Legislation needed to spare others from Laurentian's fate: Canadian Association of University Teachers

Canada needs new legislation to save universities from the same fate as Laurentian University, argues the Canadian Association of University Teachers.

Laurentian University filed for creditor protection in early 2021, cut 195 jobs

Laurentian University became the first publicly funded post-secondary institution in Canada to file for insolvency under the Companies' Creditors Arrangement Act. (Yvon Theriault/Radio-Canada)

Canada needs new legislation to save universities from the same fate as Laurentian University, argues the Canadian Association of University Teachers.

In February 2021, the Sudbury, Ont., university filed for insolvency under the Companies' Creditors Arrangement Act (CCAA), legislation designed for commercial enterprises.

That decision ultimately cost 195 people their jobs after Laurentian cut 76 programs. It also affected the career plans of an estimated 932 students, according to Ontario Auditor General Bonnie Lysyk.

In a report on Laurentian, which Lysyk submitted to the Ontario Legislature on Nov. 17, she argued the university could have avoided the CCAA to dig itself out of its financial troubles by working on a plan with the province and its staff and faculty unions.

"There is a strong argument that CCAA is an inappropriate, and perhaps damaging, remedy for public entities," Lysyk wrote.

I think everybody was pretty horrified by what happened at Laurentian.— Charlie Angus, NDP MP for Timmins-James Bay

"Use of the federal law allowed Laurentian to bypass provisions in its collective labour agreements, clear a backlog of long-standing union grievances and operate under even less transparency. The CCAA path also led to more than $30 million in fees for private sector financial advisors and lawyers as of September 2022."

David Robinson, the executive director with the Canadian Association of University Teachers (CAUT), is calling on the federal government to amend the CCAA, to ensure it can no longer be applied to publicly funded universities.

This follows a report tabled by the association, which arrived at the same conclusions as the auditor general — that the CCAA should never have been used for a public university.

Ontario Auditor General Bonnie Lysyk submitted her report on Laurentian University's insolvency to the Ontario Legislature on Nov. 17. (Aaron Vincent Elkaim/The Canadian Press)

Proposed legislation

Robinson also mentioned that Sen. Lucie Moncion, who earned her bachelor's degree from Laurentian, recently sponsored a bill that would exclude post-secondary institutions from the CCAA.

Bill S-215 had its first reading in the Senate on Nov.24, 2021, and it received its second reading on May 17, 2022.

"It's been slow, and I certainly hope that they take this seriously and that we don't see a repeat of this unnecessary situation that happened at Laurentian," Robinson said.

He added that it's rare for a bill introduced in the Senate to become law.

"But I think it's certainly important for generating a conversation and we hope that the government throws its weight behind it," he said.

Sudbury Liberal MP Viviane Lapointe said she would sponsor the bill once, or if, the Senate passes it.

"I'll be working diligently on it and working as I said, with the Liberal Party, but more so with the government to get the senator's bill through the chamber or through the House of Commons," Lapointe said.

NDP member of Parliament Charlie Angus stands during question period in the House of Commons on Parliament Hill in Ottawa on Tuesday, March 29, 2022. (Sean Kilpatrick / The Canadian Press)

Lapointe added that if the New Democrats are working on similar legislation, she would back it. 

Before Laurentian filed for insolvency, New Democrat Timmins-James Bay MP Charlie Angus, said many people never considered a public institution would use the CCAA to restructure, at the cost of jobs and the services it offers.

"The advice from the Laurentian board to go down that route certainly broke the mould, and it created an opportunity for others to go down that road," he said.

Angus would not confirm whether he was preparing to bring forward legislation but he did say, "We're hoping to have something that we can present to Parliament soon," he said.

"I think everybody was pretty horrified by what happened at Laurentian. I'm hoping we can get support for this to pass, but this will have to go through the parliamentary channels."

With files from Kate Rutherford


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