Waiting for ONCA: Don’t put your by-laws on hold

Wondering what’s happening with ONCA (Ontario’s long-awaited Not-for-Profit Corporations Act, 2010)?

Answer:  nothing.  We’re in limbo.  Back in September, the Ontario government announced that ONCA would be further delayed, indefinitely.  The announcement reassured that the government remains committed to bringing in ONCA “at the earliest opportunity”, but it did not identify a planned (or even anticipated) proclamation date.  Instead, it promised the sector at least 24 months’ prior notice of ONCA coming into force and effect.

There have been no developments or updates since September.  Practically speaking, the earliest we can hope to see ONCA come into effect is Spring 2018.

Everyone in the not-for-profit sector is eager to take advantage of ONCA, which will bring the sector participants into the 21st century.  Yes, there will be preliminary effort and resources needed to transition under ONCA – particularly applying for Articles of Amendment (which will amend the existing Letters Patent) and updating your organization’s by-laws.  But there’s a 3-year window to do that, so no urgent action will be required on the day ONCA comes into effect.

What we are looking forward to:

  • Once a not-for-profit corporation is transitioned under ONCA, member relations will be much easier. ONCA facilitates electronic communication with members and the holding of electronic member meetings.
  • ONCA allows the Board itself to appoint directors to the Board, on an annual basis, up to a threshold number. This could be a very valuable tool, allowing the Board to supplement its skill sets on an annual basis, as its priorities and objectives change.
  • ONCA allows the Board much more flexibility in delegating decision-making down to Board committees. This needs to be managed thoughtfully, but a stronger committee structure can allow the Board to focus its attention on the most strategically challenging decisions it faces.
  • ONCA offers not-for-profit boards comfort that, should they take actions that are inadvertently or technically off-side their articles of by-laws, those actions are nevertheless valid. Business corporations have enjoyed this reassurance for decades.

Areas of ongoing concern:

  • There is unease about the provisions of ONCA that give non-voting members voting rights in specific circumstances: g., amendments to rights attached to a group of members, amalgamation, and the sale of substantially all of the corporation’s property.  The Ontario government previously proposed (via 2013’s Bill 85) that those provisions would be delayed for a further 3 years after ONCA comes into force, presumably to give the government and sector further opportunities to consider the appropriateness of this scheme for the sector.  We will be watching to see if similar amendments to ONCA are introduced and passed by the Ontario government before ONCA comes into force.

Are you waiting for ONCA to update your by-laws?  Please don’t.

In chatting with a number of our not-for-profit clients, I’ve learned that many organizations that typically review their by-laws every 3 to 5 years – a good governance practice – have put that project on hold, waiting for ONCA.  Some haven’t touched their by-laws since 2010, when ONCA was passed by the Legislature.  Those by-laws are now at least 6 years stale, and in real need of some fresh eyes.

Reviewing and refreshing your organization’s by-laws should not be put on hold.  Best governance practices evolve.  Your governance structure changes.  Your by-laws are a governance and business critical legal document.  They need nurturing and care from time to time.

Don’t by like Lucky and Pozzo (that’s a Waiting for Godot reference) – stop waiting and be proactive.  Task your board’s Governance Committee with a full by-law review, if such a review hasn’t happened in the last 3 to 5 years.

New Bill 8 resurrects ECFAA changes affecting CCACs and LTC homes

On July 8, 2014, the former Minister of Health and Long-Term Care, Deb Matthews (now the President of the Treasury Board), introduced Bill 8, the Public Sector and MPP Accountability and Transparency Act, 2014, which proposes changes to several statutes including the Excellent Care for All Act, 2010 (ECFAA). The ECFAA provisions of Bill 8 are a restatement of those found in Bill 179. Clients may remember that Bill 179 had been introduced and carried at first reading during the former session of the Legislature but died on the Order Paper with the call for the provincial election.

Proposed amendments to ECFAA (Schedule 5)

Bill 8 outlines to following key amendments to ECFAA:

  • Expands the definition of “health sector organization” to include community care access centres (CCACs) and long-term care (LTC) homes.
  • Expands the functions of Health Quality Ontario (HQO) under the Act to include the area of patient relations. This appears to a formalization of initiatives already being undertaken by HQO. See here, for example.
  • Creates the position of patient ombudsman.  The patient ombudsman shall be appointed by the Lieutenant Governor in Council and employed by HQO.
  • Enumerates the functions of the patient ombudsman as:

o   receiving and responding to complaints from patients and former patients of a health sector organization, and other persons if prescribed;

o   facilitating the resolution of complaints made by patients and former patients of a health sector organization, and other persons if prescribed;

o   undertaking investigations of complaints made by patients and former patients of a health sector organization, and other persons if prescribed, and to undertake investigations of health sector organizations on the patient ombudsman’s own initiative;

o   making recommendations to health sector organizations following the conclusion of investigations; and

o   doing anything else provided for in the regulations.

  • Introduces provisions concerning complaint facilitation, investigations, reports and other matters are included.

 

Should the Bill be passed into law, CCACs and LTC homes will be most impacted, at least initially. In addition to the Bill’s increased oversight mechanisms (applicable to all health care organizations), an amended ECFAA will statutorily require CCACs and LTC home clients to adopt and implement (to the extent they have not done so already) additional and more formal quality improvement obligations – including the establishment of a Board quality committee, regular patient/provider surveying and public reporting. Quality Improvement Plan (QIP) development may be less of an issue since many in the LTC sector adopted it on a voluntary basis through the HQO Residents First initiative; and CCACs began submitting QIPs as of April 1 this year.

The Bill passed first reading on July 8, 2014. A full text of the Bill can be found here.

CASL Update #1: CRTC issues clarification for registered charities

Canada’s Anti-Spam Legislation (CASL) came into force on July 1. With many organizations still working on complying with the new legislation, the CRTC has begun to issue interpretative guidance. Most recently, the CRTC released updated FAQs that clarified the fundraising exemption and its application to commercial electronic messages (CEMs) “whose primary purpose is that of fundraising”.

What is fundraising?

The fundraising exemption under CASL enables registered charities to freely send CEMs where the primary purpose of the message is fundraising. Until recently and in the absence of additional information from either the CRTC or Industry Canada, clients struggled to understand:

1)      what activities constituted fundraising; and

2)      what “primary purpose” meant to qualify an email for the fundraising exemption.

Just prior to the coming into force of CASL, Imagine Canada released an issue alert based on advice received from Industry Canada (see Imagine Canada, Issue Alert: Update and clarifications on Canada’s Anti-Spam Law; http://www.imaginecanada.ca/node/2798 as well as their Frequently Asked Questions (FAQs) specific for registered charities at http://www.imaginecanada.ca/node/2799) that clarified the scope of fundraising covered by CASL. According to the alert, fundraising included all activities under the Canada Revenue Agency’s definition of fundraising as well as a number of other activities such as offering and/or promoting services to individuals on a cost-recovery basis and sending newsletters that promoted upcoming fundraising events.

More recently, the CRTC has provided additional updated FAQs outlining when a CEM has fundraising as its primary purpose and therefore falls under the exemption.

When is fundraising the primary purpose of a CEM?

The CRTC did not provide any hard and fast rules about when fundraising would be found to be the primary purpose of a message. Rather, the CRTC illustrated its understanding by way of example. To summarize, according to the CRTC:

  • A CEM that promotes a fundraising event where the proceeds from ticket sales flow to the registered charity has as its primary purpose the raising of funds.
  • An e-mailed charitable newsletter that does not contain any material that could be construed as encouraging the recipient to participate in commercial activity has as its primary purpose the raising of funds.
  • An e-mailed charitable newsletter that mentions corporate sponsors who support the charity (but does not encourage the recipient to participate in a commercial activity with that sponsor) has as its primary purpose the raising of funds. According to the CRTC, while this message may be considered a CEM under CASL, the primary purpose of the message may be viewed as raising funds; therefore, the fundraising exemption would apply.

In contrast, the CRTC explained that an e-mailed charitable newsletter providing information about the charity’s activities may not have fundraising as its primary purpose when the newsletter contains advertising from corporate sponsors and also encourages the recipient to participate in commercial activity with that sponsor.

The CRTC enforcement approach and registered charities

Our advice to clients has been and continues to be to interpret the fundraising exemption as broadly as possible within reason. Registered charities acting in good faith while attempting to comply with CASL are not the main focus of this legislation. Our position is validated by the CRTC, which has said that that its goals is “… to promote compliance with the CASL in the most efficient way possible while preventing recidivism.” While the CRTC acknowledges that it has the authority to impose administrative monetary penalties, it also outlined a number of key factors that will be taken into account when assessing a measure or penalty for non-compliance including:

  • demonstrations of due diligence (such as an organization’s tracking of how email addresses and consents have been obtained and the inclusion of an unsubscribe option);
  • the number of complaints and/or severity of the non-compliance related to a particular organization; and
  • whether or not an organization is willing to provide of an undertaking to comply with the CRTC (eliminates the possibility of private lawsuits).

Getting additional help with/information about CASL compliance

DDO Health Law’s Toolkit on CASL compliance is now available. For more information or to obtain a copy, please contact Kathy O’Brien at kob@ddohealthlaw.com or 416.967.7100 ext 227. Additionally, the CRTC FAQs can be found here.

DDO’s CASL (Anti-Spam) Toolkit is now available

Even though July 1 has come and gone, it is a safe bet that many of you will still not be 100% CASL compliant. Just because your organization is in the non-profit sector does not mean that you are not required to comply with CASL.  Likely some of your electronic messages have a commercial element – and therefore must comply with CASL. Read More

What’s keeping CIOs awake at night? DDO Health Law presents its eHealth Risk Management Conference

On May 22nd, DDO Health Law (DDO) hosted its eHealth Risk Management Conference in Toronto. The conference was an opportunity to highlight the opportunities and challenges associated with the increasing role of technology in health care delivery, e.g., managing databases of personal health information and using devices and electronic processes to collect, share and deliver health information. Technology is now being used to communicate with and engage patients and clients (e-mail, apps, social media, discussion boards); to coordinate health care delivery (shared electronic health information systems); and to increase provider efficiency (use of mobile devices at work).

Taking a practical approach to balancing organizational needs and potential risks, speakers from the Healthcare Insurance Reciprocal of Canada (HIROC), eHealth Ontario (eHO) and DDO shared their expertise with a packed audience representing a broad cross-section of the health sector including academic health centres, other hospitals, community mental health agencies, shared services organizations, government agencies, and family health teams.

Conference Themes

We asked our attendees – what is keeping your Chief Information Officer awake at night?

The answer – mitigating the risks associated with e-health initiatives.  Common themes were the need for oversight (to protect the privacy of health information) and minimizing liability exposure.  Whether oversight was framed as a governance, contractual compliance, human resources or system security issue, conference participants consistently expressed a need for additional information and resources to meet their obligations. This was especially true in the context of data-sharing, where many new provincial initiatives were mandating the creation and maintenance of large, pooled repositories of personal health information – creating new province-wide risks and liabilities.

Other, more specific concerns raised included:

  • Managing patient/client consent to the creation of databases
  • Developing, implementing and enforcing best practices related to employees, client/patient and family use of technology (e.g., mobile devices, e-mail, social media use in the healthcare workplace)
  • Ensuring documentation quality where information going into shared databases
  • Controlling access to collected information.

The DDO perspective

At the heart of the issues raised at the conference is the age-old problem of how best to safeguard patient/client/staff personal (health) information. In many ways, technology has only increased the scope of oversight required to ensure the security of that information. DDO speakers offered tools (including a Data-Sharing Agreement checklist) as well as best practices and risk management strategies for organizations from a technological and employment standpoint.

If you wish to receive more information about upcoming DDO Health Law conferences and publications, please visit our website at https://ddohealthlaw.com and subscribe to our mailing list.

October 17 is fast approaching – has your non-profit transitioned under the Canada Not-for-profit Corporations Act?

Introduction

The Canada Not-for-profit Corporations Act (NFP Act) is recent, federal legislation that governs federally incorporated non-profits and charities. Proclaimed into force in 2011, the NFP Act prescribed a 3-year transition period for corporations incorporated under Part II of the Canada Corporations Act (CCA) to file for continuance under the new legislation. With the deadline for transition (October 17, 2014) now just six months away, Corporations Canada recently published a list of Frequently Asked Questions (FAQs) that explain the consequences of a corporation’s failure to meet the October deadline. Read More