Hockey Canada has disclosed for the first time on its financial statements a fund that The Globe and Mail uncovered this fall, in which millions of dollars of player registration fees were quietly set aside for potential sexual-assault settlements.
The reserve, known as the Participants Legacy Trust Fund, was revealed in October, when The Globe obtained documents showing its existence, including that it was created using more than $7-million worth of player registration fees.
It was the second such fund that Hockey Canada had built using registration fees, without telling parents and players how their money was being used. A Globe investigation in July revealed the inner-workings of the National Equity Fund, which used millions of dollars in player fees for settlements – including a sexual-assault lawsuit launched this year by a woman who alleged she was raped by members of the 2018 national junior team.
After the trust was revealed, Hockey Canada’s former interim board chair, Andrea Skinner, faced heated questions from MPs at federal hearings in October about why the organization had not disclosed the Participants Legacy Trust Fund to the government, or on its financial books.
Ms. Skinner was unable to answer questions about the legal documents that revealed the trust, but said Hockey Canada didn’t consider the reserve to be an asset it needed to disclose, in part because it was set up to shield its provincial associations from potential claims.
Hockey Canada paid nearly $2.9-million in legal settlements in the past year, according to audited financial statements
However, Hockey Canada’s auditors disagreed.
In newly released financial statements for the 2021-22 fiscal year, made public Thursday, the auditors have started listing the Participants Legacy Trust Fund as an item on Hockey Canada’s books.
“We draw attention to Note 14 in the financial statements which provides details relating to the Participants Legacy Trust Fund, which was not disclosed in the prior year,” the auditor, BDO Canada LLP, said in a statement attached to the financial report.
Because Hockey Canada exerts control over the fund, including over the trustees, the auditors saw the need to disclose it.
“This confirms the Participants Legacy Trust Fund that The Globe and Mail uncovered in court documents should be included in Hockey Canada’s books by virtue of Hockey Canada’s control,” said Kate Bahen, managing director of Charity Intelligence Canada, which scrutinizes non-profit organizations.
“The previous directors testified otherwise. And the auditor’s inclusion shows us that, in their professional opinion, it should be disclosed.”
MPs at the hearings were frustrated by Hockey Canada’s unwillingness to answer questions about the trust and what they saw as an effort to mislead the public.
Ms. Skinner said the fund had been mischaracterized, even though MPs on the parliamentary committee investigating Hockey Canada had obtained the legal documents the Globe’s article was based on and read directly from them at the hearings. Ms. Skinner resigned less than a week later.
According to the newly released audited financials, the trust has total assets of $7.5-million, and generated $238,000 worth of investment income over the past fiscal year, which was distributed to Hockey Canada’s provincial members.
As The Globe reported in October, the trust was set up for potential claims against Hockey Canada and its provincial members, including sexual assault, but it had not been used on any lawsuits. Instead, it sat as a massive unused financial stockpile, if needed, which could also be used as a backstop to the National Equity Fund for legal settlements.
The financial statements released Thursday show that Hockey Canada paid out nearly $2.9-million in legal settlements in the past fiscal year.
That includes an amount paid to settle a lawsuit filed by a young woman in London, Ont., who alleged she was sexually assaulted by several members of the 2018 national junior team after a Hockey Canada fundraising event.
The woman filed a lawsuit in May for $3.55-million, which was settled in three weeks. The financial records don’t show how many settlements the $2.9-million figure includes, nor do they provide a precise figure for the 2018 settlement. However, the records show that the sexual-assault lawsuit was settled for less than the original $3.55-million claim.