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The Cooperatives Amendment Act

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S.M. 2011, c. 7

Bill 17, 5th Session, 39th Legislature

The Cooperatives Amendment Act

(Assented to June 16, 2011)

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

C.C.S.M. c. C223 amended

1           The Cooperatives Act is amended by this Act.

2           Subsection 1(1) is amended

(a) by replacing the definitions "ordinary resolution", "special resolution" and "worker cooperative" with the following:

"ordinary resolution", in relation

(a) to a cooperative that is not a multi-stakeholder cooperative, means a resolution passed at a meeting of the cooperative or of its directors

(i) by a majority of the votes cast by or on behalf of the persons who are entitled to vote on the resolution, or

(ii) if a greater number or percentage of votes than a majority is specified by the articles or a unanimous agreement of the cooperative for passing the resolution, by at least that number or percentage of the votes cast by or on behalf of the persons who are entitled to vote on the resolution, and

(b) to a multi-stakeholder cooperative, means a resolution passed

(i) at a meeting of the cooperative

(A) by a majority of the votes cast by or on behalf of the persons who are entitled to vote on the resolution, or

(B) if a greater number or percentage of votes than a majority is specified by the articles or a unanimous agreement of the cooperative for passing the resolution, by at least that number or percentage of the votes cast by or on behalf of the persons who are entitled to vote on the resolution,

and confirmed, if such confirmation is required by the articles or unanimous agreement, by a majority of the votes cast by the members of each stakeholder group at the meeting or at separate meetings of each stakeholder group duly called for that purpose, or

(ii) at a meeting of its directors

(A) by a majority of the votes cast by or on behalf of the directors who are entitled to vote on the resolution, or

(B) if a greater number or percentage of votes than a majority is specified by the articles or a unanimous agreement of the cooperative for passing the resolution, by at least that number or percentage of the votes cast by or on behalf of the directors who are entitled to vote on the resolution; (« résolution ordinaire »)

"special resolution", in relation

(a) to a cooperative that is not a multi-stakeholder cooperative, means a resolution passed at a meeting of the cooperative or of its directors

(i) by at least 2/3 of the votes cast by or on behalf of the persons who are entitled to vote on the resolution, or

(ii) if a greater number or percentage of votes than 2/3 is specified by the articles or a unanimous agreement of the cooperative for passing the resolution, by at least that number or percentage of the votes cast by or on behalf of the persons who are entitled to vote on the resolution, and

(b) to a multi-stakeholder cooperative, means a resolution passed

(i) at a meeting of the cooperative

(A) by at least 2/3 of the votes cast by or on behalf of the persons who are entitled to vote on the resolution, or

(B) if a greater number or percentage of votes than 2/3 is specified by the articles or a unanimous agreement of the cooperative for passing the resolution, by at least that number or percentage of the votes cast by or on behalf of the persons who are entitled to vote on the resolution,

and confirmed by at least 2/3 of or, if paragraph (B) applies, at least that greater number or percentage of the votes cast by the members of each stakeholder group at the meeting or at separate meetings of each stakeholder group duly called for that purpose, or

(ii) at a meeting of its directors

(A) by at least 2/3 of the votes cast by or on behalf of the directors who are entitled to vote on the resolution, or

(B) if a greater number or percentage of votes than 2/3 is specified by the articles or a unanimous agreement of the cooperative for passing the resolution, by at least that number or percentage of the votes cast by or on behalf of the directors who are entitled to vote on the resolution; (« résolution spéciale »)

"worker cooperative" means a cooperative whose articles require that not more than 20% of its members may be persons who are not workers of the cooperative; (« coopérative de travailleurs »)

(b) by adding the following definitions:

"for profit housing stakeholder group" means a stakeholder group the common interest of whose members in a multi-stakeholder cooperative is to occupy residential housing provided by the cooperative on a for profit basis; (« groupement de partenaires occupant une habitation à but lucratif »)

"multi-stakeholder cooperative" means a cooperative the articles of which conform to the requirements of section 295.2; (« coopérative composée de partenaires multiples »)

"not for profit housing stakeholder group" means a stakeholder group the common interest of whose members in a multi-stakeholder cooperative is to occupy residential housing provided by the cooperative on a not for profit basis; (« groupement de partenaires occupant une habitation sans but lucratif »)

"stakeholder group" means a collection of members of a multi-stakeholder cooperative who constitute a group because they

(a) have a common interest in the cooperative, or

(b) reside within a defined geographical area; (« groupement de partenaires »)

"worker" means an individual who works in the operation of a worker cooperative, whether for remuneration or as a volunteer; (« travailleur »)

"worker stakeholder group" means a stakeholder group the common interest of whose members in a multi-stakeholder cooperative is to work in the operation of a worker cooperative, whether for remuneration or as a volunteer. (« groupement de partenaires formé de travailleurs »)

(c) in the English version in the definition "shareholder", by striking out "shareholders or, other" and substituting "shareholders, or other".

3           Clause 4(1)(a) is amended by adding "and subsection 295.4(3)" after "subsection (2)".

4           Subsection 14(1) is amended

(a) in clause (a), by striking out "section 276 and subsection 290(1)" and substituting "section 276, subsection 290(1) or section 295.2"; and

(b) in clause (c), by striking out "Part 12 or 13" and substituting "Part 12, 13 or 13.1".

5           Subsection 17(2) is replaced with the following:

Name of certain cooperatives must reflect type

17(2)       A cooperative, other than a multi-stakeholder cooperative, must have as part of its name one or more words that suggest what type of cooperative it is.

6           Clauses 33(1.1)(b) and (c) are replaced with the following:

(b) a cooperative that requires its members to hold a quantity of membership shares per member that is greater in value than the value prescribed in the regulations; and

(c) a cooperative that requires its members to make member loans in an amount per member that is greater than the amount prescribed in the regulations.

7           Subsection 39(2) is amended by adding "or the cooperative is a multi-stakeholder cooperative" after "provide otherwise".

8           Subsection 40(3) is amended by striking out "Parts 12 and 13" and substituting "Parts 12 to 13.1".

9(1)        Subsection 198(1) is amended by adding "subsection (1.1) and" after "subject to".

9(2)        The following is added after subsection 198(1):

Quorum re multi-stakeholder cooperatives

198(1.1)    Unless otherwise provided by the articles, the by-laws or a unanimous agreement of a multi-stakeholder cooperative, at least one director elected by each stakeholder group must be present at a meeting of the directors to constitute a quorum of the directors.

10          Subsection 222(7) is amended by striking out "the facility permits all participants to communicate adequately with each other during the meeting" and substituting "the requirements of the regulations respecting holding such meetings are complied with".

11(1)       Subsection 232(1) is amended

(a) by replacing the section heading with "Request to access members or shareholders list"; and

(b) by striking out "10 days" and substituting "21 days".

11(2)       Subsection 232(2) is replaced with the following:

Affidavit in support of request

232(2)      A person making a request under subsection (1) must provide the cooperative with an affidavit that

(a) states

(i) the person's name and address, and

(ii) the purpose for which the person seeks access to the list; and

(b) contains an undertaking that the list will not be used for a purpose that is prohibited by subsection (5).

Refusing access to list

232(2.1)    A cooperative may refuse to provide a person with the requested list if it believes that the person intends to use the list for

(a) the purpose of

(i) enforcing a personal claim or redressing a personal grievance against the cooperative or its directors, officers, members or other security holders, or

(ii) promoting a general economic, political, racial, religious, social or similar cause; or

(b) a frivolous or vexatious purpose.

11(3)       Subsection 232(5) is replaced with the following:

Prohibited uses of list

232(5)      No person shall use a cooperative's members or shareholders list

(a) for a purpose other than the purpose stated in the affidavit in relation to which the list was provided; or

(b) for a purpose that is not related to the affairs of the cooperative.

11(4)       The following is added after subsection 232(6):

Trafficking in lists

232(7)      No person shall

(a) sell or purchase;

(b) offer to sell or purchase; or

(c) otherwise traffic in;

a cooperative's members or shareholders list or a copy of such a list.

12          Subsections 244(4) and (5) are replaced with the following:

Appeal to meeting of members — cooperatives that are not multi-stakeholder

244(4)       A person whose membership in a cooperative, other than a multi-stakeholder cooperative, is terminated by special resolution under subsection (1) may appeal the directors' decision to the next meeting of the cooperative's members by sending a notice of appeal to the cooperative within 14 days after the day when notice was given to the person under subsection (3).

Appeals — multi-stakeholder cooperatives

244(4.1)    A person whose membership in a multi-stakeholder cooperative is terminated under subsection (1) may,

(a) if its by-laws provide that the appeal is to the member's stakeholder group, appeal the directors' decision to the member's stakeholder group at the next meeting of the cooperative's members; or

(b) if its by-laws do not so provide, appeal the directors' decision to the next meeting of the cooperative's members;

by sending a notice of appeal in accordance with subsection (4).

Decision of meeting

244(5)      The meeting of members of a cooperative or meeting of a stakeholder group to which an appeal under subsection (4) or (4.1) is brought must, by a majority vote, either confirm or set aside the resolution of the cooperative's directors terminating the person's membership. The decision of the meeting is final and not subject to further appeal.

13          Clause 277(e) is amended by striking out "any other type of cooperative" and substituting "another type of cooperative, other than a multi-stakeholder cooperative to which subsection 295.7(3) applies".

14(1)       Subsection 280(2) of the English version is amended

(a) by striking out "Where" and substituting "If"; and

(b) by adding "subsection" before "244(1)".

14(2)       Subsection 280(3) is amended

(a) in the part before clause (a) of the English version,

(i) by striking out "Where" and substituting "When", and

(ii) by striking out "shall" and substituting "must"; and

(b) by replacing clause (a) with the following:

(a) form an appeal tribunal to hear the appeal by selecting

(i) two tribunal members from the list maintained under subsection (9.2), and

(ii) a presiding member from the list of individuals appointed under subsection (12);

14(3)       Subsection 280(4) is amended

(a) in clauses (a) to (c) of the English version, by striking out "shall" and substituting "must";

(b) in clause (d), by adding ", vary" after "confirm"; and

(c) in clause (e), by striking out "shall, within seven days, excluding Saturdays and holidays, after the completion of the hearing of the appeal," and substituting "must, within 12 days after completing the appeal hearing, excluding Saturdays and holidays,".

14(4)       Subsections 280(9) to (11) are replaced with the following:

Submitting names for appeal tribunal members list

280(9)      Every two years on or before the submission date specified under subsection (9.1), each housing cooperative must submit to the Registrar the names of at least two members of the cooperative — at least one of whom is not one of its directors — and who

(a) are individuals; and

(b) state that they are willing to

(i) act as members of appeal tribunals under this section for the two calendar years after their names are submitted, and

(ii) take the training required by subsection (9.3).

Registrar may specify submission date

280(9.1)    The Registrar may specify the biennial date on or before which names are to be submitted under subsection (9).

Registrar to maintain appeal tribunal members list

280(9.2)    The Registrar is to create and maintain a list of those individuals for participation on appeal tribunals during the two calendar years after their names are submitted.

Training for appeal tribunal members

280(9.3)    Individuals whose names are submitted to the Registrar under subsection (9) must take training specified in the regulations before participating in appeals under this section.

Remuneration of appeal tribunal members

280(10)     A member of an appeal tribunal convened under this section who is selected from a list maintained under subsection (9.2) is entitled to be paid an honorarium in an amount prescribed in the regulations.

Responsibility for certain costs of appeal tribunals

280(11)     The housing cooperative in respect of which an appeal is made under this section must pay

(a) the honorariums of the members of the appeal tribunal other than the presiding member; and

(b) the costs of obtaining accommodation for the hearing.

Presiding members list for appeal tribunals

280(12)     The Lieutenant Governor in Council must appoint two or more individuals to a list of presiding members for appeal tribunals under this section who

(a) state that they are willing to

(i) act as presiding members of appeal tribunals under this section for the term of their appointment, and

(ii) take the training required by subsection (15); and

(b) have suitable legal or other qualifications to enable the appeal tribunal to carry out its functions and duties fairly and efficiently.

Term of appointment

280(13)     The term of an individual's appointment under subsection (12) is the term specified by the Lieutenant Governor in Council, but the Lieutenant Governor in Council may terminate an individual's appointment at any time for any reason that it considers sufficient.

Remuneration of presiding members

280(14)      The Lieutenant Governor in Council may specify the remuneration to be paid to the individuals appointed under subsection (12).

Training for presiding members of appeal tribunals

280(15)     Individuals who are appointed to the list of presiding members for appeal tribunals must take training specified in the regulations before participating in appeals under this section.

15          Section 289 is amended

(a) by adding "worker" before "cooperatives"; and

(b) by striking out everything after "cooperatives".

16(1)       Subsection 290(1) is amended

(a) by repealing clause (a);

(b) in clause (b), by striking out "employees" and substituting "workers"; and

(c) by replacing clause (c) with the following:

(c) the maximum membership investment payable for membership in the cooperative by a worker who receives remuneration for his or her work in the cooperative's operation may not be more than 50% of the worker's expected annual remuneration during the first year of the worker's membership, unless any higher maximum membership investment is payable equally by all members.

16(2)       Subsections 290(2) and (3) are repealed.

17          Section 293 is replaced with the following:

Directors

293         Despite sections 184 and 185, at least 80% of a worker cooperative's directors must be both members and workers of the cooperative.

General manager may be a director

293.1        The general manager of a worker cooperative may be a director of the cooperative.

Worker members on audit committee

293.2       Despite subsection 272(1), more than a majority of the members of the audit committee of a worker cooperative may be workers of the cooperative.

18          The following is added after section 295:

PART 13.1

MULTI-STAKEHOLDER COOPERATIVES

Application

295.1       This Part applies to multi-stakeholder cooperatives.

Articles of incorporation — mandatory requirements

295.2       The articles of incorporation of a multi-stakeholder cooperative must

(a) conform to the requirements of section 9;

(b) state that the cooperative is a multi-stakeholder cooperative;

(c) provide

(i) for the division of its members into two or more stakeholder groups,

(ii) that each member of the cooperative must belong to a stakeholder group, and

(iii) that a member of the cooperative may not belong to more than one stakeholder group at the same time;

(d) provide that each stakeholder group is entitled to elect at least one director;

(e) without limiting the application of clause (d), state the method of determining the number of directors that each stakeholder group may elect;

(f) state the method of passing resolutions, including special resolutions, at a meeting of the cooperative;

(g) state the number of members or stakeholder groups required to be present at a meeting of the cooperative to constitute a quorum; and

(h) state the number of members required to be present at a meeting of a stakeholder group to constitute a quorum.

Registrar's discretion to refuse to accept articles

295.3       Without limiting the Registrar's discretion to refuse to accept articles of a cooperative under another provision of this Act, the Registrar may refuse to accept articles of a multi-stakeholder cooperative that provides or proposes to provide not for profit housing to the members of one of its stakeholder groups if the Registrar considers that the articles do not adequately protect the best interests of those members.

Articles — provisions regarding membership shares

295.4(1)    The articles of a multi-stakeholder cooperative may do one or more of the following:

(a) provide for multiple classes of membership shares;

(b) designate a class of membership shares for each stakeholder group;

(c) require a person to own one or more shares in order to be a member of the cooperative;

(d) require a person applying to join a stakeholder group to own a different number of membership shares than a person applying to join another stakeholder group.

Attributes of membership shares

295.4(2)    If the articles of a multi-stakeholder cooperative provide for more than one class of membership shares, the articles must set out the matters provided in subsection 39(4) for each class of membership share.

Articles — supporting members' stakeholder group

295.4(3)    The articles of a multi-stakeholder cooperative may provide for a stakeholder group of supporting members whose members have a common economic, social or cultural interest in the pursuit of the cooperative's objects.

No share capital

295.5       If a multi-stakeholder cooperative does not have share capital,

(a) it must issue a certificate of membership in the cooperative to each member who has paid the full membership fee; and

(b) its articles may require a person applying to join a stakeholder group to pay a different membership fee than a person applying to join another stakeholder group.

Stakeholder group determining membership

295.6       For greater certainty, the by-laws of a multi-stakeholder cooperative may provide that no person may become a member of the cooperative until the person's membership application has been approved by the members of the stakeholder group to which the person proposes to belong or by the directors elected by that stakeholder group.

Partial application of Part 12

295.7(1)    Except as expressly provided in this section, Part 12 does not apply in respect of a multi-stakeholder cooperative even though its stakeholder groups include a for profit housing stakeholder group or a not for profit housing stakeholder group.

How Part 12 applies to a multi-stakeholder cooperative that has a for profit housing group

295.7(2)    When a multi-stakeholder cooperative's stakeholder groups include a for profit housing stakeholder group,

(a) sections 279 to 283 apply to the members of that stakeholder group and to the cooperative in its relations with those members; and

(b) the following provisions of Part 12 apply to the multi-stakeholder cooperative as a whole:

(i) subsection 278(1),

(ii) sections 284 and 285.

How Part 12 applies to a multi-stakeholder cooperative that has a not for profit housing group

295.7(3)    When a multi-stakeholder cooperative's stakeholder groups include a not for profit housing stakeholder group,

(a) sections 279 to 283 apply to the members of that stakeholder group and to the cooperative in its relations with those members; and

(b) the following provisions of Part 12 apply to the multi-stakeholder cooperative as a whole:

(i) clauses 275(2)(c) and (d),

(ii) subsections 276(2) and (3),

(iii) clauses 277(a), (c), (d) and (f),

(iv) sections 278 and 284 to 287.

Restriction on changing type of cooperative

295.8       A multi-stakeholder cooperative whose stakeholder groups include a not for profit housing stakeholder group may not amend its articles to change to a different type of cooperative other than a not for profit housing cooperative.

Partial application of Part 13

295.9(1)    Except as expressly provided in this section, Part 13 does not apply in respect of a multi-stakeholder cooperative even though its stakeholder groups include a worker stakeholder group.

How Part 13 applies to a multi-stakeholder cooperative that has a worker group

295.9(2)    When a multi-stakeholder cooperative's stakeholder groups include a worker stakeholder group,

(a) the following provisions of Part 13 apply to the members of that stakeholder group and to the cooperative in its relations with those members:

(i) clause 290(1)(c),

(ii) sections 291 and 292; and

(b) sections 293.1 and 293.2 apply to the multi-stakeholder cooperative as a whole.

19          Subsection 297(1) is amended in the part before clause (a) by adding "295.8," after "sections".

20          Subsection 312(4) is amended

(a) in clause (a), by striking out "if the cooperative is a housing cooperative or a worker cooperative, with section 276 or subsection 290(1), as the case may be" and substituting "if applicable, section 276, subsection 290(1) or section 295.2"; and

(b) by replacing clause (d) with the following:

(d) if applicable, Part 12, 13 or 13.1 has been complied with.

21(1)       Subsection 388(1) is amended

(a) by replacing the part before clause (a) with "The Lieutenant Governor in Council may make regulations";

(b) by replacing clause (i), with the following:

(i) respecting appeals under section 280 and respecting the payment of expenses of tribunal members in relation to appeals under that section, including requiring the expenses to be paid by the housing cooperative in respect of which the appeal is made;

(i.1) for the purposes of subsections 280(9.3) and (15), respecting the training required to be taken by members and presiding members of appeal tribunals, including

(i) authorizing the Registrar to develop and determine the scope and content of such training, or

(ii) specifying, or authorizing the Registrar to specify, training provided by a non-governmental body;

(c) by adding the following after clause (k):

(l) respecting annual and other general meetings of and special meetings of a cooperative, including

(i) with or without conditions, authorizing cooperatives to hold annual or other general meetings or special meetings by holding two or more simultaneous meetings in different locations at which the participants at each location are able to communicate with participants at the other locations by means of electronic communication technology,

(ii) prescribing the requirements for holding such meetings,

(iii) governing voting at such meetings and counting votes, and

(iv) prescribing conditions to ensure that persons participating in a meeting authorized under subclause (i) are able to exercise their meeting rights fully and in an informed manner;

(m) respecting any matter the Lieutenant Governor in Council considers necessary or advisable to carry out the purposes of this Act.

21(2)       The following is added after subsection 388(1):

Application of regulations

388(1.1)    A regulation made under subsection (1) may

(a) be general or particular in its application;

(b) establish classes of cooperatives; and

(c) provide differently for different classes or types of cooperatives or different groups of members of a cooperative.

Coming into force

22(1)       This Act, except sections 6 and 14 and clause 21(1)(b), comes into force on the day it receives royal assent.

Coming into force: sections 6 and 14 and clause 21(1)(b)

22(2)       Sections 6 and 14 and clause 21(1)(b) come into force on a day to be fixed by proclamation.