Note: This story has been updated following interviews with Tara Main and Terri Howie.
A North Vancouver hair salon set up in 2013 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.
The relationship between Joy Hair Salon and the charity 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.
The scale of the payments are a shock to the salon’s new owner, who said she purchased the business in late 2014, renamed it, and worked hard to turn it around.
“Sheer disgust. This money had come from a charity,” said Tara Main, who runs the new business in Lonsdale Quay, Joy Hair Studio.
She told CTV News she cut ties with the Canadian Bipolar Foundation shortly after she took control, and the new company didn’t benefit from any of the payments.
Letters from the Canada Revenue Agency detail a series of payments from the charity to Joy Hair Salon, whose then-owner, Terry Howie 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 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.
A loan agreement from 2013 shows that Dr.Termansen also personally financed the venture through a loan of $45,000.
Howie sued Dr. Termansen, alleging his reaction to the loss of money was “highly injurious of Terri Howie’s mental health…
“Dr. Termansen has accused Terri Howie of misappropriation of funds and fraud, however, none of the accusations have been proven and access to the business accounts for review have been denied,” according to Howie’s lawsuit.
Documents indicate Howie’s lawsuit was dismissed.
Howie also complained to the regulatory body for doctors, the College of Physicians and Surgeons of B.C.
The College and Dr. Termansen agreed in 2015 that he would resign as a psychiatrist, pay $14,000, and admit to hugging a patient inappropriately and going into an inappropriate business relationship with another patient.
Dr. Termansen is now in his mid-eighties, and his health is deteriorating rapidly, said a family member.
“It has cost him everything he has and more,” the family member said. “He is up to his neck in debts. He has no way of repaying it.
“The whole thing with this woman and the salon was a ludicrous misadventure. It cost him tens of thousands of dollars. And that’s why he’s totally broke.”
The family member said the salon incident shouldn’t detract from his legacy for decades of treating patients in the Lower Mainland.
Howie told CTV News that she was only involved for three months, and said she complained to the CRA herself about problem spending at the charity.
“It was a huge mess,” she said.
She said she feels bad for the new owner, who has to overcome that history. “I’m sorry she got in the middle of all this,” she said.
Main, the owner of the new business, Joy Hair Studio, told CTV News that despite all the drama of the old business, it was important to her to keep philanthropic intent as a priority for her business. According to the salon’s website, partial proceeds from all hair services benefit those living with or affected by mental illness and various other community initiatives and charities.
She said she’s given at least $10,000 to charities including the Lions Gate Hospital Foundation.
“We continue to support the community. We’ve turned it around from a tragic start to a happy story,” she said.
