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View Full Version : 5.3 FQE-CFC deal renewal



Vladimir Drkulec
08-25-2019, 03:09 PM
Discussion of FQE-CFC deal renewal. The attached file is just a starting point for the discussions between the CFC and FQE. Due to restrictions in the Canada Not For Profit Act it is not possible to reserve board positions other than by running and being elected.

Pierre Dénommée
08-25-2019, 09:56 PM
Due to restrictions in the Canada Not For Profit Act it is not possible to reserve board positions other than by running and being elected.

This has already been checked by the FQE Lawyer: it is possible. Under the Act, a category of members may have the exclusive right to vote for a certain directors. We just need to recognise the FQE chess players as a separate class of members and give them the right to elect two directors. The real problem is that the VM do not elect directors who choose the officers, they elect a person to a particular office. This does not fit our current structure because we would have to decide which position are to be given to Quebec. It is hard because it is a Constitutional change, but it is possible.

It is also possible to add two new Directors at Large on the Executive and reserve them for Quebec.

Vladimir Drkulec
08-26-2019, 12:07 PM
This has already been checked by the FQE Lawyer: it is possible. Under the Act, a category of members may have the exclusive right to vote for a certain directors. We just need to recognise the FQE chess players as a separate class of members and give them the right to elect two directors. The real problem is that the VM do not elect directors who choose the officers, they elect a person to a particular office. This does not fit our current structure because we would have to decide which position are to be given to Quebec. It is hard because it is a Constitutional change, but it is possible.

It is also possible to add two new Directors at Large on the Executive and reserve them for Quebec.

Constitutional changes require a two thirds majority and likely years of negotiation with voting members and even possibly our regular members if you are talking about a fundamental change in structure. It took me two years to get the NFP continuation approved when the very survival of the CFC was an issue against a tight deadline. This was after a year or more spent by the previous NFP committee. I learned from their mistakes and adapted my approach which was ultimately successful. After much discussion there were governors still confused about the consequences of voting no. We cannot negotiate terms here in the meeting though we can discuss them with the principals of the FQE, which we will do. My duty and the duty of every director is to act in the best interests of the Chess Federation of Canada which I will always do and which any director whether he comes from Ontario, Quebec, BC or PEI would always be expected to do.

For any deal to work you will have to convince first me, then the board, then the voting members and ultimately the regular members that it is a fair deal. I am even willing to work with a slightly unfair or unfavourable deal if it all works to the greater good of chess in Canada. There are many moving parts involved and we are moving in the right direction overall. I would like us to continue to move in the right direction, together preferably.

Pierre Dénommée
08-26-2019, 12:59 PM
C My duty and the duty of every director is to act in the best interests of the Chess Federation of Canada which I will always do and which any director whether he comes from Ontario, Quebec, BC or PEI would always be expected to do.

That is why VM representing a province loose this title upon election to the Executive. A director no longer represent a province because he must act in the best interests of the Chess Federation of Canada. The Executive must never become a bunch of people acting in the interest of their own province to the detriment of the CFC. If I had seen the FQE proposal this way, I would have voted against it at the FQE AGM.

Vladimir Drkulec
08-26-2019, 02:56 PM
This has already been checked by the FQE Lawyer: it is possible. Under the Act, a category of members may have the exclusive right to vote for a certain directors. We just need to recognise the FQE chess players as a separate class of members and give them the right to elect two directors. The real problem is that the VM do not elect directors who choose the officers, they elect a person to a particular office. This does not fit our current structure because we would have to decide which position are to be given to Quebec. It is hard because it is a Constitutional change, but it is possible.

It is also possible to add two new Directors at Large on the Executive and reserve them for Quebec.

My read of the initial proposal was that there would be one director for the FQE and another for French New Brunswick. I have not heard from anyone in New Brunswick. Lets say its two on the board for the FQE and we remove New Brunswick from the equation. Currently revenues from rating fees, memberships and the Foundation (which compensate for foregone membership fees of life members) are on the order of $116,651. Rating fees indicated in the proposal would be $4503. Another $1000 on top for memberships. For a contribution of 4.6% of total revenues, 28.6% (2 of 7) or 22.2% (2 of 9) of the board would be chosen by special members from the FQE. Given the very uphill battle fought for continuation where the outcomes were continue to exist or cease to exist, I can't see how we could sell that to voting members from places like BC, Alberta or anywhere for that matter. Remember that we need two thirds of them to agree with this. While your lawyers may be right that this is technically feasible in some way if we contort our constitution in this manner, I think that we need to be grounded in reality. I still think that it runs counter to the provisions of the NFP act.

Pierre Dénommée
08-26-2019, 05:43 PM
For every dollar received by the Province, the FQE does spend $1.40. This requirement from the Minister, that the FQE generate its own revenues streams, is what prevents it from sending $36 per player to Ottawa. The FQE cannot collect $1 from the Province and spend an equal amount. If the FQE was to abandon the membership and the FQE rating fees, it would loose its recognition by the Minister. Those two sources of income are mandatory, not accessory. Off course, new revenue streams could be developed, but that takes time and those incomes must be recurrent each year.

With the situation as it is, nobody should expect the FQE to send to the CFC any amount of money that would make the FQE looks less competent in the eyes of the Minister.

Having a permanent office and a phone line would be quite an asset for the CFC. Recently, a member of a FIDE Commission called the FQE instead of the CFC because she couldn't find the CFC telephone number. The subject of this call, a possible irregularity at the NAYCC, was far from trivial.

Vladimir Drkulec
08-26-2019, 06:13 PM
For every dollar received by the Province, the FQE does spend $1.40. This requirement from the Minister, that the FQE generate its own revenues streams, is what prevents it from sending $36 per player to Ottawa. The FQE cannot collect $1 from the Province and spend an equal amount. If the FQE was to abandon the membership and the FQE rating fees, it would loose its recognition by the Minister. Those two sources of income are mandatory, not accessory. Off course, new revenue streams could be developed, but that takes time and those incomes must be recurrent each year.

That is useful information, that I am hearing for the first time, but it doesn't change the rest of the equation.



With the situation as it is, nobody should expect the FQE to send to the CFC any amount of money that would make the FQE looks less competent in the eyes of the Minister.

Having a permanent office and a phone line would be quite an asset for the CFC. Recently, a member of a FIDE Commission called the FQE instead of the CFC because she couldn't find the CFC telephone number. The subject of this call, a possible irregularity at the NAYCC, was far from trivial.

We have a permanent office and phone. It comes up first when I type in "Chess Federation of Canada phone number" into google and second when I use Duckduckgo. I'm not sure why it didn't work for the FIDE official.

The FQE came up with a creative proposal which has some promise as a way going forward but we also have to be realistic about what is possible on both ends. A constitutional rewrite is not a good starting point as that likely involves two years of negotiations, politicking and paralysis. I would prefer to take that time and energy and put it into working our CSTA contacts and generating more activity for the members.

Lyle Craver
08-26-2019, 08:41 PM
Since when are provincial organizations bound to set provincial dues equal to national dues and commit to remitting 100% of their take to the national body? Not in any organization I know of when there are national and provincial affiliates (and my knowledge goes well beyond chess). I would be amazed if there are not hundreds of non-profits in Quebec where there is a provincial association affilated with a national organization thus I am astonished that the provincial minister would be startled by such a situation.

I would not support a proposal that required a constitutional amendment to make it work.

Pierre Dénommée
08-26-2019, 09:31 PM
Since when are provincial organizations bound to set provincial dues equal to national dues and commit to remitting 100% of their take to the national body? Not in any organization I know of when there are national and provincial affiliates (and my knowledge goes well beyond chess). I would be amazed if there are not hundreds of non-profits in Quebec where there is a provincial association affilated with a national organization thus I am astonished that the provincial minister would be startled by such a situation.

If a CFC membership cost $36 somewhere and $86 in Quebec (the current cost of an FQE membership is $50 for one year) we could expect that many players would purchase a CFC membership in another province and play in Quebec. Your solution is possible, but any increase in the FQE membership fee requires a vote of the voting members at an AGM. That would be very hard to obtain because all FQE members would be entitled to vote on this issue.

Fred McKim
08-26-2019, 09:41 PM
For every dollar received by the Province, the FQE does spend $1.40. This requirement from the Minister, that the FQE generate its own revenues streams, is what prevents it from sending $36 per player to Ottawa. The FQE cannot collect $1 from the Province and spend an equal amount. If the FQE was to abandon the membership and the FQE rating fees, it would loose its recognition by the Minister. Those two sources of income are mandatory, not accessory. Off course, new revenue streams could be developed, but that takes time and those incomes must be recurrent each year.

With the situation as it is, nobody should expect the FQE to send to the CFC any amount of money that would make the FQE looks less competent in the eyes of the Minister.

Having a permanent office and a phone line would be quite an asset for the CFC. Recently, a member of a FIDE Commission called the FQE instead of the CFC because she couldn't find the CFC telephone number. The subject of this call, a possible irregularity at the NAYCC, was far from trivial.

I don't think any of us at the CFC totally understand the FQE business model, but we have understood that a grant is given from the Provincial Government the purpose of which is to assist the FQE operate as a quasi-National Federation.

I'm trying to understand your Math:

Are you saying that if the Government grant is something like $80K, then the FQE has to generate other revenue of at least $32K on top of this ? That would give them up to $112K for office expenses and programs. I think in the old agreement the FQE agreed to pay $8 per FQE member, I'm not sure where the $36 (the price of a CFC Membership) is coming from.

Vladimir Drkulec
08-29-2019, 01:50 PM
The CFC-FQE dea is not something that can be argued out during a voting members meeting. We had some discussion which provided context and useful information. We have a better idea of the situation of the FQE with regard to the operating grant from the provincial government. Our job in the coming months and weeks is to convey the situation of the CFC to the FQE and to come to an accommodation where we can move forward together. A failure to reach an agreement would be tragic for all parties but most of all for chess in Canada and chess in Quebec.


The original CFC-FQE deal provided the CFC with a boost when we really needed it and helped us pay FIDE related expenses mostly around Olympiad teams. The CFC's financial position has improved since those days and continues to improve. We've done many things right along the way and some things wrong and this has built (or killed) momentum. We would not have had Canadian Olympic Committee recognition without the CFC-FQE deal. Without the COC we would not have been invited to the Canadian Sport Tourism Alliance conference which has led to a huge increase in interest in hosting CFC tournaments including our Canadian Closeds, Zonals, Canadian Open and CYCC. Our approach has to evolve based on these new realities. In the past we had to beg and sometimes pay organizers to organize these events and now we are making multi-year long term arrangements where we have multiple cities interested and making sponsorship offers.

Richard Bérubé
08-30-2019, 05:37 PM
Hi,

Since this subject is not simple as the discussion clearly indicates, i suggest that a short committee of 4 people (two from FQE and two from CFC) study all the implications and arrive at a solution to be presented to each Federation for ratification.
A deadline may be fixed.

Richard Bérubé
FQE

Vladimir Drkulec
08-31-2019, 04:05 PM
Once the election is finalized and we know for sure who is on the executive we will discuss it and get back to you (hopefully quickly).