Co-operative Corporations Act and Regulation Amendments

On August 31, 2007, sections 1 to 16 and 18 to 31 of Schedule 8 to the Budget Measures Act (Fall), 2004, which amend the Co-operative Corporations Act ("the Act"), come into force.

This Schedule amends the Act with respect to several matters:

• The Act is amended to permit a co-operative corporation to issue preference shares in series, if the Articles of Incorporation of the co-operative corporation authorize it to do so.  Conditions and restrictions with respect to this power may be prescribed by regulation.  Complementary amendments were made to other provisions of the Act.

• Currently, the Act specifies the ways in which the shares in a class to be redeemed may be chosen.  The Act is amended to provide that additional methods to determine which shares in a class to redeem may be specified by regulation and the method for determining which shares in a series to redeem shall be specified by regulation (see below noted amendments to Ontario Regulation 414/07 made under the Act).

• Currently, the Act requires a co-operative corporation to file an offering statement with the Superintendent of Financial Services with respect to the sale of its securities if the co-operative corporation has more than 25 security holders, or would have more than 25 security holders after the proposed sale.  The Act is amended to delete the references to “25” and specifies, instead, that the number of security holders is to be prescribed by regulation (see below noted amendments to Ontario Regulation 414/07 made under the Act).

• Currently, the Act requires a co-operative corporation to send to its members a copy of its financial statements and the auditor’s report. The Act is amended to relieve the co-operative corporation of this obligation if the member has given the co-operative corporation written notice that the member does not wish to receive them.

• The Act is amended to permit co-operative corporations to send notices and documents to members and directors electronically in accordance with the Electronic Commerce Act, 2000, and with such other conditions as may be prescribed.  The same permission is given to members and directors for the notices and documents that they send to a co-operative corporation.  A restriction prohibiting non-profit housing co-operative corporations from being able to send any documents or notices to members and directors electronically is prescribed by regulation (see below noted amendments to Ontario Regulation 414/07 made under the Act).  Complementary amendments are made to other provisions of the Act.

Ontario Regulation 414/07 made under the Co-operative Corporations Act

On August 31, 2007, three (3) Co-operative Corporations Act regulation amendments come into force.  These regulation amendments:

• Govern how the shares in a series can be redeemed where only part of the series is being redeemed.

• Fix the maximum number of persons qualifying the co-operative corporation for exemption from offering statement requirements at 35.

• Prohibit non-profit housing co-operative corporations from being able to send any documents or notices to members and directors electronically.