MARCH 26, 2021 UPDATE: New legislation passed: Alberta nonprofits and AGMs

AUGUST 18 / Yvonne Chenier

The latest: Alberta Nonprofits and AGMs in 2022

For the latest about Alberta nonprofits and AGMs, see our June 20, 2022 blog: Annual General Meetings: A Primer for Alberta Nonprofits. It has all the details on the regulations for nonprofits and answers questions such as:  Should you hold a virtual or an in-person meeting? Are you allowed to hold a virtual meeting? What about hybrid meetings where some people are in the room and some people are attending virtually? How should voting happen?  


March 26, 2021 Update: New legislation passed: Alberta nonprofits and AGMs

Relief is here for Alberta organizations trying to meet in these trying times!

There is good news for organizations in Alberta that need to hold meetings of directors or members to satisfy basic governance requirements under the legislation they are incorporated under. The Alberta government has now passed legislation to catch up with other jurisdictions that have long ago modernized legislation to allow virtual meetings.

Service Alberta Statutes (Virtual Meetings ) Amendment Act, 2021 https://docs.assembly.ab.ca/LADDAR_files/docs/bills/bill/legislature_30/session_2/20200225_bill-053.pdf now allows many nonprofit organizations to issue electronic meeting notices, and conduct meetings and voting virtually. Since the law is retroactive, it will forgive those who have been doing so anyway since August 15, 2020, when an Alberta ministerial order expired that had allowed nonprofits to hold their meetings through remote means such as videoconference, teleconference or other means despite any provision in their articles, bylaws, rules or memorandum. 

All nonprofit organizations in Alberta incorporated under the Companies Act, Societies Act and also the Condominium Property Act and Cooperatives Act should review their bylaws as soon as possible to ensure their organizational goals and meeting needs will be complemented by and not adversely affected by this new law. The effect of the new law allows directors and members to attend a meeting electronically and permits organizations to meet and conduct voting electronically anytime unless the organization's bylaws, articles or other governing documents expressly provide otherwise. Some organizations may want to have restrict the unfettered ability for a person entitled to attend a meeting to attend the meeting by electronic means. Some organizations may also want to define the circumstance or otherwise restrict when they may choose to hold their meetings and voting virtually.    

Find out more on the Government of Alberta website.


 

Original Blog: August 2020

Alberta Nonprofits and AGMs: Flexibility for some nonprofits to hold meetings and delay filings has ended

Earlier this year, when the COVID-19 crisis began, the Government of Alberta responded with a suspension of deadlines for nonprofits governed by Alberta law to hold their annual general meetings. Furthermore, nonprofits could hold their meetings through remote means such as videoconference, teleconference or other means despite any provision in their articles, bylaws, rules or memorandum.  

However, it is important for Alberta nonprofits to know that this government order has now lapsed.

With the previous expiration of the public health emergency declared under Alberta’s Public Health Act, the flexibility that was given to nonprofits and other groups to hold meetings and delay filings under Ministerial order no. SA: 009/2020 (Service Alberta) has ended.  

As such, Service Alberta has noted that temporary changes to several acts and regulations that fall under the oversight of Service Alberta are no longer in effect as of August 15. Timelines or other obligations have returned to normal.

What this means for Alberta nonprofits (unless further government orders are made) is explained below.

For an organization incorporated as a Society under the Societies Act

Many Alberta nonprofits are incorporated under the Societies Act. Now that the ministerial order has lapsed, the annual general meeting provision in section 25 is no longer suspended. This section dictates that a society shall hold an annual general meeting in Alberta and shall present at that meeting a financial statement setting out its income, disbursements, assets and liabilities, audited and signed by the society’s auditor.

In other words, if a society chose to suspend the holding of their AGM during the pandemic, it is now time to resume the notice and meeting process provided for in the bylaws of the society. It should be noted that the ministerial order did not preclude any society from conducting meetings through remote means during the suspension even if their bylaws or rules stated otherwise.

Some Societies may have already managed to hold an AGM during this time. However, see that cautionary note below as to any voting that may have taken place at these virtual meetings.

For an organization incorporated as a nonprofit Company under part 9 of the Companies Act

Now that the ministerial order has lapsed, the annual general meeting provision in section 149 is no longer suspended. This section dictates that a general meeting of the company shall be held once at least in every calendar year and not more than 16 months after the holding of the last preceding general meeting (unless the Registrar of Corporations has relieved a Company of this obligation) and shall be held at the time and place the articles provide. Furthermore, section 150 is no longer suspended so in certain circumstances voting members can force an extraordinary general meeting of the company to be called.

If a nonprofit company chose to suspend the holding of their AGM during the pandemic, it is now time to resume the notice and meeting process provided for in the articles of association of the company. It should be noted that the ministerial order did not preclude any nonprofit company to conduct meetings through remote means during the suspension even if their articles or rules stated otherwise.

Some nonprofit companies may have already managed to hold an AGM during this time. However, see that cautionary note below as to any voting that may have taken place at these virtual meetings.

For an organization incorporated under the Canada Not-for-profit Corporations Act and registered in Alberta to carry on activities in Alberta

Those organizations incorporated under the Canada Not-for-profit Corporations Act have always had the option of applying under that Act to Corporations Canada for authorization to delay the calling of their AGMs and for exemptions from the requirements relating to financial statements.

Corporations Canada was likely inundated with such requests during the pandemic and on July 31, 2020, the federal Minster of Industry issued an order, retroactive to March 13, 2020, that extends the deadline for Canada Not-for-profit corporations to call their AGMs and present  financial statements (that could be for a period ending up to one year before rather than the current six months  before the meeting )and for a soliciting corporation to send a copy of their financial statements to Corporations Canada by six months or until the end of the period ending on December 31, 2020, whichever ends earlier.

Presumably after that, Canada Not-for-profit Corporations Act corporations will have to again apply to Corporations Canada for authorization to allow any further delays. The Federal ministerial order did not explicitly say that it overrides any provisions in bylaws.  

However, it should be noted that a specific provision has always been in the Canada Not-for-profit Corporations Act for a Not-for profit Corporation to hold a meeting entirely by electronic means if the bylaws so state and then it can be permitted as long as all participants can communicate adequately with each other.  

A special note about voting

Although the Alberta ministerial order allowed virtual meetings to be held during the pandemic, unlike other jurisdictions that issued similar ministerial orders, the manner of voting at these meetings was not dealt with in Alberta. Many organizations have very specific voting requirements in their bylaws. So, it is possible that even though a virtual meeting was held, the bylaw provisions related to voting would have made it impossible to carry on any vote in a virtual situation. Any such provisions need to be checked to ensure the validity of any votes held.

A recent case in British Columbia, Farrish v. Delta Hospice Society, 2020 BCSC 968, highlighted that very situation. Even though the ministerial order MO116 issued in the Province of B.C. did anticipate that voting might occur at a virtual meeting, it did not say what kind of voting. The court stated as follows: “MO116 does not authorize the Board to use mail‑in ballots. I do not accept the Society’s submission that the MO116 provision quoted above is somehow ambiguous. It is clear to me that the BC government chose to allow some change in the meeting procedures to accommodate the realities of the COVID‑19 pandemic. However, MO116 says nothing in respect of the means of voting. In my view, the result is that one must return to the Act and Bylaws in terms of what method of voting “at the meeting” the Society has approved.”

The results of this line of reasoning should be a warning for those who had any virtual meetings in Alberta as a result of Alberta’s ministerial order. Organizations should check that any voting that took place was valid and cannot be challenged in a similar fashion. This especially important in light of the fact that the Alberta ministerial order was completely silent about voting. If there is any doubt, organizations need to have a plan to properly ratify any important decisions that were made by such a vote.

Note that under the modern Canada Not-for-profit Corporations Act, that some Alberta nonprofits may be incorporated under, the rules are more certain, as this statute addresses the issue head on. Electronic participation at meetings (such as voting) is permitted under the Act by default unless the bylaws have a provision to prohibit or restrict electronic methods.

What kind of meeting and voting do our bylaws or articles allow?

Now that the ministerial order has lapsed that allowed virtual meeting in Alberta despite any provision in bylaws or articles, attention needs to be paid to these governing documents such as bylaws or articles to see what needs to be done for your organization to join the electronic world in any event, and not rely on ministerial orders. 

1. Know the legislation your organization is incorporated under and if it is incorporated under the Societies Act or Part 9 of the Companies Act, assume there is no specific process mentioned in the legislation for virtual meetings.

2. Review your bylaws or articles. Do they give the organization the power to hold a virtual AGM in Alberta? Is there flexibility to use modern technology for voting? If not consider amending them to include a robust virtual meeting and voting clause.

A common provision found in Canada Not- for-profit corporation bylaws that has often been adapted for use in Alberta is:

“If the Organization chooses to make available a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during a meeting of members, any person entitled to attend such meeting may participate in the meeting by means of such telephonic, electronic or other communication facility in the manner provided by the policies and procedures of the Organization. A person participating in a meeting by such means is deemed to be present at the meeting. Notwithstanding any other provision of this by-law, any person participating in a meeting of members pursuant to this section who is entitled to vote at that meeting may vote, in accordance with the policies and procedures of the Organization, by means of any telephonic, electronic or other communication facility that the organization has made available for that purpose.”  

3. Create and approve policies and procedures to be made for these meetings that can keep up with our rapidly changing technology.

4. Communicate these changes to those who will be affected.

5. Test the technology!

It’s never too late to amend your bylaws or articles and create policies and procedures for meetings and voting. Indeed, in the absence of permanent legislative reform in the area of nonprofit regulation in our province allowing modern ways, that is all an organization can do.

Additional notes

Annual returns to Alberta Corporate registry are now due

Section 162 of the Companies Act and section 26 (2) of the Societies Act are no longer suspended and any annual returns for part 9 Alberta companies or Alberta societies need to be kept up to date and filed to avoid being dissolved due to failing to file annual returns on time at Alberta corporate registry.

Charitable Fund-Raising Act, RSA 2000, c C-9

If your organization asks Albertans to donate to a fundraising campaign or solicits contributions that will be used for a charitable purpose, you must follow the rules set out in Alberta’s Charitable Fund-Raising Act and Regulation. Some of the time periods were suspended during the pandemic and they are now all reinstated.

If you have any questions or would like help with related matters, please reach out to IntegralOrg via email at admin@integralorg.ca or our Contact Us form. We are here to help.  

Yvonne Chenier, QC, is a lawyer and philanthropy consultant –Yvonne brings more than 35 years of experience helping those in the philanthropic, nonprofit, and social enterprise sectors as general legal counsel and as an advisor on planning, organizational, regulatory and governance matters.  

Sources

Ministerial order of April 9, 2020, https://open.alberta.ca/dataset/ministerial-order-no-sa-009-2020-service-alberta

Societies Act, RSA 2000, c S-14, <http://canlii.ca/t/53j53>

Companies Act, RSA 2000, c C-21, <http://canlii.ca/t/53j3f>

Canada Not-for-profit Corporations Act, SC 2009, c 23, <http://canlii.ca/t/535b0>

Canada Not-for-profit Corporations Act: Default Rules: https://corporationscanada.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs04994.html

Recent case in British Columbia referred to above: https://www.bccourts.ca/jdb-txt/sc/20/09/2020BCSC0968.htm

Charitable Fund-Raising Act, RSA 2000, c C-9 https://www.canlii.org/en/ab/laws/stat/rsa-2000-c-c-9/latest/rsa-2000-c-c-9.html