Home World Politics Opinion | Charles McVety’s college has questionable financial practices. So why is...

Opinion | Charles McVety’s college has questionable financial practices. So why is Doug Ford trying to give him the gift of university status?


When Doug Ford set out to be premier, he benefited from a generous benefactor that his campaign didn’t declare.

Thanks to controversial preacher Charles McVety, Ford used the facilities of Canada Christian College (CCC) for the initial phase of his Progressive Conservative leadership campaign.

Now it turns out the charity’s generosity to the premier came with a price — political and financial.

While the future premier took donated space without full disclosure, McVety as president (and his son Ryan, the vice-president) took six-figure loans from the college without detailed disclosure or collateral, and without interest for several years. Their campus is run like a family fiefdom from which the family benefits personally as father and son (both their spouses also work at CCC).

An investigation of CCC finances by the Toronto Star, assisted by forensic accountant Charles Smedmor, shows a pattern of irregularities that appear to break the rules or ignore the norms — all while the preacher and the premier were exchanging political IOUs. Now, the college is counting on Ford’s government to push through legislation upgrading it to full-fledged university status.

Among the new revelations from the latest Toronto Star investigation (about which McVety and the college refused all comment):

  • While Ford’s campaign was getting political favours on campus in early 2018, the McVetys (father and son) were lending themselves more money from the charity’s treasury. The cumulative effect from loans to top employees not at “arms’ length” — notably the McVetys as president and vice-president — was “a significant drain on the college,” according to Smedmor’s forensic analysis. “They were lending themselves more money while they were also running out of cash.” Overall, the McVetys owed the college $860,000 at the end of 2019.

At the very time McVety’s borrowings were growing, his charity apparently failed to remit in a timely manner to Canada Revenue Agency all payroll deductions for its employees (and matching amounts as employer), according to a previously undisclosed 2016 financial statement. That suggests remittances owing to the federal tax authority were helping to shore up the balance sheet of the charity — which had declared $33,000 in “bank indebtedness” — even as the McVetys were drawing cash out of the college through unsecured loans. “Were the McVetys using monies due to the Canada Revenue Agency to finance loans to themselves?” Smedmor asked.

  • While Ford and McVety were cementing their relationship in early 2018, a routine audited financial statement for the 2017 tax year was conspicuously absent from the college’s annual filing to the CRA. While the CRA does not require audits from registered charities, CCC’s practice was to submit them in previous and subsequent years. Major charities routinely post their audited statements online in the interests of transparency and donor confidence, but Canada Christian College does not.
  • Annual audits are mandatory, however, under the provincial act governing the college’s operations, requiring disclosure to anyone donating more than $100. CCC declined to share its full audits with the Star and did not answer questions about the delayed audit, whether or why it changed auditors, or any concerns raised by auditors. An audit for 2017 was submitted belatedly to the CRA in 2019 (a year later, doubled up with its 2018 submission), which Smedmor described as “a perplexing delay.”

McVety and CCC also did not respond to any questions submitted last week about delayed remittances of payroll deductions to the CRA, whether amounts due to the tax authority were diverted to lend money to the family, interest-free periods for the loans, and audit requirements. Julian Porter, the prominent Toronto lawyer who previously identified himself by email as representing McVety, also did not respond to repeated inquiries.

Taken together, the practices of this charity are cause for concern, according to Smedmor’s forensic analysis. There are indications of unsecured lending, untimely remittances, unprofessional accounting, unaudited reports and unclear disclosure.

He cited the failure to charge any interest for six-figure loans to the McVetys for at least four years (2013 to 2016) and the lack of disclosure for interest rates in subsequent years. The loans were also unsecured, meaning the McVetys did not provide collateral to safeguard the charity’s finances.

“I believe the charity has a fiduciary duty, in terms of public trust, to provide a full reporting to its donors and all stakeholders,” Smedmor said. “Yet the college submitted to CRA an unaudited and undated five-page report without any accompanying financial notes for 2017.”

Smedmor’s line-by-line analysis found “significant changes” after the college subsequently revised its filing with an audited report a year later: $175,000 in “professional fees” originally claimed in 2017, for example, were scaled back by 80 per cent to a more modest $34,000 in the updated filing. CCC did not respond to specific questions about the purpose of those professional fees and why they were scaled back so significantly when later restated to CRA.

In response to a previous column on the college’s questionable lending practices, Porter said it will only “provide answers concerning its financial statements to an appropriate authority when requested.” A media statement last month from McVety, distributed by Porter, asserted that “all loans in this regard have been reviewed and audited by independent chartered professional accountants each year.”

Smedmor points out that “reviewed and audited” does not mean the loans were deemed appropriate by an accountant “each year,” let alone accepted by the CRA as valid. “The loans were examined,” he noted, “but that does not mean approved.”

So many questions, so few answers from Ford. And no clear responses from his friend McVety, whose charitable campus is at the centre of a political and financial controversy that is dragging down the premier and embarrassing his provincial Tories, many of whom were privately opposed to his embrace of CCC.

The Canada Revenue Agency says it cannot reveal whether it now plans to undertake an audit of McVety’s charity. Ontario’s NDP had requested an investigation after revelations in a previous Toronto Star column.

The college’s filings and unaudited statements have “not necessarily been verified for accuracy or completeness by the CRA,” agency spokesperson Sylvie Branch noted. She added that “if members of the public are concerned that a registered charity is not complying with the provisions of the Income Tax Act, they are encouraged to contact the CRA’s Leads Program.”

In fact, New Democrat MPP Laura Mae Lindo made a written submission to the CRA’s Leads Program earlier this month, asking federal tax authorities to investigate McVety’s questionable loans from his own college, given that he is not “at arm’s length” as president.

Loading…

Loading…Loading…Loading…Loading…Loading…

“According to new revelations by the Toronto Star, McVety and his lawyer have refused to answer simple questions about the CCC’s finances, the loans’ basic repayment terms, or how a charity could approve such loans in the first place,” Lindo noted in an accompanying news release.

The NDP revealed last week that Ford used the college’s facilities when running for the Progressive Conservative leadership. Lindo has asked both the CRA and Elections Ontario to investigate.

“This isn’t just a sign of the cosy relationship between the premier and Mr. McVety, it’s a violation of elections law and charitable tax law,” she told the legislature.

“I have written to Elections Ontario to investigate why the premier’s financial returns have no payments to Mr. McVety’s college, and I’ve asked Revenue Canada to review why Charles McVety’s college, a registered charity, didn’t report this political activity.”

Lindo has led the opposition charge against CCC in the legislature in her capacity as the NDP’s anti-racism critic, and her concerns have been echoed by Kathleen Wynne, the province’s first LGBTQ premier. Both have questioned the current premier’s close association with McVety, a notoriously homophobic preacher whose public bigotry has been condemned by the Canadian Broadcast Standards Council, which said he made “malevolent, insidious and conspiratorial” remarks about gays on Word TV, his talk show that was later dropped by the Crossroads Television System.

An earlier Toronto Star column documented problems encountered by recent CCC graduates with the college’s academic standards and the credibility of transcripts, yet Ford’s government has proposed accrediting the discredited campus to issue coveted bachelor of arts and bachelor of science degrees. Using its majority muscle, the Progressive Conservatives are pushing through highly controversial legislation even before the application has been fully evaluated; facing public pressure, Ford’s Tories belatedly announced they would await word from the independent Postsecondary Education Quality Assessment Board before taking the final legal step to confer university status.

Lindo used the NDP’s scheduled Opposition Day time slot in the legislature Monday to introduce a motion to “condemn the extreme and hateful invective of Charles McVety and oppose any efforts to make Canada Christian College into an accredited university.” The non-binding motion passed narrowly with the support of the NDP and Liberals, after some Tories abstained or did not show up for the vote.

Why did Ford leapfrog the legal process of vetting the college’s application? It appears the preacher is cashing in his chips, and the premier is making good on his political IOU.

Smedmor, who has conducted numerous investigations in both the private and public sectors — and serves on the volunteer investment advisory committee at his own church — said he was shocked by the practices of Canada Christian College, and of those overseeing it.

“Who is holding Canada Christian College to account?” he asked.

Here’s another question: Do the McVetys work for the college, or does their college work for them?

More to the point, pray tell: Is Ford doing his job looking out for the people of the province, or is he looking after the college president who helped him get the province’s top job?

Amid the latest revelations, only a higher authority can divine the true motives of both preacher and premier. The devil, in this tale, is in the details.





Source by [author_name]

Must Read

Translate »