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CHF Canada encourages co-ops to participate in the Co-op Act consultation

Published January 14, 2022

The front of Ontario's legislative building, Queen's ParkCHF Canada supports changes to permanently allow virtual meetings; however, changes to how by-laws are passed go too far

The government of Ontario is seeking input on proposed changes to the Co-operative Corporations Act that would permanently allow virtual meetings. CHF Canada supports these changes in general, because many co-ops have found virtual meetings have led to greater participation in members’ meetings. As well, virtual meetings can help co-ops be more accessible, following the Accessibility for Ontarians with Disability Act (AODA) requirements.

While we support most of the changes, we have concerns in two areas:

  1. Changes to how by-laws are passed. We believe this change is unnecessary, and undermines the democratic nature of co-ops.
  2. Changes that allow for any member to require a secret ballot. Requiring a secret ballot when any one member requests it could be used to delay and obstruct the business of a co-op.

CHF Canada encourages co-ops to take part in this consultation by:

  • Visiting the consultation website. The deadline is Friday, January 21, 2022 at 11:59pm.
  • Sharing with the government:
    • how important electronic meetings have been for your co-op, and
    • why the by-law and secret ballot changes would disrupt your co-op business.

Proposed by-law changes

The government is proposing that section 21 and section 23 of the Co-operative Corporations Act be changed so that a by-law comes into effect immediately once passed by the board of directors. The by-law would remain in effect until the next members meeting when it would be either passed or rejected. The proposed changes mimic recent and proposed changes to the Ontario Non-Profit Corporations Act and the Business Corporations Act.

While these changes may make sense for non-profits and businesses, a guiding principles of co-operatives is democratic control. Changes to a co-op’s by-laws should happen infrequently, and are significant decisions. Under the proposed changes, if the membership disagrees with the board’s changes, and the board has entered into a new contract or borrowed money, the members may not be able to undo the board’s decision.

The proposed changes to section 23 of the Co-operative Corporations Act also creates some confusion around whether if a change to a by-law is rejected if it does not receive a two-thirds vote.

CHF Canada believes the proposed changes to section 21 and 23 of the Co-operative Corporations Act should not be made, and the current rules maintained.

Proposed secret ballot changes

We are also concerned that the proposed changes to section 75 of the Co-operative Corporations Act would allow any one member to require a secret ballot.  CHF Canada’s Model Organizational By-law includes the option of a secret ballot when a majority of members agree, and where the board has called for one on the Agenda or for elections. Allowing any one member to require a secret ballot on any issue, could create significant delay and obstruction if this right was abused.

The current Co-operative Corporations Act allows any one member to require a poll (an oral vote where the name of each member is called on and the member states their vote). This is a reasonable protection for members.

CHF Canada believes the changes to section 75 of the Act should not be made.

CHF Canada will be submitting a detailed response to the province next week. We encourage co-ops and members of the public to take part in the consultation as well.

Participate in the consultation
Deadline: January 21, 2022

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