Picture a small church in Peterborough or Lindsay. The congregation has been worshipping together for over thirty years. Faithful people. Generous with their time and their resources. Then one day, someone opens the incorporation documents and discovers something unsettling. The bylaws still reference the old Ontario Corporations Act. The membership provisions are vague. And several of the governance practices the board has relied on for years are no longer consistent with the law.
Nobody is in trouble. But the church is exposed in ways its leadership did not anticipate.
This kind of scenario is more common than you might think. Ontario’s new Not-for-Profit Corporations Act, or ONCA, applies to churches, mosques, synagogues, and other faith-based charities incorporated in the province. And religious organisations are among the most likely to have governing documents that have not been touched in decades.
If that sounds familiar, this post is for you.
Why Faith-Based Organisations Face Unique Challenges
ONCA came into force on October 19, 2021, replacing the old Ontario Corporations Act that had governed nonprofits since the 1950s. The government gave organisations a three-year transition period to update their governing documents. That window closed on October 18, 2024. If your church has not yet gone through this process, the law now applies to you whether your documents reflect it or not.
ONCA applies the same rules to every Ontario nonprofit. But faith-based charities often have governance structures that do not fit neatly into a standard corporate template.
Think about how your congregation actually works. You may have a denominational hierarchy that shapes how decisions are made. Your pastor or spiritual leader may serve on the board. Membership may be tied to a statement of faith or to regular participation in the life of the community. Voting traditions may reflect congregational values that go back generations.
None of this is a problem. But all of it needs to be reflected in your updated governing documents. ONCA does not prohibit these structures. It just requires that they be clearly set out.
For example, many churches require directors to affirm a statement of faith. ONCA allows extra director qualifications beyond the basics (being at least 18 years old, not bankrupt, and not found incapable by a court). But those qualifications must be stated in your documents in language that is in harmony with ONCA’s requirements. If they are not, they may not be enforceable.
Membership Deserves Careful Thought
Under the old Act, membership provisions in many faith-based organisations were informal. Everyone understood who was a member, even if the bylaws did not spell it out precisely.
ONCA changes this. Your articles of incorporation must include clear membership structures. If you have different classes of members, each class and its voting rights need to be stated.
For a church, this raises real questions. Who qualifies as a member? Is it everyone who attends on Sunday? Everyone who has signed a statement of faith? Everyone who has been formally received by the congregation? Do all members vote on all matters, or are some decisions reserved for certain groups?
ONCA also gives members new rights. Members can now request access to the organisation’s financial records. A group of members can call a special meeting. These are good provisions, and they promote transparency. But your leadership team needs to understand how they interact with your existing governance practices.
For many congregations, the membership question turns out to be the most important conversation they have in years. It is not just a legal exercise. It is an opportunity to clarify who you are and how you want to make decisions together.
Discipline and Removal of Members
This is a sensitive area, and one where ONCA intersects directly with congregational life.
The Act allows your articles or bylaws to give the board, or a committee, the power to discipline or remove members. Many faith-based organisations have always had some form of this. But ONCA adds procedural requirements that your documents must address.
Specifically, ONCA requires at least 15 days’ notice before any disciplinary action or termination of membership. The notice must include the reasons. The member must have an opportunity to be heard. These requirements apply even if your denomination has its own internal discipline process.
Why does this matter? Because a member who is removed without proper process can apply to court for a compliance or restraining order. It is not hard to imagine how that kind of dispute could unfold in a close-knit congregation. It would be painful for everyone involved, and it is avoidable.
Getting the language right in your bylaws protects both the organisation and the individuals within it.
The One-Third Rule for Directors
The rule that no more than one-third of directors can be employees applies to all Public Benefit Corporations. Since charitable corporations are automatically classified as Public Benefit Corporations under ONCA, they must follow this rule.
For registered charities specifically, there are stricter common law and provincial rules that often restrict directors from receiving any compensation at all, including as employees.
Your articles must also include specific provisions about what happens to the organisation’s assets if it ever winds up. These provisions must meet the requirements of ONCA, the Charities Accounting Act, and the federal Income Tax Act. For a faith-based charity, this often means directing remaining assets to another registered charity with similar purposes.
Electronic Meetings and Voting
One of the genuinely helpful changes ONCA brings is the ability to hold meetings and conduct votes electronically. For congregations with members who travel, who have mobility challenges, or who live at a distance, this is a welcome development.
Your bylaws can now permit electronic attendance at meetings, proxy voting, and even fully virtual annual general meetings. But these options are only available if your governing documents explicitly allow them. ONCA does not grant electronic voting by default.
If your congregation would benefit from this flexibility, it is worth building it into your updated bylaws.
Is Your Organisation Even Under ONCA?
This is a question I ask every client at the start. ONCA only applies to organisations incorporated in Ontario. If your church or charity is federally incorporated under the Canada Not-for-Profit Corporations Act, ONCA does not apply, even if your head office is in Ontario.
Many people are surprised to learn which Act governs their organisation. The answer is in your original incorporating documents.
There are also many religious organisations that are not incorporated federally or provincially but operate as a charitable trust. That means neither the CNCA nor the ONCA apply. If you are not sure, that is the first thing I can help you figure out.
How I Can Help
I have spent much of my career at the intersection of law and faith. My doctoral work and my book, 210 Celsius, focused on constitutional and religious freedom law in Canada. I bring that perspective to every governance matter I handle for faith-based organisations.
Whether your congregation needs a full ONCA compliance review, updated bylaws that reflect both the law and your values, or advice on a specific governance question, I am here to help. I have worked with churches and religious charities of many denominations, and I understand that these documents need to serve both legal and spiritual purposes.
Call me at (705) 749-0628, or visit our charity and nonprofit law page to get started.
Note: For a broader overview of ONCA compliance for all nonprofits, see our blog post “Is Your Ontario Nonprofit ONCA-Compliant?” and our ONCA Transition FAQ.
Barry W. Bussey, PhD, is the principal lawyer at Bussey Ainsworth, Barristers & Solicitors, in Peterborough, Ontario. He has extensive experience in charity and nonprofit law, religious freedom, and ONCA compliance.
This article is for general information only and does not constitute legal advice. Every situation is unique. Please consult with a lawyer before making decisions about your organisation’s governance or compliance.
