The 2021–2022 Laurentian University Crisis is a controversial and unprecedented financial crisis at Laurentian University in Northern Ontario, Canada. After experiencing financial difficulties over a period of years, the university filed for creditor protection on February 1, 2021. The university subsequently closed 69 undergraduate and graduate programs and terminated 195 faculty and staff with little notice or severance. The federated universities of Laurentian eliminated 143 positions. Approximately 932 students were affected. It also marked the first time in Canadian history that a public university sought to restructure under the Companies' Creditors Arrangement Act (CCAA).
The crisis has provoked sharp criticism of both the university administration and the Premiership of Doug Ford as well as sparking discussion of the state of postsecondary education in Canada, including Indigenous and Franco-Ontarian education. Concerns have also been raised about the impact of the cuts on the cultural and economic life of Northern Ontario, with estimates predicting an economic cost of over $100 million to the city of Greater Sudbury.
The auditor general's final report from November 2022 acknowledged external factors in the crisis, but identified the primary cause of the crisis as the poorly planned capital expansions that were exacerbated by administrative bloat and weak board and provincial oversight. The report confirmed that the instigation of CCAA restructuring was strategically planned by the administration on the advice of external counsel, thus bypassing the collective agreement provisions with the faculty union regarding financial exigency.
Restructuring process On February 1, 2021, Laurentian University president Robert Haché confirmed that the university had filed for creditor protection. Court filings revealed that the university's liabilities amounted to $321 million, including $91 million in loans from three Canadian banks.
The university continued to offer 107 undergraduate programs and 33 graduate programs in the aftermath of the closures and terminations. The university indicated that "We anticipate that approximately 10 per cent of undergraduate students...will be affected in some way by these program adjustments."
As part of restructuring, the university announced that it was considering the sale of some of its real estate, including the last undeveloped waterfront on Sudbury's Lake Nepahwin. For the community response, see .
From 2014 to 2021, the university spent over $160 million on new infrastructure, with around $140 million of that total coming from government subsidies and private donations.
The president reported at the university senate in September that over $9.8 million had been expended on restructuring costs. The court-appointed monitor also had earlier indicated that the university would be spending nearly $10 million in additional costs by February 2022, as well as $1.8 million in interest loan fees on the debtor-in-possession loan from Firm Capital that was received through the CCAA insolvency process. The DIP loan was assumed by the provincial government on January 31 as part of its intervention, regarding which see . As of May 1, 2022, restructuring costs were reported as $20.9 million, with an additional $3.9 million in charges related to the DIP loan. The monitor also projected there would be nearly $8 million in additional costs by September 30.
The court approved the university's request to extend restructuring several times.
Despite declaring insolvency on February 1, Laurentian University consulted with insolvency counsel at least as early as March 2020. On August 28, 2020, the Laurentian board of governors engaged the accounting firm Ernst and Young as a "financial advisor to assist LU in its restructuring efforts and if necessary, act as the Court-appointed Monitor...should LU decide to seek protection under the CCAA." Laurentian did not announce the hiring of Ernst and Young until October 1. In early November, the board's executive committee created an "a special In Camera Ad Hoc Committee on Contingency Planning" that was to provide oversight and direction for the CCAA process. On December 10, 2020, the university requested assistance from the government of Ontario, asking for $100 million, almost half of which would go toward ""termination and severance payments." Laurentian proposed that it could work with $30-$40 million, but that amount would not be enough to avoid entering the CCAA. The province replied that it could not offer $100 million unless Laurentian agreed to a third-party audit of the university's finances, but that it could offer $12 million to cover operations until the end of March. Apparently, the university administration declined both of these offers. The matter was commented upon in the auditor general's preliminary and final reports in April and November 2022. For the reports and reaction to them, see .
In December, the court granted the university's request to remove the $500,000 cap on the legal fees of independent counsel for the Board of Governors. There also was approval for the appointment of three claims officers to deal with the approximately 1,500 claims from creditors for over $360 million, and a grievance resolution officer to address grievances filed by the Laurentian University Faculty Association.
On February 1, 2022, an interactive timeline of milestones in the restructuring process was published to mark the anniversary of the insolvency declaration.
At the February meeting of the Laurentian senate, the president indicated that in May the university expected to be able to ask the court for permission to convene a meeting with the creditors.
The publication in early March of the Nous report on university governance and operations, which the university had commissioned in the fall, met a critical reception. The university also reported a deficit of $65.9 million for the fiscal year 2020–21, while the cost of restructuring had reached $79.1 million.
In March, the university agreed, with reservations, to start responding to freedom-of-information requests effective May 1, following the intervention of the provincial information and privacy commissioner. Laurentian had obtained a stay from the court on the processing such requests at the commencement of the insolvency proceedings.
At the March senate meeting, the Nous report's recommendations on senate governance were debated. Several resolutions were passed affirming senate's traditional role.
The university filed its proposed plan of arrangement with the court on July 21, 2022. The pending "retirements" of president Robert Haché and provost Marie-Josée Berger were also announced. (The university senate later passed a non-confidence motion regarding the two administrators.) The filing revealed that over $38 million in restricted funds for scholarships, bursaries and other targeted donations was instead spent as general revenue during the university's spiral into insolvency. On July 28, the court ruled that a vote among the creditors would conclude on September 14 on whether to approve the debt repayment plan, which stipulated that the majority of creditors would be paid approximately 20 percent of what was owed to them over several years. A group of terminated faculty came out strongly against the plan, while the Laurentian University Faculty Association urged its members to withhold their vote so that its concerns, which included how the university would be governed in the future, could be addressed. Following negotiations, the faculty association, together with the Laurentian staff union and the university's board of governors, recommended that creditors vote for the plan. The plan's approval at the September 14 creditors' meeting was widely reported and commented upon.
Not including the cost of the province's intervention, restructuring costs totaled $26.1 million as of September 2022, including a $4.725 million bill from the insolvency monitor for the period January 1 to July 1, 2022.
At a hearing on October 5, the court approved the arrangement plan and extended the stay period to November 30.
The university posted a $16.8 million surplus for the fiscal year 2021–22.
Haché, appointed in 2019, was fired by the Board of Governors and left the university on October 31, 2022; Berger was fired as well, and left shortly thereafter. Two former administrators from other Ontario universities were subsequently named interim president and provost effective January 1, 2023.
After 22 months, the university emerged from CCAA restructuring on November 28, 2022.
Program cuts The university closed 58 undergraduate degree programs, of which 34 were English-language programs and 24 were French-language. It also cut 11 graduate programs, which was about one-quarter of the university's graduate offerings. Programs with historically low enrolments were targeted.
Arts Arts degrees were among the programs eliminated, including several languages, philosophy, music, and the French-language history program. The program closures drew significant concern from the community about the impact it would have on local culture, as many local arts institutions and festivals had ties to the university.
Midwifery Laurentian was one of the three Ontario universities that offered an undergraduate program in midwifery, and the only university outside of the province of Québec that offered the degree in French (and the only bilingual program in Canada). Despite receiving 400 applications each year for the 30 spots in the program, midwifery was canceled, even though the province was facing a shortage of midwives. Some commentators also raised concerns about the impact of the cuts on regional healthcare in Northern Ontario, while others raised concerns about the impact on women. However, in appearing before a federal parliamentary committee, Robert Haché testified that the province's funding was insufficient to sustain the program.
In April, the provincial government announced that it intended to ensure the continuation of a bilingual midwifery program. The government had previously stated that it would redistribute the funding Laurentian received to the midwifery programs at Ryerson University (now Toronto Metropolitan University) and McMaster University. In May, the Ontario Midwifery Consortium announced that it had received temporary funding from the province for Ryerson and McMaster to train virtually the Laurentian transfer students and oversee their placements.
The abolition of the French-language program was a topic of the report published in March 2022 of the Ontario commissioner for French-language services, who found that the university and the province violated Ontario's French Language Services Act. See also .
Science Nobel Prize laureate Arthur B. McDonald, a former director of SNOLAB, criticised the elimination of the university's programs in physics and mathematics, noting that Laurentian was a founding member of the SNOLAB and that the loss of new students could significantly impact astrophysics research in Sudbury. Other programs that were cut included radiation therapy, ecology, and environmental science, despite the university having been the driving force behind Greater Sudbury's internationally recognised regreening program.
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