Charlottetown Bishop Richard Grecco has reorganized the way churches in his P.E.I. diocese are owned.

P.E.I. diocese undergoes corporate reorganization

By 
  • May 4, 2011

Bishop Richard Grecco and the diocese of Charlottetown no longer own all the Catholic parishes in Prince Edward Island.

The diocese of Charlottetown, which covers all 49 parishes on Prince Edward Island, has reorganized itself so each parish is now separately incorporated as a non-profit, charitable corporation. In the old “corporation sole” arrangement, the parishes were, legally speaking, the property of the diocese, and thus of the bishop.

This kind of corporate reorganization has been gradually taking place across Canada since a Dec. 14, 2005 letter from then-apostolic nuncio Archbishop Luigi Ventura to Canada’s bishops asking them to abandon the corporation sole and bring their corporate structures into line with the Church’s 1983 Code of Canon Law.

The big motivator for the change has been the recent history of lawsuits and bankruptcies over sexual abuse cases.

“If there is a court case and the court demands a huge sum, they demand that the diocese use all its assets to pay it,” explained Grecco. “Well, the parishes belong to the diocese’s assets.”

By separating parishes from the diocese in terms of civil incorporation, anyone wishing to sue the diocese could seek payment from its assets.

“Although this diocese currently does not face any court cases, it would be irresponsible for me not to act to protect each and every parish,” said Grecco in a March 14 letter to his diocese.

Where dioceses have gone bankrupt under the weight of heavy abuse case settlements, the courts have seized parish assets in the former diocese of St. George in Newfoundland, replaced in 2007 by the diocese of Corner Brook and Labrador. In the United States parishes had to pay when the dioceses of Portland and Spokane declared bankruptcy.

The corporation sole organization of dioceses in English-speaking North America is dominant, though not universal. It is inherited from English common law rather than the demands of canon law, said Catholic University of America professor of canon law Fr. John Beal.

“It fits badly with canon law, which sees the parish and diocese as related but separate corporations or entities,” said Beal. “Canon lawyers have been telling them (bishops) for years that the corporation sole model fits awkwardly with canon law.”

For a very long time North American bishops resisted the idea of incorporating parishes because it would mean the parish has its own property and the pastor would be more independent, said Beal.

“Until 1918 we had no canonically established parishes in the United States,” he said. “We had communities that called themselves parishes, acted like parishes, but they had never been canonically erected as such.”

The 1917 Code of Canon Law convinced American bishops to start erecting parishes. But the corporation sole remained.

In Canada, the picture is more complex. In Quebec parishes have always been separately incorporated as “fabriques,” in accordance with the Napoleonic Code. Manitoba law has mandated a “corporation aggregate” structure since 1917, just two years after the diocese was founded.

“Every parish becomes, ipso facto, a corporation. The bishop appoints the five members of the corporation for each parish,” said Fr. Richard Arsenault, archdiocese of Winnipeg chancellor.

Neither the bishop nor the pastor can write a cheque or sell a piece of property in Manitoba without the agreement of other members of the corporation. The archdiocese does hold title on the land underneath Winnipeg’s Catholic churches, but it keeps the land in trust for the parishes.

“We’re very happy with (Manitoba’s system). It works very well,” said Arsenault.

For Grecco, giving the parishes legal responsibility for their property is just a matter of lining up the legalities with the reality of how parishes work.

“Basically, they’ve been functioning on the assumption that they were the owners of their parish,” he said.

The change brought “not one word of objection,” said Grecco.

Having the property all centralized distorts the traditional understanding of parishes, said Beal.

“The way canon law foresees it, the local community controls its own property. The local community is where the church happens. The church is a community,” he said.

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