Federal government starts consultations so other schools can avoid Laurentian's fate

The federal government is starting a month of consultations on how to better protect post-secondary institutions when they become insolvent, so they can avoid the same fate at Laurentian University.

In February 2021 the Sudbury, Ont. university filed for insolvency. Laurentian became the first public university to use the Companies' Creditors Arrangement Act (CCAA) to restructure after its financial troubles.

Through that process, which has previously been used for corporate restructuring, Laurentian cut 69 programs, and nearly 200 staff and faculty members lost their jobs.

"What happened at Laurentian University has raised concerns as to whether our current insolvency laws are fit for purpose to help publicly funded post-secondary institutions resolve financial distress," Innovation, Science and Industry Minister François-Philippe Champagne said in a news release about the upcoming consultations.

"The impact this insolvency had on staff, students and the whole Sudbury community, was troubling and we need to make sure we learn from what happened."

Sue Wurtele, president of the Ontario Confederation of University Faculty Associations (OCUFA), said she welcomed the news about the consultations.

"It's a necessary first step in getting to the point of changing the legislation to exclude public universities from those insolvency processes," she said.

"We've been working hard on this issue and the consultations, to us, are the first step in making those changes."

OCUFA represents 17,000 university faculty and academic librarians across Ontario.

Wurtele said the CCAA process was "completely inappropriate" for the university sector, and was designed for corporate settings.

The confederation would like to see the federal government amend the CCAA to omit public universities from the legislation.

Wurtele said provinces should also work closely with universities to help them find other solutions if they become insolvent.

 Laurentian gerontology student Denice Zhuang said she hopes students will be able to participate in the consultations.

"We were not consulted before the (CCAA) process started, or even after the process and all the changes that followed," she said.

 Zhuang added universities should not be treated like a vending machine that "spits out a degree."

"That's not really the intention of the university and that's not what Canadians want or need," she said.