The case for Canadian Public Benefit Corporation legislation

The case for Canadian Public Benefit Corporation legislation

A plain-language introduction to federal Public Benefit Corporation legislation

Canada’s social needs extend across regions, generations and the boundaries of individual programs. Meeting those needs calls for organizations with the resources to develop useful services, the freedom to respond to changing circumstances and the responsibility to show what improves in people’s lives.

A federal Public Benefit Corporation would provide an additional way to organize this work. It would combine the investment capacity of a business with a community purpose written into its governing documents, duties to pursue that purpose and public reporting.

The goal is practical: help organizations build and sustain work that improves quality of life. Across disability supports, housing, employment, children’s well-being and other fields, the question is what people gain from the resources committed on their behalf. Better services matter. So do greater choice, participation and control over daily life.

This is an evolution in how we organize and finance public-benefit work. It would give communities, entrepreneurs and investors another tool, operating alongside charities, cooperatives, existing businesses and public institutions.

How the proposed structure would work

A Public Benefit Corporation would be a business with a stated community purpose. It could earn revenue and issue shares to investors who understand its purpose, obligations and financial risks. Investment could help finance facilities, technology, staff development or new services before they generate enough income to support themselves. Continuing revenue would sustain the work over time.

The proposal would establish this option under the Canada Business Corporations Act. [1] Its main features are straightforward:

1. The community purpose would be set out in the corporation’s governing documents.
2. Directors and officers would have to act with a view to that purpose alongside their existing legal responsibilities.
3. Ordinary rules would govern dividends and share payments; operating-transfer safeguards would remain.
4. Annual public reports would describe activities and results for each purpose in the articles and disclose financial information.
5. Closure would follow ordinary corporate rules, respecting creditors and shareholders’ rights without a compulsory community allocation.

People should have a meaningful say

An organization’s public purpose should be understandable to the people it affects. They should be able to help identify priorities, explain what is working and raise concerns when decisions make their lives harder.

The same principle reaches beyond disability. Children’s views, appropriate to their age and circumstances, and the experiences of other affected communities can reveal needs that financial statements and service totals miss. [5]

For disability-related work, this means paying attention to people’s choices about their homes, work, support and participation in the community. Medical expertise has an important place where it is needed. Decisions about the whole of a person’s life should also reflect that person’s rights, wishes and experience. [4]

These are goals to develop alongside the corporate framework. They require practical arrangements for participation and a clear response to what people say. The value lies in whether their involvement can influence decisions.

Capacity to work independently and across regions

A wider choice of financing and income sources could give organizations more room to pursue their community purpose. That capacity should be supported by clear rules about ownership, decision-making and protection of the purpose.

It could also support independent research and public discussion about how services and policies affect people, including questions raised by disability rights, children’s rights and other public commitments.

A national framework would support organizations working across regions and sharing expertise, infrastructure and resources. Local priorities would still matter, as would provincial operating requirements. Organizations should be able to explain why resources were directed to particular communities and what needs those decisions addressed.

Accountability that people can understand

Public reporting should connect how money is used with what improves in people’s lives.

An organization should explain what it set out to achieve, who benefited, which needs remain unmet and whether improvements lasted. Where results fall short, it should describe what it learned and what it will change. Reporting should protect personal privacy and be understandable to the communities concerned.

Financial information remains essential. It shows the resources available and how they were managed. Evidence about people’s circumstances helps establish whether those resources achieved the intended benefit. Developing useful measures, with the people affected, would strengthen both management and public accountability.

The corporation would operate under ordinary tax rules. The designation would not give it charitable status or the right to issue charitable donation receipts. Investors would receive clear information about the corporation’s purpose, obligations and financial risks.

Building on experience

Other jurisdictions have already expanded their legal tools for public-benefit enterprise. The United Kingdom introduced Community Interest Companies in 2005. [2] Delaware provides a public benefit corporation structure. [3] These are different legal models, but each offers experience in combining business activity with an explicit public purpose.

The proposal is a federal option under the Canada Business Corporations Act, suited to organizations working nationally. [1] The accompanying working legislation sets out the proposed framework for review. It is not existing law or a final bill.

Canada can draw on this experience while developing its own approach with affected communities, businesses, investors and legal and accounting practitioners.

We want this proposal to inform federal legislation and welcome parliamentarians and government leaders willing to advance the discussion.

The opportunity is to connect investment with accountable purpose, give people a meaningful say and judge success by lasting improvements in their lives.

Sources for the introduction

[1] Canada — Canada Business Corporations Act

[2] UK Parliament — Community Interest Companies

[3] Delaware — Public benefit corporations

[4] United Nations — Convention on the Rights of Persons with Disabilities, Articles 3, 4(3), 19 and 27

[5] United Nations — Convention on the Rights of the Child, Article 12

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Read the proposed Act

V14 working draft · 2 November 2026 · Section 23.09 revised 3 November 2026

This is ABILITYscaled’s proposed legislative text for review. It is not existing law or a final bill. The text below reproduces the V14 working draft, with headings and paragraph spacing adapted for reading online.

An Act to amend the Canada Business Corporations Act (public benefit corporations)

His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Short Title

1 This Act may be cited as the Public Benefit Corporations Act.

Canada Business Corporations Act

2 The Canada Business Corporations Act is amended by adding the following after section 23:

PART IV.1 — PUBLIC BENEFIT CORPORATIONS

Interpretation

23.01 (1) The following definitions apply in this Part.

community purpose means a purpose beneficial to society at large or to a segment of society broader than the persons related to the corporation, including the provision of health, social, environmental, cultural, educational or other services.

financial assistance includes a loan made by the corporation to another person, a guarantee by the corporation of another person's obligation, and security provided by the corporation for another person's obligation, whether the assistance is provided directly or through an intermediary. For greater certainty, this definition does not authorize financial assistance prohibited by section 23.05.

public benefit corporation means a corporation whose articles contain the statement required by subsection 23.02(1).

transfer includes a payment, expenditure, distribution, disposition, assignment, gift, sale, grant, charge, conveyance, bequest, devise, lease, divestment or release of money or other assets, and an agreement to do any of those things.

(2) For the purposes of this Part, a person is related to a corporation if the person is

(a) a director, officer, shareholder, person who beneficially owns shares of the corporation, associate or affiliate of the corporation;

(b) a director or officer of a body corporate related to the corporation; or

(c) an associate or affiliate of a person described in paragraph (a) or (b).

Public benefit status

23.02 (1) The articles of a public benefit corporation must contain the following statement:

“This corporation is a public benefit corporation. It has purposes beneficial to society and is subject to community-purpose duties, accountability requirements and restrictions on transfers of assets.”

(2) The articles must state one or more community purposes as primary purposes of the corporation.

(3) Public benefit status takes effect on the date shown on the certificate giving effect to the articles containing the statement, whether issued on incorporation, amendment, amalgamation, continuance, reorganization or arrangement in accordance with this Act.

(4) The corporation must not remove the statement except as authorized by, and in accordance with, the regulations.

Name

23.03 (1) In addition to satisfying section 10, the name of a public benefit corporation must contain the words “Public Benefit Corporation” or the abbreviation “PBC”.

(2) A person other than a public benefit corporation must not use those words or that abbreviation as a designation of corporate status, except in prescribed circumstances.

(3) Despite subsection 11(2), a name assigned under that subsection to a public benefit corporation must also contain the designation required by subsection (1).

Directors and officers

23.04 In exercising their powers and performing their duties, the directors and officers of a public benefit corporation must, in addition to complying with section 122, act with a view to the community purposes stated in the articles.

Transfers and financial assistance

23.05 (1) A public benefit corporation must not transfer money or other assets unless the transfer is

(a) for fair market value;

(b) to another public benefit corporation;

(c) in furtherance of a community purpose stated in its articles;

(d) a distribution or payment permitted by this Part and its regulations; or

(e) permitted by the regulations.

(2) Despite subsection (1), financial assistance to a related person is prohibited unless that person is another public benefit corporation. Financial assistance to a person who is not related to the corporation must further a community purpose stated in the articles.

(3) For the purposes of subsection (2), a person receiving financial assistance includes a person whose obligation is guaranteed or secured and a person for whose benefit a loan is made through an intermediary. A borrowing by the corporation for its own account, or security provided for its own obligation, is not financial assistance given by the corporation merely by reason of that borrowing or security.

(4) Subject to subsection (2), this section does not prohibit an ordinary-course transfer for goods or services where the consideration is, or could reasonably be expected to be, equivalent to fair market value.

Ordinary financial rules

23.06 (1) A dividend, a payment to purchase or redeem shares or otherwise reduce capital attributable to shares, or a payment of interest on a debt or debenture, that is otherwise lawful under this Act and other applicable law is permitted for the purposes of paragraph 23.05(1)(d).

(2) Section 23.05 does not impose an additional restriction on a payment described in subsection (1). This subsection does not authorize the underlying provision of financial assistance contrary to subsection 23.05(2).

(3) The applicable provisions of this Act, the rights attached to shares and restrictions in the articles continue to govern the transactions described in subsection (1). Nothing in this section relieves a director or officer of a duty under section 122 or 23.04.

Liquidation and dissolution

23.07 A distribution of remaining property to shareholders made in accordance with Part XVIII is permitted for the purposes of paragraph 23.05(1)(d).

Revival and undisposed property

23.08 Revival of a corporation that had public benefit status immediately before dissolution restores that status, subject to any change lawfully authorized under this Part. Property recovered by the revived corporation is subject to this Part, without displacing rights preserved by sections 209, 212 and 226 to 228.

Annual community contribution report

23.09 (1) By the deadline applicable under section 133 for its annual meeting, the directors must prepare a community contribution report for the most recently completed financial year.

(2) The report must contain

(a) a fair and accurate description of how the corporation's activities benefited society, including the activities undertaken and results achieved in relation to each community purpose stated in its articles;

(b) the amount or estimated value of assets transferred for community purposes and a description of those purposes;

(c) the dividends declared and the assets transferred for share purchases, redemptions and other capital reductions;

(d) the recipient, purpose and amount or estimated value of transfers to other public benefit corporations and financial assistance; and

(e) the information prescribed by regulation.

(3) The corporation must prepare and attach its annual financial statements despite any exemption granted under section 156 that would otherwise dispense with preparation or attachment. Section 163 continues to apply to the appointment of an auditor.

(4) The directors must approve the report, and at least one director must sign it to confirm that approval.

(5) The report must be placed before shareholders at the annual meeting and deposited with the corporate records. If no meeting is held, including where section 142 is used, it must nevertheless be deposited by the deadline in subsection (1).

(6) The corporation must promptly post the report and the attachments required by this section on its publicly accessible website, if it has one.

Public access to reports

23.10 (1) A public benefit corporation must maintain each report and attachment required by section 23.09 at the location and by the means permitted under section 20.

(2) Any person may examine those reports and attachments during usual business hours and take extracts without charge. On request, the corporation must promptly supply copies on payment of a reasonable fee.

(3) This section does not require waiver of solicitor-client privilege or, in Quebec, the professional secrecy of advocates and notaries. A corporation withholding material on that ground must provide the remaining material that can be separated from it. This subsection does not authorize withholding information merely because it is commercially sensitive or personal where disclosure is required by this Part.

Entry and amalgamation

23.11 (1) Despite section 173, an existing corporation may amend its articles to become a public benefit corporation only with the written consent of every shareholder, including shareholders otherwise without voting rights, to the statement, required name change and community purposes. Sections 177 to 179 apply to the amendment.

(2) An amalgamation under sections 181 to 186 involving a public benefit corporation must result in a public benefit corporation.

(3) Except for an amalgamation under section 184, an amalgamation proposed to result in a public benefit corporation requires written consent to the amalgamation agreement from every shareholder of each amalgamating corporation, including shareholders otherwise without voting rights, in place of approval under subsection 183(5).

(4) An amalgamation referred to in subsection (2) that is effected under section 184 may proceed only if the corporation whose articles are to be retained under subparagraph 184(1)(b)(ii) or 184(2)(b)(ii), as applicable, is a public benefit corporation immediately before the amalgamation. An amendment by that corporation to become a public benefit corporation before the amalgamation is subject to subsection (1).

Continuity and court proceedings

23.12 (1) Section 188 does not apply to a public benefit corporation. A public benefit corporation must not amalgamate and continue into another jurisdiction.

(2) The shareholder approval procedures in section 23.11 do not replace the procedures applicable to an order under section 191 or an arrangement under section 192.

(3) This Part does not confer an additional power to dispense with its substantive restrictions. An arrangement is not exempt from this Part merely because it is an arrangement.

(4) Nothing in this Part displaces a power conferred by the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act or another applicable federal insolvency enactment, or alters the effect of a valid order made under such an enactment. This subsection does not itself authorize a transaction or exempt a corporation from this Part merely because insolvency proceedings have begun.

Regulations

23.13 (1) The Governor in Council may make regulations

(a) respecting removal of the public benefit statement and exceptions concerning use of the designation;

(b) authorizing transfers and financial assistance and prescribing their conditions, but not authorizing financial assistance prohibited by subsection 23.05(2) or imposing additional restrictions under this Part on the transactions described in subsection 23.06(1); and

(c) respecting community contribution reports, disclosure thresholds and accompanying information.

(2) Regulations made under this Part must not authorize a transfer or financial assistance solely because a recipient that is not a public benefit corporation has charitable, non-profit, cooperative or other social-enterprise status.

Coordinating Amendment

3 (1) Subsection 118(2) of the Act is amended by striking out “or” at the end of paragraph (d), by replacing the period at the end of paragraph (e) with “; or” and by adding the following after paragraph (e):

(f) in the case of a corporation that is a public benefit corporation within the meaning of subsection 23.01(1), an act contrary to Part IV.1 or its regulations that results in a transfer of money or other assets by the corporation.

(2) Subsection 118(4) and paragraph 118(5)(a) of the Act are amended by adding “or Part IV.1 or its regulations” after “section 34, 35, 36, 41, 42, 124, 190 or 241”.

(3) Subsection 190(1) of the Act is amended by striking out “or” at the end of paragraph (e), by replacing the period at the end of paragraph (f) with “; or” and by adding the following after paragraph (f):

(g) in the case of a corporation that is a public benefit corporation within the meaning of subsection 23.01(1), amend its articles under section 173 to add, change or remove a community purpose stated in its articles under subsection 23.02(2).

(4) Subsection 229(2) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d):

(e) in the case of a corporation that is a public benefit corporation within the meaning of subsection 23.01(1), the business or affairs of the corporation are or have been carried on or conducted in a manner contrary to the community purposes stated in its articles under subsection 23.02(2) or to a requirement imposed by Part IV.1 or its regulations,

Coming into Force

4 Sections 1 to 3 come into force on a day fixed by order of the Governor in Council.

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