Hockey Canada third fund uncovered
Cromwell found that there was another fund to which Hockey Canada’s board of directors approved a $10.25 million transfer in reserve funds from the NEF in 2016. The organization’s board said that the transfer was a way to expand the scope of the so-called Insurance Rate Stabilization (IRS) fund, “for the purpose of providing financial support against potential future non-insured claims.”
The IRS was created by Hockey Canada to “act as a buffer against future increases in insurance rates,” Cromwell’s report noted.
A separate financial analysis also revealed that at least another $7 million was transferred from the NEF to the IRS fund since the last transfer in 2016. It was reported that this later transfer was made following the organization’s auditors recommending that Hockey Canada change its disclosure on its audited financial statements that “increased the reported balance of the National Equity Fund by several million dollars.”
Cromwell concluded in his report that Hockey Canada’s board feared that the NEF, with its sizeable funding, would attract more abuse claims.
“Hockey Canada became concerned that this change on the financial statements inflated the NEF balance artificially, which might signal a large pool of funds set aside for potential claimants and thus might increase the likelihood of additional claims,” said Cromwell in his report.
News of Cromwell’s report was first broken by Postmedia and The Athletic.
The NEF has paid 21 settlements since 1989, CBC News reported. Eleven of those settlements were related to sexual misconduct, Cromwell’s report said. The NEF’s final balance –which Cromwell said was depleted – will be disclosed during Hockey Canada’s annual general meeting on December 17.
Hockey Canada CEO Scott Smith and the organization’s entire board all stepped down on October 11, 2022, amid calls for leadership change.
Read more: Regional hockey organization rejects claims of Hockey Canada’s ‘second’ slush fund
The IRS is the third controversial fund discovered among Hockey Canada’s finances. Previously, The Globe and Mail reported that Hockey Canada had a second fund part called the Participants Legacy Trust Fund (PLTF). Funded with at least another $7.1 million from the NEF, it was created to distribute funding to its member organizations for “matters including but not limited to sexual abuse” – a claim that regional group and PLTF member Hockey Saskatchewan has vehemently denied.
