An external audit of three federal grants to Pride Toronto leaves more questions unanswered

An independent review of the way Pride Toronto handled three federal government grants totalling almost $2 million confirms the organization failed to meet many of the conditions of the grants, including providing government funders with required interim and final reports and accurately tracking how the money was spent. 

The report from KPMG Canada, available on the Pride Toronto website, states that the organization failed to deliver complete and accurate cash flow statements and was unable to produce project plans, contracts and receipts documenting expenses and employee work.

The report contains a number of recommendations for how Pride Toronto can improve, including establishing document retention processes and unique record-keeping for grants.

“I entered the house and realized it was in ruins, that the house needed not just repairs, but a complete demolishing and rebuilding.”

Pride executive director Sherwin Modeste—who took over the position in November 2020, after the alleged improprieties—says Pride Toronto is completely revamping its grant process and will adopt all of KPMG’s recommendations, including putting limits on how much grant money can be used for overhead and administrative expenses.

“We’re putting a system in place for an approval process,” he says in an interview with Xtra. “We now have a grant manager. And any grant proposal goes through the senior leadership team, and then goes through the board. It’ll be greenlit or redlit based on their feedback. The power does not lie with just one or two individuals.

“A summary of the grants we apply for will be posted on our website,” Modeste says. “And the reports we submit for the grants will be posted on our website.”

He says he recognizes the controversy will make it more difficult to obtain funding in the future.

“I entered the house and realized it was in ruins, that the house needed not just repairs, but a complete demolishing and rebuilding,” he says. “There is going to be a rebuilding of the trust. But as executive director, I’m going to have to work twice as hard to obtain grants and to rebuild trust with our funders and our community.”

The KPMG report did not, however, address the most serious accusations against one of the world’s biggest LGBTQ2S+ festivals: that the organization deliberately misled the government, falsified letters of support from queer and Indigenous organizations and exploited LGBTQ+ and Two-Spirit Indigenous artists.

In February, Xtra reported on accusations made by a history professor about what Pride Toronto had done with the federal money. In late 2018 and early 2019, Pride Toronto received three grants from the federal government totalling $1.85 million: one for $1 million from Public Safety Canada (PSC); and two, for $250,000 and for $600,000, respectively, from Canadian Heritage (PCH). Among the aims of the grants were working with police departments, celebrating the 50th anniversary of the so-called decriminalization of homosexuality in 1969 and promoting queer Indigenous artists.

As part of the grant application processes, Pride Toronto sent the government departments letters offering support and partnership supposedly signed by organizations including the Assembly of First Nations, the Art Gallery of Ontario and Toronto LGBTQ2S+ community centre, The 519. Each of those organizations confirmed to Xtra that they did not send the letters.

Pride Toronto also claimed to have signed contracts with acclaimed Indigenous artists Kent Monkman and Jason Baerg to produce work commemorating the anniversary of the decriminalization of homosexuality. Monkman told Xtra he would never have agreed to celebrate the anniversary.

“I was not shown the grant application materials Pride Toronto prepared to obtain funding nor was I informed that Pride Toronto was branding the project as commemorating 50 years of the Criminal Law Amendment Act, knowing very well that queer sex and gender nonconformity continued to be criminalized and persecuted by police well after 1969,” Monkman wrote to Xtra.

Monkman’s view is shared by many community members. Since 1969, there have been numerous instances of police targeting and harassing queer and trans people and businesses, including raids on bathhouses in Montreal and Toronto, resulting in mass arrests; criminal convictions against the staff of a gay Toronto bookstore; and the seizure of LGBTQ2S+ books by border officials, among other incidents. 

The accusations against Pride Toronto were originally brought to light by York University history professor Tom Hooper who, in January, published hundreds of documents that he obtained through freedom of information requests.

In an emailed reply to Xtra, Modeste says that KPMG was not asked to review the letters of support because Pride Toronto has publicly acknowledged falsifying them.

“We have reached out personally and formally in writing to a number of individuals and organizations who Pride Toronto wrongly, and without their permission or approval, made false representations claiming their support for Pride Toronto’s grant applications,” states Pride’s official reply to the audit, posted on its website on March 18. “While the review did not assess individual cases of misrepresentation, the recommendations provided will ensure that such actions are never repeated in the future.”

Pride hasn’t listed all of the organizations whose support it falsely claimed. In an interview with Xtra, Hooper says that he has recently obtained further falsified letters of support regarding the $600,000 PCH grant from the Peel and Toronto school boards from February, 2019. He has received replies from both boards denying that they wrote the letters, which he shared with Xtra.

Modeste did not comment directly on the letters from the school boards. In an email to Xtra, he wrote, “These organizations and individuals did nothing wrong and we do not believe it would be appropriate for Pride Toronto to risk re-victimizing them by sharing their names publicly.”

“While the review did not assess individual cases of misrepresentation, the recommendations provided will ensure that such actions are never repeated in the future.”

Though not part of the KPMG review, Pride Toronto acknowledged its mistreatment of Indigenous artists in its official reply to the report. 

“Pride Toronto has offered our apologies to the Indigenous individuals and 2-Spirit communities we have harmed,” states Pride’s reply. “We have requested the opportunity to consult with them on what might constitute an appropriate and acceptable financial resolution for the acts of settler colonialism our organization inflicted upon them.”

Despite Pride Toronto’s admission of wrongdoing, Hooper says the organization needs to be more specific in its response by itemizing what it did wrong with the grants and listing which groups and individuals were affected. He says it should not be up to others to investigate.

“Why is it our community is learning from a historian doing access to information requests?” says Hooper in an interview with Xtra. “Why is Pride not coming forward?”

Hooper says Pride Toronto also needs to come clean about whether it pushed to overturn a ban on police participation in the Toronto Pride parade in a bid to obtain not only the three federal grants, but provincial and municipal grants as well. KPMG was not asked to review questions regarding this matter.

Pride Toronto’s leadership tried to include police participation in its parade as a way to entice various levels of government into giving it grants. This, despite a 2016 protest by Black Lives Matter over police participation in the parade and frustration over the botched investigation into a serial killer who targeted local gay men, many of them BIPOC men. Pride banned uniformed police from participating in the city’s Pride parade in 2017 and 2018. Later, in 2018—after the grant applications had been sent but before the grants were approved by the federal government—Pride Toronto, without consulting its members, decided to extend an invitation to police to participate in the 2019 parade. They explained the reversal in a document sent to members just before the January 2019 annual general meeting.

“The political climate changed, and Pride Toronto’s position on the participation of the Toronto Police had to come under reconsideration, as it became clear that while our funding arrangements in the past could withstand our policy on police participation, our future funding could not,” the document read.

“Why is it our community is learning from a historian doing access to information requests? Why is Pride not coming forward?”

Nevertheless, Pride members voted 163-161 to continue not to allow police participation, and police did not march in the 2019 parade. That decision, Modeste says, remains in force today, and will remain in place unless members vote to allow police back into the parade.

It remains unclear exactly how much the ban on police participation—and Pride’s overture to the police—affected the federal government’s decisions around the grants.

Hooper points to additional documents he obtained through freedom of information requests from the City of Toronto showing communication between Pride Toronto and the office of Mayor John Tory in late 2017 and early 2018 about allowing police participation in the Pride parade as part of obtaining a grant from the provincial Trillium Foundation. KPMG was not asked to investigate any provincial or municipal grants.

Modeste says that communication around the Trillium grant does not need to be investigated because the application was unsuccessful.

“The grants we received from the city and the province were very specific to the festival,” he says. “I was not able to identify any red flags from the city or province. That grant from Trillium was not received. … Whether or not it was anything tied to the police, I cannot speak to that.”

But Modeste says Pride has learned from the problems with the grants and will focus less on money going forward. He says that Pride needs to do a much better job of deciding what it stands for.

“We must be able to identify our values, the goals, the mission,” he says. “We should not be applying for grants just for the sake of wanting money. Can we truly say we’re celebrating the decriminalization of homosexuality? If we as an organization had done our research, celebrating 50 years [of decriminalization] would not have been in our best interests.”

The KPMG report, however, focuses on the processes that were in place at the time of the federal grants. It emphasizes that it is not an official audit or assurance report. It also acknowledges its limitations, stating that its investigators involved only a “sampling of transactions.” The report also acknowledges that the company did not interview everybody “historically involved” with the grants and that they “relied on representations made by interviewees.”

Specifically, for the $600,000 grant, which included the promotion of Two-Spirit artists, KPMG could only find “documentation that supported two of the 12 activities reported in the sampled activity reports. For the remaining 10, Pride Toronto was unable to provide documentation demonstrating that the activities reported had occurred.”

For the $1-million grant, KPMG reported that Pride could only provide documentation supporting seven of nine reported activities. And for the $250,000 grant, there was only documentation for two out of 10 reported activities. “Pride Toronto also reported an activity that did not appear to match any Decriminalization Grant deliverables.”

In its official public reply, Pride provides a list of “achieved deliverables” for each of the grants. For the $600,000 grant, that list includes the participation and support of 39 Indigenous artists, and “leadership building that focused on ‘supporting three emerging leaders within the 2-Spirit community.’”

Modeste told Xtra that he could not provide the names of those “three emerging leaders” without checking with them first. When asked to put Xtra in contact with the leaders. Modeste did not respond by press time.

For the $1-million grant from Public Safety, Pride listed accomplishments including “research into structural barriers, gaps, and challenges around various Canadian 2SLGBTQ+ data landscapes; a model for a community catalyst program; overview on safer spaces and creating safer 2SLGBTQ+ nightlife spaces; and research paper: Benefits for All—The Central Role of Queer and DIY Spaces in Building Resilient Societies.”

Modeste says he could not provide access to any of that material at the moment.

“A lot of our research material was done, but not published,” he says. “We do have it, but it’s the property of Pride Toronto. We’re not just going to hand out work like that. There’s been no thought given to publishing it, but at some point this information could be used. We’d be more than happy to share it to enhance and build, to help the community as a whole.”

Pride Toronto will be adopting all of KPMG’s recommendations and ensuring such problems with grants will not happen again, says Modeste.

Hooper, though, does not believe that will be enough to rebuild trust with the queer community.

“Pride is not handling it in a way to give confidence to the community,” he says. “All the ill-will that exists out there towards Pride will continue to grow. I don’t know if it can be salvaged.”