Sudbury's Laurentian University to get provincial bailout as some board members resign

Sudbury's Laurentian University will receive a provincial bailout as it announces 11 members of its board of governors have resigned.

The university said the Ontario Ministry of Colleges and Universities will provide $35 million to refinance its existing debtor-in-possession (DIP) loan, which first was made available when it went into creditor protection earlier this year.

The province will also provide the university up to $6 million in COVID-19 funding, and "performance protection" of up to $22 million over a number of years.

"This support will be subject to conditions that ensure Laurentian's board governance strategy guarantees a strong, financially stable future for the university, and more importantly, its students," the Ministry of Colleges and Universities said in a press release. 

"It also requires that Laurentian provide enhanced, regular financial reporting."

The university said 11 members of its board of governors have resigned, effective immediately.

The province is appointing five people to Laurentian's board. 

"Once onboarded, Laurentian looks forward to working with these new members of the board," Laurentian said in a press release.

A necessary step

Glen Jones, a professor at the University of Toronto's Ontario Institute for Studies in Education, said the bailout from the province would suggest it needed to stabilize the situation with Laurentian.

"It may say something about some of the instability or uncertainty that's emerging within the process, but it certainly is a signal of the province's decision that the process needs some support and needs some stability," he said.

Jones said the province is in a difficult situation because it would not normally want to be seen bailing out a university.

"It's not good for the province and to some extent it's not good for higher education because there is a notion that these institutions should be able to make their own reasonable decisions under a set of circumstances," he said.

Requests for documents

Laurentian came under fire from MPPs last week when the Ontario Legislature unanimously approved a Speaker's warrant to obtain financial documents related to its insolvency.

Laurentian announced it was insolvent in February 2021. In April, it cut 30 programs, and around 200 staff and faculty members lost their jobs.

The Speaker's warrant followed a legal battle between Laurentian and Ontario Auditor General Bonnie Lysyk, who requested the university's privileged documents for a value-for-money audit.

Lysyk has argued Laurentian has been the least transparent institution she has dealt with during her time as auditor general.

In a court hearing on Dec. 6, an Ontario Superior Court judge heard from both sides and reserved his decision as to whether Lysyk should have access to Laurentian's privileged documents.

With the Speaker's warrant in place, Laurentian will need to hand over its privileged documents to the Ontario Legislature by Feb. 1, 2022. 

Faculty respond

The Laurentian University Faculty Association (LUFA) said in a statement that the university community "breathes a sigh of relief" with new funding from the province.

"We have always maintained that using the CCAA (Companies' Creditors' Arrangement Act) was inappropriate and that the Ontario government had to show leadership and be part of the solution,"  said Linda St-Pierre, LUFA''s executive director.

 "Because of their refusal to act sooner, many faculty members and their families  were forced to go through the claims process, meaning cents on the dollars, once all is said and done." 

The association said it welcomed changes to Laurentian's board of governors, which it said had a "secretive and non-consultative approach."

Reuben Roth, a former Laurentian labour studies professor who was terminated when the university cut its programs, said the entire board of governors should have resigned.

"We've been calling for the resignation of (Laurentian) President Haché and the entire board of governors for some time," he said.  "And when I say 'we' I mean many people in the community, including the organization that I'm a part of, Save our Sudbury."

David Leadbeater, a former Laurentian professor of economics, who was also terminated, said there should be an investigation as to why Laurentian received a provincial bailout at the same time that a number of board members resigned.

"What is going to be left is a hardcore group, a consolidation of a more authoritarian approach to the redevelopment of the university," he said, referring to the remaining board members. 

Leadbeater added the impact of Laurentian's program cuts on Francophone and Indigenous people, and on its former federated universities, has not been widely discussed.

Staff union response

Tom Fenske, president of the Laurentian University Staff Union (LUSU), said the financial support from the province is a relief for many of his members.

"It's been 10 months of incredible anxiety, and to not know where the government stands adds to that," Fenske said. 

"And so this is just one piece that helps people feel a little bit less like there's a boot on their chest and they can breathe a bit, right?"

Fenske added the changes to the board of governors were a positive step, but said the university needs a full leadership renewal.

"I'm talking about specific senior leaders that we believe cannot be here anymore because the trust with this institution and all of its people that make the institution great can never be rebuilt with these individuals," he said.