Private ski club runs big surplus and buys new snowmaking equipment, largely with federal COVID aid
An exclusive Ontario ski club has racked up an $815,000 surplus after receiving more than half a million dollars in federal wage subsidies during the pandemic, using the windfall to improve its snowmaking system and provide relief. other capital improvements.
The Mansfield Ski Club in Mulmur, Ont., about 100 kilometers northwest of Toronto, had a record-breaking 2020-21 fiscal year, according to financial statements obtained by CBC News.
With increased revenue from membership dues, initiation fees and $563,371 in Canada Emergency Wage Subsidy (CEWS), the resulting surplus was 15.6 times the $52,000 reported in the previous fiscal year, when the nonprofit club received $65,645 in support of the CEWS. .
“The strong financial situation this season (mainly thanks to the wage subsidy and the high level of initiation fees) has made essential investment work possible and has also provided us with the funds necessary to replace our old snowmaking compressors. 50, a year ahead of schedule,” club treasurer Gary Walters wrote in a report to members earlier this fall.
Walters described the 2020-21 season as the club’s “best year for new members in several decades”, with the club collecting $492,000 in initiation fees. Mansfield charges new members a one-time buy-in of $15,000 per family.
Even with fewer ski days due to pandemic restrictions, Mansfield’s bottom line improved, with lower operating income more than offset by lower expenses. The club reported overall revenue of $2.889 million, $147,000 more than in the 2019-20 fiscal year.
No signs the club broke the rules
A careful reading of the financial statements for the year ending May 31 shows that even if Mansfield had not received government aid, the club would have recorded a surplus of more than $250,000. The non-profit club is exempt from income tax on its income, but not on its investment or property income.
There is no indication that the Mansfield Ski Club violated the rules for qualifying or using the CEWS program.
The grant scheme – under which the government would pay up to 75% of employees’ wages – was launched in April 2020 to help Canadian businesses keep staff on the payroll amid tough COVID-related restrictions -19 were imposed. To qualify, companies simply had to show a decline in revenue during the pandemic, either annually or over particular periods.
The federal government has always said, however, that the program was only intended to support workers’ compensation.
“This money cannot be used for any other purpose,” Finance Minister Chrystia Freeland told a House of Commons committee in late 2020. “The wage subsidy must be used to pay workers. It is very, very clear and we expect companies to comply with this.”
Requests for interviews with Mansfield chief executive Chris Salhany, club chairman Rob Walkowiak and treasurer Gary Walters were declined.
“We are extremely busy getting ready to open and cannot take the time,” Salhany wrote.
Wouldn’t say how many employees received wage subsidy
The club executive also declined to answer a series of written questions about CEWS funds and the budget surplus or specify how many club employees have received aid through the wage subsidy.
The financial statements show Mansfield paid $1,095,674 in salaries and benefits in the 2020-21 fiscal year, down $430,000 from the prior year.
In a video posted late last month, Salhany took members through the changes they can expect when this year’s season kicks off on December 18. Among the upgrades: a new ski-patrol hut, new member washrooms, a new beginners’ area with a magic carpet lift, several new snow cannons and four giant yellow Kaeser compressors to provide “efficient and efficient forced air.” constant” to the system.
However, not all Mansfield members are happy with the use of the money.
One, who asked not to be identified for fear of repercussions, told CBC News that several people within the club felt the accumulated surplus and its use violated the spirit of the CEWS program.
“That’s the moral element,” the MP said. “It makes no sense. It has nothing to do with COVID.
“It helped privileged members of a private ski club avoid capital expenditures that they would otherwise have had to pay directly.”
CEWS paid out $97.84 billion
Annual dues, fees, and program costs at Mansfield typically range between $8,000 and $10,000 for a family of four. In return, members get access to 17 uncrowded runs with full snow coverage and a ski and race school that has over 100 professionals and instructors.
Among the touted perks are a dining room and bar in the chalet, a yoga studio, a Starbucks outlet, and charging stations for Teslas and other electric cars. Members also enjoy reciprocal privileges at several other ski resorts, golf courses and private clubs in Ontario, including the Royal Canadian Yacht Club of Toronto, the Boulevard Club and the Badminton and Racquet Club.
According to federal CEWS websiteOttawa has contributed $97.84 billion through the program, and 456,900 different businesses and organizations have received the grant. More than 137,000 of those payments exceeded $100,000.
National Revenue Minister Diane Lebouthillier, who oversees the CEWS program, declined an interview request. But his department, the Canada Revenue Agency, said it had so far completed 700 audits of CEWS recipients and had another 2,500 “in progress”.
In a written statement, the CRA said it was reviewing whether companies “took additional steps to artificially reduce or defer revenue to meet CEWS requirements,” but it would be “premature” to provide. information on how many beneficiaries broke the rules or how much money was recovered.
“The CRA is closely monitoring all audit efforts and intends to report the results to Parliament as requested,” the statement said.
The priority was to disburse the money quickly
Mansfield is not the only private or public leisure club 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 there are no publicly available details on how much these organizations received, what they did with taxpayers’ money or whether they actually needed the aid.
The federal government has prioritized sending money quickly over spending controls and reviews, said Miles Corak, an Ottawa-based economist who has studied the CEWS program.
By the time the funds arrived in spring 2020, many of the most vulnerable businesses and businesses had already laid off staff and closed due to COVID-19 lockdowns, he said.
“There has been a great deal of waste in the funds that have been spent, and I suspect that many public finance economists will see that this program is probably the greatest waste of public funds in post-war Canadian history” , said Corak, who is also a professor of economics at the City University of New York.
“It was a leaky bucket.”
Mansfield’s example seems to characterize “everything that was wrong” with the CEWS program, Corak said.
“The money went to a company that didn’t really need the money,” he said. “The Canadian taxpayer must therefore ask why the federal government is subsidizing an exclusive ski resort.
“A snow machine compressor is not an employee.”
Jonathon Gatehouse can be contacted by email at [email protected], or through CBC’s digitally encrypted Securedrop system at https://www.cbc.ca/securedrop/.