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Capital Pride declares bankruptcy

Board says financial situation is beyond its ability to repair

After 29 years of running, Capital Pride declared bankruptcy on Oct 20.

Capital Pride’s future is uncertain after a statement was released by the board on Oct 20 announcing that it is declaring bankruptcy. “It is with extreme sadness and regret that Capital Pride must inform its membership, stakeholders and community, that after 29 years of operation, the Board of Directors has found itself in a financial situation beyond its ability to alter or repair and is now forced to declare bankruptcy,” the statement reads.

Capital Pride chair Jodie McNamara declined to comment on the announcement. The board says that what will now be their final annual general meeting (AGM) will take place as scheduled and that an email will be sent to stakeholders with the agenda for the meeting. Capital Pride secretary Rob Swartz indicates in the statement that much of the meeting’s focus will be on the future of Pride in Ottawa.

“The Board of Directors has been working very hard for the last two months to find a viable solution to enable Capital Pride to continue its operations for the sake of the Pride movement, the LGBTQ community and Ottawa residents, but with no success. Operations are now clearly unsustainable,” the statement reads.

The board’s financial problems first came to light in August following the 2014 festival, which saw record numbers of attendees. Multiple vendors came forward alleging that their payment cheques had bounced. The board released a statement on Aug 29 saying that it was investigating “accounting irregularities” and that a police investigation could be pending. In the weeks following the announcement, vendors alleged that the board cancelled meetings and stopped communicating with them.

In a Sept 11 interview with Xtra, McNamara said that a preliminary review of the organization’s finances found a shortfall of bar revenue that amounted to “tens of thousands of dollars.” She also said that Capital Pride had received invoices for services that were not approved, alleging that production company House of SAS exceeded the agreed-upon budget by at least $23,000 — when the discrepancy was discovered, the board put a stop to all financial activity and launched an investigation.

House of SAS president S├ębastien Provost produced the festival’s stage entertainment as part of a sponsorship agreement with Capital Pride. He did not charge the organization for his own services but did hire entertainers, including RuPaul’s Drag Race: Battle of the Seasons. He also purchased $23,700 worth of liquor for the festival’s bar. A reimbursement cheque for that amount initially bounced, but Provost has since been reimbursed.

Provost, who had not responded to Xtra’s request for comment as of Oct 20, announced his intent to sue the Capital Pride board for libel on Oct 15 after they released a statement Sept 9 alleging that he had “significantly exceeded the agreed-upon budget” for the event. Provost requested a retraction of the statements made about him, which he told Xtra on Oct 15 had been damaging to his career and reputation. Capital Pride chair Jodie McNamara indicated at the time that the board did not intend to issue a retraction, saying all the statements made were true and could be substantiated.

Provost, along with contractor Guillaume Tasse, filed a fraud complaint against Capital Pride after the cheques started bouncing. The Ottawa Police Service’s Chuck Benoit said on Oct 20 that he couldn’t comment on whether an investigation is ongoing, adding that the filing of bankruptcy is a civil and not a police matter.

Tasse provided festival site infrastructure, including tables, chairs and bathroom facilities, as well as sub-contracting the stage and lighting equipment to Wall Sound and Lighting. He was the first to come forward with an allegation that cheques had bounced. Tasse says that he is owed $42,000 by the organization. Reached on Oct 20 for comment, he said that he has still received no payment from Capital Pride and that the resulting financial hit has had an impact on his business.

Tasse says he finds it troubling that, although the festival experienced a record year with perfect weather, the board nevertheless experienced such severe financial problems. “There’s something not right somewhere,” he says. He says he is a supporter of Pride and would consider working with Capital Pride again but only if the festival undergoes a management change.

Ottawa Mayor Jim Watson released a statement to Xtra through his press secretary, Brook Simpson, in which he says he is “disappointed” to hear of the filing but is not yet aware of the full details. “For many years, the festival and parade have been important events for Ottawa’s LGBTQ community as well as significant tourist attractions for our city,” the statement reads. “[Mayor Watson’s] hope is that the businesses affected by today’s news can be paid back what they are owed and that a Pride festival can continue to take place in Ottawa going forward.”