A hasty stock sale cost the Canada Race Relations Foundation more than $3.7 million, records show. The foundation disclosed that panicked directors made a decision to dump shares at the outbreak of the pandemic..“On March 13, 2020 the Foundation’s board of directors, in order to address the uncertain risk to the value of the Foundation’s equity financial assets posed by the COVID-19 crisis and to preserve the value of the Foundation’s endowment fund, decided to liquidate,” staff wrote in an Inquiry Of Ministry tabled in the House of Commons..According to Blacklock's Reporter, directors sold everything they could, wrote staff. Directors opted to “retain the proceeds in cash and cash equivalents which caused the investment loss.”.The losses totaled $3,785,525. The shares were sold 48 hours after the World Health Organization declared a global pandemic..The day the Foundation sold out the Toronto Stock Exchange Composite Index closed at 13,716. It closed yesterday at 20,713, a gain of 51%.Losses represented 16% of the Foundation’s original $24 million endowment. Parliament approved the grant in 1990 with passage of the Canadian Race Relations Foundation Act. The money was drawn from proceeds of a settlement with the National Association of Japanese Canadians over the 1942 internment of citizens..“The COVID-19 outbreak has, and will continue to have, a negative impact on our programs and operations,” Foundation staff wrote in their last Annual Report to Parliament. “The emergence of the COVID-19 worldwide pandemic concerns us very deeply.”.The stock sale followed successive ups and downs with the Foundation's investment strategy. “We can’t pay the going rate for people who are knowledgeable on the inside workings of investments that will benefit the Foundation,” Rubin Friedman, then-operating officer, testified at earlier hearings of the Commons public accounts committee..“We can only pay a per diem of $325,” said Friedman, who pleaded with MPs for help. “If anyone can help us to find a qualified person who would be willing to serve on the Canadian Race Relations board with expertise in finance, please forward the name,” said Friedman..“What risk can you live with?” asked Friedman. “Can you quickly recoup losses or do you have to wait for the market to come back, which could take years?”.The original $24 million endowment after 20 years of investment was worth $25,802,600, according to the Annual Report. The Foundation took a $5.1 million loss in the 2008 stock panic, prompting directors to cut the payroll 40% and reduce the size of the board from 20 to 12 members.
