Hockey Canada said it will release its audited financial statements following a public outcry over its use of controversial contingency funds that could be used to settle sexual assault allegations.
Retired Supreme Court Justice Thomas Cromwell has been commissioned by Hockey Canada to review the governance of the organization. He told the House of Commons Heritage Committee on Tuesday that he recommends Hockey Canada continue to make its financial statements public in the future.
When asked if it would act on the recommendation, Hockey Canada confirmed it would release its 2021-22 financial statements. The audited financial statements are expected to be approved this weekend at Hockey Canada’s annual general meeting.
Hockey Canada commissioned Cromwell’s review in response to outrage from parents of hockey players who learned that the National Equity Fund – made up in part of player registration fees – was being used to pay out millions of dollars for allegations of sexual assault without their knowledge.
It was later revealed that other such reserve funds exist. In a interim reportCromwell noted that the money was moved after Hockey Canada auditors recommended a change to the organization’s disclosure in its audited financial statements that “increased the reported balance of the National Equity Fund by several million dollars. dollars”.
Cromwell learned of the existence of a third fund; The Hockey Canada Board of Directors approved a transfer of $10.25 million to this fund from the National Equity Fund in 2016. Further financial analysis revealed that at least an additional $7 million was transferred from NEF to the third fund since then.
Cromwell concluded that the organization’s board was concerned that an account containing a large sum of money would attract more claims.
Stricter rules are needed, lawyer says
Cromwell said publishing financial statements is what the Canadian Code of Sport Governance recommends.
But Kate Bahen, chief executive of Charity Intelligence Canada, said the code was just a guideline, not a requirement.
Bahen said the government should require all nonprofits like Hockey Canada to publish audited financial records or forego tax benefits for charities.
“It’s absolutely shocking. I don’t understand why Canada is in the dark ages,” Bahen said.
Bahen said a number of other countries, such as the US, UK and Australia, have this requirement.
When asked if the government would change the rules to require non-profit organizations to publicly publish their financial statements, Sports Minister Pascale St-Onge did not rule out the possibility.
“We are also consulting experts to put in place best practices, and we will carefully consider any recommendations that will be made by parliamentary committees,” she said in a statement.
St-Onge said she is reviewing the requirements national sports organizations must meet to receive federal funding and is putting in place new rules on financial transparency in April 2023. She did not specify what these rules would include.
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