Laurentian University filed for creditor protection in February, saying it was weeks away from being unable to meet payroll.Gino Donato/The Globe and Mail
The Ontario government is stepping in with financial help for Laurentian University, refinancing a $35-million loan and providing millions more in additional funding as the university continues to deal with the fallout of its insolvency.
The government announced Monday it would assume the debtor-in-possession loan that Laurentian took on while it restructured its finances. The university said the government intends to provide a long-term loan once it emerges from creditor protection. Queen’s Park will also provide $6-million in special funding to cope with the effects of COVID-19 and up to $22-million to compensate for lower-than-expected enrolment and failure to meet performance funding targets.
The provincial government said its support was subject to conditions that would ensure financial stability, including a board governance strategy and stronger rules on financial reporting.
Several members of the Laurentian board resigned “in connection with the financial support package,” the university said in a statement. Three of the five board members appointed by the provincial government resigned Wednesday, as did eight other board members. The university described it as a process of “renewal.” Many faculty members at Laurentian have criticized the board for failing to sound an alarm about the university’s finances.
Laurentian did not provide the names of those who had resigned, nor did it say who would take their place.
Laurentian filed for creditor protection in February, saying it was weeks away from being unable to meet payroll. The university had been spending millions in funds earmarked for research just to keep the lights on.
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It was the first publicly-funded university in Canada to restructure under the provisions of the Companies’ Creditors Arrangement Act (CCAA). More than 100 tenured faculty lost their jobs in mass layoffs conducted over Zoom. Dozens of staff were also let go and 69 programs were eliminated. Enrolment declined sharply this fall as some students moved to other schools and others were scared off by the university’s financial troubles.
The Conservative government at Queen’s Park has come under fire from the Liberals and NDP for not stepping in earlier with financial help that could have staved off the worst impacts of the CCAA process.
Colleges and Universities Minister Jill Dunlop said in a statement Thursday that while Laurentian had made headway on its finances, “there is still considerable progress to be made to ensure its long-term sustainability.”
“Laurentian university students remain the government’s priority,” Ms. Dunlop said. “The government will continue to explore options that provide greater oversight of university finances while protecting the interests of students and Ontario taxpayers.”
Laurentian University president Robert Haché said in a statement that the provincial funding would help the university fulfill its mission to provide quality, accessible postsecondary education.
The provincial assistance comes just a week after all parties in the Ontario Legislature voted to authorize a Speaker’s warrant to obtain documents that Laurentian refused to hand over to a committee of the legislature.
The committee acted after it was notified by Auditor-General Bonnie Lysyk that Laurentian was not complying with her requests for e-mails and other documents required for a value-for-money audit of the university. She said she had never encountered comparable pushback from an institution and said there was a “culture of fear” at Laurentian.
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