Transcript Not-For-Profit Workshop - RCMP / GRC Veterans Association des

CANADA NOT-FOR-PROFIT
CORPORATIONS ACT
Presented at the Annual General Meeting
Friday, May 31, 2013
Saskatoon, Saskatchewan
COMMITTEE
Committee Chair
• Murray Milne, Director, Saskatoon Division
Committee Members
•
•
•
•
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Dave Leblanc, Vice President, Manitoba Division
Ian Atkins, President, Nova Scotia Division
Bob Kells, President, Calgary Division
Larry Power, Governor, Newfoundland/Labrador Division
Jack Briscoe, Executive Director
Committee Observers
• Cal Small, National President, Ottawa Division
• Alex Geddes, National Secretary, Ottawa Division
WORKSHOP OBJECTIVES
• To work towards obtaining membership approval of
draft Articles of Continuance at the 2014 AGM
(Ottawa)
• To work towards obtaining membership approval of
draft by-laws at, or soon after, the 2014 AGM
(Ottawa), and
• To present the results a National Member Survey
THE REASONS WHY
• Both the Articles of Continuance and the by-laws had to
be created/amended because of new legislation
applicable to Federally incorporated not-for-profit
corporations.
• New legislation is the Canada Not-For-Profit Corporations
Act (hereinafter “The Act”) which replaces 1917
legislation: Canada Corporations Act, Part II –
Corporations Without Share Capital.
• RCMP Veterans’ Association must comply with the new
Act and file Articles of Continuance with Corporations
Canada on or before October 17, 2014; otherwise we
may be deemed to have been dissolved.
THE REASON WHY (Con’t)…
• The new Act is much more comprehensive in
describing powers and obligations than the former
Act. It also provides for greater transparency,
accountability and good corporate governance.
• The new Act also reduces the regulatory burden on
affected corporations, such as the Veterans’
Association. Under the old regime, extensive by-laws
were required to fill the statutory vacuum.
THE REASON WHY (Con’t)
• New by-laws are required to be filed with
Corporations Canada within one year of their
approval by the membership.
• Finally, unlike our present by-laws that come into
effect only when approved by Corporations Canada,
the by-laws under the new Act are effective when
they are approved by the membership. Filing the bylaws with Corporations Canada is merely an
administrative step.
PROCESS GOING FORWARD
• Both documents have been drafted and they are
available today for review and to take back to your
Divisions.
• Over the next 6 to 8 months, the Committee will ask for
Division input to amend/clarify both of these draft
documents.
• We would like Division Presidents or Division delegates to
identify (1) person for each Division to be the point of
contact for all consultations.
• Email address will be provided for consultation purposes.
PROCESS OUTCOME
• Best possible outcome is to make everyone happy
with the final products.
• In reality, success can be achieved by making happy
2/3 of the members eligible to vote to approve the
Articles of Continuance; and
• 50% +1 of the members eligible to vote to approve
the by-laws.
SOME PEOPLE Should Be Made to Stay Home
TODAY’S PROCESS
• Explain the Articles of Continuance (replaces Letters
Patent) to give a flavour of what change might look like.
• The Articles is the most time-critical document. Must get
member approval by resolution at the 2014 AGM.
• Highlight some of the by-laws that will most likely affect
you and your Division members most directly.
• By-laws are less time-critical although our preference is
to also have these approved at the 2014 AGM.
ARTICLES OF CONTINUANCE
• Form 4031 is a mandatory format.
Section 1: Current Name of Corporation
Royal Canadian Mounted Police Veterans’
Association/Association des Anciens de la Gendarmerie
Royale Du Canada.
Section 2: If change of name is requested, indicate proposed
corporate name.
Not applicable
Section 3: Corporate Number
058721-4
ARTICLES OF CONTINUANCE
Section 4: Province/Territory in Canada where registered office is located
Ontario
Section 5: Minimum/maximum number of Directors
Minimum 4 – Maximum 11
Section 6: Statement of Purpose of the Corporation
To promote and assist in the promotion and advancement of best interests
of Canada, especially respect for its Constitution;
To be of service to the Government of Canada when required
or requested;
To co-operate with and render assistance to the police,
especially the Royal Canadian Mounted Police, in all matters of
common interest or concern;
ARTICLES OF CONTINUANCE
Section 6:
Statement of Purpose (Con’t)….
To promote the physical, social and economic welfare of the
Corporation’s members and the members of their immediate families;
To establish under such names and titles as may be deemed
desirable, such benevolent fund or funds as shall be deemed
requisite for the purpose of aiding such former members of the
Royal Canadian Mounted Police and the members of their
immediate families or their dependents who are in need of
assistance and to appoint trustees to supervise the administration
and management of such funds; and
To provide support to worthy community services and
organizations of a charitable or benevolent nature.
ARTICLES OF CONTINUANCE
Section 7: Restrictions on the activities that corporation
may carry on, if any.
No restrictions other than what is provided in the
Act.
Section 8: The classes, or regional or other groups, of members that
the corporation is authorized to establish.
Membership of the corporation shall be divided into two
groups: Voting and Non-Voting members. Categories shall
be defined within the by-laws.
ARTICLES OF CONTINUANCE
Section 9: Statement regarding the distribution of property remaining on
liquidation.
On liquidation, any property of the corporation remaining after
discharge of any liabilities of the corporation, including the
corporation’s obligation to return any property a person has
transferred to the corporation subject to the condition that it be
returned on the dissolution of the corporation, shall be distributed
to one or more qualified donees, within the meaning of subsection
248(1) of the Income Tax Act.
Section 10: Additional provisions, if any
The directors may appoint one or more directors, who shall hold
office for a term expiring not later than the close of the next
annual general meeting of members, but the total number of
directors do appointed may not exceed one-third of the number of
directors elected at the previous annual general meeting of members,
and for greater certainty, may not exceed the maximum number of
directors specified in these Articles.
SOME PEOPLE Should Be Made to Stay Home
TWO NEW TERMS
The new Act introduces two new terms:
1. Soliciting corporation (and its corollary) non-soliciting
corporation, and
2. Designated corporation (and its corollary) nondesignated corporation.
TWO NEW TERMS (Con’t)…
Implications for being categorized as one of the
foregoing are very important:
• It will determine how the Association must report
annually;
• how, or whether, the Association must conduct an
annual audit, and
• whether it must engage a public accountant.
TWO NEW TERMS (Con’t)…
Important concept: There is only one corporation, comprised
of a National Office and 30 Divisions.
As the corporation must retain a consolidated annual financial
report, then all 30 Divisions must contribute to such a report.
If the corporation is subject to a form of audit, a consolidated
audit report must include audit reports from all 30 Divisions.
If the corporation must engage a public accountant, that
public accountant will determine the standard accounting
practice all 30 Divisions will be required to comply with (e.g.,
by a template).
TWO NEW TERMS (Con’t)…
Soliciting Corporation: Defined in ss. 2(5.1)
A corporation that has received in a single financial year
income in excess of $10,000 in the form of:
 Donations or gifts requested from a person who is not a
member, director, officer, or employee of the corporation or a
family member of such a person
 Grants or similar financial assistance from the federal
government, a provincial or municipal government, or an
agency of such a government, or
 Donations or gifts from another soliciting corporation.
A soliciting corporation remains soliciting for 3 years.
A WORD ABOUT INCOME
• The Association’s annual “income” is income received from all sources, not
just that received at the National Office.
• Types of money receipts considered income:
–
–
–
–
membership dues
investment income
Donations
money received from a services contract, etc.
• Note 1: It is only that type of income meeting the requirements for
soliciting corporation that counts toward the $10,000 threshold.
• Note 2: Per capita dues that is received by National Office is not income as
it already been accounted for as Association income at the Division level;
i.e., no double counting of income.
TWO NEW TERMS (Con’t)…
• If a corporation does not meet the requirements for a soliciting
corporation, it is a non-soliciting corporation.
• A designated corporation is a soliciting corporation with annual gross
revenues less than $50,000; and a non-soliciting corporation with annual
gross revenues less than $1,000,000.
• A non-soliciting corporation with gross annual revenues exceeding
$1,000,000 is simply referred to a “non-for-profit corporation”.
GROSS REVENUE DEFINED
•
Gross revenue are all monies that flow through the
Association bank accounts at the Division level, and at the
National level as long as that revenue did not originate at
the Division level; i.e., no double counting of revenue.
•
Examples include:
All that is considered income; funds received from such
activities as golf tournaments, social events and dinners, sale
of inventory items, etc. when members remit fees to their
Division, and the event expenses are paid from the Division
bank account; [sponsorship funds received]; etc.
IMPLICATIONS FOR AUDITS
Type of
Corporation
Gross Annual
Revenues
No Review
Review
Engagement
Audit
Soliciting
Less than $50k
Optional
Default
Optional
Soliciting
Between $50
and $250K
Not Possible
Optional
Default
Soliciting
More than
$250k
Not Possible
Not Possible
Mandatory
Non-Soliciting
Less than $1
million
Optional
Default
Optional
Non-Soliciting
More than $1
million
Not Possible
Not Possible
Mandatory
Where the choice of review/audit is “optional”,
that option is chosen by way of a by-law.
IMPLICATIONS FOR FINANCIAL RECORDS
A soliciting corporation must send a copy of its comparative
annual consolidated financial statement to the Director
(Corporations Canada Official) not less than 21 days before the
corporation’s AGM. (ss. 176(1)).
All corporations must furnish a copy of these same financial
statements to the Director upon request. (s. 177)
These same financial statements must be made available, upon
request, to members of the corporation, at the corporation’s
registered office during normal business hours. (ss. 174(2))
PUBLIC ACCOUNTANT
S. 181(1): Subject to section 182, members of the corporation
shall, by ordinary resolution [50% +1], at each annual
meeting, appoint a public accountant to hold office until the
close of the next annual meeting.
S. 182(1): Members of a designated corporation may resolve
not to appoint a public accountant, but the resolution is not
valid unless all the members entitled to vote at an annual
meeting of members consent to the resolution.
S. 182(2): The resolution is valid until the following annual
meeting of members.
CORPORATE RECORDS
A corporation shall prepare and maintain at its registered office:
a) the Articles of Continuance and the By-laws;
b) the minutes of meetings;
c) the resolutions of members;
d) any debt obligations in prescribed format;
e) a register of directors in prescribed format;
f) a register of officers in prescribed format, and
g) a register of members in prescribed format.
“in prescribed format” includes: name; residential address; email
address if the director, officer or member consented to receive information
and documents by electronic means; the date the director, officer or member
became, and/or ceased to become, a director, officer or member; and for the
member registry, the class or group of membership. Each registry must be
capable of being rendered in alphabetical order and in print format.
SOME PEOPLE Should Be Made to Stay Home
BREAK TIME
BY-LAWS
• There are two mandatory by-laws:
1. A by-law setting out the conditions of membership
is required by section 154.
2. A by-law setting out the requirements for meetings
of members (Annual General Meeting/Special
Meeting) is required by subsection 162(1).
BY-LAWS (CON’T)…
• All other by-laws have but one purpose - - to vary the
“default” position of a section of the Act when the Act invites
it, and when the default position is deemed not be
appropriate to meet the needs of the Association.
• Example #1: s.143(1): Subject to the Articles, the by-laws and
any unanimous member agreement, the directors of a
corporation may fix the reasonable remuneration of the
directors, officers and employees of the corporation.
• Example #2: ss. 126(2): Unless the by-laws otherwise provide,
a director of a corporation is not required to be a member of
the corporation.
BY-LAWS (CON’T)…
• But, if the default position is deemed appropriate, or there is
no invitation to vary the position, then what’s in the Act
prevails.
Implications
o With the comprehensive legislation, and the by-laws only to vary
the default positions, members and particularly members of the
Executive at the National level (and to a lesser extent at the Division
level) will have to become familiar with the Act, the Regulations and
the by-laws.
o The Regulations contain only the “prescribed” detail.
o In the past, members could adequately cope with Association
business by being familiar with only the by-laws.
BY-LAWS (CON’T)…
o The intention is have one set of by-laws. By-laws are a level
of statutory authority and they are written pursuant to an
authority given by the Act.
o By-laws will be supplemented by a National Operations
Manual for Association policy and procedures.
o By-laws and the Operations Manual will be supplemented by
Division Procedures Manuals governing each Division’s policy,
procedures and activities at the local level.
BY-LAWS (CON’T)…
o The new Act authorizes the corporation directors to amend
the by-laws. This is a default position.
o However, a by-law has been drafted varying the default and
retaining the current practice that requires amendments to be
approved by the membership before they have force and
effect.
BY-LAWS (CON’T)…
o Mandatory By-law #1: Conditions of Membership
o Two classes or groups: Voting and Non-Voting
o Numerous categories within each class (or group)
Voting
Active and Life Members
Non-Voting
Transitional, Associate, Honourary, Honourary Life,
Honourary Officer, Honourary President, Patron and
Provincial Patron.
MEMBERSHIP DUES
o S.30 Subject to the Articles, the By-laws and any unanimous
member agreement, the directors may require members to
make an annual contribution or pay annual dues and may
determine the manner in which the contribution is to be
made or the dues are to be paid.
o By-Law V11 (1) The annual dues payable by Active Members
and Life Members shall be those fixed on annual basis by the
Board. The Board shall authorize Divisions to assess
additional annual contributions from those members of the
Association within their Division as they see fit.
MEETING OF MEMBERS (AGM)
o Mandatory By-law #2: Meetings of Members
•Refers only to National Meetings (AGM/Special);
•Must be held annually within 3 months of previous AGM, but no later than 6
months after close of preceding financial year;
•Must be held in Canada;
•By-laws prohibit electronic meetings of members;
•Notice of meeting process is exacting and all time lines are prescribed •4 possible methods:
1. By post mail, courier or personal delivery
2. By telephonic or electronic communications
3. By affixing a notice on a Notice Board
4. By publication in a newspaper or Association publication
MEETING OF MEMBERS (AGM)
• The Directors may fix a record date, that being 21 to 60 days before the
date of the meeting to:
• determine the members entitled to receive a Notice of Meeting
• determine the members entitled to vote at a Meeting of Members
• However, if no record date is fixed by the Directors:
• determining the members entitled to receive a Notice of Meeting
• determining the members entitled to vote
is the close of the business day preceding the day the Notice is given.
• If no Notice is given, the determination is made as at day of the meeting.
VOTING
• THE CURRENT PROCESS
o Members in attendance vote
o Division delegates serves as proxy holders for all other Division
members and votes the number of members entitled to vote en bloc,
minus those members in attendance.
• THE NEW PROCESS
o Only those in attendance can vote, or, in addition
o Absentee voting can be authorized by By-law, but must be one or
more of the following:
by proxy
by mail in ballot
by electronic means
VOTING
o Detail around available voting procedure in the NFP
Regulations.
o
Attendance-only voting was deemed un-democratic and too
radical a departure from current practice.
o
By-laws authorize absentee voting plus in-attendance voting.
o
Voting by mail in ballot and by electronic means requires
potentially expensive procedures, as confidentiality in voting is
required.
o
Therefore, proxy voting is seen as the most viable absentee voting
process – but must follow prescribed procedures.
PROXY VOTING
o Every member entitled to vote will receive a proxy form containing
a list of candidates to be elected, and resolutions to be voted on.
o If not attending the meeting, members who are entitled to vote can
assign their votes to a proxy holder who will be attending the
meeting.
o Absentee voters thereby become eligible to cast a vote.
o The member will indicate on the proxy form their voting choices for
candidates and for resolutions.
o The proxy holder will attend the meeting and vote according to the
instructions on each proxy form.
o Processes have been developed to distribute and collect proxy
forms, to validate proxies and proxy holders, and the method to
tally votes at an AGM. The detail will be in Operations Manual.
DIRECTORS AND OFFICERS
o CURRENT
o Members elect officers and directors at AGM
o All comprise the Board of Directors
o President chairs the Board
o NEW PROCESS
o Distinguishes directors and officers
o Directed must be elected by members
o Officers appointed by directors
o Directors may also be officers
o Officers may attend Board meetings (by right if by-laws provide for it)
but cannot vote
o Ex officio directors are prohibited
MISCELLANEOUS
o Useful terms
Ordinary resolution means 50% + 1 of votes cast
Special resolution means not less than 2/3 of the votes cast.
o Not-For-Profit Corporations Act available at:
http://laws.justice.gc.ca/eng/acts/C-7.75/FullText.html
o Regulations available at:
http://laws-lois.justice.gc.ca/eng/regulations/SOR-2011-223/index.html
o Consultation contact at:
[email protected]
SOME PEOPLE Should Be Made to Stay Home
BREAK TIME
SURVEY SAYS….
The motivation to conduct a National Member Survey is derived
from the mandate given to the Executive Director from the
Chair, National Operations Committee on behalf of the Board of
Directors, to identify the strengths, weaknesses and
opportunities to streamline and improve the overall
management of the National Office and, to provide advice
whether the current governance structure is the most effective
model for the future of the Association.
The results from the survey, when considered in the context of
the Canada Not-For-Profit Corporations Act, are very instructive
and provide the motivation to examine options for a more
effective governance structure.
Leadership is a choice, not a position.
SURVEY SAYS….
 On-line, confidential, bilingual survey was produced and
disseminated to all 30 Division Presidents for distribution
to all Active and Life Members.
 The survey was available for 30 days, closing at midnight
March 10, 2013.
 The survey was also made available in hard copy for any
member who requested it in that form.
 The data was collected by the National Office only and no
person was identified and no attribution was made.
SURVEY SAYS….
Overall Results:
 The survey was opened 2,732 times in 30 days.
 773 responses were received, including hard copies.
 Represents 18% of the total population of 4,691 Active and
Life Members.
SURVEY SAYS….
What we asked, what we got and what we did with it..
 Twelve 12 questions were asked related to the roles,
responsibilities of the National Office, the quality of our
national communications, the effectiveness of the Board of
Directors, motivation to join the Association and finances.
 Twenty-six (26) pages of candid, narrative comments were
provided by the respondents.
 A summary report has been provided to the Board and to
the Committee members to assist in our deliberations.
SURVEY SAYS….
Question 1,2 and 3: The National Office
 Cost to maintain a National Office
 Level of awareness about work of National Office
 Services most valued by members
Statistical Summary
 72% of respondents support maintaining a National Office
 68% said they were somewhat informed
 78% said advocacy and communications most valued
SURVEY SAYS….
Summary of Narrative Comments
 With notable exception, the majority of respondents
identified a lack of awareness of roles, responsibilities
and activities of the National Office in order to make an
informed judgment on the value added of maintaining a
national office funded by membership per capita dues.
Advocacy and communications were seen to be the most
valued services.
SURVEY SAYS….
Question 4,5,6 – Communications
 Quality, content and value of national communications
 Frequency of access to National website
 Effectiveness of National website
Statistical Summary
 60% of respondents said they were fully satisfied
 50% access the national website frequently
 74% believe it is an effective platform
SURVEY SAYS….
Summary of Narrative Comments
 The majority of respondents believe that National needs to
communicate more effectively with the membership. While it was
acknowledged that communication from National to Divisions on a
wide variety of issues is being frequently disseminated, respondents
felt these messages were oftentimes too bureaucratic, sometimes
lack clarity and too content heavy; more executive summaries would
be appreciated. In this regard, Division communications were
generally more valued than National information. Respondents felt
the national website needs to be upgraded and better coordination
was required between division and national websites, including ease
of access, currency of information and search capacity.
SURVEY SAYS….
Question 7,8,9 - Board of Directors
 Level of awareness of Board functions
 Need for strategic planning by Board
 Effectiveness of the Board of Directors
Statistical Summary
 63% are somewhat aware of the Board’s functions
 71% believe a strategic plan for future is needed
 58% believe the Board is somewhat effective.
SURVEY SAYS….
Summary of Narrative Comments
 Respondents felt there is a lack of understanding of the roles and
responsibilities and activities of the Board of Directors. Moreover,
they expressed the opinion that divisions are not always consulted
and more interaction with divisions is necessary. While respondents
generally appreciated the volunteer work of their elected directors,
they would like to see more proactive participation between the
Board and the membership particularly on matters of advocacy and
lobbying efforts on member benefits. Board relevance and a
perception the Board is somewhat detached from the membership is
particularly noteworthy.
SURVEY SAYS….
Question 10: Finance
 Alternatives to membership dues
Statistical Summary
 61% agree revenue options should be explored
 39% either somewhat agree or completely disagree
SURVEY SAYS….
Summary of Narrative Comments
 There is minimum support for exploring alternatives to
funding National operations rather than a reliance on
membership dues, however some respondents feel that
if the membership values the role of an Association
National Office, then we should fund it from within.
SURVEY SAYS…
Question 11: Reason for Joining Vets’ Association
Statistical Summary
•
•
•
•
•
80% said to stay connected to the RCMP
50% said for the fellowship
33% said to assist members in retirement
23% said for community involvement
20% said for social activities and fraternity
SURVEY SAYS…
Question 12: Per Capita Increase




$10
$15
$20
$25
Statistical Summary
•
•
•
•
60% supported $10.00
17% supported $15.00
14% supported $20.00
10% supported $25.00
SURVEY SAYS…
TO EVERYONE WHO PARTICIPATED,
THANK YOU!
GOVERNANCE
The Canada Not-For-Profit Corporations Act creates an opportunity for
the RCMP Veterans’ Association to revise our governance regime to
better serve the needs of the membership.
At present, a not-for-profit corporation can avoid giving significant rights
to members, leaving the Board with relative autonomy to run the
business and affairs of the corporation.
Under the new Act however, and the not-for-profit legislative regime,
members will have significantly enhanced, and unalterable, rights
and remedies. These rights will have an effect on the autonomy of the
Board and will change how the Board and the corporation interact with
members.
NEXT STEPS
Given the feedback from the survey relative to our
strengths, weaknesses and opportunities for
improvement, and because the Act provides an
opportunity to explore new models to enhance
our effectiveness, the Committee welcome the
active participation of the Division representatives
to work with us to design governance options to
be presented to the membership at the 2014
AGM in Ottawa.
THE END!
Your present circumstances don’t determine
where you can go, they merely determine
where you start.
Nido Qubein