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Hockey Canada moved cash from fund used for sexual assault claims to avoid encouraging more claims: report

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A controversial reserve fund that Hockey Canada publicly vowed it would stop using to settle sexual assault allegations is significantly depleted after the organization transferred millions of dollars in past years to another account, a new interim report reveals.

Former Supreme Court justice Thomas Cromwell’s interim report on Hockey Canada’s governance, released last week, contains damning details about the organization’s management of its National Equity Fund — a fund Cromwell said is projected be in deficit by 2023.

Hockey Canada commissioned Cromwell’s review in response to hockey parents’ outrage after learning that the National Equity Fund — made up in part of players’ registration fees — was being used to pay out millions of dollars for sexual assault allegations without their knowledge.

Cromwell learned of the existence of a third fund to which Hockey Canada’s board of directors approved the transfer of $10.25 million in reserve funds from the National Equity Fund (NEF) in 2016. Another financial analysis has found that at least another $7 million has been transferred from the NEF to the third fund since then.

The money was moved after Hockey Canada’s auditors recommended a change to the organization’s disclosure on its audited financial statements that “increased the reported balance of the National Equity Fund by several million dollars,” Cromwell found.

Cromwell concluded that the organization’s board of directors feared that an account with more money would attract more 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,” Cromwell wrote in his report.

In November 2016, Hockey Canada’s board of directors transferred the money from the NEF to another fund called the Insurance Rate Stabilization (IRS) Fund, which was created years earlier to “act as a buffer against future increases in insurance rates,” the report said. The Athletic was the first to report on the new fund and the money transfers.

$17 million transferred

The board justified the transfer, saying it was a way to expand the scope of the IRS Fund “for the purpose of providing financial support against potential future non-insured claims,” Cromwell’s report said.

Cromwell said Hockey Canada also broadly expressed that changes to its transparency were “not well suited for their organization, such as making financial statements and minutes of Member meetings available to the public.”

“Although Hockey Canada has achieved considerable financial success over the years, Hockey Canada is concerned that being seen as an organization with ‘deep pockets’ could create some negative implications,” Cromwell’s report said.

“For example, this could have an effect on their bargaining power with respect to the settlement of lawsuits, and this could also influence the amount of money that sponsors would be willing to offer in the future.”

Kate Bahen, managing director of Charity Intelligence Canada said Cromwell’s report showed her “there was an intent to hide funds.”

By examining Hockey Canada’s audited financial statements, Bahen found the NEF’s “true balance” was $15.7 million in 2016 before the organization ended up transferring $9.5 million to the other fund. (Cromwell’s report said the board approved a $10.25 million transfer, but the statements show $9.5 million was moved, according to Bahen.) That transfer brought the NEF down closer to its $5.2 million level in the previous year, before the accounting changes, she said.

Bahen said she also discovered that Hockey Canada’s board approved the transfer of $17 million from the National Equity Fund to the IRS Fund between 2016 and 2021.

“This wasn’t just a one-off occurrence in 2016 … Hockey Canada has for years and years kept its books closed and fought against financial transparency,” said Bahen, who was given Hockey Canada’s audited financial statements obtained under the access to information act.

She said Hockey Canada spent about as much of the NEF’s money on staff salaries, travel, meals and grants between 2014-2021 as it did on insurance claims.

 

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

A report commissioned by Hockey Canada found serious flaws with how the organization handled a fund used to pay for sexual assault claims.

Hockey Canada said in June that, “effective immediately,” it would no longer use the National Equity Fund to settle sexual assault claims.

The organization’s chief financial officer Brian Cairo softened that message in July when he told Hockey Canada members and executives that the organization “stopped using the fund to settle sexual assault claims pending the outcome of our governance review by an independent third party.”

CBC News asked Hockey Canada what fund would be used to settle sexual assault claims and was told the organization is waiting for Cromwell’s final report.

Bahen said the audited financial statements show that the NEF balance in June 2021 was $9.6 million. Since then, the fund has paid out the maximum amount for a $3.5 million lawsuit alleging a group sexual assault in 2018 involving eight hockey players, including members of the World Junior team, she said.

The new balance of the NEF — which Cromwell said is depleted — will be released at Hockey Canada’s annual general meeting on December 17.

‘A culture of secrecy’

NDP MP Peter Julian sits on a parliamentary committee that held public hearings on Hockey Canada’s handling of sexual assault allegations.

“[The funds transfer] proves once again this labyrinth of funds was designed to avoid public scrutiny and accountability,” he said.

Sébastien Lemire, the Bloc Québécois sports critic, said the existence of a “third fund is not surprising and is a testament to the culture of secrecy that exists within the organization.”

“To learn that the fund that was originally supposed to help injured players is now empty, in part because Hockey Canada used it to settle sexual assault lawsuits, only reinforces the idea that the executives associated with this scheme should resign,” said Lemire.

 

Hockey Canada board, CEO resign amid widespread criticism

 

Hockey Canada has announced its CEO and entire board of directors are stepping aside after mounting backlash over its handling of sexual assault allegations.

Liberal MP Anthony Housefather said he asked Hockey Canada’s interim board chair Andrea Skinner earlier this month if there were any other funds beyond the two the committee knew about.

Skinner responded that, to the best of her knowledge, no other funds were used.

“It reflects what I thought was misleading testimony at committee,” said Housefather.

The NEF has paid 21 settlements since 1989, 11 of which were related to sexual misconduct, according to Cromwell’s interim report.

Nine of those 11 settlements were based on historical cases and given to complainants against perpetrators Graham James, Gordon Stuckless and Brian Shaw. All three names were on a list given to Hockey Canada’s insurer and excluded from insurance claims when Hockey Canada expanded its insurance policy in 1998 to provide sexual misconduct coverage to the organization.

The tenth case involved a historic claim of sexual assault against a referee — someone the insurer said Hockey Canada was aware of and should have warned the insurer about. The eleventh matter was the 2018 group sexual assault allegation involving members of the World Junior team.

Bahen said she’s posted all the audited financial statements on her website and hopes other accountants and experts dig into them too.

Hockey Canada has not yet responded to CBC News’ request for comment.

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Looking for the next mystery bestseller? This crime bookstore can solve the case

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WINNIPEG – Some 250 coloured tacks pepper a large-scale world map among bookshelves at Whodunit Mystery Bookstore.

Estonia, Finland, Japan and even Fenwick, Ont., have pins representing places outside Winnipeg where someone has ordered a page-turner from the independent bookstore that specializes in mystery and crime fiction novels.

For 30 years, the store has been offering fans of Agatha Christie’s Hercule Poirot or Arthur Conan Doyle’s Sherlock Holmes a place to get lost in whodunits both old and new.

Jack and Wendy Bumsted bought the shop in the Crescentwood neighbourhood in 2007 from another pair of mystery lovers.

The married couple had been longtime customers of the store. Wendy Bumsted grew up reading Perry Mason novels while her husband was a historian with vast knowledge of the crime fiction genre.

At the time, Jack Bumsted was retiring from teaching at the University of Manitoba when he was looking for his next venture.

“The bookstore came up and we bought it, I think, within a week,” Wendy Bumsted said in an interview.

“It never didn’t seem like a good idea.”

In the years since the Bumsteds took ownership, the family has witnessed the decline in mail-order books, the introduction of online retailers, a relocation to a new space next to the original, a pandemic and the death of beloved co-owner Jack Bumsted in 2020.

But with all the changes that come with owning a small business, customers continue to trust their next mystery fix will come from one of the shelves at Whodunit.

Many still request to be called about books from specific authors, or want to be notified if a new book follows their favourite format. Some arrive at the shop like clockwork each week hoping to get suggestions from Wendy Bumsted or her son on the next big hit.

“She has really excellent instincts on what we should be getting and what we should be promoting,” Micheal Bumsted said of his mother.

Wendy Bumsted suggested the store stock “Thursday Murder Club,” the debut novel from British television host Richard Osman, before it became a bestseller. They ordered more copies than other bookstores in Canada knowing it had the potential to be a hit, said Michael Bumsted.

The store houses more than 18,000 new and used novels. That’s not including the boxes of books that sit in Wendy Bumsted’s tiny office, or the packages that take up space on some of the only available seating there, waiting to be added to the inventory.

Just as the genre has evolved, so has the Bumsteds’ willingness to welcome other subjects on their shelves — despite some pushback from loyal customers and initially the Bumsted patriarch.

For years, Jack Bumsted refused to sell anything outside the crime fiction genre, including his own published books. Instead, he would send potential buyers to another store, but would offer to sign the books if they came back with them.

Wendy Bumsted said that eventually changed in his later years.

Now, about 15 per cent of the store’s stock is of other genres, such as romance or children’s books.

The COVID-19 pandemic forced them to look at expanding their selection, as some customers turned to buying books through the store’s website, which is set up to allow purchasers to get anything from the publishers the Bumsteds have contracts with.

In 2019, the store sold fewer than 100 books online. That number jumped to more than 3,000 in 2020, as retailers had to deal with pandemic lockdowns.

After years of running a successful mail-order business, the store was able to quickly adapt when it had to temporarily shut its doors, said Michael Bumsted.

“We were not a store…that had to figure out how to get books to people when they weren’t here.”

He added being a community bookstore with a niche has helped the family stay in business when other retailers have struggled. Part of that has included building lasting relationships.

“Some people have put it in their wills that their books will come to us,” said Wendy Bumsted.

Some of those collections have included tips on traveling through Asia in the early 2000s or the history of Australian cricket.

Micheal Bumsted said they’ve had to learn to be patient with selling some of these more obscure titles, but eventually the time comes for them to find a new home.

“One of the great things about physical books is that they can be there for you when you are ready for them.”

This report by The Canadian Press was first published on Sept. 15, 2024.



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Labour Minister praises Air Canada, pilots union for avoiding disruptive strike

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MONTREAL – Canada’s labour minister is praising both Air Canada and the union representing about 5,200 of its pilots for averting a work stoppage that would have disrupted travel for hundreds of thousands of passengers.

Steven MacKinnon’s comments came in a statement shared to social media shortly after Canada’s largest air carrier announced it had reached a tentative labour deal with the Air Line Pilots Association.

MacKinnon thanked both sides and federal mediators, saying the airline and its pilots approached negotiations with “seriousness and a resolve to get a deal.”

The tentative agreement averts a strike or lockout that could have begun as early as Wednesday for Air Canada and Air Canada Rouge, with flight cancellations expected before then.

The airline now says flights will continue as normal while union members vote on the tentative four-year contract.

Air Canada had called on the federal government to intervene in the dispute, but Prime Minister Justin Trudeau said Friday that would only happen if it became clear no negotiated agreement was possible.

This report from The Canadian Press was first published Sept. 15, 2024.

Companies in this story: (TSX:AC)

The Canadian Press. All rights reserved.



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As plant-based milk becomes more popular, brands look for new ways to compete

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When it comes to plant-based alternatives, Canadians have never had so many options — and nowhere is that choice more abundantly clear than in the milk section of the dairy aisle.

To meet growing demand, companies are investing in new products and technology to keep up with consumer tastes and differentiate themselves from all the other players on the shelf.

“The product mix has just expanded so fast,” said Liza Amlani, co-founder of the Retail Strategy Group.

She said younger generations in particular are driving growth in the plant-based market as they are consuming less dairy and meat.

Commercial sales of dairy milk have been weakening for years, according to research firm Mintel, likely in part because of the rise of plant-based alternatives — even though many Canadians still drink dairy.

The No. 1 reason people opt for plant-based milk is because they see it as healthier than dairy, said Joel Gregoire, Mintel’s associate director for food and drink.

“Plant-based milk, the one thing about it — it’s not new. It’s been around for quite some time. It’s pretty established,” said Gregoire.

Because of that, it serves as an “entry point” for many consumers interested in plant-based alternatives to animal products, he said.

Plant-based milk consumption is expected to continue growing in the coming years, according to Mintel research, with more options available than ever and more consumers opting for a diet that includes both dairy and non-dairy milk.

A 2023 report by Ernst & Young for Protein Industries Canada projected that the plant-based dairy market will reach US$51.3 billion in 2035, at a compound annual growth rate of 9.5 per cent.

Because of this growth opportunity, even well-established dairy or plant-based companies are stepping up their game.

It’s been more than three decades since Saint-Hyacinthe, Que.-based Natura first launched a line of soy beverages. Over the years, the company has rolled out new products to meet rising demand, and earlier this year launched a line of oat beverages that it says are the only ones with a stamp of approval from Celiac Canada.

Competition is tough, said owner and founder Nick Feldman — especially from large American brands, which have the money to ensure their products hit shelves across the country.

Natura has kept growing, though, with a focus on using organic ingredients and localized production from raw materials.

“We’re maybe not appealing to the mass market, but we’re appealing to the natural consumer, to the organic consumer,” Feldman said.

Amlani said brands are increasingly advertising the simplicity of their ingredient lists. She’s also noticing more companies offering different kinds of products, such as coffee creamers.

Companies are also looking to stand out through eye-catching packaging and marketing, added Amlani, and by competing on price.

Besides all the companies competing for shelf space, there are many different kinds of plant-based milk consumers can choose from, such as almond, soy, oat, rice, hazelnut, macadamia, pea, coconut and hemp.

However, one alternative in particular has enjoyed a recent, rapid ascendance in popularity.

“I would say oat is the big up-and-coming product,” said Feldman.

Mintel’s report found the share of Canadians who say they buy oat milk has quadrupled between 2019 and 2023 (though almond is still the most popular).

“There seems to be a very nice marriage of coffee and oat milk,” said Feldman. “The flavour combination is excellent, better than any other non-dairy alternative.”

The beverage’s surge in popularity in cafés is a big part of why it’s ascending so quickly, said Gregoire — its texture and ability to froth makes it a good alternative for lattes and cappuccinos.

It’s also a good example of companies making a strong “use case” for yet another new entrant in a competitive market, he said.

Amid the long-standing brands and new entrants, there’s another — perhaps unexpected — group of players that has been increasingly investing in plant-based milk alternatives: dairy companies.

For example, Danone has owned the Silk and So Delicious brands since an acquisition in 2014, and long-standing U.S. dairy company HP Hood LLC launched Planet Oat in 2018.

Lactalis Canada also recently converted its facility in Sudbury, Ont., to manufacture its new plant-based Enjoy! brand, with beverages made from oats, almonds and hazelnuts.

“As an organization, we obviously follow consumer trends, and have seen the amount of interest in plant-based products, particularly fluid beverages,” said Mark Taylor, president and CEO of Lactalis Canada, whose parent company Lactalis is the largest dairy products company in the world.

The facility was a milk processing plant for six decades, until Lactalis Canada began renovating it in 2022. It now manufactures not only the new brand, but also the company’s existing Sensational Soy brand, and is the company’s first dedicated plant-based facility.

“We’re predominantly a dairy company, and we’ll always predominantly be a dairy company, but we see these products as complementary,” said Taylor.

It makes sense that major dairy companies want to get in on plant-based milk, said Gregoire. The dairy business is large — a “cash cow,” if you will — but not really growing, while plant-based products are seeing a boom.

“If I’m looking for avenues of growth, I don’t want to be left behind,” he said.

Gregoire said there’s a potential for consumers to get confused with so many options, which is why it’s so important for brands to find a way to differentiate themselves, whether it’s with taste, health, or how well the drink froths for a latte.

Competition in a more crowded market is challenging, but Taylor believes it results in better products for consumers.

“It keeps you sharp, and it forces you to be really good at what you’re doing. It drives innovation,” he said.

This report by The Canadian Press was first published Sept. 15, 2024.



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