Hockey Canada says it will release its audited financial statements following a public outcry over its use of controversial reserve funds that could be employed to settle sexual assault allegations.
Retired Supreme Court justice Thomas Cromwell was commissioned by Hockey Canada to review the organization’s governance. He told the House of Commons heritage committee on Tuesday that he’s recommending Hockey Canada continue making its financial statements public going forward.
When asked if it would follow through on the recommendation, Hockey Canada confirmed it will publish its 2021-2022 financial statements. The audited statements are set to be approved this weekend at Hockey Canada’s annual general meeting.
Hockey Canada commissioned Cromwell’s review in response to hockey parents’ outrage upon learning that the National Equity Fund — made up in part of players’ registration fees — was being used to pay out millions of dollars for sexual assault allegations without their knowledge.
It was later revealed that other such reserve funds exist. In an interim report, Cromwell noted that money was moved after Hockey Canada’s auditors recommended a change to the organization’s disclosure on its audited financial statements that “increased the reported balance of the National Equity Fund by several million dollars.”
Cromwell learned of the existence of a third fund; Hockey Canada’s board of directors approved a transfer of $10.25 million to that fund from the National Equity Fund in 2016. Another financial analysis has found that at least another $7 million has been transferred from the NEF to the third fund since then.
Cromwell concluded that the organization’s board of directors feared that an account containing a large amount of money would attract more claims.
Tougher rules needed, advocate says
Cromwell said posting the financial statements publicly is what the Canadian Sport Governance Code recommends.
But Kate Bahen, managing director of Charity Intelligence Canada, said that the code is only a guideline, not a requirement.
Bahen said the government should require all non-profit organizations like Hockey Canada to either post audited financial records or do without charitable tax benefits.
“It’s absolutely shocking. I do not understand why Canada is in the dark ages,” Bahen said.
Bahen said a number of other countries, such as the U.S., U.K. and Australia, have this requirement.
When asked if the government would change the rules to make it a requirement for non-profits to publicly post financial statements, Sport Minister Pascale St-Onge didn’t rule out the possibility.
“We are also consulting with experts to put in place best practices, and we will carefully study all the recommendations that will be made by the parliamentary committees,” she said in a media statement.
St-Onge said she’s reviewing requirements national sport organizations must satisfy to receive federal funding and is putting in place new rules on financial transparency in April 2023. She didn’t say what those rules will include.