Hockey Canada's toxic secrecy has come to light

CBC Sports' daily newsletter explains how a retired Supreme Court justice's new report throws another spotlight on the troubling lack of transparency at Hockey Canada.

New report spotlights lack of transparency with controversial reserve fund

Four middle-aged men in suits sit side by side at a table in front of microphones.
Hockey Canada CEO Scott Smith, second from right, and the entire board of directors are finally leaving after a retired Supreme Court justice recommended they do so as part of his review of the organization's shaky leadership. (Sean Kilpatrick/The Canadian Press)

This is an excerpt from The Buzzer, which is CBC Sports' daily email newsletter. Stay up to speed on what's happening in sports by subscribing here.

The start of a new NHL season is bringing excitement and optimism to Canadian hockey fans this week. Connor McDavid's hat trick in Edmonton and the Habs' dramatic win over the Leafs in Montreal last night were two quick examples of the joy the pro game can deliver. Meanwhile, boys and girls around the country are getting back on the ice and reuniting with friends on their own teams. Hockey is back. And it feels good.

At the same time, the darker side of the nation's favourite sport has been painfully visible this week as well. On Tuesday, Hockey Canada announced that CEO Scott Smith and its entire board of directors would step down, finally capitulating to months of pressure from sponsors, politicians and the public. The angry calls for the national governing body to clean house stemmed from its controversial handling of a young woman's $3.5-million lawsuit alleging a 2018 group sexual assault involving players from Canada's world junior championship team. Prime Minister Justin Trudeau reflected the country's frustration with the organization's leadership when he said last week: "If these individuals continue to be deluded enough to think there is a pathway forward for them to continue to run Hockey Canada, then Canadians will have no choice but look for another structure to run our national winter sport."

WATCH | Hockey Canada board, CEO resign amid pressure: 

Hockey Canada board, CEO resign amid widespread criticism

8 months ago
Duration 2:44
Hockey Canada has announced its CEO and entire board of directors are stepping aside after mounting backlash over its handling of sexual assault allegations.

The main cause of Canadians' outrage toward Hockey Canada is its use of an opaque reserve fund — funded partly by kids' registration fees — to settle that lawsuit and others where Hockey Canada either couldn't or wouldn't get its insurance provider to cover the payments to claimants. Excluding the lawsuit over the 2018 alleged group sexual assault, which was settled this year for an unspecified amount, Hockey Canada has paid $8.9 million to 21 complainants since 1989. About three quarters of that money was tied to the case of Graham James, the former junior hockey coach accused of sexually abusing players on his teams. Hockey Canada officials told a parliamentary committee that it took $7.6 million out of the so-called National Equity Fund to make those payments, while the other $1.3 million came from insurance.

In the wake of these revelations, Hockey Canada hired former Supreme Court justice Thomas Cromwell to review both its governance structure and its use of the National Equity Fund. Cromwell's final review isn't due until the end of the month, but an interim report was made available to the public today by Hockey Canada after CBC News published a story summarizing its main findings last night.

In the report and an accompanying memo dated Monday, the retired judge warns that public confidence in Hockey Canada and its leadership group have "sunk to dangerously low levels," and recommends that the entire board of directors leave at the end of their current term, in mid-December. Given the timing, it would appear that this suggestion is what triggered Tuesday's announcement that the board and CEO Smith are all on the way out, but Cromwell also identifies several problems with how the National Equity Fund was administered that still need to be addressed.
Though the concept of a semi-secret reservoir of cash for settling lawsuits might seem unsavoury to many of us, Cromwell says there's nothing wrong with it per se. In fact, maintaining a fund to "address uninsured and underinsured liabilities is not only sound... the failure to do so would be a serious oversight," he writes.

The problem, as Cromwell details, is the way in which Hockey Canada handled the fund. For starters, it never told players and/or their parents that a portion of their registration fees was earmarked for the National Equity Fund — much less exactly how much (he found that $13.65 of the $20.80 insurance fee players are expected to pay annually went there). There were also no policies and procedures in place to guide how the money was used. In addition, though Hockey Canada is required to report to its members when new settlements, claims or judgments may cost more than $500,000, Cromwell identified six cases since 1999 where the organization failed to do so in a formal, verifiable way.

WATCH | Hockey Canada's use of fund to pay sexual assault claims flawed: report:

Hockey Canada's use of fund to pay sexual assault claims flawed: report

8 months ago
Duration 2:48
A report commissioned by Hockey Canada found serious flaws with how the organization handled a fund used to pay for sexual assault claims.

The common thread here is secrecy. That's what sparked the initial moral outrage from hockey parents and politicians and led to all those corporate sponsors abandoning ship. Now we have Cromwell picking that lack of transparency apart in a colder, more mechanical way, itemizing and detailing the exact nature of the shoddiness in some of Hockey Canada's practices.

The election for a new board of directors has been delayed a month, to Dec. 17, so everyone can have time to digest Cromwell's full report once it's delivered. The fact that Hockey Canada released the preliminary report today and pledged to implement Cromwell's recommendations regarding the fund "as soon as possible" are promising signs that the organization is interested in repairing its reputation and regaining the public's confidence. But that's a pretty low bar, and it'll take a lot more changes to ensure Hockey Canada steps out of the shadows for good. Read more about Cromwell's findings and what's next for Hockey Canada here. You can read Crowmell's report here and read his memo here.

Add some “good” to your morning and evening.

A variety of newsletters you'll love, delivered straight to you.

Sign up now