MP Charlie Angus introduces bill to save public institutions from insolvency

Timmins-James Bay MP Charlie Angus introduced a private member's bill Thursday that would protect publicly funded institutions, such as hospitals and universities, from insolvency proceedings designed for commercial enterprises.

The bill came in the wake of insolvency proceedings at Laurentian University which fell under the Companies' Creditors Arrangement Act (CCAA).

After the Sudbury, Ont., university announced it was insolvent in February 2021, Laurentian used the CCAA to cut 76 programs in April of that year. As well, nearly 200 staff and faculty members lost their jobs.

"The decision to use the CCAA at Laurentian was without precedent and it had disastrous consequences," Angus said before he introduced Bill C-309 in the House of Commons.

"It is essential that we have legislation in place that ensures that no institution that receives federal or provincial funding can be subject to the Companies' Creditors Arrangement Act, or CCAA, if they find themselves in financial difficulty."

A similar Senate bill

Sen. Lucie Moncion, who earned her bachelor's degree from Laurentian, introduced a similar bill in the Senate.

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

But Moncion's bill would only apply to post-secondary institutions. 

Angus said his bill takes things a step further, excluding all publicly funded institutions from the CCAA.

"Having a bill like this on the order in Parliament allows us to start organizing, to put political pressure on, to continue the conversation about what happened at Laurentian across the country," he said.

Fabrice Colin, president of the Laurentian University Faculty Association, said a recent report from Ontario's Auditor General on Laurentian showed the CCAA was not necessary to address Laurentian's financial issues.

"After misspending millions of dollars on buildings they could not afford, the administration spent millions of additional dollars on the CCAA to avoid accountability," he said.

Colin agreed with the auditor general's conclusion that the CCAA was not appropriate for a publicly funded institution.

Peter McInnis, president of the Canadian Association of University Teachers, said it's important the CCAA can't be used on other universities.

"We feel strongly the CCAA process should never have been invoked at Laurentian and that there were more equitable procedures to deal with this situation in Sudbury," he said.

"Just recently, documents made clear that senior university administrators deliberately chose the CCAA to avoid paying out severance and pensions and to be able to conduct mass layoffs."

The documents he referred to were two affidavits submitted to the Ontario Superior Court of Justice on Jan. 30, 2021, which include two letters, a timeline of events and a presentation on possible outcomes of different courses of action Laurentian considered to address its financial issues.

One of the letters, from then Laurentian president Robert Haché to then Minister of Colleges and Universities Ross Romano, confirmed the university had outlined a plan for the CCAA months before it announced it was insolvent.