effect on October 19, 2021. Before that, nonprofits in Ontario were governed by an outdated law from the 1950s. ONCA was created to modernize the rules, make things clearer, and give nonprofits more flexibility.

What Is the Purpose of ONCA?

The goal of ONCA is to:

• Give members stronger rights
• Make it easier to incorporate a nonprofit
• Provide clear rules for governance
• Allow certain nonprofits to skip full audits and use a review engagement instead
• Clarify when nonprofits can make money from business activities

Does ONCA Apply to Your Organization?

ONCA only applies to nonprofits and charities that are incorporated in Ontario.

If your organization is federally incorporated, then you’re governed by the Canada Not-for-Profit Corporations Act (CNCA) — not ONCA. This is true even if your head office is registered in Ontario or have extra-provincial registration in Ontario.

What’s the Difference Between CNCA and ONCA?

Here’s a simple breakdown of the differences:

Some nonprofits are considering moving from ONCA to CNCA if they operate across provinces or prefer the federal rules. This process is called “continuance.”

What Changed Under ONCA?

ONCA introduced several new rules. If your organization is incorporated in Ontario, these changes apply to you:

• Clear membership structures must be stated in your Articles
• Electronic and proxy voting are now allowed
• Member proposals at meetings are permitted
• Employees can serve as directors
• Directors don’t have to be members
• Default rules for quorum and voting at meetings
• New rules for Public Benefit Corporations
• Flexible financial reporting (you may not need a full audit, and audit threshold requirements are significnicanly higher)
• Directors must give written consent to serve
• Minimum and maximum terms for directors

These changes are designed to make nonprofit governance more efficient and transparent.

How Do I Become ONCA Compliant?

To become ONCA-compliant, your organization must:

1. Review your governing documents (Letters Patent, bylaws, etc.)
2. Update your bylaws to match ONCA’s rules
3. Amend your Articles of Incorporation if needed
4. Get board and member approval for the changes
5. File the updated documents with the Ontario government

It’s best to do this with the help of an Ontario lawyer experienced in charity and nonprofit law generally and with ONCA legislation in particular.

What If You Missed the ONCA Deadline?

The deadline to comply with ONCA was October 18, 2024. If you haven’t updated your documents yet, your organization is now legally non-compliant.

This can create serious problems:

• Your bylaws may no longer be valid
• Board decisions could be challenged
• You may lose out on grants or funding
• Members may raise legal concerns

The good news: It’s not too late to fix it.

We help nonprofits and charities:

• Review their documents
• Update their bylaws and Articles
• Regain full compliance with ONCA

Need Help With ONCA Compliance?

Our team of charity lawyers have helped hundreds of Ontario nonprofits and charities update their documents, stay compliant with ONCA and all relevant provincial and federal legislation, and where prudent, transition to federal incorporation.

Call us at: 416-488-5888

Email: ask@charitylawgroup.ca

‍

‍