Politicians point fingers over Laurentian University insolvency

Sudbury MP Paul Lefebvre says more could have been done to help Laurentian University before it declared itself financially insolvent, but a lack of communication stymied the process.

Province says federal government only asked to meet after Laurentian announced layoffs, program cuts

Timmins-James Bay New Democrat MP Charlie Angus is asking why Mélanie Joly, minister of economic development and official languages, was not informed of the nature of the crisis at Laurentian University. (Parliament of Canada)

Sudbury MP Paul Lefebvre says more could have been done to help Laurentian University before it declared itself financially insolvent, but a lack of communication stymied the process.

Laurentian's restructuring under the insolvency process allows it to stay operating while dealing with its financial situation, but dozens of programs and staff have been cut.

Lefebvre said that when he met with Laurentian officials in December 2020, there was no mention of cutting 100 professors and another 80 staff. The university announced it had entered insolvency proceedings on Feb. 1.

The mass layoffs and program cuts took place on April 12.

"Any time that I could help, I am always there. I think that's why they reached out to me [in December]," said Lefebvre.

"So that's why I took this very seriously and brought it up as quickly as I could."

He said he reached out to Mélanie Joly, minister of economic development and official languages, for help in January.

While testifying before the standing committee on official languages Wednesday, Joly said she asked the provincial government to discuss the future of Laurentian University and French-language post-secondary education.

"We initiated a discussion with the province of Ontario, since they are ultimately responsible for the good management of post-secondary institutions in the territory, to offer our assistance," she told the committee. "We haven't had any feedback." 

Joly said during the standing committee that she was aware Laurentian had suffered losses due to COVID-19 as colleges and universities across the province had as well.

But the province says it did not receive any formal communication from Joly's office or the federal government with respect to helping stave off an impending financial crisis at Laurentian University in January.

Sudbury MP Paul Lefebvre says he had no knowledge of the severity of Laurentian University's financial problems until after it had made massive program cuts and layoffs. (CBC News)

A spokesperson with the Ministry of Colleges and Universities said the first formal communication it received was on April 13, after the prime minister had stated Joly had been in contact with her provincial counterpart.

"Staff representatives first met on April 14. Ministry officials have met three times on this matter in 2021, but all were after Laurentian U entered CCAA on Feb. 1." The legislation bars politicians from being a party to the restructuring, which is a judicial process.

Timmins-James Bay MP Charlie Angus said the lack of clarity around the issue is vexing.

"I was really shocked that Minister Joly said she was not made aware of the situation and she would have stepped in because the feds can put a fair amount of money on the table, even if it was bridge financing. Laurentian needed breathing room so that they could recalibrate their loans," he said.

"The Laurentian crisis has been an economic, cultural and educational catastrophe for Northern Ontario. It boggles the mind that Minister Joly was kept in the dark. Why?"

He said university president Robert Haché testified he met several times with the federal and provincial government to discuss the university's financial crisis, and the lobbying registry shows those meetings were with Sudbury-area MPs Lefebvre and Marc Serré (Nickel Belt).

"It is hard to imagine that the university president would have withheld the drastic nature of the choice he was facing from the local MPs. If that is the case, why didn't they bring in the minister to help find a solution?"

But Lefebvre reaffirms he was never told about the severity of Laurentian's financial problems.

"Neither the seriousness of the financial situation nor the possibility of appealing to the Companies' Creditors Arrangement Act was raised by Laurentian University or the province to the attention of our office prior to the announcement of February 1, 2021," wrote Lefebvre in a news release.

It is a very frustrating turn of events of how things unfolded- Paul Lefebvre, Sudbury MP

In hindsight, he said, he would have knocked a lot harder on the province's door — "and I think that will always be with me."

He noted universities are created by the province, by law, and he has to respect the jurisdiction it holds.

"People think that the federal government has to step in and provide a loan or bridge funding ... and then what? The plan has to come from the province," he said.

"We can't give bridge financing if any institution has problems ... it is a very frustrating turn of events of how things unfolded."

With files from Kate Rutherford.


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