Annual meetings of federal corporations during the COVID-19 outbreak

Heather Dow, CAE, CPhT

For federally incorporated NFPs or Charities, it is a requirement under the Act that we hold an AGM within 6 months of closing the books and within 15 months of the preceding AGM.

Financial statements are required to be available to the members in advance of the AGM. It is possible that some organizations may struggle with this as offices are shuttered.

You do have options:

  1. Delay the AGM – Under the Act, it is possible to apply to Corporations Canada for an extension to permit a corporation to hold an AGM at a later date. For instance, a corporation that must hold its AGM by the end of June could apply to hold its AGM in September in the same year. Given the circumstances, one would hope that reasonable extension requests would be granted. This would permit an NFP to hold its AGM in the traditional format, but at a later date. 
  2. Virtual Meetings – Under the Act, if a corporation’s by-laws permit it, a meeting of the members may be called and may be held entirely by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting. A person participating in the meeting by such means is deemed present at the meeting. Most older bylaws do not contain an express provision that permits the corporation to have a meeting of the members by entirely electronic means.  The Act is clear that the By-laws must contain such a provision for such a meeting to take place. An example of a bylaw article that would permit an entirely virtual meeting would be: “If the Directors or the Members call a meeting of the Members, those Directors or Members, as the case may be, may determine that the meeting be held, in accordance with the Act, entirely by means of a telephonic, electronic or other communications facility that permits all participants to communicate adequately with each other during the meeting.”
  3. Hybrid Meetings – A “hybrid meeting” where one or two members are present in a physical location and the rest attend the meeting virtually. The benefit of this approach is that a corporation could implement it without by-laws that permit.
    • If the corporation will be convening a virtual meeting, it may be advisable to defer the contentious business to a later date when an in-person meeting can take place (if this is possible).  
    • If a virtual meeting or hybrid meeting will take place, the notice of the meeting should include instructions for how to use the electronic platform. 
    • If a notice for an in-person meeting has already been issued, but the corporation wishes to move to a virtual meeting, it would be advisable to cancel the in-person meeting and to call a virtual meeting at a later date (instead of trying to change an existing notice). 
    • If an in-person meeting or hybrid meeting will take place, the corporation should give consideration to including a statement in the notice of the meeting regarding the potential health risks associated with attending the meeting in-person.
    • NFPs should explain to their members any proposed changes to the format of their AGMs due to the pandemic.

    If you are going the route to delay your AGM, and you wish to write to corporations Canada, an application must clearly set out:

    • when the annual meeting is required to be called according to the NFP Act and NFP Regulations
    • when the corporation proposes to call the annual meeting
    • why the meeting cannot be called within the required time frames and the nature of the detriment to the corporation if the meeting were called within the required time frames, and
    • how extending the time for calling an annual meeting would cause little or no prejudice to the members of the corporation.

    The official letter should include the following:

    • Cover letter: It should read “In the Matter Concerning the Director appointed Under the Canada Not-for-profit Corporations Act and The Application of {Name of Applicant}”. The applicant should also identify the involved corporation and explain the applicant’s relationship to the corporation (e.g., my name is Jane Smith and I am a director of Corporation X).
    • Description and details of the decision sought: You must clearly set out which decision you are applying for. For clarity, a reference to the relevant section of the NFP Act is useful (e.g., this application is made under subsection 2(6) of the Canada Not-for-profit Corporations Act for a decision that the corporation is not a soliciting corporation).
    • Statement of Facts: The information you provide here will vary depending on the type of application you are making. As a rule, include enough facts and all information that you think may be relevant, paying particular attention to the test the Director will apply and the factors the Director will consider when making a particular decision. Generally, you should set out a description of the corporation’s activities, the affected stakeholders, the function and importance of the imposed requirements to these stakeholders, and, if relevant, the corporation’s financial situation.
    • Argument: You should provide convincing reasons that the test the Director will apply will be met if your request is accepted. Additional details are provided in the Director’s Review section of the specific policies.

Exemption fee is $250

As it relates to Ontario and Alberta provincial societies ONLY

In response to the COVID-19 pandemic an emergency was declared in Ontario on March 17, 2020, under the Emergency Management and Civil Protection Act. The Ontario government issued an order effective March 17, 2020 (the “Order”) that temporarily extends the deadlines for Ontario business and not-for-profit corporations to hold their annual meetings and allow for electronic meetings. This ONLY applies to provincially incorporated businesses in the province of Ontario under the Ontario Business Corporations Act (“OBCA”) or the Ontario Corporations Act (“OCA”). This order has now been extended to Ontario co-ops and condo corporations.

Government of Alberta has suspended the deadlines for nonprofits governed by Alberta law to hold their annual general meetings. Alberta nonprofits are incorporated under the Societies Act. One of the reasons why the Government of Alberta may have made the temporary order is because the Act is silent on the subject of virtual or electronic meetings.

The Ontario and Alberta announcements do not apply to federally incorporated NFPs under the Canada Not-for-Profit Corporations Act (CNFPCA).

SOURCES