Laurentian University should have been recruiting more international students, consultant says

A consultant specializing in higher education says Laurentian University dropped the ball when it came to attracting international students — among other things.

Consultant sees '$11M hole' that Laurentian University is not accounting for

No one from Laurentian University has been willing to talk with CBC News about its current financial state. (Yvon Theriault/Radio-Canada)

A consultant specializing in higher education says Laurentian University dropped the ball when it came to attracting international students.

Alex Usher, the president of Higher Education Strategy Associates in Toronto, has been blogging about the dire financial situation of the university, after the school filed for creditor protection this week.

Usher says if they'd increased international enrolment at the same rate as other universities, they wouldn't be in such a terrible situation.

"Because you can grow your way out of some of these problems, if you are serious about international students, which Laurentian has not been, to date, I would argue. Or not very serious anyway," he said.

"It would have [brought in] an extra $7.5 million in 2018-2019, and that would have wiped out the deficit several times over. They're leaning toward a helplessness on enrolment, which I don't think is borne out by the facts, either Laurentian or elsewhere."

While the school does recruit international students, they're nowhere near the Ontario average, Usher notes.

"And that's a lot of money, because they charge those students so much more — $20,000 [per school year] at minimum."

Usher has been looking through the financial documents, and he says there's an "$11 million hole" that is not being accounted for.

"I just don't understand where it is. I mean, there may be a perfectly useful explanation of it, but they don't actually go through the finances in detail enough to tell you what that issue is.

No one from Laurentian University has been made available to CBC News for comment on the situation.

'They've been spending that money'

Usher also points to an issue in the financial information that shows the University wasn't separating out its restricted funds. That means money allotted for a specific purpose such as research, was spent on other things — and that's something that needs to be examined more closely, he said.

"You've got money that comes in every year for research. And if that money is not expended in one year, it goes to the next year. They've been spending that money. It's not going to the researchers," Usher said.

"So there's a huge issue now with the grant counsels about whether or not that money has, in effect, been misappropriated, that it was diverted from its intended use. If you read the filing, what it's saying is that the medical benefits plan for retirees, there is no money to cover it. The supplemental retirement plan — same thing. Money for scholarships — that's not there."

Alex Usher is the President of Higher Education Strategy Associates, a Toronto-based consulting firm. (Martin Trainor/CBC)

He says they were using the funds for their operating budget.

"You can do that as long as you've got a line of credit. Typically Laurentian would take $15-20 million, get themselves from February to September. And what seems to have been the key thing that kicked everything off this time is that Desjardins said 'no'."

Usher says there are big questions for the school's accounting firm, KPMG, to answer, as well as the university board's financial committee.

"The idea that you put all this money in one bank account, that you don't separate out the bank accounts for different purpose ... serious universities don't do that."

Government policies 'have not helped'

Going forward, Laurentian University says it plans to reduce the number of programs its offering.

"Which implicitly means, I think, that they want to get rid of a few profs. And declaring financial exigency allows you to do that."

Usher says Laurentian's average program size at the undergraduate level is about 40-50 students per program in all years. And at the graduate level, it's about 15-20 students per program.

"And those numbers are not actually sustainable, particularly when you have a faculty which is paid as high as Laurentian. The median salary paid to Laurentian professors is $20,000 higher than it is at McGill."

The province has stated that it will be looking into making sure this kind of situation doesn't happen anywhere else, and Laurentian argues that government policies have not helped with its financial situation.

Usher points out that Ontario has the lowest per capita funding "by a country mile" in Canada for post-secondary education.

"These kinds of financial strains on universities, the kinds of strains that have made them now system-wide, almost as reliant on international students as they are on Queen's Park, maybe we've come to the end of that strategy."

Trust and collaboration?

The news out of Laurentian — the first post-secondary institution in Ontario to become insolvent — has had a huge impact on many people, Usher says.

"People come to me a lot when these kinds of crises happen and the amount of shock and anger and grief and sadness that I'm seeing from Laurentian profs, people who I've known for a number of years, is immense," he said. "They're scared." 

And the silence that continues from the northern school is not helping.

"I don't understand how you can run a strategy, which involves saying 'we're bankrupt' and not be providing more guidance and support and solidarity to your own staff ... I just think it's crazy. A university functions on trust and collaboration, and you kill that trust and collaboration by being silent while all this grief and anger is going around," he said.

"Even if the university survives financially, I'm not sure the university community survives if you don't get better at communication."

With files from Markus Schwabe


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