An audit ordered by the federal government has confirmed Hockey Canada did not use grant money it received from Ottawa to settle sexual assault cases. It instead used registration fees to pay such lawsuits, without disclosing to parents and players how their money was being used.
The results of the eight-month federal audit were expected, because Hockey Canada had already admitted, following a Globe and Mail investigation last summer, that it used a little-known financial reserve known as the National Equity Fund to settle sexual assault allegations. That reserve is financed entirely by player-registration fees.
The audit was called last June, after documents emerged showing Hockey Canada settled a lawsuit in May from a woman who alleged she was sexually assaulted by several members of the 2018 national junior team following a Hockey Canada fundraising event in London, Ont. The government was concerned federal grant money had been used.
However, The Globe revealed in July that Hockey Canada instead used player-registration fees to settle such lawsuits. The investigation showed Hockey Canada had built the National Equity Fund into a financial reserve worth more than $15-million in recent years and quietly used that money to pay out alleged sexual assault cases. The fund was constructed with fees from players ranging from beginner Timbits hockey to senior recreational leagues across Canada.
After The Globe’s investigation, Hockey Canada was forced to admit at federal hearings that it had not only used the National Equity Fund to pay the 2018 case, but had used the reserve to settle $7.6-million worth of sexual assault claims since 1989.
The amount of the 2018 settlement is not known. In December, Hockey Canada disclosed in its audited financial statements that it paid nearly $2.9-million in legal settlements during its 2021-22 fiscal year, which ended June 30. The records don’t say how many claims were paid, or how much it cost to settle the 2018 case. But the figure shows the 2018 sexual-assault lawsuit was settled for less than the original $3.55-million claim.
Hockey Canada has come under public criticism for using player-registration fees to settle sexual assault lawsuits, without disclosing this practice to parents and players. A poll conducted by Nanos Research last year found three-quarters of Canadians were against the idea of children’s registration fees secretly being used to settle alleged sexual assault claims.
In a statement Friday, Hockey Canada chair Hugh Fraser said the organization, which has had its financing frozen by Ottawa since the controversy began last spring, is looking to rebuild its relationship with the government.
“The Government of Canada is an integral partner in promoting Canada’s game and ensuring communities across the country have access to safe and accessible hockey programming,” Fraser said.
“We have made significant progress in addressing the government’s concerns to date, and are grateful for the auditor’s review, which serves as another important step in repairing our partnership.”
A governance review conducted in the fall by retired Supreme Court justice Thomas Cromwell found serious problems with how Hockey Canada operated the National Equity Fund, and other similar reserves set aside for sexual assault settlements, including a lack of proper disclosure to parents and players, and a lack of oversight and controls on how the money was ultimately used.
The governance review concluded that Hockey Canada’s board of directors should resign, which they did. Hockey Canada’s audited financials for the 2021-22 fiscal year say CEO Scott Smith was “terminated without cause.” A new board of directors was elected on Dec. 17.
The federal audit released Wednesday is the first of a set of audits Hockey Canada is expecting this year.
Following the revelations about Hockey Canada’s finances last summer, the government expanded the audit beyond just trying to confirm whether grant money had been used in the settlement. A full forensic audit of Hockey Canada dating to 2016 is now under way, and those results have not been produced.
The first audit suggested improvements, including reviewing salaries recorded on Hockey Canada’s books.
Hockey Canada also announced in July that members of its 2003 world junior team were being investigated for a group sexual assault. Police investigations into the 2003 and 2018 allegations are ongoing. Neither case has been proved in court.
With a report from The Canadian Press
Grant Robertson