Regulation - LGIC
Proposed Permanent Changes to Enable Digital and Virtual Processes under the Ministry of Public and Business Service Delivery's Condominium Act
Regulation Number(s):
O.Reg. 48/01 (General) under the Condominium Act, 1998
Instrument Type:
Regulation - LGIC
Bill or Act:
Condominium Act, 1998
Summary of Proposal:
On April 3, 2023, the government introduced the Less Red Tape, Stronger Economy Act, 2023. Among other things, the bill includes proposed amendments to the Condominium Act, 1998 (Condo Act) to enhance flexibility for condominium corporations (condos) to implement certain virtual processes.
If passed, the proposed changes would replace the temporary legislative framework for virtual processes, including virtual meetings, which was enacted in response to the COVID-19 pandemic and which expires on September 30, 2023. In particular, the proposed changes would, unless the condo's governing documents specify otherwise:
• Enable condos to hold virtual or hybrid meetings, and to conduct voting (e.g., for elections) virtually or in hybrid form.
• Better facilitate the sending of notices or other documents by electronic means.
You can find the proposed legislative changes, as well additional information about the Less Red Tape, Stronger Economy Act, 2023, by following the link below.
To complement the proposed legislative changes, the ministry is proposing changes to O. Reg. 48/01 (General) under the Condo Act, which are posted here for public comment. These proposed regulatory changes contain important details to support the proposed new legislative framework for virtual processes.
The draft proposed amendments O. Reg. 48/01 (General) under the Condo Act include provisions that would, among other things:
• Amend definitions in the French version of the regulation to ensure accuracy.
• Require certain information to be in notices of owners' meetings that are held virtually or in hybrid form, such as instructions for attending virtually.
• Require owners' email addresses and other electronic communication addresses to be kept in the corporation's record of owners in certain circumstances, including to enable delivering notices electronically without an agreement.
• Permit condo owners to opt-out of electronic communication of notices under the new framework.
• Prohibit records requesters from accessing electronic communication addresses in the corporation's record under the new framework.
• Remove requirements for the condo board to make a resolution to determine the corporation's method of electronic communication in certain circumstances.
• Outline transitional provisions to help condos move to the new framework.
• Amend or revoke certain regulatory provisions that may no longer apply due to proposed legislative changes, such as provisions related to the agreement to receive electronic notices.
The ministry welcomes feedback on the draft proposed amendments.
If passed, the proposed changes would replace the temporary legislative framework for virtual processes, including virtual meetings, which was enacted in response to the COVID-19 pandemic and which expires on September 30, 2023. In particular, the proposed changes would, unless the condo's governing documents specify otherwise:
• Enable condos to hold virtual or hybrid meetings, and to conduct voting (e.g., for elections) virtually or in hybrid form.
• Better facilitate the sending of notices or other documents by electronic means.
You can find the proposed legislative changes, as well additional information about the Less Red Tape, Stronger Economy Act, 2023, by following the link below.
To complement the proposed legislative changes, the ministry is proposing changes to O. Reg. 48/01 (General) under the Condo Act, which are posted here for public comment. These proposed regulatory changes contain important details to support the proposed new legislative framework for virtual processes.
The draft proposed amendments O. Reg. 48/01 (General) under the Condo Act include provisions that would, among other things:
• Amend definitions in the French version of the regulation to ensure accuracy.
• Require certain information to be in notices of owners' meetings that are held virtually or in hybrid form, such as instructions for attending virtually.
• Require owners' email addresses and other electronic communication addresses to be kept in the corporation's record of owners in certain circumstances, including to enable delivering notices electronically without an agreement.
• Permit condo owners to opt-out of electronic communication of notices under the new framework.
• Prohibit records requesters from accessing electronic communication addresses in the corporation's record under the new framework.
• Remove requirements for the condo board to make a resolution to determine the corporation's method of electronic communication in certain circumstances.
• Outline transitional provisions to help condos move to the new framework.
• Amend or revoke certain regulatory provisions that may no longer apply due to proposed legislative changes, such as provisions related to the agreement to receive electronic notices.
The ministry welcomes feedback on the draft proposed amendments.
Analysis of Regulatory Impact:
Issues & Objectives:
• The effect of the pandemic has demonstrated that the ministry's business law statutes and the Condominium Act, 1998 (Condo Act) should be modernized to accommodate contemporary business practices and eliminate burden for corporations and businesses.
• Accordingly, the ministry is proposing to implement permanent legislative and regulatory changes that would enable certain corporations and businesses to hold virtual or hybrid meetings, and undertake other virtual processes associated with meetings (such as sending an electronic notice about the meeting), without needing to take certain preliminary steps, such as passing a corporate by-law, as well as proposed changes to address digital storage of and electronic access to records. These changes would also replace temporary legislative changes that currently permit certain corporations and businesses to hold virtual or hybrid meetings until September 30, 2023.
• Overall, the proposal is intended to remove statutory barriers or hurdles and provide corporations and businesses with enhanced flexibility to satisfy their corporate governance obligations in a manner that is suitable to their needs.
Benefits, Costs, and Other Impacts:
• Because of the structure of the statutes (organizational/framework statutes where the ministry generally has no oversight function over the corporations) and because of the nature of the proposed changes (the proposed changes are enabling/permissive in nature and corporations could choose the virtual processes that work for them), the ministry cannot anticipate how many corporations may choose to implement virtual processes, or in which fashion they may be implemented. However, in order to estimate the potential cost savings from the proposed amendments, the ministry relied on statistics from ServiceOntario (SO) and made some conservative assumptions to conclude that an estimated direct compliance net cost-savings of approximately $14M per year could be realized across Ontario corporations.
• This figure was calculated by comparing the costs of hosting in-person meetings versus hosting virtual meetings only for a sample of corporations under the Ontario Business Corporations Act currently active in Ontario (this sub-set of corporations was chosen because the ministry could identify and review enough data to make reasonable assumptions for this group).
• This figure will fluctuate based on the individual corporation's choices on whether they decide to continue hosting virtual only meetings, switch to hybrid or return to in-person meetings in the future.
• Notably, the proposal impacts over 1.3 million business corporations, over 576,000 partnerships, over 60,000 not-for-profit corporations, over 12,000 condo corporations, over 1,700 co-operative corporations, over 130 share capital social clubs, and over 120 insurers.
• The effect of the pandemic has demonstrated that the ministry's business law statutes and the Condominium Act, 1998 (Condo Act) should be modernized to accommodate contemporary business practices and eliminate burden for corporations and businesses.
• Accordingly, the ministry is proposing to implement permanent legislative and regulatory changes that would enable certain corporations and businesses to hold virtual or hybrid meetings, and undertake other virtual processes associated with meetings (such as sending an electronic notice about the meeting), without needing to take certain preliminary steps, such as passing a corporate by-law, as well as proposed changes to address digital storage of and electronic access to records. These changes would also replace temporary legislative changes that currently permit certain corporations and businesses to hold virtual or hybrid meetings until September 30, 2023.
• Overall, the proposal is intended to remove statutory barriers or hurdles and provide corporations and businesses with enhanced flexibility to satisfy their corporate governance obligations in a manner that is suitable to their needs.
Benefits, Costs, and Other Impacts:
• Because of the structure of the statutes (organizational/framework statutes where the ministry generally has no oversight function over the corporations) and because of the nature of the proposed changes (the proposed changes are enabling/permissive in nature and corporations could choose the virtual processes that work for them), the ministry cannot anticipate how many corporations may choose to implement virtual processes, or in which fashion they may be implemented. However, in order to estimate the potential cost savings from the proposed amendments, the ministry relied on statistics from ServiceOntario (SO) and made some conservative assumptions to conclude that an estimated direct compliance net cost-savings of approximately $14M per year could be realized across Ontario corporations.
• This figure was calculated by comparing the costs of hosting in-person meetings versus hosting virtual meetings only for a sample of corporations under the Ontario Business Corporations Act currently active in Ontario (this sub-set of corporations was chosen because the ministry could identify and review enough data to make reasonable assumptions for this group).
• This figure will fluctuate based on the individual corporation's choices on whether they decide to continue hosting virtual only meetings, switch to hybrid or return to in-person meetings in the future.
• Notably, the proposal impacts over 1.3 million business corporations, over 576,000 partnerships, over 60,000 not-for-profit corporations, over 12,000 condo corporations, over 1,700 co-operative corporations, over 130 share capital social clubs, and over 120 insurers.
Further Information:
Proposed Amendments to Ontario Regulation 48/01 (General)
(Download Adobe Reader)
Bill 91, Less Red Tape, Stronger Economy Act, 2023
Proposal Number:
23-MPBSD007
Posting Date:
April 3, 2023
Comments Due Date:
May 3, 2023
Contact Address:
56 Wellesley St. W.,
Toronto ON M5S 2S3
Toronto ON M5S 2S3