Exclusive ski club received $1.4M in federal COVID relief amid ‘record’ year

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Leaked financial documents show that Georgian Peaks, an exclusive Ontario ski club, received almost $1.4 million in federal pandemic relief in 2020/21 — a record-breaking season. The club ended up with a $1.5-million budget surplus, and hiked initiation fees to $43,000.

Georgian Peaks Ski Club, near Collingwood, Ont., opened this new, 'state of the art' $13-million lodge this season, after receiving almost $1.4 million in federal COVID relief last fiscal year. (Rob Krbavac/CBC News)

The Georgian Peaks Ski Club, near Collingwood, Ont., has a history of producing winners.

Three of its racing alumni were on the slopes at the Beijing Winter Games, with Jack Crawford capturing Olympic bronze in the men's combined.

But "the Peaks" — one of Canada's most exclusive private clubs, with an initiation fee of $43,000 — has had much more to celebrate this season, including an unprecedented surge in new members and the opening of a "state of the art" $13-million lodge.

Not to mention $1.37 million in taxpayer-supplied federal COVID relief, which helped propel the club to a $1.54-million budget surplus, three times greater than the year before.

Financial statements for the fiscal year ending May 31, 2021, obtained by CBC News show that Georgian Peaks received $1.203 million under the Canada Emergency Wage Subsidy (CEWS) and a further $166,885 from the Canada Emergency Rent Subsidy (CERS).

Overall, the club, which enjoys not-for-profit tax status, reported $7.948 million in revenue against $4.741 million in expenses.

The resulting $3.207-million surplus was halved by a $1.667-million depreciation and amortization charge — an extra-large accounting writedown triggered by the demolition of its old clubhouse and the opening of the $12.833-million replacement. The annual report brags that the facility is "second to none when compared to any contemporary skiing venue anywhere."

While pandemic-related shutdowns meant less operating revenue, expenses dropped almost in lockstep. The club benefited as people in the Greater Toronto Area looked for a release from lockdown life, taking in $2.524 million in annual dues and $1.541 million in new initiation fees, both healthy increases from the prior season.

"From a membership perspective 2020/21 delivered a record year for the Club," the Membership Committee reported. "And as a result we are proud to say that for the first time in our history the Georgian Peaks membership is 'full.' We now have the hottest waiting list on the [Niagara] Escarpment."

Those who manage to make the grade pay handsomely for the privilege. Annual dues are $3,000 per person, while racing program costs for kids range between $3,000 and $6,000 a season. Add in $2,500 for a premium parking spot, the minimum bar tab and capital improvement fees, and the cost for a family of four easily tops $20,000 to $25,000 a year.

Club says it followed all rules

It's not clear why the club felt it necessary to apply for the federal wage and rent subsidies. The financials note that the funds helped support "over 270 employees," but they also report that an Ontario government-ordered ski hill shutdown starting on Boxing Day 2020 triggered the layoff of most of its food and beverage workers.

Georgian Peaks representatives declined multiple interview requests and did not respond to written questions from CBC News.

In a text, board president Nick Hamilton, a Collingwood investment advisor, simply wrote "we always abide by the rules of any government programs for which we qualify and use any funds received for their designated purposes." Finance chair Laura Boland, the chief financial officer for a grocery chain, didn't acknowledge emails or text messages.

A family rides the chairlift at Georgian Peaks. Financial documents show the not-for-profit club enjoyed a record year in 2020/21, raising its initiation fees to $43,000.(Georgian Peaks Ski Club/YouTube)

Per the financial statements, the club's budget windfall will help kick-start a new 10-year capital improvements plan, with $2.5 million earmarked for the refurbishment of one of the main chairlifts, and upgrades to the snow-making control centre in the coming off-season.

As a non-profit, Georgian Peaks pays tax only on its investment and property income. For fiscal year 2021, that bill amounted to $13,048 — less than half the $27,237 it paid Ottawa the season before.

There is no indication that the club violated any rules surrounding the CEWS or CERS programs. And Georgian Peaks is hardly the only private or public recreation association to have received government support during the pandemic.

A CBC News analysis of the federal database of CEWS recipients found listings for 718 golf and country clubs, 65 tennis clubs, 57 ski clubs and 45 yacht clubs.

But Ottawa doesn't share details about how much money those organizations received, what they did with the taxpayer funds or explain why they needed the assistance. Many clubs haven't been keen to make such information public.

After CBC News reported on another private ski hill's CEWS-fueled surplus last December, Georgian Peaks removed its 2021 financial statements from a members-only section of its website. They have not yet been reposted.

Calls for more government oversight

Niki Ashton, the federal NDP critic for Tax Fairness and Inequality, is raising questions about the lack of government transparency surrounding pandemic relief.

In late February, she tabled a motion calling on National Revenue Minister Diane Lebouthillier to appear before the Commons Finance Committee to explain how the government is ensuring that the $100-billion-and-counting spent on CEWS is going to the right places.

"The wage subsidy program was meant to create a stop-gap … to provide some sort of security," Ashton told CBC News. "To hear private ski clubs that are only available to the richest among us take advantage of these programs is frankly grotesque. This money should be paid back."

Ashton wants to see the Liberal government "beef up" its efforts to ensure that CEWS money went to deserving businesses and organizations and was used solely to support worker pay.

"We know that the CRA is overstretched in the work it's doing, not just in terms of tracking where the wage subsidy went, but also tracking tax avoidance and other measures that have contributed to the rich getting richer," said Ashton.

In a statement provided to CBC News, the Canada Revenue Agency said it has completed around 630 CEWS-related audits, and is working on almost 2,600 more. But the agency declined to provide any details about what the audits have found, or whether anyone has been ordered to repay the wage subsidy.

A worker helps prepare the course in advance of a February 2021 race at Georgian Peaks Ski Club.(Rob Krbavac/CBC News)

"Compliance activities are ongoing and it is still premature to report on the program," said the statement.

According to the CRA website, 459,000 businesses and organizations across Canada have received CEWS funding to date.

Tax rules for non-profits haven't changed since 1917

Mark Blumberg, a Toronto lawyer who advises non-profits and charities, notes that the government made it easy to qualify for CEWS funding in an effort to get pandemic relief out the door quickly, and that there seems to have been little oversight.

"This was a very poorly constructed program and it got worse as it went on," said Blumberg.

He said the Georgian Peaks situation underlines another issue — a lack of clarity surrounding what a non-profit is, or should be, under Canadian law.

"The definition is from 1917, when they brought in the first Income Tax Act, and it hasn't changed," said Blumberg.

He points to a 2013 CRA project that examined financial statements from a cross-section of 1,300 non-profits and determined that at least 43 per cent of them didn't actually qualify for that status under tax rules.

This is a huge potential enforcement problem, given that there are an estimated 80,000 to 100,000 non-profits operating in Canada, says Blumberg. And while registered charities have to make their financial statements and other corporate information available to the general public, there are no such disclosure rules for non-profits.

"With the charities, you at least have a bit of transparency," said Blumberg. "The non-profits are just a black hole."

"You have some non-profits that could be making hundreds of millions of dollars and the public wouldn't even know. "

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