Laurentian University may survive its financial challenges, insolvency trustee says
This is the first time an Ontario university or college has ever filed for creditor protection, officials say
A licenced insolvency trustee in Sudbury says Laurentian University has a good chance at successfully restructuring and surviving its financial challenges.
The university announced Monday it's filed for creditor protection.
Nathan Sugeng says, more often than not, companies that go through this process are able to restructure, and continue on. He says it shouldn't be confused with bankruptcy proceedings.
"It is designed to help the company improve it's financial condition and continue. So absolutely the first thing I would say is the university wants to continue operations, and the process is designed for that purpose. It's not to end things and just stop things from continuing."
According to court documents filed by the university, it would not have been able to continue operations through to the end of the month — and make payroll — without court intervention. The documents indicate the university plans to reduce costs by paring down the number of programs it offers and trimming faculty positions.
University officials have declined CBC's requests for interviews.
Meanwhile, a sessional professor at the University of Sudbury (one of Laurentian's three federated universities) says he was shocked by the news.
Christopher Duncanson-Hales questions why the union wasn't involved in conversations sooner about the need to cut positions.
"And the union, I know for a fact, has been talking and we've all been asking questions about the university finances," he said.
"That's where a lot of the shock was. I can't even fathom it, to be honest with you, how it got to that point."
The university's faculty association, along with the Ontario Confederation of University Faculty Associations, put out a statement yesterday, saying the university has had a secretive approach to making important financial decisions, and has not properly consulted.
They also called on the province to provide more funding to ensure the university's long-term success.
Malek Abou-Rabia, a second year student and a vice president with the Students General Association, said the situation is worrying.
"It's a brand new announcement and it's a lot of information to take in all at once and we don't quite know the repercussions and the implication it has for the entire Laurentian community," he said.
The university estimates it will take about three months to develop the new framework for the university.
"It will not affect the day-to-day operation of the University or the student experience that defines Laurentian," stated Robert Haché, the university's president and vice-chancellor in an online letter.
"All decisions that are made will continue to be made in the ordinary course."
Ontario's ministry of colleges and universities says this is the first time a university or college in the province has ever filed for creditor protection.
Haché detailed in his statement that a number of factors have played a role in its financial challenges — including recurring deficits, changing demographics in northern Ontario, closing the school's Barrie campus in 2019, and a tuition reduction and freeze that same year. And more recently, there have been pandemic-related costs and lost tuition revenue.
With files from Sarah MacMillan