Listen to this article
Estimated 5 minutes
The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.
After being replaced as chair of Hamilton’s Ottawa Street Business Improvement Area (BIA) during an emergency meeting two weeks ago, Michael Carruth says he feels “sick that [he] broke the trust” of his fellow small-business owners when he used about $16,000 of the organization’s funds “to keep [his] head above water personally.”
The BIA, which is funded by local businesses as well as grants, informed its members of financial irregularities at a meeting held April 29. Carruth was removed from his role “due to the misuse of BIA funds” and Thomas Lute, the BIA’s former vice-chair, was chosen as the new chair that day, according to a statement on the BIA website.
Hamilton police and the city’s auditor general are currently investigating, spokespeople from the police and city told CBC Hamilton.
Lute, who owns bars The Argyle and Malarky, told CBC Hamilton the BIA’s accountant recently alerted him to “discrepancies” in the organization’s finances. He said the rest of the board worked quickly to “safeguard” its accounts and revoke Carruth’s access to the BIA building. They filed a police report the day after the emergency meeting, he said.
“We’ve had full transparency towards all our members on the street,” he told CBC Hamilton. “That was our main focus and then it’s handed over to the authorities, and now we follow their lead.”
Carruth says he took money out of ‘desperation and poor decisions’
Lute said he didn’t know over what period the money was withdrawn, and declined to say how much was missing. Carruth said he believes it’s about $16,300, and that he has been struggling personally, including with health challenges that affected his business, Down the Street Food Co., which closed in November.
“It wasn’t a lump-sum kind of thing,” Carruth wrote in an email to CBC Hamilton on Thursday. “I used funds over a period of time to keep my head above water personally. These funds were always meant to be returned.
“There were no trips, drugs, gambling, anything like that at all. It was simply desperation and poor decisions. I went into survival mode. I just handled it poorly,” he said.
Carruth, 63, said he closed his business due to nerve damage in his back that makes him feel numb from the waist down when he stands for too long. He says a GoFundMe he recently started and then cancelled was intended to help him start a catering company, which would be easier for him to run given his medical issues.
In the meantime, he says he is in a “battle” with his former business landlord to get into the building so he can sell his restaurant equipment and pay back the BIA.
“I am fully aware that my actions destroyed something I’ve really enjoyed doing for so many many years,” he said, about his longtime involvement with the BIA. “I’m not proud.”
Missing money is more than 8 per cent of BIA’s budget
BIAs are designated areas within which all commercial and industrial properties pay a levy collected through their property taxes. The Ottawa Street BIA runs along Ottawa Street North between Main and Barton streets. The levy goes 100 per cent to the BIAs, who decide internally how the money is spent, explained city spokesperson James Berry.
“BIA initiatives are focused on enhancing their areas and attracting visitors and investment, typically through beautification, placemaking, events and marketing activities,” he said.
Lute said that on Ottawa Street North, those activities include food truck festival Sew Hungry, an annual sidewalk sale, Halloween activities for children, and funds also for street beautification. He said he doesn’t think those activities will be affected by the loss of the missing funds.
The BIA’s approved budget for 2026 was $197,236, said Berry. If Carruth’s estimate of the missing funds is correct, they add up to more than 8 per cent of the organization’s annual budget.
Ward 3 Coun. Nrinder Nann, whose ward includes Ottawa Street North, called the news that there had been misuse of funds “truly concerning,” saying that money was intended to promote the success of many local businesses.
“Small businesses are the backbone of our commercial corridors,” she said in an email to CBC Hamilton. “Any form of theft, including a coordinated and ongoing one, of valuable resources pooled to support BIA success would have a tremendous and negative impact.”
The Ottawa Street BIA has promised it will share additional information “when appropriate.” Its next regular board meeting is April 21.