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CAUT welcomes federal plan to exclude public universities and colleges from bankruptcy and insolvency laws

(Ottawa – November 22, 2023) The Canadian Association of University Teachers (CAUT) welcomes yesterday’s announcement in the Fall Economic Statement that the federal government will amend the Companies’ Creditors Arrangement Act and the Bankruptcy and Insolvency Act to exclude public universities and colleges.

“The Liberal government has made good on its promise to close the loophole that allowed the Laurentian University administration to bypass traditional ways that colleges and universities manage 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.”

Following the staff cuts and program closures arising from the unnecessary use of insolvency legislation at Laurentian University in 2021, CAUT’s academic staff associations, the Sudbury community, and champions in Parliament have pressed the government for an exemption. CAUT members across the country sent thousands of letters and participated in national consultations on the legislation.

“Corporate insolvency legislation was never intended to be used by public institutions like universities and colleges,” said Robinson. “The laws are misaligned with the goals of public universities and colleges to train students, promote democracy, and advance knowledge. The legislative changes announced yesterday are necessary, long overdue, and will help ensure that the scandal of what happened at Laurentian will never be repeated.”

Read CAUT’s full submission on post-secondary educational institutions and insolvency legislation here.