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Governments must take action to prevent a repeat of Laurentian U crisis

(Ottawa —September 15, 2022) The Canadian Association of University Teachers (CAUT)—the national voice of academic and professional staff at 125 universities and colleges across Canada—says the vote in favour of a new plan of arrangement for Laurentian University is a step forward in what has been a long and dark chapter in the history of post-secondary education in Canada.

“When facing financial troubles, the university administration’s decision to turn to an insolvency tool designed for private corporations was a fundamental and costly mistake,” says Peter McInnis, president of CAUT.  “This should have never happened. Faculty, staff, students, and the broader community paid a terrible price for administrative failures. Now it is the federal and provincial governments’ turn to assume leadership and ensure this does not happen again.”

In April, the Ontario Auditor General concluded that Laurentian University did not have to file for creditor protection under the Companies’ Creditors Arrangements Act (CCAA).  The report debunks the University’s claim that faculty salaries were in to blame for the financial woes and notes that one of the issues was “high senior administrator salaries and expenses that negatively impacted Laurentian’s financial situation”. The report also blames poor management and lack of transparency at the University.

“The hard lesson we can take away from the failures at Laurentian is that universities need to be more open, transparent and accountable to the academic community,” says CAUT’s Executive Director, David Robinson.  “At the federal level, we need the government to amend the insolvency legislation to prevent a repeat in the future. And provincial governments need to ensure that institutions follow collegial and cooperative processes that already exist to deal with financial crises.”  

The Laurentian University Faculty Association fought hard to protect jobs and faculty and staff pensions, as well as lay the groundwork to enable the community of Sudbury in northern Ontario to rebuild what was lost due to irresponsible university management and government inaction. 

LUFA and its members managed to secure important changes to the final plan of arrangement, including the departure of senior administrators responsible for the crisis, formal LUFA representation on new committees struck to review university operations and governance, and a commitment to hire additional faculty.

The CCAA process was unprecedented for a public institution in Canada. Legislation designed for private corporations was forced upon the Laurentian community in February 2021, leading to the termination of 69 university programs and loss of jobs.


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