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Will the new BC Societies Act transition be a train wreck?
Public

Dr Z. Essak, MD - Vancouver, BC - February 13, 2017.

Train wreck No one can deny the importance of BC societies to communities large and small throughout the province, assisting all kinds of people as charitable and not for profit societies, including associations that represent occupations and professions.

What can we learn from the early example of transition by the Doctors of BC, the BC Medical Association, formerly a Reporting Society, declaring themselves to be a member-funded society and escaping public disclosure. Do they even meet the required criteria?

When we ask, it may come as a shock to learn the BC Registry is not confirming compliance requirements are met. Is the BC Government failing to provide proper leadership and oversight to the tasks of government?

Is the public trust being neglected? Will there be havoc on public interest and individual rights? Are we going to see a train wreck?

Why any concern?

The end of 2016 has seen a complete change in how not for profit societies are qualified and regulated by the B.C. government through the BC Societies Act that came into effect on November 28th. It is the dawn of a new era and the provisions of the Act warrant close scrutiny.

The new BC Societies Act has been brought in with words such as; long-overdue, modernize, improve, and simplify although the new act has more than twice as many sections and pages as the previous act.

When the new BC Societies Act came into effect at the end of November 2016, it launched a two-year transition period during which all societies in BC have to file a transition application.

We may all be affected in one way or another. Some as recipients, members or employees of the 27,000 societies and some, possibly everyone, may be affected by societies that represent an occupation or profession; including important ones like the BC Medical Association (Doctors of BC), BC law society, BC pharmacists, naturopaths, home inspectors, and others.

Does the Doctors of BC meet the criteria?

One important example of transition is the Doctors of BC, the BC Medical Association, founded 117 years ago in January 1900.

On December 6, 2016, just one week after the new Act came into force, the CEO and Board sent to membership referendum a new set of bylaws with major restructuring of the Board in addition to transition requirements and the declaration that it is a “member-funded society” - thus removing itself from obligations of public disclosure even though it had previously been a Reporting Society.

On January 19, 2017 the referendum results were posted on the Doctors of BC website. The referendum passed by a significant percentage of those who voted, although more than 75 per cent of member doctors did not vote. Is this a sign of apathy, or a sign they did not know which way to vote?

The BC Medical Association transition application was filed electronically with the BC Registry on January 23, 2017 including the declaration it is a member-funded society.

Does the Doctors of BC, the BC Medical Association, meet the criteria required to be a member-funded society?

To be a member-funded society, public donations and government funding cannot exceed $20,000 or 10 per cent of the societies’ income, whichever is greater.

The BC Medical Association receives government funding destined to doctors as RRSPs and benefits. From the government funding received, in the case of non-member doctors, the BCMA keeps administrative fees equivalent to that of annual dues, distributing the balance.

Estimates are that approximately 12,000 doctors are members of the BCMA and 1,500 doctors are not members.

These numbers suggest that more than 10 per cent of income is retained from government funding and the BC Medical Association, the Doctors of BC, does not meet the criteria to be a member-funded society.

Transition applications not checked for compliance

It may be shocking to learn that the BC Registry is not reviewing transition applications to confirm compliance with the new BC Societies Act.

According to staff at the BC Registry, it is left up to each society to complete the electronic filing of the transition application accurately and in compliance with the Act.

Views obtained from the BC Registry are: “We are not receiving transition applications, they are filed electronically; we are not confirming compliance to requirements under the act, it is up to each society to do that, they are accountable for that.”

Some staff indicated the technology for electronic filing includes some flags and, although they may review some applications, they are not reviewed specifically to confirm compliance. Other staff have apologized for any misunderstanding and offered this explanation: “We do not have any flags from the electronic filing or circumstances to confirm compliance. We do not have the financial statements of societies.”

So how are societies to be held accountable for compliance in transition applications, if not by the government and the registry?

Transition of previously Reporting Societies

Under the previous act, approximately 250 or more societies were Reporting Societies. How many of them will declare they are member-funded societies and escape obligations of public disclosure?

Some of these societies, like the Doctors of BC, may pose important public interest considerations.

The BC Registry does not have a list of the Reporting Societies under the previous act and, although the database records previously showed if a society was a Reporting Society, this is no longer shown in public summaries because the Reporting Societies classification has been dropped in the new BC Societies Act.

BC Registry staff can see if a society was previously a Reporting Society but only before a transition application is filed. After filing, that information is no longer available on public summaries or to BC Registry staff.

Why is there no cross-checking of changes in classification to review public interest implications?

Why is there not scrutiny of all transition applications with the member-funded declaration, whether or not they were previously reporting societies, as this is the only exception to escape public disclosure?

Technology and the responsibilities of ministries

In the rush to adopt technology and electronic filing, has the BC Government and staff lost sight of the importance of ensuring compliance and preservation of the public interest?

Isn't that the job of government - to protect the public trust, to ensure that legislation is followed, especially in transition, and to confirm compliance?

How much has been spent on technology for electronic filing of transition applications and on-line resources to explain the changes? Meanwhile, has attention to confirming compliance and accuracy for the public interest been neglected? Has the focus been lost?

There is also confusion as to which Ministry is responsible. Is the BC Registry operating under the oversight of the Ministry of Finance when it comes to corporations and societies, or is it now under the Ministry of Technology?

Is technology design and implementation determining government record keeping or are the responsibilities of Ministries determining technology and recording keeping?

Is the BC Government failing to provide proper leadership and oversight to the tasks of government?

Other implications of member-funded societies

Member-funded comparison chart As a member-funded society, other changes also come into effect.

It is allowed that more than half, or even all, the directors can receive income from the society for other work or contracts in addition to their income as a director.

Furthermore, the society can, through bylaw changes, become a company under the incorporations act.

Is this appropriate for a society that represents the interests of an occupation or profession, some for over a hundred years, like the BC Medical Association - Doctors of BC?

Do we need to further consider how a society is not a company?

While corporate thinking may predominate in some places, it is not a full reflection of the broader society thinking needed in serving communities where public interest and needs of others, not just that of members or directors, matter.

In some societies, directors find they are not governing but being managed.

Member-funded or Occupational Title Societies

In the Special Societies section of the new Act there are two types; member-funded and occupational title societies.

Many societies may want to declare they are member-funded, whether they were previously reporting societies or not, to escape obligations of public disclosure.

The member-funded declaration has several criteria, other than government funding and public donations, that exclude a society from being member-funded such as being a student society or a hospital society or excluded in the regulations.

The occupational title society category, on first glance, appears as though it is meant to be a meaningful and useful distinction and separate from member-funded. However, on closer examination it turns out to be a dead end.

It provides a useful definition of an occupational title society, “a society that has as one of its purposes the representation of the interests of an occupation or profession”.

However, societies that meet the definition are not bound to provisions of the new act unless they were already registered and no more can be registered.

Just under two dozen societies were voluntarily registered under the previous BC Society Act, including the Medical Office Assistants Association of BC, the Cardiology Technologists Association of BC, and Home Inspectors Association of BC to mention a few. Notably absent from the registered list are societies with a purpose to represent the interests of professions like doctors, lawyers and others.

Why are only the 23 registered societies subject to these provisions in the legislation? Why does the new act prevent any other society being registered as an occupational title society, and exclude them from the requirements of these provisions? Is this an attempt to phase out recognition of this category of societies and reduce responsibilities for public disclosure and government scrutiny over occupational title societies?

Meanwhile, it may be of technical interest to note important differences in the transition application requirements for occupational title societies detailed in section 243 of the new act. Should this apply to all societies that meet the definition, not just those that were registered? Is this a crucial safeguard for occupational title societies that the bylaws submitted in transition applications cannot include additional alterations at the same time thereby ensuring clarity of the changes inherent with the transition and separate from any additional alterations?

What societies are, by definition, an occupational title society?

Can we truly overlook the significance of societies that, by definition, are an occupational title society with a purpose to represent the interests of an occupation or profession?

In the case of the Doctors of BC, the BC Medical Association, there can be little doubt. It claims to represent all doctors, member or not, in negotiations with the BC Government and has received approval for this from the BC Government. It not only receives government funds, but also through its activities in co-management of BC Health Care determines the administration of significant government funds when it comes to health care.

What about other BC societies such as those for pharmacists, engineers, lawyers, chiropractors, naturopaths, etc? Are they, by definition of their own stated purpose, occupational title societies?

Does the BC Societies Act need to be amended to ensure all societies that meet the definition of an occupational title society are registered and comply with special provisions?

As an interim measure, should the member-funded criteria exclude through the regulations those societies that meet the definition of an occupational title society and not exempt them from public disclosure?

These are questions that the BC Government must answer.