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Rogers Place during the game between Canada and Latvia at the World Junior Hockey Championships in Edmonton on Aug. 10, 2022.TODD KOROL/The Globe and Mail

Before Hockey Canada became engulfed in controversy this year over its handling of sexual-assault allegations, the government had concerns about its board of directors, including aspects of transparency and accountability within the organization.

Documents obtained by The Globe and Mail show that Hockey Canada’s board of directors received poor grades from Sport Canada in an internal 2021 governance review, lagging behind its peers in two key categories.

Particular concern was raised over conflicts of interest on Hockey Canada’s board, including procedures in place to manage or mitigate the problem. In that category, listed on the report card under accountability and transparency, Hockey Canada received its lowest grade, “insufficient,” with a score of 1 out of 5.

The report card, which has not been released publicly, also gave Hockey Canada failing grades for strategic planning, for which the board received a score of 2, or “marginal.”

In those two categories, Hockey Canada did not meet the average score set by more than 60 national sport organizations across the country, despite being one of the largest and best-funded of these groups.

The report card raises new questions about Hockey Canada’s governance, as well as Sport Canada’s oversight of the organization, at a time when both are facing criticism over their handling of an alleged sexual assault in 2018.

At federal hearings last month, Hockey Canada came under fire over its decision to settle a $3.55-million sexual-assault lawsuit quickly, with limited outside scrutiny into what occurred. During testimony before a parliamentary committee, senior Hockey Canada officials were accused by federal MPs of attempting to cover up the situation to escape accountability.

A woman, who is not named in court documents, alleges she was sexually assaulted by several players, including members of the 2018 world junior team, after a Hockey Canada fundraising gala. The lawsuit was settled in May, three weeks after it was filed, for an undisclosed amount.

Hockey Canada didn’t use its insurance coverage to settle the claim, which would have instigated an investigation by the insurance company. It instead settled the lawsuit outside court by tapping into a little-known fund it built through registration fees, without disclosing to parents and players that their money was being used toward sexual-assault cases.

Subsequent to those revelations, Hockey Canada chairman Michael Brind’Amour resigned this month, and was replaced by Andrea Skinner, who will serve as interim chair. However, federal MPs have called on the rest of Hockey Canada’s board of directors and top executives to resign, saying they believe the current management and oversight structure is unfit to fix the problems now hanging over the organization.

Sport Canada also came under fire at the hearings when it was revealed that the federal department, which funds Canada’s athletic organizations, had been informed of the alleged sexual assault in 2018, but failed to keep tabs on whether Hockey Canada was investigating the matter. It continued giving the organization millions of dollars of grants in subsequent years.

The 2021 report card shows that Hockey Canada had governance weaknesses, but documents indicate it was not concerned that Sport Canada would clamp down despite low scores in key areas. The report card also reveals that such governance problems aren’t limited to Hockey Canada, but are evident throughout Canada’s national sport organizations [NSOs].

In addition to poor grades for its management of conflicts of interest and strategic planning, Hockey Canada received a score of just 3 out of 5, for the board’s role and responsibility – which Sport Canada defines as the policies and procedures in place to ensure effective decision-making and oversight.

After the 2021 report card was issued, Hockey Canada was allowed to challenge its scores by providing additional information or documents, which it did. When a follow-up report card was issued in June this year, Hockey Canada had three of its ratings upgraded. For board structure, it was raised to a 5, from a 2. For board development, it was increased to a 4, from a 2. And on risk management, it was given a 5, instead of a 2.

“Following an opportunity offered to all NSOs to provide supplemental information and documents in response to initial report-card findings, Hockey Canada did so,” the organization said in an e-mailed statement. “After further review, Sport Canada reissued Hockey Canada’s report card with improved scores.”

However, several scores were unchanged. Hockey Canada’s low grades for its management of conflicts of interest, board responsibilities, and strategic planning stayed the same on the second report card.

Hockey Canada said it exceeded the average score of its peers in seven of the nine categories. But in many cases, the national averages for NSOs indicate failing or barely acceptable grades throughout the Canadian sport system.

Hockey Canada’s grade for managing conflicts of interest was below the national average of 1.66 for all national sport organizations. Its grade of 2 for strategic planning also lagged the NSO average of 3.15.

Average NSO scores in categories such as risk management (1.63 average), board development (1.56 average), and board composition (2.40 average) suggest many national sport organizations have boards of directors that do not meet acceptable governance standards.

Notes attached to the 2021 document, also obtained by The Globe, indicate Hockey Canada officials only saw the low scores as “recommendations on how to improve our governance structure,” and did not expect the department to follow up with them.

Nor was Hockey Canada worried that the low grades would threaten the millions of dollars of funding it received from the federal government, according to the notes.

Sport Canada spokesman David Larose said the report card was part of a pilot project. It was created by the department to track the progress organizations made on governance, and the grading standards were based on domestic and internationally accepted standards.

Minister of Sport Pascale St-Onge announced this spring that the government will require more board accountability from national sport organizations. Starting in 2023, governance improvements will be a requirement for receiving federal funding, though specific details of these changes are not yet known.

Until recently, Hockey Canada received about 6 per cent of its annual budget from Sport Canada, before the government froze that money this summer amid concerns about the organization’s handling of the sexual-assault allegations. The funds amounted to $5.8-million in 2021, and have totalled more than $48-million over the past 10 years.

At parliamentary hearings in June, Hockey Canada offered few details about where it got the money to settle the sexual-assault claim. The Globe revealed in July that Hockey Canada used a special reserve known as the National Equity Fund, which was fed by registration fees across Canada, to pay out the claim.

However, the organization did not disclose that player fees, from as young as beginner Timbits Hockey to senior recreational leagues, also went toward settling sexual-assault claims, which has angered parents and minor-hockey associations across Canada.

The Globe’s investigation revealed that the National Equity Fund had exceeded $15-million in recent years and allowed Hockey Canada to settle the allegations without additional scrutiny.

Prime Minister Justin Trudeau called the findings “unacceptable,” and Conservative MP Kevin Waugh told the hearings that the revelations about the National Equity Fund “caught everyone off guard.” Mr. Waugh questioned Hockey Canada about its lack of transparency, particularly toward parents and players.

Under pressure to disclose more information about such payments for sexual assault, Hockey Canada told the hearings that it has used the special reserve to pay nine such claims worth $7.6-million since 1989, not including the settlement reached this year around the 2018 allegations. “I can understand that parents aren’t happy. I wouldn’t be happy as well,” Hockey Canada chief financial officer Brian Cairo said.

Hockey Canada’s board of directors kept no records of its discussions about the most-recent settlement, and avoided keeping meeting minutes, which MPs at the hearings said was highly questionable and irregular conduct.

Hockey Canada chief executive officer Scott Smith acknowledged that the lawsuit was settled without determining the facts of the case or holding players alleged to be involved accountable. As well, Mr. Cairo said the organization “didn’t know all the details of the night, but we believe harm was caused.”

On announcing his resignation as board chairman this month, Mr. Brind’Amour said he had heard the calls for change. “I have listened carefully and intently to the comments of Canadians about the culture of our sport and our organization, and about our actions and leadership,” Mr. Brind’Amour said in a statement.

“I know that there is no need to wait for a new era. Immediate action is essential to address the important challenges facing our organization and our sport.”

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