Regulations Amending the Canada Cooperatives Regulations: SOR/2019-226

Canada Gazette, Part II, Volume 153, Number 13

Registration

SOR/2019-226 June 17, 2019

CANADA COOPERATIVES ACT

P.C. 2019-802 June 16, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to paragraph 372(1)(c)footnote a of the Canada Cooperatives Actfootnote b, makes the annexed Regulations Amending the Canada Cooperatives Regulations.

Regulations Amending the Canada Cooperatives Regulations

Amendments

1 Section 61 of the Canada Cooperatives Regulations footnote 1 is replaced by the following:

61 (1) The fee payable in respect of a service set out in column 1 of Schedule 3 is the applicable fee set out in column 2.

(2) There is no fee payable in respect of the following services:

61.1 On April 1, 2024 and every five years after that date, the fees set out in column 2 of Schedule 3 are to be increased by one per cent and rounded down to the nearest multiple of five dollars.

2 Schedule 3 to the Regulations is replaced by the Schedule 3 set out in the schedule to these Regulations.

Coming into Force

3 These Regulations come into force on January 15, 2020.

SCHEDULE

(Section 2)

SCHEDULE 3

(Subsection 61(1) and section 61.1)

Fees

Item

Column 1

Service under the Act

Column 2

Fee ($)

1

Receipt and examination by the Director of

  
 

(a) an application made under subsection 4(4) or 167(1), section 248 or subsection 263(2) or a request for an exemption referred to in subsection 267(2)

250
 

(b) an application for incorporation sent under section 10

250
 

(c) articles of amendment sent under subsection 126(5) or 291(1) or articles of reorganization sent under subsection 303(5)

250
 

(d) articles of continuance sent under subsection 285(4)

250
 

(e) articles of continuance and articles of amalgamation sent under subsection 285(5)

250
 

(f) a request for a document evidencing the satisfaction of the Director for the purpose of subsection 287(1)

250
 

(g) restated articles of incorporation sent under subsection 294(2)

100
 

(h) articles of amalgamation sent under subsection 299(1)

250
 

(i) articles of arrangement sent under subsection 304(7)

500
 

(j) articles of revival sent under subsection 308(2)

250
 

(k) a statement of revocation of intent to dissolve sent under subsection 310(10)

100
 

(l) an annual return sent under section 374

12
 

(m) a request for a certificate referred to in subsection 375(1)

20
 

(n) documents sent under subsection 376.1(1) or a request referred to in subsection 376.1(3)

250
 

(o) a request for a cancellation referred to in subsection 376.2(1) or a request referred to in subsection 376.2(3)

250

2

Provision by the Director of an uncertified copy or uncertified extract under subsection 377(2), if requested using any means other than the Director’s online service, per copy or extract

5

3

Provision by the Director of a certified copy or certified extract under subsection 377(2)

  

(a) if requested using the Director’s online service, per copy or extract

10

(b) if requested using any other means, per copy or extract

40

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Fees for services under the Canada Cooperatives Act (Coop Act) have not changed since 2001. Some fees need to be better aligned with the cost of delivering the related services and to better reflect the objectives of better and more efficient design and delivery of services. In addition, the Standing Joint Committee for the Scrutiny of Regulations (SCJSR) has identified concerns with the wording of certain fees and has recommended that the fee schedule be clarified with respect to what the fee covers.

Background

The Coop Act provides a legislative framework for the incorporation of non-financial cooperatives at the federal level. It is modelled on federal acts governing the incorporation of business corporations and cooperatives in the financial sector and on best practices adopted at the international level. The services and fees under the Coop Act are prescribed in the Canada Cooperatives Regulations (the Regulations).

In parallel with the proposed updates to the fee structure for the Canada Business Corporations Act (CBCA) and the Canada Not-for-profit Corporations Act (NFP Act), it is proposed to align the Coop Act service fees with those of the other two acts and with the true cost of delivering the services. However, the fee changes proposed to the Regulations may differ, as there is no online filing option for requests under the Coop Act at this time.

Objectives

The objectives of the proposed amendments are to better align service fees under the Coop Act with the cost of delivering the services and to achieve the following principles and objectives identified by Corporations Canada and the Government of Canada:

Description

Below is a summary of the proposed changes, followed by a table setting out the proposed fee changes under the Coop Act.

Certificates

Service fees related to certificates issued under the Coop Act would increase to $250. This will better align the fee for certificate applications with the cost of delivering the service.

Annual returns

There is a requirement under the Coop Act for every cooperative to file an annual return to allow Corporations Canada to keep its database of federal corporations up to date. It is proposed to reduce the fee for filing an annual return to $12 from the current fee of $40.

Reducing the fee would result in cost savings for all corporations including the many small cooperatives that are created under the Coop Act.

Cancellations and corrections

A new fee is proposed for applications to cancel a certificate. Currently, there is no fee for a cancellation application. However, there is a fee of $200 for a correction application. Both cancellation and correction services are processed similarly and therefore have similar costs. Cancellation requires review and approval to ensure that the statutory criteria are met, such as whether the cancellation would be prejudicial to members, shareholders, and creditors.

The proposal is to add a fee of $250 for cancellations and increase the current fee for corrections to $250 to align it more closely to the cost of delivering the service. Requests resulting from an error that is solely attributable to the Director appointed under the Coop Act would continue to be free.

Certificates of compliance or existence

The proposal is to decrease the fee for requests from $35 to $20 to ensure consistency with the CBCA and NFP Act fees for the same service.

Intent to dissolve and revocation of intent to dissolve

To ensure consistency between the fees for the CBCA, NFP Act and Coop Act, it is proposed that the fee for the Coop Act would

Copy fee for corporate records

The proposal is to provide copies of corporate records for free when requested online. Making online requests for copies free would increase corporate transparency and would benefit many stakeholders, including cooperatives and the general public.

There are additional costs for non-online requests for copies related to the resources required to process them; therefore, the fee for these requests would be $5 per document. There would be no fee for such requests from police and law enforcement and other federal, provincial or municipal governments and agencies that use the corporate information for compliance and investigative activities.

Certified copy fee for corporate records

The fees related to certified copies of corporate records filed with Corporations Canada would also change. The online fee would be $10 per document, which is a $25 reduction from the current fee. For non-online requests, the fee would be $40 per document, which represents the current fee of $35 plus the new copy fee of $5.

To address an issue raised by the SJCSR, the proposed fee would clearly indicate that the certified copy fee includes any fee for copies.

Fee for certificate of arrangement

It is proposed to increase the fee for reviewing arrangement transactions from the current fee of $200 to $500. The increase in fee takes into account the costs of reviewing arrangements prior to the issuance of a certificate of arrangement.

An arrangement is a complex corporate transaction that is supervised by a court. Corporations Canada reviews the court applications to ensure compliance with the requirements at both the interim and final order stages of the court process. Once a final court order is received, Corporations Canada issues a certificate of arrangement by the Director.

Fee for exemption applications

Exemption applications are available under the Coop Act for a service fee of $250 except for the fee for exemptions related to financial statements, which is $100. A new fee of $250 is proposed for financial statement exemption applications since they are processed similarly and therefore have similar costs to the other exemption applications.

Restated articles

The proposal is to increase the fee for restated articles of incorporation to $100 from the current $50. The $100 fee would also apply to restated articles that are filed with articles of amendment, for which there is currently no fee. This will better align the fee with the cost of providing the service.

When the fee is payable

According to the Coop Act, the fee for a service is payable before the Director can deliver the service. The current wording of the fee schedule suggests that the fee is only payable if the Director approves the application. However, the costs associated with the service are assumed during the review of the application, not at the issuance of the certificate. Even if an application is rejected due to non-compliance with the Act, costs will have been assumed.

Moreover, the SJCSR has suggested that the wording of the fee schedule in the Regulations be clarified to indicate that the fee covers the cost of reviewing the application and not for the issuance of the certificate.

As a result, the wording of the fee schedule under the Coop Act would be clarified so that the service fee is payable when an application is filed. Once the Director has received an application containing all the required documents and the fee, a refund would not be issued if the application is deficient or rejected.

Periodic escalator clause

The Service Fees Act requires each fee to be increased each fiscal year based on the percentage change in the Consumer Price Index (CPI), as published by Statistics Canada for the previous fiscal year. The objective of the annual increase is to ensure that service fees keep pace with the increase in the cost of providing the service so that potential funding gaps are eliminated. An annual increase is not required if fees are adjusted periodically by an escalator clause set out in the Regulations.

An escalator clause is being proposed for the Regulations that better reflects Corporations Canada’s experience. Specifically, the escalator clause would

This approach would eliminate the need for annual increases to the service fees to minimize costly system changes, including to Corporations Canada’s IT system. The proposed escalator clause also takes into account Corporations Canada’s experience with its ongoing efforts to reduce costs. The result has been that for many years, the revenue collected by Corporations Canada has been sufficient to cover the costs of providing the services and it is expected that this will be sufficient to cover future inflationary costs.

Table of fee changes

Canada Cooperatives Act Fee Changes

Service

Current Fee

Proposed Fee

Annual return

$40

$12
  • Amendment
  • Amalgamation
  • Continuance
  • Revival

$200

$250

Letter of satisfaction

$200

$250

Restated articles

$50

$100

Arrangement

$200

$500

Intent to dissolve

$50

free

Revocation of intent to dissolve

free

$100

Certificate of compliance or existence

$35

$20

Cancelled certificate

free

$250

Corrected certificate

$200

$250

Exemption related to financial statements

$100

$250

Copies of documents — online

N/A

free

Copies of documents — non-online

$1 per page

$5 per document

Copies of documents for police or governments

$1 per page

free

Copy of a corporate profile (online service only)

$1 per page

free

Certified copies of documents — online

N/A

$10

Certified copies of documents — non-online

$35 per document certified

$40 per document certified including the copy fee

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal, as the proposal is expected to reduce overall fee payments for all business, including small businesses.

Consultation

On May 31, 2018, information was posted on the Innovation, Science and Economic Development Canada website about public consultations on proposed changes to the service fees under the CBCA, the NFP Act and the Coop Act. Two comments were received in response to the consultations. One comment supported the proposed changes and considered them reasonable. The other comment objected to service fees being charged to not-for-profit corporations under the NFP Act. This comment is described and responded to in the Regulatory Impact Analysis Statement in support of the proposal to update fees under that Act.

On March 16, 2019, the proposed regulations were prepublished in the Canada Gazette, Part I for a 30-day consultation period. No comment was received.

While consultation did not lead to any change, a change to reduce the filing fee for an Annual Return from $40 to $12 has been made to match the online fee for the CBCA and the NFP Act since cooperatives are not currently able to file the Annual Return online, which has a lower fee. Online service is available for business and not-for-profit corporations.

Rationale

Following the review of the cost for each service, several service fees were adjusted. The proposed changes to the service fees are based on the cost of delivering the service and are consistent with the proposed fees for delivering comparable services under the CBCA and the NFP Act. They also implement recommendations made by the SJCSR on clarifying the fee structure and what is covered by each fee. Given the higher costs for processing non-online applications (via email, fax or mail), the majority of the changes would result in a fee increase for those transactions since most applications under the Coop Act are non-online requests. The service fee for filing annual returns is the exception where the Coop Act will be reduced to $12 to match the online fee for the CBCA and the NFP Act since cooperatives are not currently able to file the Annual Return online, which has a lower fee.

Copies of corporate documents would be available free

Making copies free increases the availability of accurate information on corporations. Accurate information is required for the effectiveness and efficiency of the Coop Act framework because it

The proposed increases to fees are small. Based on the number of Coop Act transactions in 2017–2018, it is anticipated that the fee increases would generate $330 of increased costs for cooperatives if the new fees had been in place in 2017–2018.

For the applications where there is a fee reduction, including a reduction to $0, it is anticipated that the fee decreases would generate a benefit to cooperatives of $1,184 if the new fees had been in place in 2017–2018. For the annual return specifically, the reduction of the service fee to $12 would generate a benefit to cooperatives of $840 each year.

The proposed fee changes would have resulted in an annual net benefit of $854 for cooperatives if the new fees had been in place in 2017–2018. The net benefit for cooperatives would have resulted in a reduction in an equal amount to Corporations Canada’s revenue.

Implementation, enforcement and service standards

Implementation

The proposed regulatory amendments are targeted to come into force on January 15, 2020.

As part of the implementation of the amendments, a communication strategy would include notices to stakeholders about the changes to the fees and updates to the Corporations Canada website.

Enforcement

The Coop Act requires fees to be paid before the associated application is processed by Corporations Canada. If a user fails to pay a fee, then the service will not be provided in accordance with standard practices.

Service standards

Currently, the service standard under the Coop Act is generally 5 business days, with a few exceptions such as corrections, cancellations, arrangements and exemptions. The intent is to have the general service standard increased to 10 business days.

Table of service standard changes

Canada Cooperatives Act Service Standards Changes

Service

Current

Proposed

Annual Return

5 days

10 days
  • Amendment
  • Amalgamation
  • Continuance
  • Revival

5 days

10 days

Letter of satisfaction

5 days

10 days

Restated articles

5 days

10 days

Intent to dissolve

5 days

10 days

Revocation of intent to dissolve

5 days

10 days

Certificate of compliance or existence

1 day

5 days

Cancelled certificate

20 days

10 days

Corrected certificate

20 days

10 days

Copies of documents — online

N/A

1 day

Copies of documents— non-online

1 day for active cooperatives /
6 days for inactive cooperatives

10 days

Copies of documents for police or governments —
online

1 day for active cooperatives /
6 days for inactive cooperatives

1 day

Copies of documents for police or governments —
non-online

1 day for active cooperatives /
6 days for inactive cooperatives

10 days

Certified copies of documents — online

N/A

1 day

Certified copies of documents — non-online

1 day for active cooperatives /
6 days for inactive cooperatives

10 days

All other services — non-online

5 days

10 days

Contact

Isabelle Breault
Acting Manager
Policy Section
Corporations Canada
Innovation, Science and Economic Development Canada
Telephone: 1-866‑333‑5556
Email: ic.corporationscanada.ic@canada.ca