Vote against the proposed NFP Transition plan

[Pierre Dénommée]

Dear CFC Governors,

The current text has been cut and pasted from Government source without taking into account the specific nature of the CFC.

Under the proposed text, Class A members are named by the directors as they see fit. Do not believe those who claim that there is no change: Words goes but what is written remains and nowhere is is written that there is one class A member per 50 class B member. Nowhere it is written how those class A members are selected. Under the proposed text, it would be possible for the directors to name NO class A members other then themselves. This is a risk too great to be taken.

How to become a class B member is not a clear enough because there are currently many classes of B members: life, honorary, regular, youth.

The proposed text does mention neither the Foundation nor the Trustees. So it give full controls over the Foundation to the directors and there could be as few as 3 directors.

The proposed text fail to mention the NAC, the TDOCP, the Ethics Committee the Rating Auditor, the Master Representative... It would create, if approved, a CFC without any permanent structure. This is not acceptable.

The proposed bylaws fail to comply with Article 138 of the Act http://laws-lois.justice.gc.ca/eng/acts/C-7.75/page-33.html?texthighlight=138#s-138 that mandate that only a Committee made exclusively of directors may receive a delegation of powers from the board of directors. With only 10 director at most, they cannot realistically fill all committees positions.

The power of the class A members to approve new provincial affiliates and to revoke them has been removed from this text. This power has been implicitly transferred to the directors.

Hockey Canada has proven that we can comply without abandoning what makes the CFC unique.

The proposed text is in no way representative of the way CFC is operated and it pose a great threat to the democratic future of the CFC.

Please vote against it. We have plenty of time to vote on a correct text in June.

[Pierre Dénommée]

I have found two other major flaws in the proposed text. The first one is that class B membership requires approval of the board of directors. That would make the CFC a private club, a situation that is not compatible with our status of a member of FIDE. All those who pay should be admitted as class B member unless they have been suspended or expelled from the CFC.

Class A members must have the right to vote separately on the creation of any class of members with more rights. Otherwise, class C members with 1 000 000 000 votes each could easily be created by crooked directors. With those votes, all class A members would become useless. Shares with millions of voting right are common in for profit corporation in Quebec, but they usually are in possession of the founders of a corporation in order to ensure that they will not be thrown out of their own corporation. Those shares are referred to as control shares and command a large premium when sold.

A policy can be changed by the board of directors as it see fit. Only by writing something in the Article of Incorporation that the Government has can the power of the directors be limited. The way class A members are chosen must be sent to Ottawa, it is the only way to protect the members. I am not sure that it is legal to refer to an external document when dealing with members designation. In Quebec, the enforcability of external clauses is limited and the reference to policies could be ruled null and void, leaving the board in full control.

The CFC fundamental documents are made of two parts: the Article of Incorporation, that is sent to Ottawa and the bylaws, which are not sent to Ottawa. Because we are still under the old law, any bylaw change must be sent to Ottawa for approval. How to split the rules between those two documents is a fundamental issue that has not been taken care of yet.

Putting the number of class A voting members per province in the Act of Incorporation and HOW they are selected is not a demand for statu quo. Those numbers could be changed by the class A voting member with a 2/3 majority at any time. Class A voting members will be far less involved in the governance of the CFC then the actual Governors. Their number is not the most important issue, even a one member on vote approach is possible, getting rid of the class B members.

[Vladimir Drkulec]

Dear CFC Governors,

The current text has been cut and pasted from Government source without taking into account the specific nature of the CFC.

Under the proposed text, Class A members are named by the directors as they see fit. Do not believe those who claim that there is no change: Words goes but what is written remains and nowhere is is written that there is one class A member per 50 class B member. Nowhere it is written how those class A members are selected. Under the proposed text, it would be possible for the directors to name NO class A members other then themselves. This is a risk too great to be taken.

How to become a class B member is not a clear enough because there are currently many classes of B members: life, honorary, regular, youth.

At one point you were arguing that we should not allow the current members to keep that designation. You wanted to make them player participants. Having them as members means that it is more difficult for a group of corrupt individuals to take over the CFC and pillage its assets. You have to answer to 2000 members instead of having to persuade as few as eight governors.



The proposed text does mention neither the Foundation nor the Trustees. So it give full controls over the Foundation to the directors and there could be as few as 3 directors.

The aim is to transition the CFC into the new act warts and all. If there is a problem with the current structure the same problem will exist under the new act. Three directors is the minimum for a charity of which I only hold a faint hope of becoming. A minimum of one is necessary for a non-profit. There is no mention of the Foundation because this transition does not affect the Foundation. The Foundation is a holy grail which is assumed to exist as a separate entity but it is not a separate entity, it never was a separate entity and I don't have time to go through the steps or expense which would make it a separate entity and therefore there is no need to mention it because of the fact that the government really doesn't care about the pet names that we call our bank accounts.



The proposed text fail to mention the NAC, the TDOCP, the Ethics Committee the Rating Auditor, the Master Representative... It would create, if approved, a CFC without any permanent structure. This is not acceptable.

The goal of this was to simply continue the CFC in a form consistent with what we are today. There is no need for an NAC, a TDOCP, an Ethics Committee, a rating auditor, a masters representative or an executive director if the CFC ceases to exist which is the probable result of the course of action that you are proposing. I called for volunteers from among the governors multiple times. Only you and Frank Lee offered to join the NFP Act committee. I don't want to bust too harshly on someone who did volunteer but you were incorrect in a lot of your observations and you are wrong in these posts.



The proposed bylaws fail to comply with Article 138 of the Act http://laws-lois.justice.gc.ca/eng/acts/C-7.75/page-33.html?texthighlight=138#s-138 that mandate that only a Committee made exclusively of directors may receive a delegation of powers from the board of directors. With only 10 director at most, they cannot realistically fill all committees positions.

138. (1) Directors of a corporation may appoint from their number a managing director or a committee of directors and delegate to the managing director or committee any of the powers of the directors.
Marginal note:Limits on authority


(2) Despite subsection (1), no managing director and no committee of directors has authority to
(a) submit to the members any question or matter requiring the approval of members;
(b) fill a vacancy among the directors or in the office of public accountant or appoint additional directors;
(c) issue debt obligations except as authorized by the directors;
(d) approve any financial statements referred to in section 172;
(e) adopt, amend or repeal by-laws; or
(f) establish contributions to be made, or dues to be paid, by members under section 30.
[/QUOTE]

I am not getting your point. You should be lobbying the government if you object to this. Note that in two other places the act specifically mentions committees of members though I have to check that.



The power of the class A members to approve new provincial affiliates and to revoke them has been removed from this text. This power has been implicitly transferred to the directors.

Directors cannot make any decisions which are not approved by the voting members in any of these areas.



Hockey Canada has proven that we can comply without abandoning what makes the CFC unique.

If I had Hockey Canada's budget and lawyers I am sure I could have done a better job, not to mention the salary of their president. I have charged zero dollars to the CFC for my personal benefit as far as I am aware of. I haven't submitted an expense claim for gas or as much as a stamp so far. We don't have Hockey Canada's budget or lawyers so we have to deal with what we do have.



The proposed text is in no way representative of the way CFC is operated and it pose a great threat to the democratic future of the CFC.

Please vote against it. We have plenty of time to vote on a correct text in June.

There have been no less than three meetings where the current bylaw was discussed and debated extensively. The bylaw was already passed by the requisite majority. The only question on this ballot is whether the governors wish the executive to apply and thus initiate the process of the CFC continuing to exist beyond October 17th. If the answer is No well then maybe we can persuade the FQE or FIDE to take over because on October 18th our assets will no longer be ours including the bank accounts and the Foundation. The only questions that we are left with is how much are we required to pay our creditors, the life members, the executive director, FIDE and the remaining balance on the memberships. I think a full refund of one year to the present members would be in order. Maybe Paul Leblanc could figure out what we owe the life members. We'd have to go through the contracts to figure out what we owe to everyone else. If the CMA does manage to become a registered charity by October perhaps we could leave the balance to them so that we could at least be sure that it went to a chess charity.

[Pierre Dénommée]

The proposed text imply to lie to the Federal Government twice. First lie: hiding the FQE-CFC agreement, second lie, hiding that members in MB and QC cannot choose their voting members. The second one is likely illegal because all members of the same class are supposed to be equal under the Law. The first one is illegal if the agreement supersede the Article of Incorporation or the bylaws, I did not check that.

The CFC could still exist with an Act of Incorporation approved in 2 weeks rather then right now. I have never proposed to close it, I am trying to save it in the long term.

We are lucky to have an honourable person as president, but there is a lot if danger in this text if a dishonourable person gets elected. I did have to deal in the past with dishonourable persons in a board of directors and I can confirm that this is no piece of cake. The core problem with the text is not what is written but what crooked directors could do in full legality because the Law supersede this text.

If we do not money for paying an attorney, we should design the text more carefully.

When I was on the Executive, I also did not ask for the reimbursement for my visits to the Ottawa Office, so I can easily understand this part.

[Vladimir Drkulec]

The proposed text imply to lie to the Federal Government twice. First lie: hiding the FQE-CFC agreement,

Where exactly in the act does it say that we have to reveal all of our agreements? I don't see it. Where would I even display the agreement? I understand that you don't like the agreement. Everyone understands that by now. There is no place in the documents that must be submitted for this application for me to include the CFC - FQE agreement.



second lie, hiding that members in MB and QC cannot choose their voting members. The second one is likely illegal because all members of the same class are supposed to be equal under the Law.

So in your view we are not allowed to have cooperation agreements with like-minded federations. My understanding of the CFC - FQE agreement is that it is an agreement for the CFC to treat FQE members as if they were CFC members and the FQE to treat CFC members like they were FQE members for purposes of play in each others' tournaments and to cooperate in areas of mutual interest like international play. I doubt that the agreement could be construed as illegal by anyone.




The first one is illegal if the agreement supersede the Article of Incorporation or the bylaws, I did not check that.

Articles of Incorporation are for new corporations. We must submit Articles of Continuance (transition) as per what I have submitted to the governors for their approval. There is no restriction in the act on how voting members are chosen. It can be in multiple ways.




The CFC could still exist with an Act of Incorporation approved in 2 weeks rather then right now. I have never proposed to close it, I am trying to save it in the long term.

What would change in two weeks?



We are lucky to have an honourable person as president, but there is a lot if danger in this text if a dishonourable person gets elected. I did have to deal in the past with dishonourable persons in a board of directors and I can confirm that this is no piece of cake. The core problem with the text is not what is written but what crooked directors could do in full legality because the Law supersede this text.

I don't like all the provisions of the law either. I would have been happy with the CFC staying as it was with more sensible decisions being made as were made in the past. The fact is that we have to follow the law. The situation is not as bad as you are making it out to be. It seems to me that you want to make the governors the board of directors. You can't do that. No one who was sensible would be willing to serve in that case. Everyone could lose their house because of some boneheaded decision.


If we do not money for paying an attorney, we should design the text more carefully.

When I was on the Executive, I also did not ask for the reimbursement for my visits to the Ottawa Office, so I can easily understand this part.

We have money for an attorney but not enough to have the attorney do the whole application. On the last NFP committee we had the lawyer who was instrumental in the CFC coming into existence [as a charitable non-profit] and a person that helped negotiate NAFTA. They presented a plan that was more consistent with how the government wants non-profits to run. They did not explain it to governors and it was rejected. The governors did not like the changes. My method was the opposite. Who cares what the government wants lets continue the CFC with as few changes as possible starting out with the minimum required and consulting and educating the governors every step of the way. A few are still confused but I have tried to answer their questions. The day after we get the continuation the same people will be in charge. The governors will still be the voting members. The CFC members will still be class B members. Nothing will be changed. The masters representative will still be masters representative. The president will still be president. The FIDE rep will still be FIDE rep. The ratings auditor will still be ratings auditor and on and on.

The only thing that will be different is that we won't have to worry about the CFC ceasing to exist.

[Pierre Dénommée]

We do not know if the CFC-FQE agreement is legal under the Act. The CFC-FQE agreement supersede the bylaws in some respect, such as the requirement to have a CFC membership to play a CFC rated game. If Ottawa wants the bylaws, it also wants to know the truth about an agreement that is of a higher status then the bylaws. I have voted against the agreement but I have supported the official CFC position after the vote, as it should because I was a CFC Officer at the time. The debate on the CFC-FQE agreement has been closed by the vote, we should not reopen it. The new debate concerns the interaction with the new NFP Act.

In 2 weeks, we could clear all the obvious weakness in the current text. The first one being that the composition of the General Assembly is left to a document included by reference.

I do not want to have the Governors serve as directors, on the contrary, I want to make sure the Governors realize that they will no longer control anything after this new Constitution is in place. Most decisions will be taken by directors. Apart from the change to the bylaws, most other actions of the director will fall outside of the voting members control.

A lot will change after the approval: most CFC officers will no longer have their office written in the Constitution, this means that the directors could unilaterally remove the functions of Master Representative, Rating auditor, Fundraiser, Public relation, Tournament Coordinator and so on. No approval from the voting member is required because those functions are not officially written in the bylaws. As you say, in order to protect the houses of the voting members, they do not have the authority to overturn a decision of the directors or of an officer. If, after a vote of the voting members, the directors fail to enact the voted resolution, the sole recourse of the voting members is the dismissal of the directors. Absence of real authority protects the members from civil liability. For a non-executive officer, the members cannot directly dismiss them because they are appointed by the directors.

You are right that 1 second after the change, nothing will change, but 2 minutes after the change, 10 directors could unilaterally completely change the face of the CFC. Furthermore, as written 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. The term of membership of a Class A voting member shall be annual, subject to renewal in accordance with the policies of the Corporation. The policies of the Corporation are not legally protected from unilateral modification by the directors. 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 This gives absolute powers to the directors in the designation of class A members. At this place, there is no reference to the policies of the CFC and the bylaws supersede a policy in case of conflict. Those 2 conceptions of class A members conflicts. Furthermore, according to this text, the directors have to approve all class B member requests.

The first attempt at compliance with the new NFP has been rejected for a very good reason : it simply give to much powers to the board of directors. The Act permits us to give them less power. In order to be enforceable, the restrictions of the power of the director must be written in the Article of Incorporation. The current Articles completely fails to restrict the directors authority in any significant manner and the bylaws gives them excessive control over the members. For example, class B membership should be available to anybody who pays the fee except those who have been suspended or expelled from the CFC, the board of director should have no authority to refuse the member and the money it brings us. The relationship between the number of members in a province and the number of class A members must be written in the Article of Incorporation in order to ensure that the director are bound by them.

The actual solution also fails to give proper voting rights to MB and QC class B members, and this is likely illegal because all class B members must enjoy the same rights.

[Vladimir Drkulec]

We do not know if the CFC-FQE agreement is legal under the Act. The CFC-FQE agreement supersede the bylaws in some respect, such as the requirement to have a CFC membership to play a CFC rated game.

It is a reciprocal agreement that extends benefits to all Canadians in a fair way. There is nothing magical or special about it and the government is concerned with people looting the treasuries of non-profits and not whether a twelve year old girl gets to play in a tournament or not. It is a non-issue.



If Ottawa wants the bylaws, it also wants to know the truth about an agreement that is of a higher status then the bylaws.

Where exactly do you think I should have put the CFC-FQE agreement in among the limited information required in the application. I don't see where it would fit.



I have voted against the agreement but I have supported the official CFC position after the vote, as it should because I was a CFC Officer at the time. The debate on the CFC-FQE agreement has been closed by the vote, we should not reopen it. The new debate concerns the interaction with the new NFP Act.

In 2 weeks, we could clear all the obvious weakness in the current text. The first one being that the composition of the General Assembly is left to a document included by reference.

Nothing is stopping anyone from continuing to work on the file after we get approval or before.



I do not want to have the Governors serve as directors, on the contrary, I want to make sure the Governors realize that they will no longer control anything after this new Constitution is in place.

How can you say that? Have you read the document? I followed the government template for the situation where you wanted the voting members to have final say. The Voting Members will have final say on any non-ephemeral issues.



Most decisions will be taken by directors. Apart from the change to the bylaws, most other actions of the director will fall outside of the voting members control.

A lot will change after the approval: most CFC officers will no longer have their office written in the Constitution, this means that the directors could unilaterally remove the functions of Master Representative, Rating auditor, Fundraiser, Public relation, Tournament Coordinator and so on. No approval from the voting member is required because those functions are not officially written in the bylaws.

Which can be rewritten by the voting members at any time. The current officers will become voting members. If a nefarious board tries to remove the rating auditor he can propose the establishment of the position and it will not be a constitutional amendment so will only require a simple majority. it is silly to try to raise some of these positions which we cannot even fill to the level of a constitutional issue.



As you say, in order to protect the houses of the voting members, they do not have the authority to overturn a decision of the directors or of an officer.

Yes they do if it involves the establishment of a bylaw.



If, after a vote of the voting members, the directors fail to enact the voted resolution, the sole recourse of the voting members is the dismissal of the directors. Absence of real authority protects the members from civil liability. For a non-executive officer, the members cannot directly dismiss them because they are appointed by the directors.

They can propose any motion subject to the rules but of course subject to any liability generated. Don't take me to court. I always win except for the time I slept in and then I just had to refile a month later.




You are right that 1 second after the change, nothing will change, but 2 minutes after the change, 10 directors could unilaterally completely change the face of the CFC. Furthermore, as written 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. The term of membership of a Class A voting member shall be annual, subject to renewal in accordance with the policies of the Corporation. The policies of the Corporation are not legally protected from unilateral modification by the directors.

Yes they are protected.



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
This gives absolute powers to the directors in the designation of class A members. At this place, there is no reference to the policies of the CFC and the bylaws supersede a policy in case of conflict. Those 2 conceptions of class A members conflicts. Furthermore, according to this text, the directors have to approve all class B member requests.

If you pay your membership fee you are approved as long as you refrain from committing a crime against other chessplayers or have not been sanctioned by the CFC or in some cases the provincial organization.



The first attempt at compliance with the new NFP has been rejected for a very good reason : it simply give to much powers to the board of directors. The Act permits us to give them less power. In order to be enforceable, the restrictions of the power of the director must be written in the Article of Incorporation. The current Articles completely fails to restrict the directors authority in any significant manner and the bylaws gives them excessive control over the members. For example, class B membership should be available to anybody who pays the fee except those who have been suspended or expelled from the CFC, the board of director should have no authority to refuse the member and the money it brings us. The relationship between the number of members in a province and the number of class A members must be written in the Article of Incorporation in order to ensure that the director are bound by them.

That is silly. There is nothing sacred about the number of class B members per governor (voting member) ratio and it is something the voting members should be able to change without reference to a constitutional amendment. I have no intention of fiddling with it.



The actual solution also fails to give proper voting rights to MB and QC class B members, and this is likely illegal because all class B members must enjoy the same rights.

If MB and QC class B members do not have proper voting rights now then they won't have it after the transition because I said I would leave everything the same as the way I found it in the beginning at the end of this process. If it is illegal after the transition then it was also illegal before. They (class B members) do not enjoy the same rights. Some have to pay less (juniors) and get only proportional representation. Some get to pay nothing IAs and IMs and GMs but get membership as a result of their accomplishments. We will still have work to do but it will all eventually come together.

[Pierre Dénommée]

The notion has passed, so there is no need for further discussion.

[Vladimir Drkulec]

The notion has passed, so there is no need for further discussion.

Actually our work is just beginning but I will take a few days away from the NFP act to work on other things.

[Pierre Dénommée]

If MB and QC class B members do not have proper voting rights now then they won't have it after the transition because I said I would leave everything the same as the way I found it in the beginning at the end of this process. If it is illegal after the transition then it was also illegal before. They (class B members) do not enjoy the same rights. Some have to pay less (juniors) and get only proportional representation. Some get to pay nothing IAs and IMs and GMs but get membership as a result of their accomplishments. We will still have work to do but it will all eventually come together.

Was was illegal before the transition may be legal after and what was legal before the transition may be legal after, otherwise there would be no requirement to comply with the new Act.

Now that the CFC has an online voting system, it is indecent that class B members from two provinces be deprived of their vote. Do you plan to give us the vote before the AGM?