A North Vancouver hair salon took cut of charity funds, federal government revokes charitable status

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A North Vancouver hair salon set up to give a cut to a charity benefiting those with mental illness actually received nearly $100,000 from the charity instead, according to documents obtained by CTV News.

Joy Hair Salon turned into a scandal that prompted the federal government to revoke the Canadian Bipolar Foundation’s charitable status and was one factor that ended the career of a respected North Shore psychiatrist.

Letters from the Canada Revenue Agency detail a series of payments from the charity to the Lonsdale Quay salon, whose then-owner told media outlets when it began in 2013 that it was a social enterprise.

“One hundred per cent of the profits go to the mental health community,” said Terri Howie, who ran the salon at the time and was a patient of the charity’s president, Dr. Paul Termansen.

But behind the scenes, business wasn’t good. The CRA letter says Joy Hair Salon had run through an initial $70,000 start-up fund provided by the Canadian Bipolar Foundation “for start-up, development, and leased space costs,”  with the intention it would generate money for the organization.

“Within a year after opening, the salon faced bankruptcy and in 2014, the Organization (Canadian Bipolar Foundation) provided an additional $25,000 grant to the salon to provide closure of all responsibilities of the Organization, even though the Organization was not legally responsible for the salon,” the letter says.

Howie was also driving the charity’s Smart Car, according to the letter.

All of those were gifts that charities aren’t allowed to make, said the CRA, which revoked the charity’s status in June.

The charity’s closure meant a loss of services for people who are newly diagnosed with bipolar disorder, said Chris Dorais, who was on the charity’s board until this spring.

Read the full story over CTV News Vancouver.

This story was summarized by Canadian Fraud News Inc.