Legal Basis for Private Membership Associations (PMAs) in Canada
Private Membership Associations (PMAs) in Canada are typically structured as unincorporated associations—voluntary groups of individuals who associate for shared private purposes, such as social, professional, or business activities (e.g., exclusive clubs, health cooperatives, or member-only land leasing arrangements).
These operate in the "private domain," meaning they are not open to the general public and are governed by internal contracts (e.g., bylaws, membership agreements) rather than public regulations. This allows members to exchange goods, services, or information consensually with greater autonomy, provided activities do not violate criminal laws or pose risks to public safety or third parties.
Unlike the U.S., where PMA concepts sometimes draw on fringe "sovereign citizen" ideas (which courts reject as pseudo-legal), Canadian PMAs are firmly rooted in common law, contract principles, and constitutional protections. They are not a formal "entity" like a corporation but arise from mutual agreements among members. Courts recognize them but emphasize that they lack separate legal personality, meaning members may face personal liability unless mitigated by bylaws or trusts. Claims of absolute immunity from all laws are unfounded and routinely dismissed. Below, I outline the core legal foundations, supported by precedents and statutes.
1. Constitutional Foundations
PMAs derive their legitimacy from the **Canadian Charter of Rights and Freedoms** (Part I of the Constitution Act, 1982), which protects private consensual activities from undue government interference:
- Section 2(d) (Freedom of Association): This guarantees the right to form and join associations without state compulsion or prohibition, including the "constitutive" right to establish groups, the "derivative" right to pursue other Charter freedoms collectively (e.g., expression under s. 2(b)), and the "purposive" right to associate for mutual benefit against more powerful entities. It shields private groups like clubs from arbitrary regulation, as long as they remain non-public.
Section 2(d) includes a "negative" aspect: freedom *not* to associate, preventing forced ideological conformity.
- Section 2(b) (Freedom of Expression): Supports private exchanges of information or services among members, as long as they are not public advocacy.
- Section 7 (Life, Liberty, and Security of the Person): Often invoked for personal autonomy in private health or lifestyle associations, protecting consensual decisions from state overreach.
- Section 1 (Reasonable Limits): Charter rights are not absolute; limits must be "prescribed by law" and "demonstrably justified in a free and democratic society" (Oakes test). Private activities like member-only leasing are generally upheld if they don't harm others.
These provisions create a "private domain" where government regulations (e.g., licensing, zoning) typically apply only to public commerce, not internal member contracts.
2. Key Supreme Court of Canada (SCC) Precedents
The SCC has interpreted s. 2(d) broadly for collective rights but stresses that it protects the *activity of associating*, not specific outcomes. Over 40 years of jurisprudence affirm PMA-like protections for private groups, evolving from narrow labour-focused rulings to broader associational freedoms. Judicial intervention is limited unless a legal right (e.g., contract) is at stake.
- Ethiopian Orthodox Tewahedo Church of Canada St. Michael’s et al. v. Aga (2023 SCC 23): Clarified that courts intervene in voluntary associations only to enforce underlying legal rights (e.g., contracts, property), not internal decisions like expulsions. Membership is not automatically contractual; explicit bylaws must affirm it. This protects PMA autonomy while allowing judicial review for fairness in private contracts.
- Highwood Congregation of Jehovah’s Witnesses (Judicial Committee) v. Wall (2018 SCC 26): Reaffirmed limited court jurisdiction over private associations; no review absent a legal right (e.g., contract breach). Upholds PMA privacy in member disputes.
- Saskatchewan Federation of Labour v. Saskatchewan (2015 SCC 4): Expanded s. 2(d) to include collective bargaining and striking as essential to meaningful association, striking down anti-strike laws. For PMAs, this supports member-only negotiations (e.g., land leases) as protected activities.
- Mounted Police Association of Ontario v. Canada (Attorney General) (2015 SCC 1): Invalidated a regime excluding RCMP from labour laws, affirming the right to independent representation. Bolsters PMAs' ability to self-govern without state-imposed structures.
- Meredith v. Canada (Attorney General) (2015 SCC 2): Upheld temporary wage restraints as not infringing s. 2(d), showing limits: economic measures don't violate association if they don't target group activities.
- Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia (2007 SCC 27): Landmark shift; recognized collective bargaining as a s. 2(d) right, overruling earlier narrow views (e.g., Labour Trilogy: Reference re Public Service Employee Relations Act (Alta), 1987 SCC). Protects historical associational practices like private member agreements.
- Dunmore v. Ontario (Attorney General) (2001 SCC 94): Struck down exclusions for agricultural workers, establishing a two-step test for s. 2(d) breaches: (1) Does the activity fall within protected association? (2) Does state action substantially interfere? No higher threshold for "positive rights" claims (affirmed in Société des casinos du Québec inc. v. Association des cadres de la Société des casinos du Québec, 2024 SCC 13).
These cases (the "2015 Labour Trilogy" and beyond) emphasize s. 2(d)'s purposive role in enabling vulnerable groups to associate equally, but courts won't "create" rights—PMAs must rely on strong internal
3. Statutory and Common Law Recognition
- Common Law: PMAs are unincorporated associations under common law, treated as contractual arrangements where members bind each other via bylaws (the "contract-holding theory"). No separate legal personality: associations can't sue/be sued directly; members act jointly.
Property is held in trust by nominees (e.g., trustees) for members.
No federal/provincial statutes govern them specifically; rules derive from contract, agency, and trusts law.
- Canada Not-for-Profit Corporations Act (CNCA) and Provincial Equivalents; While PMAs often stay unincorporated for privacy, incorporation under CNCA or provincial acts (e.g., Ontario's Corporations Act) is optional for larger groups, providing limited liability but more oversight.
- Tax Treatment: Not automatically tax-exempt; income passes through to members and may be taxable. Charitable status requires separate registration under the Income Tax Act; most PMAs avoid it to remain private.
4. Limitations and Risks
- Not Immune: PMAs must comply with criminal, tort, and human rights laws (e.g., no discrimination under provincial codes if affecting protected groups). Courts pierce privacy for fraud, harm, or public safety (e.g., unlicensed public services).
Quebec's civil law adds unique rules for associations.
- Personal Liability: Members (especially officers) are jointly liable for debts/torts; use indemnity clauses in bylaws.
- Provincial Variations: More permissive in common-law provinces (e.g., Ontario, BC) for private clubs; stricter human rights scrutiny in others.
- Best Practices: Draft explicit bylaws acknowledging contractual binding (per Ethiopian Orthodox).
Maintain records, use trusts for property, and resolve disputes internally. Consult a lawyer for province-specific advice.
In summary, Canadian PMAs have a robust basis in s. 2(d) freedoms and common law contracts for private, consensual operations, but success hinges on clear governance and avoiding public-facing activities. For your specific PMAs, this supports exclusive arrangements under contract law, with Charter protection against undue interference. Tailor to provincial laws (e.g., if applicable).
This is the legal entanglement, staying completely lawful is the most free.