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President’s Message / Administering Disaster: The Mismanagement of Laurentian University

President’s Message / Administering Disaster: The Mismanagement of Laurentian University

President Brenda Austin Smith

by Brenda Austin-Smith

When the administration of Laurentian University filed for insolvency under the Companies’ Creditors Arrangement Act (CCAA) in February 2021, shock waves reverberated across the country. This was the first time a public institution petitioned for the same kind of consideration granted to private, for-profit companies such as Sears, Canwest Global Communications Corp., Le Chateau, and Toys R Us.

Because the CCAA is a brutal piece of federal legislation, the administration of Laurentian was able to bypass collective agreement obligations to Laurentian faculty and support staff, denying them full severance pay, sweeping aside outstanding grievances, and gutting rights and benefits. In all, 195 faculty and staff lost their jobs, a third of the university’s programs were shut down— and hundreds of students had their educational plans disrupted or crushed completely.

What we know now is that none of this needed to happen. An incompetent and secretive administration was to blame for all of it, strategically choosing this way out of fiscal trouble rather than abiding by sector norms and collective agreement processes. We know this because Bonnie Lysyk, Ontario’s Auditor General, released a preliminary report in April on the insolvency of Laurentian University. It makes for infuriating reading. The report is scathing in its indictment of a staggeringly inept administration that drove a public institution over a cliff, while refusing to share information with the academic staff association (LUFA) about what was really going on.

Lysyk identifies “poorly considered capital investments,” “poor management of the university’s financial affairs and operations,” and “weak oversight” by the Board of Governors as the primary cause of this failure. But her report goes further and takes on the accusations levelled against our colleagues that faculty salaries were the cause of the crisis. Not so, writes Lysyk, whose team found faculty compensation “did not surpass those of comparable universities”.

The truth, says the report, is that administrative salaries and expenses “negatively impacted Laurentian’s financial situation”. The size of the university’s senior administration was relatively higher than most other Ontario universities, certain management candidates were hired without “a clearly documented rationale,” and senior management salaries “surpassed limits set by legislation”. The result was that between 2010 and 2020, senior administrative costs had risen by 75%.

Despite this excessive compensation, the report suggests that LU management failed to do their jobs properly: they resisted cooperating with LUFA, refused to share crucial information about the institution’s financial situation leading up to the CCAA filing, and delayed addressing union grievances, “including those alleging discrimination and harassment”.

Nor did the various management committees—including the Audit Committee—carry out their duties in a responsible and transparent way. This is failure on a spectacular scale—failure that the staff, students and community of Sudbury paid for handsomely.

Above all else, Lysyk and her team confirm what many of us suspected, that the CCAA filing did not have to happen, but was a “strategic” decision that “enabled Laurentian to limit the full disclosure of financial and operational information to the public and other stakeholders”.

Who benefitted from this train wreck? Lawyers and consultants did, says the report. The cash-strapped institution somehow delivered $24 million to outside bodies, including those who had recommended and guided the insolvency process itself. This was after its management had already scooped up funds intended for employee health benefits and research projects.

A more detailed, final report on this breath-taking failure will eventually follow this one. But what is here for everyone to read is beyond shameful. One hopes a court will eventually consider every detail of what happened at Laurentian and hold the right people accountable for this mess.

Meanwhile, in April the CAUT Council again unanimously passed a motion condemning the Laurentian administration and calling for the termination of senior administrators. It’s hard to fathom how any group of people, conducting themselves with this little regard for transparency and competence, would keep their positions. But yet, there they sit, unscathed, untouched, and unaccountable.

Justice calls, at least, for the firing of Robert Haché, Marie-Josée Berger, Claude Lecroix, and Serge Demers at Laurentian, and Ross Romano, Ontario Minister of Training, Colleges and Universities. Please join me in calling for their collective dismissal.

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