Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs

Issue 5 - Evidence for April 25, 2001

The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill S-25, to amend the act of incorporation of the Conference of Mennonites in Canada, met this day at 4:35 p.m. to give consideration to the bill.

Senator Lorna Milne (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, we are meeting to consider Bill S-25, to amend the act of incorporation of the Conference of Mennonites in Canada. We have before us Mr. John Lohrenz, Director of Constituency Relations for the Conference of Mennonites in Canada.

Please proceed, Mr. Lohrenz.

Mr. John Lohrenz, Director of Constituency Relations, Conference of Mennonites in Canada: Honourable senators, it is a privilege and an honour to address the Standing Senate Committee on Legal and Constitutional Affairs on behalf of the Conference of Mennonites in Canada.

This corporation is a national umbrella organization encompassing 260 congregations with a membership of approximately 36,000 adults in six area conferences located in seven provinces. It provides leadership in theology, missions, education, resources and social concerns. The membership consists of English- and German-speaking Canadians, as well as more recent Canadians including Chinese, Vietnamese, Laotian, Taiwanese, French and Spanish. The Conference of Mennonites in Canada was organized in Western Canada in 1902 to provide leadership to Mennonites immigrating from Europe during the latter part of the 19th century and the beginning of the 20th century.

On May 14, 1947, an act to incorporate the Conference of Mennonites in Canada became law. The Conference of Mennonites in Canada has experienced significant changes during the last decade, necessitating the revision of the 1947 legislation.

One of these changes occurred in 1995 when the Mennonite Conference of Eastern Canada, with 96 congregations, joined the Conference of Mennonites in Canada. Many of the Mennonites of Eastern Canada are descendants of the Loyalists and of Mennonites who came directly from either Switzerland or Germany prior to the 1874 immigration of Mennonites to Western Canada. The integration of these two conferences changed the dynamics of the Conference of Mennonites in Canada, resulting in a new name, Mennonite Church Canada.

A second major change is a recent decision making the Conference of Mennonites in Canada independent of the General Conference Mennonite Church, a North American body.

The 1947 legislation restricted the activities of the corporation to Canada. As the corporation grew, activities outside of Canada were facilitated and channelled through the General Conference Mennonite Church, and after 1995 through the Mennonite Church in the United States as well.

With the Conference of Mennonites in Canada becoming an independent organization, legislation permitting the corporation to carry on its activities in other countries became a necessity, especially with congregations of other ethnic groups joining it.

The purpose of the proposed amending legislation is to update and revise the 1947 act of incorporation, primarily by changing the name, removing some of the limitations in the current legislation and deleting some wording no longer appropriate.

The first major amendment proposed is to change the corporation's name to Mennonite Church Canada, making it consistent with similar national bodies in other countries - for example, Mennonite Church U.S.A.

The second major amendment proposed revises the corporation's objects and powers to more closely reflect current reality and the changes that have occurred since 1947. The primary revisions include expanding the powers of the corporation to that of a natural person and permitting the corporation to carry on its business in jurisdictions outside Canada.

The third major amendment proposed is to remove certain restrictions on holding and disposition of real property. This is requested primarily to update the reality that exists in current general corporate legislation, giving the corporation rights and privileges similar to those of a natural person.

The fourth major amendment proposed is to permit the corporation to hold membership meetings once every two years rather than each year. The Conference of Mennonites of Canada has met for annual delegate assemblies each year since 1902. The delegates are chosen by each of the congregations, based on the number of members per congregation. Considering the expense of holding full delegate assemblies each year, it may be desirable to hold a full delegate assembly every second year, with perhaps a teleconference or similar meeting in the intervening year.

The discussions to amend the 1947 legislation began shortly after 1995 and came to a head with the decision to reorganize the General Conference Mennonite Church body, making the Conference of Mennonites in Canada independent of the North American body. The initial step was to appoint a constitutional review committee, which held its first meeting in February 1999.

After examining several options, the decision was made to pursue amending the 1947 legislation. It soon became apparent that the special status offered by that legislation was both valued and appreciated. It offered flexibility and allowed the Conference of Mennonites in Canada to grow and flourish in a spirit of unity and to carry out its mandate and responsibilities with minimal legislation concerns. The 1947 act served the corporation well for over 50 years.

Subsequently, discussions were begun with Mr. Mark Audcent, Law Clerk and Parliamentary Counsel, his assistant Deborah Palumbo and, more recently, his predecessor Raymond du Plessis. Their excellent counsel and guidance brought us to the point where all the requirements have been fulfulled. The Conference of Mennonites in Canada also appreciates the excellent support received from Senator Carstairs and, more recently, from Senator Kroft.

The membership has been informed of the progress on a continual basis, both through the annual delegate assemblies and through publications. Canadian Mennonite, for example, a publication that contains regular updates, is distributed without charge to each membership household twice a month.

The actions taken with reference to the amending legislation received strong formal approval at the delegate annual assembly held in Lethbridge, Alberta in July 2000. There is excitement about the future with virtually no opposition from the membership concerning the actions taken.

Honourable senators, it is with optimism and excitement that I present this brief to you with the sincere request that you give Bill S-25 your formal approval.

I am prepared to answer any questions. However, before doing so I should like to bring to your attention that Senator Kroft has agreed, at our request, to ask the committee to consider at clause-by-clause study a technical amendment to clause 2. The amendment would clarify the wording of the bill relating to the membership of the church under its new name.

The Chairman: Thank you.

Senator Kroft is not a member of this committee and therefore cannot move an amendment. A member of the committee will have to move the amendment, after which we can vote on the amendment and then, if passed, on the bill as amended.

However, before we get to that stage, how many congregations do you represent, Mr. Lohrenz?

Mr. Lohrenz: We represent approximately 260 congregations from seven provinces. The adult membership is about 36,000, although with children it is considerably larger than that.

The Chairman: Is the Conference of Mennonites, which now includes the Ontario and eastern group and the more recent immigrant group from the West, one of the more conservative groups?

Mr. Lohrenz: In the Mennonite church, the Conference of Mennonites in Canada would be considered the more liberal group. The other is perhaps a little more conservative, but they have now integrated and formed one conference. As a result of it being a different group of people, there has been demand for a name change. Initially, most of the membership of the Conference of Mennonites in Canada were Mennonites who immigrated to Canada after 1874, and most of them came directly from Russia. Following that, there was another immigration in the 1920s and another after the Second World War, in 1948 and beyond.

Among Mennonites, the Mennonites of Eastern Canada are considered the old Mennonites because they have been here much longer. They came after the American Revolution as Loyalists, and many of them came directly from either Switzerland or Germany. They have a much longer history and tradition in Canada than does the Conference of Mennonites in Canada.

Senator Nolin: I am confused about the amendment to change the name. I am looking at the proposed amendment that I have just received. In the bill, clause 1(1) deals with the new name. The proposed amendment before me is to amend clause 2 of the bill.

Could Mr. du Plessis explain this to us?

Mr. Raymond du Plessis, Q.C., Legal Counsel: Clause 1 is in bold type, which means that that portion will not form part of the act of incorporation. Once this bill has been passed, it becomes a spent clause, just like the other clauses that introduce proposed amendments. Every clause that introduces an amendment is in bold print because it will be spent once the bill is passed.

Having said that, we come to clause 2, which will, in effect, introduce a proposed new section 1 for what will become the consolidated act of incorporation of the church once this bill is passed. The motion in amendment would introduce a proposed new section 1, replacing 1 of the 1947 act of incorporation.

Senator Nolin: It means that the name will be in the proposed new act of incorporation.

Mr. du Plessis: That is right.

Senator Nolin: The amendment will need to be tabled.

The Chairman: Apparently not today, I am told, but when we are dealing with clause-by-clause tomorrow.

Senator Kroft, do you have anything to add?

Senator Kroft: No, I do not.

The Chairman: Senator Corbin was hoping to be here today because he has some concerns about this type of matter coming before the Senate as opposed to a regulatory body. Having it here is like shades the old Divorce Act, where people were required to come before the Senate to be divorced. Perhaps, Mr. du Plessis, you could tell us a little bit about that.

Mr. du Plessis: The only reason we have this kind of bill coming before the Senate is because of the old system, when corporations of this kind were incorporated by special acts of Parliament.

Also, under the general legislation - that is, the Canada Corporations Act - there is a provision that states that every corporation incorporated under that act must have an annual general meeting. Some of these organizations, such as churches, as you heard today, might want to meet only every two or three years, so they do not quite fit under the general legislation. This kind of proposed legislation will not come forward often, except in the case of institutions that were incorporated by special act many years ago.

There has been some concern expressed about corporations sole. That is a different matter, one that can be regulated by a general act. I believe that that is of concern to the Senate; possibly that sort of incorporation could be regulated by a future act of Parliament.

The Chairman: Mr. du Plessis, you are saying "corporations sole," meaning one, and not S-O-U-L?

Mr. du Plessis: That is right.

Mr. Lohrenz: We looked at different ways of doing that, and after examining it and talking to different lawyers and to counsel here the best option for us was to go this route. We have been counselled to do this. I imagine that if we were to start anew, do a new incorporation, it probably would not go this route.

Senator Nolin: How many congregations are coming from the Province of Quebec?

Mr. Lohrenz: I cannot answer that directly. There are some in Montreal. There is at least one in Montreal and either one or two north of Montreal, near Rouyn. There is one in New Brunswick, none in Prince Edward Island, Newfoundland or Nova Scotia. The majority of Eastern Canada congregations are in Ontario.

Senator Nolin: In Eastern Canada, when the '96 congregation joined the conference, most of them were in Ontario?

Mr. Lohrenz: That is correct.

The Chairman: Most, I would imagine, in the Kitchener-Waterloo area. There are quite a number in the St. Catharines area, as well as in the Leamington area. The three major areas are Leamington, the Niagara Peninsula and Kitchener-Waterloo; there is one in Toronto and one in Ottawa.

Senator Joyal: My question is addressed with respect to the comments of Mr. du Plessis. I tried to understand the legal grounds for the vacuum that exists in the legislation in Canada, either at the federal or provincial level, that compels a church to get a federal incorporation through a special statute. We all know that in our own respective provinces and activities there are a large number of religious orders and churches that have a legal status that has nothing to do with a federal statute or a federal incorporation.

I am trying to understand, in terms of the development of the legislation in the province and in Canada, how it happens that the Mennonite Church needed to resort to a federal incorporation. Why, for instance, does not the Anglican Church of Canada or the Roman Catholic Church of Canada or many other denominations need specific federal legislation? I am trying to understand why the Parliament of Canada must address itself to the request on a petition, as the one we have before us today?

I know it is a complex question, because the situation may vary from one province to another; however, I wonder if might enlighten us on that aspect of the reality.

Mr. du Plessis: The purpose of the federal legislation is to deal with a situation that will prevail throughout Canada and comes under the jurisdiction of Parliament.

I believe that, in the case of the Mennonites, some of the congregations are already incorporated provincially.

Mr. Lohrenz: That is right.

Mr. du Plessis: Therefore, the purpose of their bill is to achieve something that is national in scope. I believe, with regard to other churches, some of them are incorporated provincially. I am told that the United Church is incorporated as a national church.

Your question is indeed a complex one, to which I do not have a complete answer, except to say that any group that wants to incorporate has the right to incorporate, and they can incorporate provincially or federally.

The honourable senator mentioned a possible gap. We know that for business corporations there is the Canada Business Corporations Act, which was brought in, I believe, in the 1980s. At that time, there was a bill before Parliament to create an equivalent act for all the non-profit corporations, but that never got anywhere because of opposition by the charities and the organizations that would have been governed by that bill. That may be where there is a bit of a gap in the legislation.

It is possible that, at some time in the future, legislation respecting non-profit corporations will be brought forward, making it possible for new groups that wish to become incorporated to be incorporated under that legislation. Really, though, it up to organizations whether they want the individual entity to be governed by federal or provincial law. I am sure we can all think of examples of churches that are governed by specific legislation that is local in nature; others are of a national nature.

Mr. Lohrenz: If memory serves me, the United Church had quite similar legislation to this when it was first incorporated in 1946. I know similar legislation exists for other groups. The Mennonites are not the only group who have gone this route. In the 1940s, this was the accepted way to incorporate national bodies.

Senator Joyal: Normally, when a group of people want to incorporate, there is a provision to say to whom the assets of a corporation would be routed in case of dissolution. Could you indicate to us, in your incorporation, where that aspect is covered?

Mr. Lohrenz: It probably is not covered in the present legislation.

Mr. du Plessis: In 1947, when they were incorporated, they did not take that into consideration. It is a very good question.

Senator Joyal: I raise the question with all respect, Madam Chairman, because I live in a province where the issue is very real. Certain religious orders must phase out because their recruits are very limited. They are confronted with the responsibility of assets, in some cases very large assets, and this raises a question of corporate law. When the privilege is granted by a legislature or by the Parliament of Canada to act as a corporation, the legislature should always take into account the element of ensuring the benefits of fiscal dispositions. For instance, fiscal receipts are always issued. The income tax department always makes sure that, if at a point in time, the corporation ceases to exist, there is a specific disposition to return the assets to some other kind of charity that will continue in the same domain. I read the documents here and I was wondering if that aspect is covered.

Mr. du Plessis: That provision is found more often in relation to non-profit corporations, rather than churches. I suppose that, when a church is incorporated, it is assumed that it will continue for a long period of time. I have seen that type of provision in legislation relating to non-profit, volunteer organizations or charities as such, but I have never seen it in any legislation relating to a church.

Now, if an organization such as a church is dissolved, there are federal and provincial escheats acts. I would have to look into those. That legislation covers situations where there is no provision for disposal of assets and the assets actually revert to the Crown.

Senator Joyal: I understand that, and I know it is the agenda of the committee to proceed with a vote on this bill, but would it be possible to have some additional explanation on the status of the situation within the Mennonite Church of Canada? I would appreciate it.

Mr. du Plessis: Would you like that for tomorrow?

Senator Joyal: Yes, if it is possible. I do not want to change the agenda, but this is an important aspect of discussion.

Senator Gustafson: Would that situation not be covered by the local church? If a local church building is closed and sold, would that event not be handled by the local church?

In the church to which I belong, there is a serious concern about being sued, as there is in many churches today. The conference is deciding that it would make more sense to have congregations own the properties individually. One church may go down financially after being sued, but it would not affect the whole group of, in your case, 260 churches. Perhaps the documents of the church have laid this out. Those provisions would not apply here, but they would certainly apply between head office, the conference and the various local churches.

Mr. Lohrenz: In the Conference of Mennonites in Canada, each congregation owns its own property and its own church building. The Conference of Mennonites in Canada, as such, does not own churches.

Senator Gustafson: That is your answer.

Mr. Lohrenz: The only asset held by the Conference of Mennonites in Canada is the head office building. It might have some property, but it is very limited. Everything else is owned by individual congregations. The individual congregations have the right to withdraw or remain in that.

Senator Gustafson: It is called democracy.

Senator Nolin: The problem remains, even if it is for one office building. The question raised by Senator Joyal is valid. We may need to wait a little longer and introduce some amendments to properly cover the possibility of disposal.

The Chairman: What would happen in an area like the Niagara Peninsula where a tremendous amount of development is going on? If a congregation, which may or may not be rural, wants to move to another area, how do they dispose of the assets of that particular church and move on to another one?

Mr. Lohrenz: The congregation itself makes that decision. They sell that property and purchase another. It is a local decision. It has nothing to do with anyone else. It is the decision of an individual congregation, just as you would purchase a house and sell it and buy another one. It would not be an issue for the Conference of Mennonites in Canada or the Mennonite Church Canada. It would be a local-congregation issue.

Senator Joyal: I know of a specific case in the Roman Catholic Church where a parish decided to abandon its legal identity and to merge with another parish for development or change of sociological configuration. That has happened a lot in large cities in Quebec. I am sure it is happening, as many of us could testify, in other places in Canada, too.

The question of the disposition of assets is an important one. The bishop corporation has a kind of veto right over property; it can seize the assets of the local parish and decide upon its disposal. The local parish cannot decide to sell until it gets authorization for the disposition. I do not want to enter into specifics, but the Court of Appeal in Quebec has quashed some parish decisions because those decisions were deemed to have not been endorsed by the episcopal authority of the diocese. It is a very complex sort of legislation.

The Mennonites face the same kinds of changes and challenges that all other churches face. This is an important aspect now. In the 1940s, as Mr. du Plessis said, everyone was thinking that the church would exist forever, but these changes and reconfigurations are part of our reality. Can you give us enlightenment on the legal structure that governs those aspects of the church's activities? If so, it may be very helpful to us in other discussions on other days and on other related issues.

Senator Cools: The exchange here has evoked a particular question in my mind, though not really on the particular subject matter of asset disposal when a church is winding up. My question rather relates to the functions of your organization that would be described as charitable.

Church structure can be absolutely enormous and very complex. I am an Anglican, and trying figure out our church's structure would take a lifetime and some more.

The bill before us is largely an amendment to a 1947 act. Can you give me some insight on how this act interacts with your responsibilities, for example, under the Income Tax Act as a charity? I am assuming that you have charitable status and that the donations that you collect are tax-deductible.

I was under the impression that charitable status carries with it a bunch of regulations on how charitable assets are disposed of on a winding-up. I could be wrong on that.

Mr. Lohrenz: I do not know the complete details but I can answer in this way. First of all, congregations themselves choose the proportion or the amount they send to the Conference of Mennonites in Canada. Basically, what congregations cannot do themselves is done through a bigger organization. Provincial area conferences govern some activities that can be done better there than in the individual congregations. Then there are some aspects that are done through the national organization. Until recently, for example, missions in foreign countries were covered by the North American body. Therefore, everything must be accounted for in a charitable way. I know that the treasurer must fill out all the necessary detailed information each year about where the money goes and how it is being used.

Senator Cools: This act, though, does not grant any kind of charitable status. That charitable status comes under the Income Tax Act, the charity section. In reference to the previous questions, that act governs how solicitations are made and accounted for and disposed of. The process is usually complex, but we may actually be inquiring from you about regulations that are governed by yet another federal statute. Mr. du Plessis is no longer with us, but perhaps we should attempt to look at some of these issues in future through our current staff.

I have to tell honourable senators that I like to see organizations like this come before the Senate. I like to see the public of Canada come before the Senate. I like to see the Senate of Canada acting in its full legislative and judicial capacity.

Earlier, our chairman spoke about the Divorce Act of some time ago. I have read many of those debates. In 1968, members of Parliament, particularly senators, really thought that we were making enormous advances when we went to a statutory Divorce Act. Now, the evidence is coming in to show that the Senate was doing a good job of sorting out issues in a complete and thorough manner because no one would bother to apply for a divorce here until everything was in order.

I like the fact that some areas of activity still require individuals to come before Parliament for an act of Parliament. As I said before, Mr. Chairman and honourable senators - and I do not mean to burden our researcher any more - perhaps we could get some insight on how such an act functions in conjunction with the other various acts that govern churches. The questions of Senator Nolin and Senator Joyal could perhaps be answered in the process. It is a mighty complex question.

The Chairman: I will not ask Mr. Lohrenz to answer because that question is probably beyond the scope of this amendment and also of the original act. It would be interesting to find out the interplay with the Income Tax Act.

Senator Gustafson: Would the sale of local church property not be covered under the constitution of the general church? You do have a constitution?

Mr. Lohrenz: Yes.

Senator Gustafson: Would that constitution not cover the autonomy of the local church to act as directed by the members who vote on the local board?

Mr. Lohrenz: I belong to a church called Fort Garry Mennonite Fellowship. The members of that congregation own the church building and can dispose of it as they decide.

Senator Gustafson: It is a democratic process.

Mr. Lohrenz: In most instances, the money raised in such a way would go to another charitable organization, as opposed to benefiting an individual member or members. The nature of the set-up is that no individual person has ownership - only the membership, not individuals per se. No one person would ever benefit from that.

Many congregations have ceased to exist because of rural population changes. They may take their assets to another congregation or congregations, but individuals do not benefit.

I agree that there are other acts that cover this whole area of ceasing to function.

Senator Kroft: I apologize for being late. I also apologize for not bringing greater expertise as sponsor of the bill.

I do bring some knowledge and an enormous appreciation of the Mennonite community, especially where I live. The community is a significant part of our lives in Manitoba.

The question raised here and the whole idea of whether it is fair, appropriate, good, bad or otherwise for a petitioning body to be heard in front of the Senate are fascinating questions. I am just concerned -

Senator Cools: You just want this bill passed.

Senator Kroft: - that we do not let this particular group of individuals get caught in broader areas of concern and specula tion.

Senator Cools: Do not worry. You have lots of supporters of the church around here.

Senator Moore: I want to follow on the question of Senator Gustafson. When a congregation makes a decision on disposition, does it require a simple majority of 50 per cent plus 1, or does disposition of a serious asset, such as a building, require more?

Mr. Lohrenz: I am assuming from experience that if there is a majority of one that the decision is not really a very full decision. Ceasing to exist as a congregation is a big issue. At some point, a decision is made and the congregants act very democratically within that process. I am not concerned that that would happen.

There have been splits in congregations where other kinds of battles were being fought, and the assets were divided in some way, either by membership or by some other agreement. That has occurred in the Winnipeg area where we have 18 congregations. Winnipeg has more Mennonites than any other city in the world. If you count all the Mennonite churches, including these, there are probably 40 in Winnipeg.

The Chairman: That is very interesting. If there are no further questions, I thank the witnesses for waiting so patiently for us. We will be doing clause-by-clause study on this bill tomorrow morning at 10:45. I do not think you will have any problems.

Honourable senators, we do not have any other bills before us. We have agreed to meet informally with Senators Austin and Stratton next Wednesday at our regular meeting time to discuss Senate committees. We may also discuss at that time the draft report of our meeting with the Chief Electoral Officer.

The committee adjourned.