8. POLICY DISCUSSION - Canada Revenue Agency NFP (Not For Profit Regulations) [Archive] - Chess Federation of Canada

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Lyle Craver

01-04-2014, 01:40 PM

Here is the background for new Governors who are approaching this for the first time.

More than a year ago the Executive were informed of new federal regulations coming into effect in October 2014 concerning federal recognition of Not For Profit organizations. (It should be carefully noted that NFP status is NOT the same as charitable status!)

The new regulations can be found at (special thanks to Vlad Drkulec for providing the links)
http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/h_cs04954.html

Links to the act and transition guides are on the left.

If you follow the links you get to the following including a pdf of the regulations:

http://laws-lois.justice.gc.ca/PDF/SOR-2011-223.pdf

Previous discussions on the subject can be found at:
http://www.chesscanada.info/forum/showthread.php?3617-New-Not-for-Profit-Governance-Rules

http://www.chesscanada.info/forum/showthread.php?3109-NFP-Act-Transition-Committee-Report (Note that the link to the previous NFP Act committee is attached to the first message in this thread)

The Governors in the January 2013 quarterly meeting decided not to support the framework proposed by the committee. Given the CFC loses its NFP status if we do not adopt constitutional changes that would comply with the new Act, we have a need to do something but what specifically?

I have been asked by the President to put this question to the Governors for feedback. Note that this is the same information presented in the October 2013 meeting. We are in serious trouble if we fail to transition to the New Act's requirements by the deadline. As the Federal website says: "Corporations can take advantage of the benefits of the NFP Act once the transition is complete. The transition process involves obtaining a Certificate of Continuance and making by-laws that comply with the NFP Act."

[Speaking personally not as CFC Secretary, I am not at all comfortable with some of the things Ottawa is requiring of us but the bottom line is my personal opinion isn't important - our non-profit status is in question if we fail to comply and there can be no consideration of charitable status or any other type of status without "new" Not for Profit status in place. This is the "bear in the room" and all Governors need to be aware that the deadline is coming. I would specifically urge any Governor who feels unfamiliar with the issue to read the thread http://www.chesscanada.info/forum/showthread.php?3109-NFP-Act-Transition-Committee-Report] (that's the second thread given under "previous discussions on the subject...")

Vladimir Drkulec

01-05-2014, 02:31 PM

Here is a nice transition guide PDF which provides a good overview of what we are faced with.

http://www.ic.gc.ca/eic/site/cd-dgc.nsf/vwapj/Transition_Guide_2ndeditionl_EN.pdf/$file/Transition_Guide_2ndeditionl_EN.pdf

We realistically need to have this whole process at a point where it can be approved by the governors by the April meeting. If we wait until the AGM then we will be faced with a set of new governors and possibly a new executive who will have to be taken through the same considerable education process once again. This will take us very dangerously close to the edge of an October 17th 2014 cliff without a good reason. Lets be very clear, it is not our non-profit status which is at risk. It is our existence and all of our assets which are at risk.

My belief is that if we do choose to behave irresponsibly that Humpty Dumpty (the CFC) will have a great fall and all the King's Horseman and all the King's men will not be able to put Humpty Dumpty back together again at least in a form that is recognizable as Humpty Dumpty.

The last attempt at resolving this failed in large part because the committee and the executive adopted the vision set forward by the government of how a non-profit should be governed. This was not deemed acceptable by the governors including me at the time. Perhaps it might have been if the ground had been prepared and more thorough explanations had been made and the governors had been educated on the requirements. Perhaps a compromise might have been reached which would have allowed us to become compliant much earlier. In any case this is not the right moment to be concerned with might have beens.

My current vision for the worst case scenario is that we simply get an acceptable (to the government) set of bylaws done which will bring us into compliance with the new NFP act. This will be a major reset of how the CFC is currently structured and operated. Our old bylaws, constitution and handbook would largely disappear at least from the point of view of the government.

Based upon the feedback that I have received on my previous postings on this subject what I think that we can maintain is voting members (currently called governors) who will ultimately have the power to elect members of the board of directors which will have a similar structure to the current executive with the exception that we cannot have a past president that is not elected by the members or board as this is specifically prohibited in the new act. I see the voting members electing specific members of the board to specific positions (president, vice-president, FIDE representative, youth coordinator, treasurer and perhaps one or more additional board members in order to maintain or increase the current size). The legislation requires us to give a minimum (default is 3) and maximum (default is 9) number of board members.

I will within a few hours post a set of bylaws for discussion purposes which will show what a minimally compliant set of bylaws might look like. I have done this on the governors private board but will make some changes to reflect the feedback which I got there.

Christopher Mallon

01-05-2014, 04:28 PM

Technically you could still have a "past president" position as long as it's an elected one, correct?

Would it be illegal if they were elected from a group of former presidents?

Just curious.

Vladimir Drkulec

01-05-2014, 04:58 PM

Technically you could still have a "past president" position as long as it's an elected one, correct?

Would it be illegal if they were elected from a group of former presidents?

Just curious.

Yes, I believe that you are correct. I think that if the past president is elected by the voting members from the former presidents then it would be legal to have a past president on the board even with the title of past president. We just can't have an unelected one whether the legitimizing election is by the members or by the board.

Vladimir Drkulec

01-05-2014, 09:11 PM

I have moved this from the other thread on the life membership motion as we are getting into NFP territory.

Vlad this is getting a little OT for this thread but I don't see that implemented NFP-compliant bylaws for the government as automatically invalidating the entire CFC handbook. We just have to make sure to take out anything that would conflict with those new rules.

Also I've stated elsewhere repeatedly that some regulation amendments should still require the super-majority to change under the new rules, even if they are not part of what we file with the government.

We will have to generate bylaws that are compliant. That is our first task. The governors will have to accept the bylaws with some requiring two thirds acceptance and others requiring 50% plus one vote. Oddly enough the ones that are required by the act require a two thirds positive vote which doesn't make much sense. Maybe its the government's way of weeding out not for profits who can't get their act together or perhaps their way of ensuring that every non profit that can't agree is run entirely under the rules of the new act.

Vladimir Drkulec

01-05-2014, 10:48 PM

A by-law relating generally to the conduct
of the affairs of
Chess Federation of Canada
(the "Corporation")
BE IT ENACTED as a by-law of the Corporation as follows:

1. Definition
In this by-law and all other by-laws of the Corporation, unless the context otherwise requires:
"Act" means the Canada Not-For-Profit Corporations Act S.C. 2009, c. 23 including the Regulations made pursuant to the Act, and any statute or regulations that may be substituted, as amended from time to time;
"articles" means the original or restated articles of incorporation or articles of amendment, amalgamation, continuance, reorganization, arrangement or revival of the Corporation;
"board" means the board of directors of the Corporation and "director" means a member of the board;
"by-law" means this by-law and any other by-law of the Corporation as amended and which are, from time to time, in force and effect;
"meeting of members" includes an annual meeting of members or a special meeting of members; "special meeting of members" includes a meeting of any class or classes of members and a special meeting of all members entitled to vote at an annual meeting of members;
"ordinary resolution" means a resolution passed by a majority of not less than 50% plus 1 of the votes case on that resolution;
"proposal" means a proposal submitted by a member of the Corporation that meets the requirements of section 163 (Shareholder Proposals) of the Act;
"Regulations" means the regulations made under the Act, as amended, restated or in effect from time to time; and
"special resolution" means a resolution passed by a majority of not less than two-thirds (2/3) of the votes cast on that resolution.

2. Interpretation
In the interpretation of this by-law, words in the singular include the plural and vice-versa, words in one gender include all genders, and "person" includes an individual, body corporate, partnership, trust and unincorporated organization.
Other than as specified above, words and expressions defined in the Act have the same meanings when used in these by-laws.

3. Corporate Seal
The Corporation may have a corporate seal in the form approved from time to time by the board. If a corporate seal is approved by the board, the secretary of the Corporation shall be the custodian of the corporate seal.

4. Execution of Documents
Deeds, transfers, assignments, contracts, obligations and other instruments in writing requiring execution by the Corporation may be signed by any two (2) of its officers or directors. In addition, the board may from time to time direct the manner in which and the person or persons by whom a particular document or type of document shall be executed. Any person authorized to sign any document may affix the corporate seal (if any) to the document. Any signing officer may certify a copy of any instrument, resolution,by-law or other document of the Corporation to be a true copy thereof.

5. Financial Year
The financial year end of the Corporation shall be April 30 in each year.

6. Banking Arrangements
The banking business of the Corporation shall be transacted at such bank, trust company or other firm or corporation carrying on a banking business in Canada or elsewhere as the board of directors may designate, appoint or authorize from time to time by resolution. The banking business or any part of it shall be transacted by an officer or officers of the Corporation and/or other persons as the board of directors may by resolution from time to time designate, direct or authorize.

7. Borrowing Powers
The directors of the Corporation may, without authorization of the members,
i. borrow money on the credit of the corporation;
ii. issue, reissue, sell, pledge or hypothecate debt obligations of the corporation;
iii. give a guarantee on behalf and
iv. mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the corporation, owned or subsequently acquired, to secure any debt obligation of the corporation.
8. Annual Financial Statements
The Corporation shall send to the members a copy of the annual financial statements and other documents referred to in subsection 172(1) (Annual Financial Statements) of the Act or a copy of a publication of the Corporation reproducing the information contained in the documents. Instead of sending the documents, the Corporation may send a summary to each member along with a notice informing the member of the procedure for obtaining a copy of the documents themselves free of charge. The Corporation is not required to send the documents or a summary to a member who, in writing, declines to receive such documents.
9. Membership Conditions
Subject to the articles, there shall be two classes of members in the Corporation, namely, Class A members and Class B members. The board of directors of the Corporation may, by resolution, approve the admission of the members of the Corporation. Members may also be admitted in such other manner as may be prescribed by the board by resolution. The following conditions of membership shall apply:
Class A Members
i. Class A voting membership shall be available only to individuals who have applied and have been accepted for Class A voting membership in the Corporation.
ii. The term of membership of a Class A voting member shall be annual, subject to renewal in accordance with the policies of the Corporation.
iii. As set out in the articles, each Class A voting member is entitled to receive notice of, attend and vote at all meetings of members and each such Class A voting member shall be entitled to one (1) vote at such meetings.
Class B Members
iv. Class B non-voting membership shall be available only to individuals who have applied and have been accepted for Class Bnon-voting membership in the Corporation.
v. The term of membership of a Class B non-voting member shall be annual, subject to renewal in accordance with the policies of the Corporation.
vi. Subject to the Act and the articles, a Class B non-voting member shall not be entitled to receive notice of, attend or vote at meetings of the members of the Corporation.
Pursuant to subsection 197(1) (Fundamental Change) of the Act, a special resolution of the members is required to make any amendments to this section of the by-laws if those amendments affect membership rights and/or conditions described in paragraphs 197(1)(e), (h), (l) or (m).

10. Membership Transferability
A membership may only be transferred to the Corporation. Pursuant to Section 197(1) (Fundamental Change) of the Act, a special resolution of the members is required to make any amendment to add, change or delete this section of the by-laws.

11. Notice of Members Meeting
Notice of the time and place of a meeting of members shall be given to each member entitled to vote at the meeting by telephonic, electronic or other communication facility to each member entitled to vote at the meeting, during a period of 2 to 7 days before the day on which the meeting is to be held.
Pursuant to subsection 197(1) (Fundamental Change) of the Act, a special resolution of the members is required to make any amendment to the by-laws of the Corporation to change the manner of giving notice to members entitled to vote at a meeting of members.
Pursuant to subsection 197(1) (Fundamental Change) of the Act, a special resolution of the members is required to make any amendment to the by-laws of the Corporation to change the manner of giving notice to members entitled to vote at a meeting of members.

12. Members Calling a Members' Meeting
The board of directors shall call a special meeting of members in accordance with Section 167 of the Act, on written requisition of members carrying not less than 5% of the voting rights. If the directors do not call a meeting within twenty-one (21) days of receiving the requisition, any member who signed the requisition may call the meeting.

13. Absentee Voting at Members' Meetings
Pursuant to section 171(1) (Absentee Voting) of the Act, a member entitled to vote at a meeting of members may vote by mailed-in ballot or by means of a telephonic, electronic or other communication facility if the Corporation has a system that:
a. enables the votes to be gathered in a manner that permits their subsequent verification, and
b. permits the tallied votes to be presented to the Corporation without it being possible for the Corporation to identify how each member voted.
Pursuant to subsection 197(1) (Fundamental Change) of the Act, a special resolution of the members is required to make any amendment to the by-laws of the Corporation to change this method of voting by members not in attendance at a meeting of members.

14. Membership Dues
Members shall be notified in writing of the membership dues at any time payable by them and, if any are not paid within one (1) calendar month of the membership renewal date the members in default shall automatically cease to be members of the Corporation.

15. Termination of Membership
A membership in the Corporation is terminated when:
. the member dies or resigns;
a. the member is expelled or their membership is otherwise terminated in accordance with the articles or by-laws;
b. the member's term of membership expires; or
c. the Corporation is liquidated and dissolved under the Act.

16. Effect of Termination of Membership
Subject to the articles, upon any termination of membership, the rights of the member, including any rights in the property of the Corporation, automatically cease to exist.

17. Discipline of Members

18. Proposals Nominating Directors at Annual Members' Meetings
Subject to the Regulations under the Act, any proposal may include nominations for the election of directors if the proposal is signed by not less than 5% of members entitled to vote at the meeting at which the proposal is to be presented.

19. Cost of Publishing Proposals for Annual Members' Meetings
The member who submitted the proposal shall pay the cost of including the proposal and any statement in the notice of meeting at which the proposal is to be presented unless otherwise provided by ordinary resolution of the members present at the meeting.

20. Place of Members' Meeting
Subject to compliance with section 159 (Place of Members' Meetings) of the Act, meetings of the members may be held at any place within Canada determined by the board or, if all of the members entitled to vote at such meeting so agree, outside Canada.

21. Persons Entitled to be Present at Members' Meetings
Members, non-members, directors and the public accountant of the Corporation are entitled to be present at a meeting of members. However, only those members entitled to vote at the members' meeting according to the provisions of the Act, articles and by-lawsare entitled to cast a vote at the meeting.

22. Chair of Members' Meetings
In the event that the president and the vice-president of the board are absent, the members who are present and entitled to vote at the meeting shall choose one of their number to chair the meeting.

23. Quorum at Members' Meetings
A quorum at any meeting of the members (unless a greater number of members are required to be present by the Act) shall be 25 percent of the members entitled to vote at the meeting. If a quorum is present at the opening of a meeting of members, the members present may proceed with the business of the meeting even if a quorum is not present throughout the meeting.

24. Votes to Govern at Members' Meetings
At any meeting of members every question shall, unless otherwise provided by the articles or by-laws or by the Act, be determined by a majority of the votes cast on the questions. In case of an equality of votes either on a show of hands or on a ballot or on the results of electronic voting, the chair of the meeting in addition to an original vote shall have a second or casting vote.

25. Participation by Electronic Means at Members' Meetings
If the Corporation chooses to make available a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during a meeting of members, any person entitled to attend such meeting may participate in the meeting by means of such telephonic, electronic or other communication facility in the manner provided by the Act. A person participating in a meeting by such means is deemed to be present at the meeting. Notwithstanding any other provision of this by-law, any person participating in a meeting of members pursuant to this section who is entitled to vote at that meeting may vote, in accordance with the Act, by means of any telephonic, electronic or other communication facility that the Corporation has made available for that purpose.

26. Members' Meeting Held Entirely by Electronic Means
If the directors or members of the Corporation call a meeting of members pursuant to the Act, those directors or members, as the case may be, may determine that the meeting shall be held, in accordance with the Act and the Regulations, entirely by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.

27. Number of Directors
The board shall consist of the number of directors specified in the articles. If the articles provide for a minimum and maximum number of directors, the board shall be comprised of the fixed number of directors as determined from time to time by the members by ordinary resolution or, if the ordinary resolution empowers the directors to determine the number, by resolution of the board. In the case of a soliciting corporation the minimum number of directors may not be fewer than three (3), at least two of whom are not officers or employees of the Corporation or its affiliates.

28. Term of Office of Directors
The directors shall be elected to hold office for a term expiring not later than the close of the next annual meeting of members following the election.

29. Calling of Meetings of Board of Directors
Meetings of the board may be called by the chair of the board, the vice-chair of the board or any two (2) directors at any time. If the Corporation has only one director, that director may call and constitute a meeting.

30. Notice of Meeting of Board of Directors
Notice of the time and place for the holding of a meeting of the board shall be given in the manner provided in the section on giving notice of meeting of directors of this by-law to every director of the Corporation not less than 2 days before the time when the meeting is to be held. Notice of a meeting shall not be necessary if all of the directors are present, and none objects to the holding of the meeting, or if those absent have waived notice of or have otherwise signified their consent to the holding of such meeting. Notice of an adjourned meeting is not required if the time and place of the adjourned meeting is announced at the original meeting. Unless the by-law otherwise provides, no notice of meeting need specify the purpose or the business to be transacted at the meeting except that a notice of meeting of directors shall specify any matter referred to in subsection 138(2) (Limits on Authority) of the Act that is to be dealt with at the meeting.

31. Votes to Govern at Meetings of the Board of Directors
At all meetings of the board, every question shall be decided by a majority of the votes cast on the question. In case of an equality of votes, the chair of the meeting in addition to an original vote shall have a second or casting vote.

32. Committees of the Board of Directors
The board may from time to time appoint any committee or other advisory body, as it deems necessary or appropriate for such purposes and, subject to the Act, with such powers as the board shall see fit. Any such committee may formulate its own rules of procedure, subject to such regulations or directions as the board may from time to time make. Any committee member may be removed by resolution of the board of directors.

33. Appointment of Officers
The board may designate the offices of the Corporation, appoint officers on an annual or more frequent basis, specify their duties and, subject to the Act, delegate to such officers the power to manage the affairs of the Corporation. A director may be appointed to any office of the Corporation. An officer may, but need not be, a director unless these by-laws otherwise provide. Two or more offices may be held by the same person.

[B]34. Description of Offices

35. Vacancy in Office
In the absence of a written agreement to the contrary, the board may remove, whether for cause or without cause, any officer of the Corporation. Unless so removed, an officer shall hold office until the earlier of:
. the officer's successor being appointed,
a. the officer's resignation,
b. such officer ceasing to be a director (if a necessary qualification of appointment) or
c. such officer's death.
If the office of any officer of the Corporation shall be or become vacant, the directors may, by resolution, appoint a person to fill such vacancy.

36. Method of Giving Any Notice
Any notice (which term includes any communication or document), other than notice of a meeting of members or a meeting of the board of directors, to be given (which term includes sent, delivered or served) pursuant to the Act, the articles, the by-laws or otherwise to a member, director, officer or member of a committee of the board or to the public accountant shall be sufficiently given:
. if delivered personally to the person to whom it is to be given or if delivered to such person's address as shown in the records of the Corporation or in the case of notice to a director to the latest address as shown in the last notice that was sent by the Corporation in accordance with section 128 (Notice of directors) or 134 (Notice of change of directors);
a. if mailed to such person at such person's recorded address by prepaid ordinary or air mail;
b. if sent to such person by telephonic, electronic or other communication facility at such person's recorded address for that purpose; or
c. if provided in the form of an electronic document in accordance with Part 17 of the Act.
A notice so delivered shall be deemed to have been given when it is delivered personally or to the recorded address as aforesaid; a notice so mailed shall be deemed to have been given when deposited in a post office or public letter box; and a notice so sent by any means of transmitted or recorded communication shall be deemed to have been given when dispatched or delivered to the appropriate communication company or agency or its representative for dispatch. The secretary may change or cause to be changed the recorded address of any member, director, officer, public accountant or member of a committee of the board in accordance with any information believed by the secretary to be reliable. The declaration by the secretary that notice has been given pursuant to thisby-law shall be sufficient and conclusive evidence of the giving of such notice. The signature of any director or officer of the Corporation to any notice or other document to be given by the Corporation may be written, stamped, type-written or printed or partly written, stamped, type-written or printed.

37. Invalidity of any Provisions of this By-law
The invalidity or unenforceability of any provision of this by-law shall not affect the validity or enforceability of the remaining provisions of this by-law.

38. Omissions and Errors
The accidental omission to give any notice to any member, director, officer, member of a committee of the board or public accountant, or the non-receipt of any notice by any such person where the Corporation has provided notice in accordance with theby-laws or any error in any notice not affecting its substance shall not invalidate any action taken at any meeting to which the notice pertained or otherwise founded on such notice.

39. By-laws and Effective Date
Subject to the articles, the board of directors may, by resolution, make, amend or repeal any by-laws that regulate the activities or affairs of the Corporation. Any such by-law, amendment or repeal shall be effective from the date of the resolution of directors until the next meeting of members where it may be confirmed, rejected or amended by the members by ordinary resolution. If the by-law, amendment or repeal is confirmed or confirmed as amended by the members it remains effective in the form in which it was confirmed. The by-law, amendment or repeal ceases to have effect if it is not submitted to the members at the next meeting of members or if it is rejected by the members at the meeting.
This section does not apply to a by-law that requires a special resolution of the members according to subsection 197(1) (fundamental change) of the Act because such by-law amendments or repeals are only effective when confirmed by members.

The above is mostly a default by-law builder set of bylaws with two clauses removed into the next post (one section 17. Discipline of Members to separate out the potential controversy) and another Section 34 Description of Offices because it is not ready for prime time. Would this set of bylaws be acceptable to the governors who will become the voting Class A members under the new bylaws?

Vladimir Drkulec

01-05-2014, 11:06 PM

Article 17 needs to be addressed by the governors. The first part of the article mirrors the default NFP Act section on discipline with the exception that I have altered it to allow the voting members (currently called governors) to overturn the discipline decision of the directors.

The board shall have authority to suspend or expel any member from the Corporation for any one or more of the following grounds:
. violating any provision of the articles, by-laws, or written policies of the Corporation;
a. carrying out any conduct which may be detrimental to the Corporation as determined by the board in its sole discretion;
b. for any other reason that the board in its sole and absolute discretion considers to be reasonable, having regard to the purpose of the Corporation.
In the event that the board determines that a member should be expelled or suspended from membership in the Corporation, the president, or such other officer as may be designated by the board, shall provide twenty (20) days notice of suspension or expulsion to the member and shall provide reasons for the proposed suspension or expulsion. The member may make written submissions to the president, or such other officer as may be designated by the board, in response to the notice received within such twenty (20) day period. In the event that no written submissions are received by the president, the president, or such other officer as may be designated by the board, may proceed to notify the member that the member is suspended or expelled from membership in the Corporation. If written submissions are received in accordance with this section, the board will consider such submissions in arriving at a final decision and shall notify the member concerning such final decision within a further twenty (20) days from the date of receipt of the submissions. The board's decision may be appealed to the class A voting members at the next regularly quarterly meeting. The board decision may be overturned by a simple majority / two thirds majority of the members.

The members shall have authority to suspend or expel any member from the Corporation by a three quarters majority vote at the annual general meeting.
[/B]
In the second half we have the current rule in the CFC. The governors can require someone to resign with a three quarter majority vote at the annual meeting.

The third option is to have no provision for discipline of members.

Article 34 needs to be re-written. At the moment it is a mish mash of the default for the new NFP act and the current CFC executive.

34. Description of Offices
The Board of Directors shall be elected at the Annual Meeting of the Assembly and shall be constituted by seven persons, namely, the President, Vice-President, Past President, Secretary, Treasurer, FIDE Representative and Youth Coordinator unless these titles are changed by ordinary resolution of the Assembly pursuant to section 8(f) at the annual meeting. The position of Past President shall not be elected but shall be occupied by the immediate Past President unless he resigns or the Assembly, by ordinary resolution, at the Annual Meeting specifically decides to elect another person in place of the Past President. Upon election at an Annual Meeting the Board of Directors shall serve as Directors until the next Annual Meeting of the Assembly or until the Director(s) resign(s) or their successors are elected or appointed in their stead unless replaced by a vote of the Assembly prior to that time.

Unless otherwise specified by the board (which may, subject to the Act modify, restrict or supplement such duties and powers), the offices of the Corporation, if designated and if officers are appointed, shall have the following duties and powers associated with their positions:
. President – The chair of the board, if one is to be appointed, shall be a director. The chair of the board, if any, shall, when present, preside at all meetings of the board of directors and of the members. The chair shall have such other duties and powers as the board may specify.
a. Vice-Chair of the Board – The vice-chair of the board, if one is to be appointed, shall be a director. If the chair of the board is absent or is unable or refuses to act, the vice-chair of the board, if any, shall, when present, preside at all meetings of the board of directors and of the members. The vice-chair shall have such other duties and powers as the board may specify.
b. President – If appointed, the president shall be the chief executive officer of the Corporation and shall be responsible for implementing the strategic plans and policies of the Corporation. The president shall, subject to the authority of the board, have general supervision of the affairs of the Corporation.
c. Secretary – If appointed, the secretary shall attend and be the secretary of all meetings of the board, members and committees of the board. The secretary shall enter or cause to be entered in the Corporation's minute book, minutes of all proceedings at such meetings; the secretary shall give, or cause to be given, as and when instructed, notices to members, directors, the public accountant and members of committees; the secretary shall be the custodian of all books, papers, records, documents and other instruments belonging to the Corporation.
d. Treasurer – If appointed, the treasurer shall have such powers and duties as the board may specify.

The powers and duties of all other officers of the Corporation shall be such as the terms of their engagement call for or the board or president requires of them. The board may from time to time and subject to the Act, vary, add to or limit the powers and duties of any officer.

Vladimir Drkulec

01-06-2014, 12:42 AM

Yes, I believe that you are correct. I think that if the past president is elected by the voting members from the former presidents then it would be legal to have a past president on the board even with the title of past president. We just can't have an unelected one whether the legitimizing election is by the members or by the board.

Pierre Dénommée has indicated that, "The newly elected board can appoint the past president. At most 1/3 of the directors can be appointed by the Board of Director after the voting members have elected it." My answer reflected this option but may not have been clearly stated.

Lyle Craver

01-06-2014, 02:59 AM

I am unclear on Vlad's use of color - I presume the blue means areas where he feels we are OK and red where we are not.

I like Pierre's suggestion with respect to the Past President

I have major concerns with item 23 on Quorum - is this supposed to be based on Governors or on the membership at large? If the latter it's a formula for nervous collapse on the part of the Secretary since an important part of the Secretary's role is determining who is and is not entitled to vote.

The online AGM would appear to be OK based on my reading of #20 and #25.

I note en passant that the USCF called the role we call "Governor" "Voting Member" for years. I do not know whether this was in response to US Federal legislation or simply their own practice.

I think we're OK on voting in Governors' meetings under 13A and 13B as that reflects our current practice. I am unclear if this requires all Governors voting to be secret after the ballot which is not our current practice on most matters.

I am unclear the usefulness of the provision for removing an Executive or Officer at an AGM since presently their terms of office go from AGM to AGM so wouldn't the point be moot?

Egidijus Zeromskis

01-06-2014, 10:21 AM

Will these new bylaws benefit to obtain a status of a registered Canadian amateur athletic association as a way for the CFC to become a charitable organization again?

Lyle Craver

01-06-2014, 11:55 AM

They're pretty much a prerequisite for application as I understand it

Vladimir Drkulec

01-06-2014, 01:45 PM

I am unclear on Vlad's use of color - I presume the blue means areas where he feels we are OK and red where we are not.

The colour is meant only to highlight the two separate bylaws as separate items for discussion. The first part of the one in blue is the default law on discipline under the new NFP act with minor tweaks to allow an appeal to the voting members of any suspension.

The members shall have authority to suspend or expel any member from the Corporation by a three quarters majority vote at the annual general meeting.

This line in blue is our current law in the area of discipline. It probably doesn't make sense in our present practice of quarterly online meetings.

I like Pierre's suggestion with respect to the Past President

I have major concerns with item 23 on Quorum - is this supposed to be based on Governors or on the membership at large? If the latter it's a formula for nervous collapse on the part of the Secretary since an important part of the Secretary's role is determining who is and is not entitled to vote.

The current rule is 15 governors. I guessed that we had 60 governors and thought that the number of governors might increase or decrease so 25 percent seemed reasonable. We can stick with the present rule which is:

There shall be a quorum of 15 governors to constitute a meeting.

Which would become:

There shall be a quorum of 15 voting members to constitute a meeting.

The online AGM would appear to be OK based on my reading of #20 and #25.

I note en passant that the USCF called the role we call "Governor" "Voting Member" for years. I do not know whether this was in response to US Federal legislation or simply their own practice.

I think we're OK on voting in Governors' meetings under 13A and 13B as that reflects our current practice. I am unclear if this requires all Governors voting to be secret after the ballot which is not our current practice on most matters.

I am unclear the usefulness of the provision for removing an Executive or Officer at an AGM since presently their terms of office go from AGM to AGM so wouldn't the point be moot?

I suspect that this is an old holdover from what the rule was when the AGM was the way CFC business was conducted.

Vladimir Drkulec

01-06-2014, 01:55 PM

Will these new bylaws benefit to obtain a status of a registered Canadian amateur athletic association as a way for the CFC to become a charitable organization again?

For the most part they are the defaults suggested by the new legislation with some minor tweaks to pay homage to our current practices. If there are any additional steps required for sporting organization status we will be able to amend these later at a cost of $200. I can look at this but our task is to find bylaws acceptable to the governors and to the government ahead of the deadline. Michael von Keitz has mentioned some of the requirements of registering as a sporting organization and getting compliant with the new NFP act is the main first step before we can even think about any of the others.

Christopher Mallon

01-06-2014, 03:05 PM

Vladimir Drkulec

01-06-2014, 03:15 PM

I think that setting a specific number for quorum is just asking for problems in the future after possible other changes. Why not just say quorum is 25% of the Voting Members?

Actually that probably needs to be higher. We are going to be losing the Life Governors. I'd go with 33% or even 40%.

I don't think at this point that we need to lose the life governors. They can't be on the board of directors but I don't see anything in the legislation which says that they can't be voting members. I hope if I am wrong on this that Pierre will correct me with a pointer to the clause that proscribes life voting members. I didn't see it on my look at the legislation nor did I see any reference in any of the government or information websites that I have consulted so far.

If we set quorum at 40% then this meeting would not have quorum at the moment though it might be getting close with 20 governors signed in. I also like to keep things simple so maybe a simple count is better than a percentage. At the sample bylaw at the following government website they give 10% as an acceptable quorum unless proscribed by the NFP act.

http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs04999.html#fnb8

A quorum at any meeting of the members (unless a greater number of members are required to be present by the Act) shall be 10% of the members entitled to vote at the meeting. If a quorum is present at the opening of a meeting of members, the members present may proceed with the business of the meeting even if a quorum is not present throughout the meeting.

Bob Armstrong

01-06-2014, 06:58 PM

I don't think at this point that we need to lose the life governors. They can't be on the board of directors but I don't see anything in the legislation which says that they can't be voting members. I hope if I am wrong on this that Pierre will correct me with a pointer to the clause that proscribes life voting members. I didn't see it on my look at the legislation nor did I see any reference in any of the government or information websites that I have consulted so far.[/B]

Hi Vlad:

While I respect the contribution of Life Presidents in the past, they make generally no contribution at these meetings at all NOW. And "Life" is anathema to me - undemocratic - unelected. They should be given some type of "Honorary" role, to confirm their past contributions, but NO CURRENT VOTE, unless they agree that they will annually run for office and not adhere to their current LIFE ENTITLEMENT.

Bob A

Christopher Field

01-06-2014, 10:44 PM

Will these new bylaws benefit to obtain a status of a registered Canadian amateur athletic association as a way for the CFC to become a charitable organization again?

I believe it has been stated that we first need to comply with the not-for-profit act.
Once we have done this, and a certificate of continuance has been issued, other kinds of status could be sought.
I believe that Vlad is correct: we need to get this done at the April meeting, with the current board of governors.

Vladimir Drkulec

01-06-2014, 10:46 PM

Hi Vlad:

While I respect the contribution of Life Presidents in the past, they make generally no contribution at these meetings at all NOW. And "Life" is anathema to me - undemocratic - unelected. They should be given some type of "Honorary" role, to confirm their past contributions, but NO CURRENT VOTE, unless they agree that they will annually run for office and not adhere to their current LIFE ENTITLEMENT.

Bob A

They are currently life governors. To eliminate them might require a two thirds majority vote of the life governors in addition to a two thirds majority of the governors as a whole under the new act and maybe even a two thirds majority of the senior members if your motion to create a senior member class succeeds. Of course you might be able to eliminate life governors before the NFP transition. In that case you need to convince two thirds of the governors including the life governors. Time is running out though. You will need to do it by the next meeting. Things get much more difficult after that.

I have noticed that some of the life governors do vote.

Bob Armstrong

01-06-2014, 11:10 PM

Of course you might be able to eliminate life governors before the NFP transition. In that case you need to convince two thirds of the governors including the life governors. Time is running out though. You will need to do it by the next meeting. Things get much more difficult after that.

I have noticed that some of the life governors do vote.

Hi Vlad: I tried that a number of years ago, supported by my grassroots group at the time, the Canadian Constitutional Coalition. We had a 2/3 majority it seemed, until Les Bunning move a compromise, and the motion failed. And Les never did come back with the activity motion restraint on Life Governors that he promised at the time.

I do not know if the minds of any governors have changed on the worthwhileness of the compromise. I find it a failure, myself. There should be no LIFE GOVERNORS, now or in the new age. But it is others who must now judge this - seems my judgment has been a bit off on it. Maybe someone else will analyze it as I once did, and bring the needed motion (or maybe not).

Bob A

Lyle Craver

01-07-2014, 02:10 PM

Egidijus Zeromskis

01-07-2014, 03:00 PM

My remarks reading a document:

Definitions should include "Officer means ...".

"5. Financial Year The financial year end of the Corporation shall be April 30 in each year." - Should it say when the year starts too?

"8. Annual Financial Statements
The Corporation shall send to the members a copy of the annual financial statements " - is this mandatory by the Act? Can it be posted online? or Limited to Governors (Members A)?

A membership in the Corporation is terminated when:
. the member dies or resigns;
a. the member is expelled or their membership is otherwise terminated in accordance with the articles or by-laws; - a numeration is missed for a "dies" item.

"Subject to the Regulations under the Act, any proposal may include nominations for the election of directors if the proposal is signed by not less than 5% of members entitled to vote at the meeting at which the proposal is to be presented." - Are you kidding? Where did disappear The Mover and the Seconder?

"19. Cost of Publishing Proposals for Annual Members' Meetings
The member who submitted the proposal shall pay the cost of including the proposal and any statement in the notice of meeting at which the proposal is to be presented unless otherwise provided by ordinary resolution of the members present at the meeting." - How much will be introduce the motion (aka hourly rate of Secretary + President)?

20. Place of Members' Meeting
Subject to compliance with section 159 (Place of Members' Meetings) of the Act, meetings of the members may be held at any place within Canada determined by the board or, if all of the members entitled to vote at such meeting so agree, outside Canada.
26. Members' Meeting Held Entirely by Electronic Means - 20 +26 should go side by side.

My suggestions:
Rename Vice-Chair to Vice President
Remove Past President, and replace it with a Tournaments Coordinator (Director).

IMHO, the by-laws dismantle a Federation as an association of the Provincial organizations. Unless Articles will be presented too ("9. Membership Conditions
Subject to the articles"

Bob Armstrong

01-07-2014, 03:07 PM

Vladimir Drkulec

01-07-2014, 03:13 PM

I've always been a supporter of the concept of life governors as I've felt it an accolade for some of our hardest working volunteers. As someone who has directed 100+ tournaments from club level through provincial and national championships I don't want to denigrate volunteers who didn't serve as CFC president but on the other hand having served on the Executive for a number of years know how much work doing a good job as CFC president entails. (Given my work commitments and knowing what's required to do the job right I've never been inspired to seek the job myself)

However Ottawa seems to be dictating that the life governorship model is to be history so I now seek some alternate way of honoring these past Executives. I don't want to be sending these folks letters saying "Thank you for your past service but..." - to me that would be a gratuitous kick in the teeth.

As far as I can tell Ottawa is not dictating that the life governors are to be history. Having an unelected (whether by the voting members or executive) past president on the board is not allowed. Having unelected past presidents as voting members IS allowed. In fact to change our present arrangement may require two thirds majority of all of the different classes of members.

The following article entitled "The Members" gives a summary of the requirements and rights and responsibilities of members.
http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs05006.html

Vladimir Drkulec

01-07-2014, 03:50 PM

Hi Lyle:

I agree that Life governors have earned our thanks and respect. But this need not involve giving them a non-elected vote for life.

Does the new NFPA allow for "Honorary Non-Voting Members For Life (unelected)"??

They would be like the old governors, able to attend meetings, join in debate, bring and second motions, etc. They just could NOT VOTE.

Bob A

Giving them a non-elected vote for life has already been done. The NFPA does not allow for "Honorary Non-Voting Members For Life (unelected)" and trying to add such a class would be a problem as even if you got it past the approval process then you would have created an additional class of members of which you would might require two thirds approval of any major change of the CFC bylaws and structure.

The time to deal with these questions is right now, before the new act kicks in. It seems to me that quite a few people are sleepwalking through this discussion. If we don't resolve this by October 17th then on October 18th the CFC will cease to exist as a corporation. Our money and assets will belong to the federal government. There will be no governors, no executive and no CFC.

Vladimir Drkulec

01-07-2014, 04:19 PM

My remarks reading a document:

Definitions should include "Officer means ...".

"5. Financial Year The financial year end of the Corporation shall be April 30 in each year." - Should it say when the year starts too?

No, there is no provision to put that in. The new financial year starts the day after the old one ends.

"8. Annual Financial Statements
The Corporation shall send to the members a copy of the annual financial statements " - is this mandatory by the Act? Can it be posted online? or Limited to Governors (Members A)?

The financial statements can be posted online. I don't believe that you can limit access to just the governors.

A membership in the Corporation is terminated when:
. the member dies or resigns;
a. the member is expelled or their membership is otherwise terminated in accordance with the articles or by-laws; - a numeration is missed for a "dies" item.

This is the way the bylaw builder generates the output. It is their glitch which we will need to be aware of when we create our version.

"Subject to the Regulations under the Act, any proposal may include nominations for the election of directors if the proposal is signed by not less than 5% of members entitled to vote at the meeting at which the proposal is to be presented." - Are you kidding? Where did disappear The Mover and the Seconder?

We have the option of changing that to 5%, 4%, 3%, 2% or 1%. The default was 5%. No mention in the act of a mover and a seconder.

"19. Cost of Publishing Proposals for Annual Members' Meetings
The member who submitted the proposal shall pay the cost of including the proposal and any statement in the notice of meeting at which the proposal is to be presented unless otherwise provided by ordinary resolution of the members present at the meeting." - How much will be introduce the motion (aka hourly rate of Secretary + President)?

We are going to continue to largely rely on email for our notifications so the cost of including notice will continue to be zero at least under this executive.

20. Place of Members' Meeting
Subject to compliance with section 159 (Place of Members' Meetings) of the Act, meetings of the members may be held at any place within Canada determined by the board or, if all of the members entitled to vote at such meeting so agree, outside Canada.
26. Members' Meeting Held Entirely by Electronic Means - 20 +26 should go side by side.

They should be side by side but I can only do that manually and not through the bylaws generated by the government website bylaw builder application.

My suggestions:
Rename Vice-Chair to Vice President
Remove Past President, and replace it with a Tournaments Coordinator (Director).

IMHO, the by-laws dismantle a Federation as an association of the Provincial organizations. Unless Articles will be presented too ("9. Membership Conditions
Subject to the articles"

That section is still a work in progress on my part. I think that it can largely be replaced using the present list of descriptions in our articles/handbook. At the moment I believe that we can largely preserve our handbook and articles but rewriting them to remove and replace references to the governors with references to voting members and references to executive with references to the board. I think that we have to set a timeline for updating the handbook after we get compliant with the new act.

It seems to me that large parts of the handbook will continue to be relevant but we will have to do some work on them. There are currently many sections that really address a CFC that has passed out of existence many years ago.

The provincial organizations are facing their own revamps of provincial not for profit acts at least in Ontario and I suspect also in a few other provinces.

Les Bunning

01-07-2014, 09:03 PM

Although I haven't looked at the legalities of including life governors as voting members I believe that as a life governor I am at least as active as many of the other governors. Nevertheless I appreciate that some of the life governors are inactive and should have their privileges revoked. We should have a rule that life governors who do not participate in governors discussions for say one or 2 years are deemed to have their life governership lapse.
Les Bunning

Bob Armstrong

01-07-2014, 09:39 PM

Vladimir Drkulec

01-07-2014, 09:50 PM

Pierre makes a couple of points.

Life Governors are illegal under the new Act. No vote is required to get rid of them. Its like drug dealers, they are illegal and no vote is taken for removing them from the street.

So far I do not see where the new legislation says this but I will take a closer look.

The current Act makes a difference between the Act of Incorporation and the Bylaws. The later can be changed without paying and the former cost 200$ per change.

It seems to me that Pierre is right on this which means that much of my concern around this process has been significantly reduced. If we get it wrong it is not going to cost us large amounts of money to fix it.

Garland Best

01-07-2014, 10:46 PM

Looking at the list of life governors, I note that Les and Halldor are active contributors to the meetings, and definitely add value in their roles. Regarding the remaining 7 life governors, I do not recall any contributions from either of them in any of the meetings. If I am wrong, perhaps someone could correct me. Les's motion would reduce the number of Life Governors down to two. An argument could be made that if Life Governorships were revoked, then at the annual EOCA meetings it would be almost a formality if Les and Halldor submitted their names to be governors.

If an activity motion was drafted, I would most likely vote in favor, but I personally think the concept of life governors is archaic. There are other ways to honor these people. A "hall of of fame" and free lifetime membership come immediately to mind. I don't think it would be an insult if Life Governors were eliminated as part of the restructuring process (perhaps Les and Haldor would disagree).

Vladimir Drkulec

01-08-2014, 12:24 AM

http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs04965.html

Annex A
Provisions in Letters Patent and By-laws Superseded by the NFP Act
Show Table of Contents
Because the old Act contained few rules, the letters patent and by-laws of your corporation likely include provisions relating to the following matters. In contrast, the NFP Act provides rules to deal with these matters that apply to all not-for-profit corporations. Consequently, the articles and new by-laws of your corporation do not need to set out these provisions.

Do not include provisions dealing with the following matters:

Statement that the operations of the corporation may be carried on throughout Canada: The NFP Act makes it clear that the corporation may carry on activities throughout Canada.
Statement that the corporation is to carry on its operations without pecuniary gain to its members: Under the NFP Act, no profit can be distributed to members unless it is in furtherance of the corporation’s activities or is otherwise permitted by the Act.
Removal of directors: The NFP Act provides that members may remove a director by majority vote at a special meeting. This reinforces the NFP Act rule that only members elect directors.
Appointment of ex-officio directors: The NFP Act does not permit ex-officio directors (i.e., individuals who are directors by virtue of the office they occupy). Individuals, not offices, are elected by members to be directors.
Powers of the board of directors to manage the corporation: The NFP Act gives directors the responsibility for managing or supervising the management of a corporation. This responsibility can be restricted in the articles.
Annual meetings of members: The NFP Act requires that annual meetings of members be held. Written resolutions in lieu of a meeting are allowed.
Enactment, amendment or repeal of by-laws: Ministerial approval will not be required to make a by-law effective.
Appointment of auditor: The NFP Act requires members of a corporation to appoint a public accountant at the annual meeting. Members of a soliciting corporation with gross annual revenues equal to or less than $50,000 and members of a non-soliciting corporation with gross annual revenues less than or equal to $1 million can, by unanimous vote, decide not to appoint a public accountant.
Report by auditor: The NFP Act specifies the types of financial review (audit or review engagement) that an auditor can conduct (see table).
Financial Review Requirements
Type of Corporation Gross Annual Revenues Default Financial Review Options Members Can Choose
soliciting less than $50K Review engagement Audit or no review
soliciting between $50K and $250K Audit Review engagement
soliciting more than $250K Audit N/A
non-soliciting less than $1M Review engagement Audit or no review
non-soliciting more than $1M Audit N/A

Vladimir Drkulec

01-08-2014, 12:48 AM

http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs05012.html

Special Resolution of Members

Continuing the Corporation under the provisions of the Canada Not-for-profit Corporations Act and authorizing the directors to apply for a Certificate of Continuance.

WHEREAS the Corporation was incorporated under Part II of the Canada Corporations Act by Letters Patent dated the space to insert day day of space to insert month, space to insert year; and

[WHEREAS those Letters Patent were amended by Supplementary Letters Patent dated the space to insert day day of space to insert month, space to insert year; and]

WHEREAS it is considered to be in the best interests of the Corporation that it be continued under the Canada Not-for-profit Corporations Act (NFP Act) pursuant to section 297 of the NFP Act;

BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:

The directors of the Corporation are authorized and directed to make an application under section 297 of the NFP Act to the Director appointed under the NFP Act for a Certificate of Continuance of the Corporation;
The Articles of Continuance (transition) of the Corporation, which have been submitted to this meeting and are annexed to these minutes as Schedule A, are approved;
The general operating by-law of the Corporation (as amended) is repealed effective on the date that the corporation continues under the NFP Act and the new general operating by-law No.1 which has been submitted to this meeting and is annexed to these minutes as Schedule B is approved and will be effective on the same date.
Any one of the officers and directors of the Corporation is authorized to take all such actions and execute and deliver all such documentation, including the annexed Articles of Continuance (transition), the notice of registered office and of directors in the forms fixed by the Director, which are necessary or desirable for the implementation of this resolution.
The undersigned, being the duly appointed (Secretary) of the Corporation, certifies that the above is a true and correct copy of a special resolution of space to insert day day of space to insert month, by a majority of not less than two-thirds of the votes cast by the members of the Corporation who voted in respect of the resolution, and the resolution is in full force and effect, unamended as of the date below.

Dated space to insert date

space to insert full name
Secretary

Vladimir Drkulec

01-08-2014, 12:53 AM

The implications of this model special resolution are that our old general operating bylaw is to be repealed.

Lyle Craver

01-08-2014, 01:27 AM

Looking at the list of life governors, I note that Les and Halldor are active contributors to the meetings, and definitely add value in their roles. Regarding the remaining 7 life governors, I do not recall any contributions from either of them in any of the meetings. If I am wrong, perhaps someone could correct me.

Bunning, Palsson and Cabanas have all voted in 2013-14 so far.

During 2012-13 Bunning, Palsson, Cabanas and Peter Stockhausen have both participated in Quarterly Meetings during 2012-2013. (Stockhausen actually cast more votes than Bunning)

In 2011-12 the same 4 plus Maurice Smith.

These statistics are taken from the voting ledgers of 2011-12, 2012-13 and 2013-14.

Lyle Craver

01-08-2014, 02:09 AM

The implications of this model special resolution are that our old general operating bylaw is to be repealed.

Specifically do you mean Section 2, Bylaws 1, 2 and 3? (http://chess.ca/handbook#section-2)

I've just finished re-reading the Transition Guide (http://www.ic.gc.ca/eic/site/cd-dgc.nsf/vwapj/Transition_Guide_2ndeditionl_EN.pdf/$file/Transition_Guide_2ndeditionl_EN.pdf) which I recommend all Governors do read - read the appendices if nothing else! and am wondering if we define our membership classes in terms of
"the following membership types are voting: O,L,F,H...", "the following membership types are non-voting: J..." Would we be legal with a clause saying "All classes defined as voting are one class for all Federation purposes"?

I'm also trying to wrap my head around the terminology - looks to me like what the guide calls "Members" are what we call "Governors" and the present Executive are what are called Directors. I am unclear in NFP Guide-ese where our non-Executive Officers fit in exactly which is important since most of them fill roles the Executive doesn't really have the time to effectively do. In the interests of clarity we probably should have a list clearly saying which CFC terms designate which NFP Act terms. I like the old USCF term "Voting Member"

Past-President - a >LOT< of NFP's have past-presidents on their boards - it looks like the board could each year elect the PP till the next AGM, no?

I've also read through their sample bylaws. 3.03 on expelling a member seems quite hard. 4.01 on those entitled to be present at a meeting does not seem to require any change on the existing procedures

To me the strangest part of the whole document is the last sentence of section 7 which says If the office of any officer of the Corporation shall be or become vacant, the directors may, by resolution,
appoint a person to fill such vacancy. which to me says the appointed member of the Executive doesn't even have to be a member (!?!) which to me is quite remarkable.

I confess I am struggling to work out a formula for 'voting member' that would pass the new NFP test though being a national organization I think the present scheme of affilates and the per capita formula serves the CFC well. Perhaps Les could weigh in on whether the present formula or something much like it could go forward.

Fundamentally I'm concerned about the NFP Acts use of 'member' since if the NFP Act's "member" was what most of us think of as a member we could never have an AGM because we could never get 5% of our total membership present. And an online meeting with 90-100 people taking part would almost certainly be unworkable. Does anybody here know another NFP that has passed their continuance that could share their experience on this point? Overall, I despise terms like the NFP Act's use of "member" which clearly means something different from what most of us (most especially those we represent) think of as "member". Unless we make the full version of "member" to be "member of the CFC Assembly of Governors"

Vladimir Drkulec

01-08-2014, 04:12 PM

My thought on how this might go forward is that we will submit to the governors a stripped down bylaw which will be consistent with the new NFP act and will be largely (I hope) uncontroversial. It will contain those provisions which are required by the government and non-negotiable and nothing else. It will need two thirds approval by the governors. If it doesn't pass then we might have to consider packing it in.

A second set of hopefully non-controversial modifiers which are required in order to give the voting members many of the rights that the governors now enjoy will be also submitted and will also require two thirds approval. If that is not accepted then we will separate out every clause out of this group and will vote on each individually and there will be a lot of them. That is why I need feedback now so that I can minimize the pain of the process later. Any clause which doesn't get two thirds acceptance will simply be left out because these are by definition not essential to a successful application.

Any controversial portions will be separated out and will be voted on clause by clause with a two thirds majority acceptance required for them to make it into the submission.

We cannot spend a great deal of time making tweaks because while something might seem like a good idea, that good idea could derail our application. If we get it wrong we can fix it later if we continue to exist past October 17th, 2014.

Vladimir Drkulec

01-08-2014, 05:30 PM

Specifically do you mean Section 2, Bylaws 1, 2 and 3? (http://chess.ca/handbook#section-2)

Yes, I believe I do. Certain sections are irrelevant to our current situation. Other sections are no longer required by the government. Almost everything has to be rewritten to conform to the new NFP act if they are to be kept. I think that we might somehow redefine some useful parts of the rest as regulations which don't have to be submitted to the government.

We need the submission to the government to be the minimum required. A more complex submission increases the risk of rejection. Of course we also have to deal with what the governors will accept by a two thirds majority.

I've just finished re-reading the Transition Guide (http://www.ic.gc.ca/eic/site/cd-dgc.nsf/vwapj/Transition_Guide_2ndeditionl_EN.pdf/$file/Transition_Guide_2ndeditionl_EN.pdf) which I recommend all Governors do read - read the appendices if nothing else! and am wondering if we define our membership classes in terms of
"the following membership types are voting: O,L,F,H...", "the following membership types are non-voting: J..." Would we be legal with a clause saying "All classes defined as voting are one class for all Federation purposes"?

That may be possible but I would prefer to go with the default which is that there are two types of membership: Class A voting members and Class B non-voting members. There may be multiple ways to become a Class A (election by class B or life governor who maintains membership by participating) or Class B (life membership, adult membership, junior membership, possibly senior membership) member.

I'm also trying to wrap my head around the terminology - looks to me like what the guide calls "Members" are what we call "Governors" and the present Executive are what are called Directors. I am unclear in NFP Guide-ese where our non-Executive Officers fit in exactly which is important since most of them fill roles the Executive doesn't really have the time to effectively do. In the interests of clarity we probably should have a list clearly saying which CFC terms designate which NFP Act terms. I like the old USCF term "Voting Member"

Past-President - a >LOT< of NFP's have past-presidents on their boards - it looks like the board could each year elect the PP till the next AGM, no?

Yes, this would be the case under the default scenario.

I've also read through their sample bylaws. 3.03 on expelling a member seems quite hard. 4.01 on those entitled to be present at a meeting does not seem to require any change on the existing procedures

To me the strangest part of the whole document is the last sentence of section 7 which says If the office of any officer of the Corporation shall be or become vacant, the directors may, by resolution,
appoint a person to fill such vacancy. which to me says the appointed member of the Executive doesn't even have to be a member (!?!) which to me is quite remarkable.

I don't think that this is that different from the current situation. Under the current rules the President can replace any officer of the Corporation who resigns and there is no requirement except in the case of the President (who would be replaced by the choice of the executive and has to be a member of the executive or a governor) that it be another member of the board or one of the governors.

Current rule:
Upon the office of President becoming vacant between annual meetings of the Assembly, the Board of Directors shall elect another member of the Board of Directors or in special circumstances any other member of the Assembly of Governors to be President for the rest of the term. Upon the office of any other member of the Board of Directors becoming vacant between annual meetings the President may fill the vacancy for the rest of the term by way of appointment.

I confess I am struggling to work out a formula for 'voting member' that would pass the new NFP test though being a national organization I think the present scheme of affilates and the per capita formula serves the CFC well. Perhaps Les could weigh in on whether the present formula or something much like it could go forward.

I don't think that the formula goes to the government. That asks for trouble. I think some mention that they have to follow the rules and regulations as determined by and subject to revision by the directors and Class A voting members including provisions for payment of dues.

Fundamentally I'm concerned about the NFP Acts use of 'member' since if the NFP Act's "member" was what most of us think of as a member we could never have an AGM because we could never get 5% of our total membership present. And an online meeting with 90-100 people taking part would almost certainly be unworkable. Does anybody here know another NFP that has passed their continuance that could share their experience on this point? Overall, I despise terms like the NFP Act's use of "member" which clearly means something different from what most of us (most especially those we represent) think of as "member". Unless we make the full version of "member" to be "member of the CFC Assembly of Governors"

I don't think we should use the term governors under the new act unless it is within the regulations which we are not required to submit to the government and then only with careful thought. Aside from the potential for rejection of our application, some creative lawyer could use the existence of the term to create some deep pockets (the assets of all of the governors plus the executive) that would make the CFC a very attractive lawsuit target.

Vladimir Drkulec

01-08-2014, 05:55 PM

Bunning, Palsson and Cabanas have all voted in 2013-14 so far.

During 2012-13 Bunning, Palsson, Cabanas and Peter Stockhausen have both participated in Quarterly Meetings during 2012-2013. (Stockhausen actually cast more votes than Bunning)

In 2011-12 the same 4 plus Maurice Smith.

These statistics are taken from the voting ledgers of 2011-12, 2012-13 and 2013-14.

My reading of the act seems to indicate that voting membership can be conferred any way which the voting members or directors decide including but not limited to a recognition of donations of money, donations of volunteer time, or election by some process usually initiated by the present directors or voting members. Unless someone points me at a specific clause which proscribes this my approach will be to move us forward in a way that as much as possible maintains the current situation subject to the rules of the new Not For Profit Act which means that everything cannot be exactly the same.

To eliminate the life governors now would require a two thirds majority vote of the governors. If we do the transition properly then it will still require a two thirds vote of the voting members. Our situation will not have changed after the transition. Let us focus on what is important and not be distracted by things that are not important. While we might want to insert some clause in the regulations at some point that will weed out life governors who have not participated for a few years I see no reason to weed out people who are contributing now. We need more volunteers and not fewer.

Lyle Craver

01-09-2014, 02:54 PM

I agree that calling the voting members "Governors" is asking for trouble and suggest the terms "Voting Members" and "Regular Members" - I've never felt comfortable with "Ordinary"!

I'm sort of kidding on ordinary but I'm serious - and if anybody asks "Voting Members" is an old USCF term (and as I've said repeatedly I do not know whether this term was created by them or by their governing legislation).

I'm not sure how we square the circle on the other classes - presumably by designating them non-voting and giving them their current names. I note en passant that it is critical to clearly delineate which classes are voting and which not since the default is voting and omitting this on any class makes them voting.

If nothing else I would like to have a crystal clear idea by the end of this meeting which items are non-controversial (and therefore which we can move ahead on final language) and which require more talk to bring about a consensus. If that means we need to extend the meeting to reach a consensus I'm 100% fine with that

I know very well exactly what day the CFC is dissolved if we don't get this done (Oct 18th - my son's birthday) and the last people we need to be in "time trouble" with are the Feds. Better to agonize now than agonize later though with the degree of progress we're making I doubt there will be much agony!

PS. I have read the Transition Guide and I do not see that our current method of electing Governors (i.e. the per capita fee) is an issue though we may need to examine how we do Governors from non-affiliated Governors and Quebec since any Governors / Voting Members appointed by the AGM cannot exceed 20% of the total Assembly of Governors.

Vladimir Drkulec

01-09-2014, 11:04 PM

Pierre Dénommée has sent me the following message:

The current Life Governors would be considered Life Directors under the new Act. The actual powers of a Life Governor could only be exercised by the a Director under the new Act.

Life Governors could be transformed into Life Voting Member, this would still be a huge advantage in our current model in which only one member in 50 is a voting member.

This is the plan. There are only a few life governors so I don't see this as being a big issue.

The status of Registered Participant has not been discussed by the Governors. Discipline of Registered Participants is clearly distinct from discipline of the members. Should the players still be members?

I think they should be non-voting class B members. It is the default that the government suggests for two classes of members and I don't see any reason to vary it with time being so short. My feeling is that we should keep things as simple as possible so rather than go with participants I prefer that we stick to the non-voting class B members nomenclature used in the examples on the government website.

Discipline of the members should be very specific, not vague as it is. Giving the right to the Board Directors to revoke a membership for any reason that they see fit is clearly wrong.

I don't think you can anticipate every circumstance where such a sanction might be invoked. I think the fact that the voting members can bring a motion to the floor on any subject in effect means that they can overrule the directors in the circumstances of an unfair expulsion of a member.

Sometime, dictators get elected and their first move is to revoke the membership of those who have not voted for them. Discipline of member is better left to a committee of members. Who can initiate the disciplinary process is also very important. Removal of a member is rare, suspension of a player is much more current. Off course, Discipline of a Provincial Association is a much more serious action then discipline of a member.

I don't recall the executive which has powers similar to directors ever undertaking such an action though maybe someone can recall such an instance. Our task is to submit something to the government that means that we continue to exist after October 18th. Future voting members and directors can tweak things if necessary. We simply can't afford to be distracted from the mission right now. Will our implementation be perfect? No, but it will mean that we can fix anything that we don't like later...

Again in these cases I think that since the directors assume liability they are the best ones to make such decisions. Voting members by virtue of their ability to put forward motions can override those decisions. I don't think that a committee of the members is going to be any more objective than the directors and since the directors are on the firing line for lawsuits they should be the ones that make the initial decision unless they choose to delegate to a committee which is an option under the legislation.

I see no way to legally maintain the actual discrimination against the provinces and territories without an a Provincial or Territorial Association. By default, a CFC non-voting member can vote for all Voting Members in all provinces and territories. To maintain the actual sound system of voting by province, each province should be considered a separate class of members. As such, the Ontario players elects the OCA representative but they have no authority to act outside of their province and they cannot elect the Quebec or Manitoba voting members. Election are easily organised with a forum software, there is no sound reason to perpetuate this discrimination.

That is a good point. I think it should be addressed but probably not at this point.

Quebec members would have to pay a CFC membership to vote, so the Quebec would still be heavily penalised. Any attempt to let the FQE members vote at the CFC level without paying a CFC membership would required a very special CFC Constitution in order to be legal.

My impression of the rules for membership are that they offer a great deal of flexibility.

Lyle Craver

01-11-2014, 06:38 PM

That is my view as well.

From what I've read the formula for the allocation of Governors should transition with only the replacement of "Voting Members" for "Governor" which is my view of nearly all the existing bylaw detail.

In the new bylaw I would transfer nearly all the historical information in Bylaw 1 to a "Historical Section" or "Information for Members" section. Call it "Executive Summary" if you will but much as I honor our history as a Federation is it really crucial to the Governance of the Federation?

One thing that does have to be crystal clear to the NPR people in Ottawa is the relationship between the CFC and the Affiliates. There is the potential for trouble if this is at all fuzzy to them and I think it should be explicitly said which legislation each affiliate is chartered under. The BCCF is chartered under the BC Societies Act and is governed by the BC Registrar of Societies. I assume this is the case in each respective province - though I do not know where the CCCA is registered. (If it's Federal they also have work to do).

At this point I don't think we're in nearly as much trouble as I thought we were two months ago BUT most of my reading of the NFP materials is along the lines of "OK what are the potential landmines hidden here that might trip us up?"

Vladimir Drkulec

01-11-2014, 07:43 PM

The relationship between the CFC and affiliates definitely needs to be codified but I don't want the continuation of the CFC to hinge on each and every affiliate having their own ducks in a row. I don't think that even the names of the affiliates should be in the document that goes to the government because when a group drops out as happened in Saskatchewan or if one of the affiliates changed their name we would have to send $200 to amend the list. We need to keep it as simple as is possible. I still have to do some reading and comprehension work to be sure of the requirements and how best to present them to ensure acceptance.

Christopher Mallon

01-11-2014, 07:58 PM

If they do need to know that... the OCA is a Not-for-profit corporation, incorporated provincially in Ontario.

Lyle Craver

01-11-2014, 08:51 PM

OK Vlad, I see your point. Nevertheless I think we need to have this info on hand in case we're asked and would not be at all surprised if we were.

I would expect this info would fit on a single 8 1/2 x 11 sheet of paper.

I definitely would prefer to use Ottawa's terminology wherever possible and would prefer "Voting Member" and "Regular Member" over "Class A" and "Class B" which is liable to create confusion or paranoia among the membership. We certainly don't want to give the Feds any reason to reject our Application for Continuance over labels.

Christopher Mallon

01-11-2014, 10:10 PM

We need to keep it as simple as is possible. I still have to do some reading and comprehension work to be sure of the requirements and how best to present them to ensure acceptance.

I don't want anyone to take any offense to what I'm about to say (type), but if even our President who has been the strongest pusher on this file still does not fully understand what we need to do to comply, how can the governors be expected to make informed decisions on this topic?

Should we perhaps at least investigate the cost of legal advice from a firm that specializes in these situations?

Vladimir Drkulec

01-12-2014, 03:03 PM

I don't want anyone to take any offense to what I'm about to say (type), but if even our President who has been the strongest pusher on this file still does not fully understand what we need to do to comply, how can the governors be expected to make informed decisions on this topic?

Should we perhaps at least investigate the cost of legal advice from a firm that specializes in these situations?

Any confusion on my part is the result of occasionally contradictory advice within the government publications. At one point the website says we are not required to submit bylaws with the initial application, and that they can be submitted within one year of their being passed by a special resolution, elsewhere it indicates that we are required to submit a bylaw. I still have to talk to the CRA with regard to the faint hope of becoming a charity again. There are a couple of clauses that the CRA suggests that soliciting corporations include in their submission. They don't seem to negatively impact a non charitable CFC.

We will be seeking legal advice but my experience is that you have to be very well prepared yourself in order to be in a position to use legal advice. There are many things that WE have to do in order to get to the point where we can profit from that advice. First off we need to have a consensus from the governors on what they want and what can be passed consistent with the requirements of the act. The lawyers should help us clean up the last 1% of the process and not guide us through the first 99% unless we are comfortable with a legal bill in the five figure range.

The last NFP committee had Gordon Ritchie (who helped negotiate NAFTA) and Les Bunning who has acted as the pro bono lawyer for the CFC for decades. The governors rejected their recommendations in part due to the lack of an educational process like the one that we are undertaking here. Les has been quite helpful in responding to and answering questions that have come up.

Vladimir Drkulec

01-12-2014, 03:20 PM

My inclination is to continue this meeting for a few more days, continuing with our discussion of the NFP act. At the end of the meeting I hope to have a good idea of what we want to proceed with and the remaining concerns. I think we should have a special meeting of the governors in a month to six weeks after this meeting ends which will deal with the NFP Act and nothing else at which point the governors will be asked to vote on specific and more detailed articles and bylaws. The aim of the special meeting will be to complete the governor's portion of the process. If we get hung up on any details the final approval will be pushed to the April meeting. We will need two thirds approval of the governors at that February meeting in order to proceed and get the CFC compliant with the new act.

Lyle Craver

01-13-2014, 03:16 AM

Your proposal sounds good to me.

From an administrative point of view we need to notify the Governors of this (both the continuance and the special meeting) ASAP.

I propose that at this point you close all but this thread and 9 (New Business) and have a draft of your closing comments prepared for posting.

The agenda for a February meeting should be easy - one agenda item with one or more items to vote.

A mass mailing to Governors can be done anytime in the next two weeks but the sooner the better as we need as strong a voting turnout as possible - it's bad governance to do a major constitution set of motions on a minimum quorum and if this topic can't get our biggest voter turnout since the advent of the online meeting there is something wrong.

But no question I think we've made considerable progress in the last week.

Bob Armstrong

01-13-2014, 08:37 AM

Christopher Field

01-13-2014, 11:56 AM

Vladimir Drkulec

01-13-2014, 12:24 PM

Your proposal sounds good to me.

From an administrative point of view we need to notify the Governors of this (both the continuance and the special meeting) ASAP.

I propose that at this point you close all but this thread and 9 (New Business) and have a draft of your closing comments prepared for posting.

At the moment I don't have the forum permissions to close threads so I will ask you to do so on my behalf.

The agenda for a February meeting should be easy - one agenda item with one or more items to vote.

A mass mailing to Governors can be done anytime in the next two weeks but the sooner the better as we need as strong a voting turnout as possible - it's bad governance to do a major constitution set of motions on a minimum quorum and if this topic can't get our biggest voter turnout since the advent of the online meeting there is something wrong.

But no question I think we've made considerable progress in the last week.

Yes, I am very happy with where we are at the moment relative to where we were before the meeting.

Vladimir Drkulec

01-13-2014, 12:28 PM

How many governors do we have?
I note that 24 voted on the two motions presented at the January meeting, of which one passed and one failed.
Is this a quorum?
How can we be sure that sufficient governors will participate in a special meeting?

Quorum is 15 governors. If we can't get that many we would really have to rethink what we are doing.

Bob Armstrong

01-13-2014, 12:30 PM

How many governors do we have?
I note that 24 voted on the two motions presented at the January meeting, of which one passed and one failed.
Is this a quorum?
How can we be sure that sufficient governors will participate in a special meeting?

Hi Chris:

The only issue is quorum.

We active governors cannot force deadwood governors (shows the problems with some provincial affiliates) to do the job they made a commitment to do. The active governors are the important ones and they are competent to decide.

Of course, governors don't attend for many reasons. That is why, when I was posting secretary in these meetings, I use to send out daily or every 2 or 3 days, e-mail updates to ALL governors. The point was to alert the deadwood to wake up!

Bob

Vladimir Drkulec

01-13-2014, 12:32 PM

I'd just like to congratulate Vlad on his shepherding of this complicated file for us governors - you seem to have a good grasp on it, and I think the governors have a high trust in you, and the committee on this.

Thanks.

Bob A

Thank you for the vote of confidence. We still have some work ahead of us but I am optimistic that we will get this done at which point we will be able to move on to new challenges like becoming a sporting federation.

Vladimir Drkulec

01-14-2014, 02:30 PM

I am sorry for being AWOL last night. I have been fighting a muscle strain and/or a possible pinched nerve that has been causing a great deal of pain and consequent disruption of my sleep patterns. It has also made it difficult to type at times. Of course this also has negatively impacted my blood sugar readings. Last night, after returning from lessons, I took some over the counter pain reliever (Tylenol for back and muscle ache) contrary to doctor's orders (because of effects on blood pressure of such meds) and slept. This morning my blood sugar was normal and the best reading I have had in some weeks and the pain is at least for now greatly reduced.

John Coleman has suffered a fall on the ice and broken his hip (a clean break fortunately if you can use that word about this set of circumstances) and will be in a hospital bed for the next several weeks. I am going to have to pick up some of the slack for him and direct the practice tournaments that he set up leading up to the Windsor Chess Challenge at the end of February. John is hoping that he will be able to attend the Chess Challenge in a wheel chair.

I would like the governors who have a specific concern to post them here ASAP. If possible I will address it here now or at least make sure they are addressed in the February meeting. The special February meeting will deal only with matters NFP and at the end we should have what we need to proceed with the application for continuation of the CFC into the new act (ie articles, bylaws approved by a two thirds margin of the governors). At the end of this process, once the government gives us the certificate of continuance into the new act the governors will become class A voting members and the CFC members will become class B non-voting members. Until then we will continue to be governed under the old act.

I will wind up this meeting and present my closing remarks in the next day or two unless it gets lively again. Please watch the governors forum as I will be posting there and answering any questions in the interim.

Ken Craft

01-14-2014, 04:01 PM

Please look after your health, Vlad.

Vladimir Drkulec

01-14-2014, 04:40 PM

Please look after your health, Vlad.

I have been doing my best. The major snowfalls of the last week or so put a crimp in things though that may be offset by the exercise shovelling snow. Once the weather gets nicer I will probably do a better job of taking care of myself by getting the required exercise. John Coleman's experience has shown how this is not always the best practice this time of year. I will probably visit him tonight if I can figure out the visiting hours at the hospital that currently is his temporary prison...

Vladimir Drkulec

01-14-2014, 06:54 PM

Pierre Dénommée has sent me the following message. I have deleted the Wavepoint Consulting URL for model bylaws which doesn't appear to work anymore. I agree that we will have to individually vote on each of the optional bylaws though there are some required bylaws which will be lumped together since by definition they are required by the government. I will also group noncontroversial measures together for voting to speed up the process.

For the optional bylaws the sequence will be to present the recommended options. If there is enough support we will vote on accepting them. Some of the options can be accepted by a simple majority vote but I think it would be better if we can achieve a two thirds majority in each case. I hope the governors are ready for a significant number of votes as there may be as many as twenty or more of them.

In the case of the non-voting members it will be necessary to insert the clauses which explicitly say that the non-voting members are not entitled to vote in instances of circumstances materially changing their membership. The provisions for obtaining addresses and contact information of members are in conjunction with an effort to notify or influence the voting members so I think the nonvoting members are relatively safe from those disclosure requirements. That is my interpretation at least and subject to change if someone points me to a regulation that would change my interpretation.

With respect to some of the other points, they will have to be addressed in the committee and in the coming month by the governors. Our implementation will probably not be perfect but it will get us past the October 17th deadline and allow us to continue as an organization. I remind everyone of the proverb:

The perfect is the enemy of the good.

If we wait until our implementation of the transition is perfect I am certain that we will miss the October 17th deadline. If we follow the more realistic path of aiming for a good implementation that will pass the government's scrutiny we will be able to later strive for perfection. Most changes that involve modification of bylaws do not appear to have a cost attached.

I have just gotten the model bylaws.

Model bylaws are basically useless. For every optional bylaws provisions we must decide which option his to be taken.

The relationship with our affiliates will probably be problematic. This has been left so fuzzy that when wrongdoing has been made with a Trillium Grant, it was unclear who was responsible for the disciplinary action against the perpetrator. The situation when there is no affiliate cannot remain as it is, that cannot be delayed. There are multiple issues, such as autonomy of Provincial Associations, Appeal of Sanctions against players and members to the CFC, punishment for failure of the Provincial Affiliates to participate in the CFC National programs (not organising the qualifiers) (this will cause a lot of problem).

Furthermore, there is still no discussion on the need of the players to be recognised as member of the CFC. Chess players vote at the Provincial level for the CFC Voting Members, this requires them to be a member of the Provincial Association but they do not need to be a CFC member. Many NSO in Canada have only 13 real members: the Provincial Associations. Many attorneys consider that membership give the players too much right under the new Act because non-voting members vote on some fundamentals changes. Confidentiality of the members' personal information is another issue because any member has access to the personal information of all other members.

We should stop bevelling that it will be as it was before, it won't. Under the current Act, all bylaw changes must be given to the Federal Government for approval. Nobody has ever answered my question about this requirement. I can only assume that not all changes have been submitted and that our first step in the transition process is to ask the Government for a copy of our current Constitution. If we can't agree and the case goes to court, as it should, the judge will use the bylaw that have been filed to the Government as the basis.

The previous Committee recommendations has been rejected because it give too much power to the Board of Directors, something that has not been addressed in those discussions.

My reading of the previous Committee recommendations is that they largely followed the default regulations under the new act. Our discussions have focused on modifications to those rules which attempt to make the post new NFP CFC largely operate in the same way that the current governors are comfortable with while still remaining compliant.