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A Hockey Canada jersey is displayed with memorabilia from the 2010 Olympics at the B.C. Sports Hall of Fame.DARRYL DYCK/The Canadian Press

Prime Minister Justin Trudeau criticized Hockey Canada in response to a Globe and Mail investigation on Tuesday that revealed the organization uses registration fees to maintain a multimillion-dollar fund to settle alleged sexual assault claims, without disclosing it to parents or players.

The fund allows Hockey Canada to settle a variety of claims on its own, outside of the courts, without an investigation by its insurance company.

“What we’re learning today is absolutely unacceptable,” Mr. Trudeau said. “I think right now it’s hard for anyone in Canada to have faith or trust in anyone at Hockey Canada.”

The Globe’s investigation detailed how the pool of money, known internally as the National Equity Fund, has exceeded $15-million in recent years, and has earned more than $1-million in interest and investment income, although Hockey Canada discloses little publicly about where the money comes from, and what it is used for.

Mr. Trudeau, speaking in Bowen Island, B.C., said he was upset as a hockey parent himself.

“A few years ago I had my son in hockey, and when I think about the culture that is apparently permeating the highest orders of that organization, I can understand why so many parents, so many Canadians who take such pride in our national winter sport, are absolutely disgusted by what’s going on,” Mr. Trudeau said.

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The Globe found the fund is used at Hockey Canada’s discretion, and can be deployed to pay out-of-court settlements without being subject to the scrutiny or controls an insurance claim would require.

Hockey Canada said in a statement on Tuesday that the National Equity Fund will be assessed as part of a governance review the organization pledged to undertake recently, amid criticism of its handling of an alleged sexual assault in 2018.

In May, Hockey Canada settled a $3.55-million lawsuit for an undisclosed sum over allegations of sexual assault involving players from the 2018 Canadian World Junior team.

Hockey Canada said no public money and no sponsorship dollars were used to pay out the settlement. At federal hearings last month, Hockey Canada chief executive officer Scott Smith said the organization “liquidated a portion of our investments,” although he did not give details about where the money came from.

The existence of the fund, which shows up in court documents and audited financial statements, raises questions about Hockey Canada’s handling of allegations of sexual assault within its ranks. The Globe reported that Hockey Canada does not disclose the fund in its annual reports, nor in a handbook for parents and players that details insurance costs and how registration fees are used.

Hockey Canada charges players, from beginner Timbits Hockey to senior leagues, $23.80 for insurance, administration and other fees. It does not mention that some of the money goes toward settling claims of sexual assault that are deemed uninsurable or do not involve the insurer investigating.

The organization collects more money for insurance than it spends, and some of those funds are held in the National Equity Fund and used for settlements.

Minister of Sport Pascale St-Onge said the revelations about the fund, specifically where the money comes from, indicate Hockey Canada leaders need to be held to account.

‘’The new information that was revealed this week, especially the existence of a special fund to cover complaints of sexual assault, is extremely concerning. I can imagine the frustration and disappointment of Canadians, and parents who register their children in hockey across our country,” Ms. St-Onge said in a statement.

Hockey Canada confirmed the existence of the fund last week after The Globe sent the organization questions about court documents sworn by its former senior vice-president of risk management, Glen McCurdie. In an affidavit Hockey Canada has since tried to remove from the court record, Mr. McCurdie said the organization “maintains a reserve fund in a segregated account” to pay for uninsured liabilities, including claims for sexual abuse.

He does not refer to the fund by name, but evidence of the National Equity Fund emerges in the organization’s audited financial statements, although without details about how the money is used.

Hockey Canada did not answer several of The Globe’s questions, including how long the fund has existed, how much money it contained, and why it is needed when Hockey Canada carries extensive coverage for alleged sexual assault liability.

Further documents obtained by The Globe show the fund was worth $8.9-million as of June, 2021, and its value fluctuates from year to year. The fund had a balance of $5.5-million in 2013, $7.3-million in 2014, and $5.2-million in 2015, before rising to $15.6-million in 2016, according to the available records.

The government has frozen Hockey Canada’s federal funding as it examines the organization’s handling of the 2018 case.

Mr. Smith said Hockey Canada couldn’t determine what transpired or which players were alleged to be involved, despite paying out the claim.

The woman, known as E.M. in the statement of claim, alleged she engaged in sex with one player in a hotel room in London after a Hockey Canada event that summer, but did not consent when several other players entered the room. The allegations have not been proven in court. Lawyers for several of the unnamed players dispute the claim.

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On Tuesday, Hockey Canada said in the statement that the National Equity Fund covers a broad range of expenses, in addition to “claims not otherwise covered by insurance policies, including those related to physical injury, harassment, and sexual misconduct.”

The fund also is used to cover wellness and equity initiatives, Hockey Canada said. “This includes, but is not limited to, counselling and treatment for players, concussion research grants to the Canadian Hockey League,” and other initiatives.

But it is the fund’s role in settling sexual assault claims that is drawing scrutiny, particularly given how quickly it appears Hockey Canada moved to settle the lawsuit – in about three weeks – even though it said it could not determine what happened that night.

Hockey Canada said the fund “was established in a manner consistent with reserve funds maintained by other large national organizations,” but did not answer The Globe’s questions about why it appears not to be disclosed to parents and players when they pay registration fees.

Recent statements by Hockey Canada have raised questions about how much money the organization spends to deal with alleged sexual assault claims that are settled out of court. At federal hearings, Mr. Smith said Hockey Canada has had an average of one to two cases for the past six years.

Those numbers alarmed the government.

“Certainly, as a government we will continue to be unequivocal in our condemnation of what we’re learning and mostly in our demands that things change significantly,” Mr. Trudeau said on Tuesday.

“There must be a reckoning, and there need to be consequences for people who are responsible for that deep lack of respect for the institution.”

Ms. St-Onge said culture change is needed at Hockey Canada and its leaders must ensure it happens.

“We will continue to follow Hockey Canada’s next steps very closely, to ensure that a shift in culture occurs within the organization and the sport,” Ms. St-Onge said. “Clear actions and results must follow the words and commitments expressed by the organization’s leadership.’’

With reports from Ian Bailey and Colin Freeze

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