by Hockey Canada has announced that it will release its audited financial statements following public backlash over its use of disputed reserve funds that could be used to settle sexual assault allegations.
Retired Supreme Court justice Thomas Cromwell was commissioned by Hockey Canada to review the organization’s governance. One of his last recommendations to Hockey Canada was to make the organization’s financial statements forward-looking – a repeated appeal to the House of Commons heritage committee on Tuesday, Cromwell said.
When asked whether it would follow through on the recommendation, Hockey Canada told CBC news it would release its financial statements for 2021-2022. Audited statements will be approved at Hockey Canada’s annual general meeting this weekend.
Hockey Canada commissioned a review of Cromwell in response to his anger after learning that the National Equity Fund (NEF) – which consists of some of the players’ registration fees – had been used to pay millions of dollars for sexual assault allegations without their knowledge.
Later it turned out that other such reserve funds exist. a interim reportCromwell noted that the money moved after Hockey Canada auditors recommended a change in the organization’s statement 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 $10.25 million transfer from the National Equity Fund to this fund in 2016. Another financial analysis revealed that at least $7 million has since been transferred from NEF to the third fund.
Cromwell concluded that the organization’s board feared that an account containing large sums of money would bring further claims.
Lawyer says stricter rules are needed
Cromwell said that making financial statements public is what the Canadian Sports Governance Act recommends.
But Kate Bahen, chief executive of Charity Intelligence Canada, said the rule is only a guideline, not a requirement.
Bahen said the government should require all nonprofits like Hockey Canada to either submit audited financial records or waive their charitable tax benefits.
“Absolutely shocking,” Bahen said. “I don’t understand why Canada is in the dark ages.”
A number of other countries, such as the US, UK and Australia, also have this requirement, he said.
Sports Minister Pascale St-Onge didn’t rule out the possibility when asked if the government would change the rules to require nonprofits to publish their financial statements publicly.
“We are also consulting with experts to implement best practices and will carefully review all recommendations made by parliamentary committees,” he told the media.
St-Onge said it is reviewing the requirements that national sports organizations must meet to receive federal funding, and introduced new rules on financial transparency in April 2023. He did not say what those rules would include.
