Canada Cooperatives Act
In June 1999, the Canada Cooperatives Act was proclaimed and its regulations came into force on December 31 of that year. The Act modernizes the corporate governance rules relating to non-financial co-operatives and is partly modeled on the Canada Business Corporations Act. It replaces the old Canada Cooperative Associations Act adopted in 1970.

Key Points

• Modernizes the corporate statute law for co-operatives
• Enhances the co-operative nature of co-operatives by defining co-operative basis. Ensures that a co-operative is carrying on business in accordance with the co-operative principles: open membership; one member/one vote; no proxy voting; limited interest on member loans; limited dividends on members' shares; members provide capital as much as possible; surplus funds used for a number of purposes including members services reserves or payment of interest, community welfare and patronage allocations; and co-operative education.
• Enhances membership rights over business decisions, communicating views to the co-operative and fellow members, and strengthens members' protection.
• Enables members of co-operatives to decide on whether to issue equity in the marketplace on a competitive basis, while retaining a co-operative structure.
• Provides greater flexibility of methods for members to finance their co-operative by giving access to new ways to raise capital if members decide that internal financing is not enough.
• Makes directors subject to a statutory duty of care and fiduciary duty - modernizes, clarifies, and limits these duties.
• Allows for a good mix of qualified individuals to serve on the board of directors of a co-operative by permitting members to elect (limited) outside expertise. At least 2/3 of a co-operative's directors must either be members of the co-operative or representatives of members that are co-operatives, business corporations, or other entities: 1/3 of the directors may be outside directors. If the co-operative issues investment shares to non-members, members may decide to authorize investment shareholders to elect no more than 20% of the directors.
• Gives co-operatives access to an array of modern corporate tools (e.g. amalgamations, arrangements, and reorganization) that competitors use everyday to carry on business efficiently and effectively.
• Harmonizes aspects of the Canada Cooperatives Act with similar provisions in the Canada Business Corporations Act (CBCA).