Hockey Canada said it would release audited financial reports following a review that found oversight and transparency issues at the organization.
Retired Supreme Court judge Thomas Cromwell was commissioned by Hockey Canada in August to review his governance amid a public outcry over the controversial use of a reserve fund to settle sexual assault allegations.
One of Cromwell’s recommendations in his report was for Hockey Canada to release its audited financial statements forward – a call Cromwell repeated to the Commons inheritance committee on Tuesday.
Asked by CBC News whether to act on the recommendation, Hockey Canada confirmed for the first time that it would.
Hockey Canada said it would publish its 2021-22 financial reports at an “opportune time” on its website. The audited statement will be approved Saturday at Hockey Canada’s annual general meeting.
Hockey parents were outraged to learn that the organization’s National Equity Fund – which was created as part of a player registration fee – was used to pay millions of dollars for sexual assault allegations without their knowledge.
It was later revealed that there was another such reserve fund.
in a interim reportCromwell found that millions of dollars transferred from the fund and to another, called the Insurance Rate Stabilization Fund, to keep the balance low.
Cromwell concluded that the organization’s board of directors was concerned that accounts containing large amounts of money would attract more claims.
In total, $17 million was transferred over the five years between 2016 and 2021, according to an analysis by Charity Intelligence Canada.
Conservative MP Kevin Waugh accused Hockey Canada of “hiding funds” at a committee hearing on Tuesday. He said Hockey Canada “fears that insurance rates will go up or that people will apply to be paid for injuries and the like for sexual abuse or harassment.
“That’s troubling, I think for Canadians,” Waugh told Cromwell. “Do you agree?”
Cromwell, who testified on Tuesday, said his interim report to the board of directors in October was clear.
“I demonstrated in my assessment that the trust of stakeholders has been compromised and that is why my advice to the board [was] not seek re-election when their term ends,” Cromwell told the committee.
Tighter rules are needed, advocates say
Cromwell also told the committee that posting financial reports publicly was what the Canadian Sports Governance Code recommended and was “reasonable advice”.
Kate Bahen, managing director of Charity Intelligence Canada, said the code is just a guide, not a requirement.
Bahen said the government should require all nonprofits like Hockey Canada to post audited financial records or do so without the tax benefits of charity.
“It was a complete shock,” said Bahen. “I don’t understand why Canada is in the dark ages.”
He said a number of other countries, such as the US, UK and Australia, had this requirement.
“You are the government, you can manage this,” Bahen said.
Hockey Canada has agreed to release its latest financial statements following a review of the organization’s governance conducted in relation to the settlement the group has paid for alleged sexual misconduct by players.
NDP MP Peter Julian, who also sits on the Commons inheritance committee, said the federal government was not doing enough.
“Sport Canada has been completely sluggish in asking national sports organizations to fulfill their obligations to the Canadian public,” Julian told CBC News. “That needs to change.”
Bloc Québécois MP Sébastien Lemire agreed and said the government should make it mandatory so there are clear “boundaries” so there is “more transparency”.
The sports minister said changes were coming in April
Asked whether the government would change rules to make it mandatory for non-profit organizations to publicly post financial reports, Sports Minister Pascale St-Onge did not rule out the possibility.
“We are also consulting with experts to implement best practices, and we will carefully study all the recommendations that will be made by the parliamentary committee,” he said in a media statement.
St-Onge said he was reviewing the conditions national sports organizations must meet to receive federal funds and enact new rules on financial transparency by April 2023. He did not say what those rules would include.
