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$20M in NOSM money in jeopardy because of Laurentian insolvency, med school dean says

The dean of the Northern Ontario School of Medicine can't say much about the situation unfolding at Laurentian University. But she does acknowledge the medical school has money tangled up in the insolvency process.

Sarita Verma says last week's announcement to make NOSM a stand-alone institution took her by surprise

CBC News ·
The entrance to NOSM university in Sudbury is a combination of glass windows, stone walls and wooden columns.
The Northern Ontario School of Medicine campus in Sudbury. The province says making NOSM independent will "free it of a great deal of additional burden, some red tape and regulation that is duplicitous and unnecessary." (Jenifer Norwell/CBC)

The dean of the Northern Ontario School of Medicine (NOSM) can't say much about the situation unfolding at Laurentian University.

But she does acknowledge the medical school has close to $20-million tangled up in the Laurentian insolvency.

Dr Sarita Verma, NOSM dean and CEO, says she is unable to comment on the situation at Laurentian due to the Companies' Creditor Arrangement Act process (CCAA). However, NOSM is listed as one of Laurentian's creditors in the insolvency documents.

Last week the province announced that NOSM would separate from Laurentian University in Sudbury and Lakehead University in Thunder Bay, and would become an independent institution, granting its own degrees.

Verma says she did not ask the government to declare the school a stand-alone institution, and the announcement took her by surprise. But she understands why the government made the decision.

Ross Romano, the provincial minister of colleges and universities, said the decision to table the bill had nothing to do with the financial woes of Laurentian University, which is currently undergoing major financial restructuring after filing for bankruptcy in February.

Rather, the move to make NOSM independent will "free it of a great deal of additional burden, some red tape and regulation that is duplicitous and unnecessary," he told CBC News in an interview.

Dr. Sarita Verma is the dean and CEO of the Northern Ontario School of Medicine, which will become its own standalone institution. (Markus Schwabe/CBC)

$20-million in jeopardy

Financially, NOSM had a $1.5 million structural deficit, and normally would get relief from the government. That didn't happen this year because of COVID-19.

Then Laurentian filed for insolvency from its creditors under the CCAA.

"Laurentian's, let's just say 'use' of our funds — which were $1.6 million of tuition, and they hold about $14 million of our endowments — are uncertain," Verma said. 

The interest from the endowments normally provides bursaries for low-income students.  

"For a medical school that has an annual budget of less than $50-million, having close to $20 million in jeopardy is a challenge," she said."So ask yourself the question, if you were the government and you were looking at this situation, what would you do? I did not ask for this, I did ask [the government] for money, but they weren't going to give me any," Verma added.

Romano says NOSM "already largely operates independently," and he expects partnerships with Lakehead and Laurentian to continue.

He describes the bill as "exceptionally amazing news for northern Ontario," saying the move was simply part of "the evolution of a university" and would provide NOSM with the "flexibility to be more nimble to deliver healthcare, health human resources and training across all of the region."

NOSM not leaving Thunder Bay, Sudbury

Verma is also reassuring Sudbury and Thunder Bay that NOSM does not plan on leaving either of its campuses.

"We have a campus [in Thunder Bay], we have employees there, we have institutions with Thunder Bay Regional where we're planning on building our residences," she said.

"Same thing in Sudbury, you know working closely with [Health Sciences North] and HSNRI, with the other colleges. We're very involved with building our relationship with the municipalities across northern Ontario."

Verma adds that she wants NOSM to still be able to work together with Laurentian and Lakehead.

"Whatever Laurentian ends up being, it will still be an important partner for us, as will Lakehead."

The Northern Ontario School of Medicine has campuses in Sudbury and Thunder Bay, pictured here. Earlier this week, thunder Bay's city council passed a motion supporting the position of Lakehead University's president that the decision to sever NOSM's relationship with the only university in northwestern Ontario "is not in the best interests of our University, NOSM, Thunder Bay, or Northwestern Ontario." (Northern Ontario School of Medicine)

Benefits to stand-alone institution

Verma says becoming a stand-alone institution is not something she had discussed with the government.

"We've been talking to the province about expansion with the other medical schools," she said.

"I've been wanting to expand the medical school since I got here, and it's in our strategic plan."

Having the medical school be its own independent institution will have benefits.

"Certainly for northern Ontario, it means that we can build on our capacity to deliver health services and health professions in a more pan-northern way," Verma said.

"I want people to know that nothing changes, NOSM is here, we're going to grow, we're going to continue to leverage our full potential," she added.

"We are a great school, so nobody should be concerned that there's going to be a seismic shift in our business."

CBC Radio interviews related to this story:

With files from Markus Schwabe

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