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News / CAUT welcomes federal consultations on insolvency laws and public universities and colleges

News / CAUT welcomes federal consultations on insolvency laws and public universities and colleges

By CAUT Staff

CAUT welcomed the federal government announcement on May 1 that it will consult Canadians on how to protect the public interest when public post-secondary institutions face insolvency.

“We are cautiously optimistic that the Liberal government is making good on its promise to close the loophole that allowed the Laurentian University administration to bypass traditional ways of managing financial difficulties,” said CAUT executive director David Robinson. “As the Auditor-General of Ontario noted in her report on Laurentian, invoking corporate insolvency laws was unnecessary, inappropriate, and damaging to the public mission of the university.”

Laurentian University received insolvency protection on February 1, 2021, under the federal Companies’ Creditors Arrangement Act (CCAA). That process resulted in the cancellation of 69 programs and the loss of nearly 200 faculty and staff positions.

“Corporate insolvency legislation was never intended to be used by public institutions like Laurentian,” said Robinson. “We know that the university administration had other options, including provincial assistance, but chose instead to let their staff and students pay for the cost of gross financial mismanagement.”

“The federal consultation is a step in the right direction,” added Robinson. “Canada’s insolvency laws are misaligned with the goals of public universities and colleges. Post-secondary education is a public good that educates students, promotes democracy, and provides vital research. These goals are incompatible with the commercial aims of the CCAA.”

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