TORONTO - International adoption agencies will now have to provide a clear picture of their financial status to have their annual licences renewed following this summer's bankruptcy of Imagine Adoption that left hundreds of families in limbo.

Ontario Minister of Children and Youth Services Deb Matthews announced Wednesday that agencies will have to submit an audited financial statement, an annual report that's made public and a report from the board of directors outlining agency operations and activities.

The steps will help ensure families seeking to adopt internationally are better informed and protected, said Matthews.<

The changes follow the July 14 bankruptcy of Cambridge, Ont.-based Kids Link International Adoption Agency -- which operated as Imagine Adoption -- that left more than 350 families and their dreams of adopting children from overseas in a legal nightmare.

The agency, which was licensed annually by the Ontario government, collapsed amid concerns about the six-figure salaries of its executives and personal expenses that included trips, home renovations and a horse.

"I'm encouraged that they are making steps to protect the families," said Rob Eagleson, who sits on the new board of directors that will run a revived Imagine Adoption agency under the Kids Link banner.

"Obviously that is very important for international adoptions moving forward," said Eagleson, in an interview from London.

"Those checks and balances in place would have assisted the families that were caught up in regards to the bankruptcy of Imagine Adoption, if that information was public," said Eagleson, who adopted his own daughter through Imagine Adoption in 2008.

Imagine Adoption was meeting all required standards of the government, he said, however its licensing renewal did not include a full review of financial statements.

"The minister's announcement today is an appropriate response to what happened with Imagine Adoption," said David Cotter, a former spokesman with Families of Imagine Adoption.

"The problem is she's closed the barn door after the horse is out."

Cotter, who also adopted through Imagine Adoption but said he no longer speaks for the families involved, said the fact that it wasn't previously required for adoption agencies to provide financial records showing that they were solvent "is almost unbelievable."

"I think the minister should step up and take responsibility for making sure that there's no additional costs for families that continue to adopt through Imagine, if it's her responsibility to certify that that organization was in good shape," said Cotter.

Clients of Imagine Adoption voted 248-20 last month to restructure the agency and on Tuesday, a court in Kitchener approved the proposal to bring Imagine Adoption out of bankruptcy.

That allowed the eight-member board to take over running Kids Link from bankruptcy trustee BDO Dunwoody in Kitchener and it will "start moving forward to bring the adoption agency back into an existence and start moving forward with international adoptions for the many families," said Eagleson.

The board of directors, supported by an advisory board, can now hire two full-time staff, a part-time staff member and conduct a search for an executive director, he said.

"The first step for us is to re-establish the relationship with Ethiopia and the orphanages that are in Ethiopia, then we'll have opportunity to start matching orphans in Ethiopia with families here in Canada," said Eagleson.

Clients who decide to continue with their international adoptions through the restructured agency must provide it with an extra $2,000 by Nov. 30 and a further $2,000 in March 2010. They must also pay any outstanding fees.

The board won't know how many families will continue with their adoptions until then, said Eagleson.

The province also announced that it will extend the period for Imagine Adoption's clients to complete in-home assessments needed for them to proceed with an adoption.

Those clients whose home studies expire before April 2010 will be granted a six-month extension.

The new rules also require international adoption agencies to ensure prospective adoptive families understand the licensing process, the roles and responsibilities of licensed agencies, and the financial and other risks associated with international adoption.

The ministry has requested that a working group of licensed agencies examine ways to establish an insurance plan to protect prospective parents in the event of an agency's collapse.

"I'm very pleased that many families involved with Imagine Adoption will be able to continue their adoptions," Matthews said.

"We're taking steps now to ensure that families seeking to adopt internationally, an already lengthy and emotional process, are better informed and protected," she said.

Started in 2005, Imagine Adoption charged fees of about $15,000 to adopt children from a variety of countries, mostly Ethiopia.

Sixteen international adoption agencies and one individual are currently licensed in Ontario under the Intercountry Adoption Act to facilitate international adoptions, the ministry said.

Since 2000, an estimated 6,900 Ontario families have had home studies for international adoption approved by the ministry.