June 18, 1999
Canada
Cooperatives Act
Corporations Directorate,
Industry Canada has announce that the Canada Cooperatives Act was proclaimed on
June 17, 1999. This means that the Canada Cooperatives Act will replace the
Canada Cooperative Associations Act on that date. Until December 31st,
federal cooperative activity, such as incorporation of new cooperatives will be
under the existing Canada Cooperative Associations Act.
The new Act modernizes the
laws governing federally incorporated non-financial cooperatives by
strengthening and clarifying corporate governance rules. Cooperatives now have
greater access to sources of capital other than member capital, allowing them
to better compete with business corporations. While partly modeled on the
Canada Business Corporations Act, the new Act also recognizes the unique nature
of cooperatives by strengthening member rights. In addition, the cooperative
principles set out in the Act reflect the cooperative values prevailing in
Canada and internationally.
The proclamation of the Act
marks a milestone eagerly anticipated by the cooperatives sector. Through the
two national associations, the Canadian Co-operative Association and le Conceil
Canadien de la Cooperation, the sector played an instrumental role in the
development of the Canada Cooperatives Act and its accompanying regulations.
Exiting non-financial
federal cooperatives will be governed by the new Act as of December 31, 1999.
If the articles of these cooperatives do not contain a provision that is
required under the new Act, they will be required to amend their articles
within five years of the coming-into-force date (i.e., by December 31, 2004)
Four information kits have
been developed to assist with the new procedures under the Canada Cooperatives
Act:
These kits as well as the
regulations and forms under the new Act are available.