Co-operative Legislation

 

Co-operative corporations are an important part of Ontario’s economy and serve the needs of their members in communities across the province.   

Ontario's non-financial co-operatives are regulated by the Ontario Co-operative Corporations Act. The Financial Services Commission of Ontario (FSCO) – an agency of the Ministry of Finance – administers the Act and registers organizations conducting business as a co-operative under the Act. As of April 1, 2019, FSCO will be disolved and the administration and regulation of co-operatives is to be determined. 

The Act came into force in 1974, has never been subject to a full legislative review. As a result, the legislation has not kept pace with other business statutes in Ontario. It requires modernization to more accurately reflect the current economic climate of co-operatives in Ontario. For this reason, OCA and CCO have been lobbying the Ontario government to review and update the legislation affecting non-financial co-operatives for a number of years.

OUR KEY RECOMMENDATIONS

 

1. Updating the 40-year old Act to align our audit requirements with accepted accounting principles.

2. Updating the 40-year old Act to remove the requirement to conduct 50% of business with members.

3. Ontario co-operatives require an increase to exemption thresholds for offering statements. These thresholds were last reviewed more than 25 years ago and are inadequate for modern co-operatives to raise the required capital required for their businesses.

Read our January 2019 Pre-Budget Submission to the Ministry of Finance to learn more about the recommendations. 

 

(Pictured here: Erin Morgan, Executive Director, with Finance Minister Charles Sousa on February 6, 2018.)

 

A BIG WIN FOR ONTARIO CO-OPERATIVES ANNOUNCED IN SPRING OF 2018

Our perseverance and efforts are paying off. Over 5 years of advocacy work by Ontario’s co-operatives was recently rewarded in Budget 2018. The government has made a commitment to review and modernize the 44-year-old Co-operative Corporations Act this year. Specifically, the Ministry of Finance recognizes the co-operative legislation has not kept pace with other business statutes in the province, and acknowledged that a more modern legislative framework will help ensure co-operatives are able to grow, meet the needs of members and compete effectively with other businesses in Ontario.

As part of the review, the government will consider key policy issues, including restrictions on non-member business, exemptions from audit requirements, the process for offering statements, and the government body that would be most suitable to administer the legislation.  

The legislation is expected to be voted on in the House in the next couple of months and if passed, the process toward modernization of the CCA will begin. For those interested in reading more, the section of the Ontario Budget referencing Ontario’s co-operative sector can be found here.

This is very positive news for co-operatives in Ontario. A more modern legislative framework for co-operatives will help ensure they are able to grow, meet the needs of their members and compete effectively with other businesses in the province. OCA looks forward to future consultations with the co-operative sector to ensure all legislative changes enhance our sustainable and profitable business model.