Former justice who released report on Hockey Canada to detail its problems at hearings

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As former Supreme Court justice Thomas Cromwell prepares to testify at hearings probing Hockey Canada this week, MPs are expected to ask for more details on several troubling findings he uncovered during a recent governance review of the organization.

Mr. Cromwell’s report found significant transparency and oversight problems at Hockey Canada, including misleading statements to the public about large and opaque reserve funds it built using player registration fees, which were then quietly used for sexual-assault settlements.

The timing of Mr. Cromwell’s appearance on Tuesday is no accident; the parliamentary committee examining the organization’s handling of sexual-assault cases wants to hear his views before Hockey Canada’s members vote on a new board of directors later this week.

After being presented with Mr. Cromwell’s initial findings in October, Hockey Canada’s board announced that its CEO Scott Smith departed immediately, and its directors would step down.

Since then, a Hockey Canada nominating committee has assembled a list of potential new directors, who will be voted on this Saturday by Hockey Canada’s 13 provincial and territorial associations. The proposed slate was named Monday.

“We want to ask him about whether he’s satisfied with the work of the nominating committee,” Liberal MP Anthony Housefather said. “I’m guessing that they’ve tried to make sure he’s following the process and has confidence in it.”

Mr. Cromwell’s report called for more diversity on Hockey Canada’s new board, including bringing more outside skills, professionalism and management qualifications into the organization.

The hearings began in June as a probe into Hockey Canada’s handling of sexual-assault allegations involving members of the 2018 national junior team, which MPs have accused the organization of trying to cover up. They have since broadened out into an investigation of Hockey Canada itself amid revelations that it operated several multimillion-dollar reserve funds, built by registration fees, that were earmarked for sexual-assault claims – without telling parents and players how their money was being used.

After a Globe and Mail investigation in July revealed the inner workings of an opaque financial reserve known as the National Equity Fund, Hockey Canada made several statements to the public and to the media trying to distance the fund from sexual-assault settlements. Among those statements, Hockey Canada said the fund was used to support health and wellness programs for players.

However, Mr. Cromwell said in his review that he could find no evidence in Hockey Canada’s financial records that the National Equity fund paid for such programs. The organization later acknowledged he was correct; the fund had not paid for those programs.

A subsequent Globe investigation last week detailed how Hockey Canada has said on numerous occasions that the National Equity Fund exists to help injured players with medical bills not covered by insurance. However, players with serious injuries have been denied funding, and were also never told about the fund.

Several have been forced to take legal action after being denied by Hockey Canada’s insurance. One player, who was paralyzed in 2014, has been forced to fight for funds to cover his medical costs ever since. Meanwhile, Hockey Canada waited less than a month last spring to settle the $3.55-million sexual-assault lawsuit involving members of the 2018 national junior team, without fully investigating the incident or holding any of the accused accountable.

The lawsuit was settled in May, for an undisclosed amount, prompting MPs to accuse Hockey Canada of trying to sweep it under the rug to protect its brand.

After The Globe’s investigation, Hockey Canada was forced to detail the National Equity Fund at hearings in July, revealing that it was used to cover more than $7-million worth of sexual-assault settlements since 1989, including multiple cases related to disgraced junior coach Graham James. That figure did not include the settlement reached in May.

When The Globe asked last week how much the fund has been used in injury cases, Hockey Canada would not provide any numbers.

Mr. Cromwell also found serious lapses in financial controls and governance of the fund, noting at least six cases where Hockey Canada cut large cheques totalling more than $500,000 from the reserve, but may not have kept proper records or fully disclosed these transactions to it members.

Though Mr. Cromwell said keeping reserve funds for legal liabilities is not inherently improper, he raised several concerns with the National Equity Fund, which his report said did not meet proper governance standards. MPs have alleged that the fund was set up to look like a typical contingency reserve, but was instead used to obscure its settling of sexual-assault cases.

“It’s a question of how they did it, and what they used it for,” Mr. Housefather said, noting that the committee wants to hear Mr. Cromwell’s opinions on how to fix the problems inside Hockey Canada.

“I’m going to ask him to diagnose within Hockey Canada whether or not he felt that this was mostly just administrative incompetence, or was there anything else there that we should be concerned about, when it comes to misrepresentation of the fund or other things,” Mr. Housefather said.

NDP MP Peter Julian said recently that the questions hanging over the National Equity Fund and how it was deployed are, at their core, ethical questions. “They are questions of accountability and transparency,” he said.

Conservative MP Rachael Thomas said she is concerned that Hockey Canada has conducted numerous governance reviews in the past but that the recommendations appear to have gone unheeded.

“This is actually the third independent governance review since 2014,” Ms. Thomas told Hockey Canada representatives at hearings in November. “So in eight years, this is the third one that has been required because adequate action hasn’t been taken.” She accused the organization of fostering a culture of secrecy and cover-ups during that time.

In response, Hockey Canada’s senior vice-president of strategy, operations and brand, Pat McLaughlin, acknowledged the criticism, and said there was “no room for error” as the organization begins to restructure itself in the months ahead.