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Federal government must shield universities from private insolvency procedures

(Ottawa – May 7, 2021) Universities are publicly-funded institutions and should not be subject to legislation that regulates how private companies address insolvency, says the Canadian Association of University Teachers (CAUT)—the national voice representing 72,000 university faculty and staff at 125 universities and colleges.

“Universities and their academic staff associations have negotiated procedures to deal with financial exigency matters,” said CAUT President Brenda Austin-Smith, in a letter sent this week to Canada’s Minister of Innovation, Science and Industry, François-Philippe Champagne. “These procedures are collegial and respectful of the principles of academic freedom and tenure.”

Austin-Smith says such procedures—instead of the Companies’ Creditors Arrangement Act (CCAA)—should have been followed in the financial crisis facing Laurentian University in Northern Ontario. The crisis has had ripple effects across the region, resulting in job losses, the cancellation of French-language and Indigenous programs, and has left hundreds of students scrambling to complete their education.

CAUT member associations passed resolutions at their April Council meeting calling on the federal government to exclude publicly-funded institutions from the CCAA, and to provide stronger leadership to strengthen the post-secondary education and research sector as part of its post-pandemic recovery strategy. CAUT is asking the federal government for both emergency and increased long-term funding for public universities and colleges. The last federal government top-up to provincial transfers for post-secondary education was in 2008.

“The CCAA must be amended to exclude publicly-funded institutions and governments must step up for post-secondary education so that there are thriving high quality, affordable and accessible universities and colleges for all” says Austin-Smith. “Supporting post-secondary education is critical for our collective future.”


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