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News / An update on Laurentian and prevention

News / An update on Laurentian and prevention

By CAUT Staff

On October 5, 2022, Ontario’s Superior Court approved Laurentian University’s plan of arrangement, putting the institution’s exit from insolvency protection within reach. The plan was previously approved by the University’s creditors and unions on September 14.

“The administration’s decision to turn to an insolvency legislation designed for private corporations was a fundamental and costly mistake,” says Peter McInnis, president of CAUT. “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. We need to amend the legislation to ensure publicly funded universities and colleges follow negotiated financial exigency processes and do not seek a loophole in commercial insolvency law.”

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 also debunks the University’s claim that faculty salaries were to blame for the financial woes.

“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 (LUFA) 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.

CAUT appeared at a Senate Committee on October 4, 2022 to speak in favour of Bill S-215, An Act respecting measures in relation to the financial stability of post-secondary institutions, proposed by Northern Ontario Senator Lucie Moncion. The proposed bill would amend both the Companies’ Creditors Arrangement Act and the Bankruptcy and Insolvency Act to exclude post-secondary public institutions.

“The CCAA process is inappropriate and unnecessary for publicly funded universities and colleges and is counter to fundamental values and principles of those institutions, including quite centrally collegial decision-making and academic freedom,” said CAUT’s David Robinson in his address to Committee.

The proposed bill is in second reading and if approved at Committee, will go to a vote in the Senate likely in November. If it passes in the Senate, it will move to the House of Commons for consideration.

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