Unsealed documents show Laurentian University pushed for program cuts early to fix finances

Newly unsealed documents show Laurentian University suggested the Companies' Creditors Arrangement Act (CCAA) to address its financial issues as early as August 2020, months before it filed for insolvency in February 2021.

"Their minds were already made up," said Nickel Belt MPP France Gélinas. "They were going to do this no matter what."

The documents are two affidavits submitted 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.

In a motion on Feb. 10, 2021, the Ontario Superior Court of Justice ordered the "confidential" documents be sealed.

The university exited its insolvency proceedings under the CCAA on Nov. 28. As a result, the courts unsealed some documents that outlined the decisions that led up to that point.

Under its restructuring through the CCAA, Laurentian cut 76 programs in April 2021. Around that time, nearly 200 staff and faculty members also lost their jobs.

In her special report on Laurentian University, Ontario Auditor General Bonnie Lysyk said there was a "strong argument that CCAA is an inappropriate, and perhaps damaging remedy for public entities."

The legislation was designed to help commercial enterprises restructure and had never before been used on a publicly funded university.

It should have never happened, and we're going to hold the people that did it accountable.- Tom Fenske, Laurentian Staff Union president

Laurentian first proposed using the legislation to Ontario's Ministry of Colleges and Universities (MCU) on Aug. 4, 2020.

On Dec. 12, 2020, then Laurentian president Robert Haché wrote to Ontario's Ministry of Finance and the MCU outlining the severity of Laurentian's financial crisis and the need to file for CCAA by the end of January 2021.

In a lengthy letter to then Minister of Colleges and Universities Ross Romano on Jan. 25, 2021, Haché said the CCAA was the "best path forward for Laurentian University."

In the same letter, Haché declined an offer of $12 million from the province and suggested the province provide support as the university pursues the CCAA instead.

Laurentian made an earlier request for $100 million in financial support from the province, but in a letter to Haché on Jan. 21, Romano said the ministry could not provide a grant of that size.

A 'disruptive outcome for students'

In the Jan. 25 letter, Haché expressed concern over ongoing collective bargaining negotiations with the Laurentian University Faculty Association (LUFA) and the possibility the union could go on strike due to an impasse.

"Obtaining the protection of the court through a CCAA proceeding prior to any of those actions being taken is critically important," he wrote.

"Laurentian University simply does not have the ability to withstand a strike, and this would also create the most disruptive outcome for our students."

LUFA president Fabrice Colin told CBC News the effect of the university's CCAA proceedings, and the resulting program closures and staff and faculty terminations, were far more disruptive to students than a strike would have been.

"I cannot understand how a strike would have been more disruptive and more destructive than what actually happened at Laurentian University," he said.

Colin noted that Romano also offered Laurentian a special adviser to look at their finances and provide some recommendations, but the university declined to open its books.

Tom Fenske, president of the Laurentian University Staff Union, said Haché's Jan. 25 letter to Romano showed the university's board and senior leaders were "prioritizing protecting themselves against liability for their own mismanagement of funds over the future of the organization, or the staff, faculty and retirees."

In the letter, Haché said the CCAA process would provide court-ordered protection for the university and Laurentian's board in the form of a stay of proceedings and a court-ordered charge over its assets.

"This standard protection in a CCAA proceeding is to insulate the board for liabilities that may be incurred or accrue from and after the commencement of the CCAA proceeding," he wrote.

"In the absence of a CCAA filing, the university and the board would have no protection for those liabilities, some of which includes potential personal liability for the members of the board."

Fenske said the staff union plans to take civil action again against Laurentian's directors and officers responsible for the university's insolvency.

"Somebody has to step up here and say this was wrong," Fenske said.

"It should have never happened, and we're going to hold the people that did it accountable."