Letter reveals Laurentian University used creditor protection to cut jobs and programs

Laurentian University has gone to court for creditor protection to cut faculty jobs and departments while avoiding union pushback and paying what was owed to faculty in severance, say recently published documents.

In a letter refusing a $12 million financial lifeline offered by the Ministry of Colleges and Universities – aid accompanied by a special adviser providing oversight and a promise not to turn to the courts – the president of the Laurentian’s Robert Haché explained why using the Companies’ Creditors Arrangement (CCAA), a first for a Canadian public post-secondary institution, was the best way forward for the school.

Haché, in the January 25, 2021 letter, said the province’s grant was not sufficient to cover all of the financial obligations the Sudbury school was facing and could engage the board’s liability. Without creditor protection, the letter said in part that it would be difficult to cut faculty staff — which he estimated at 120 full-time employees — and cut university programs from 171 to 136.

« We see no scenario in which these reductions would be voluntarily accepted by LUFA (the teachers’ association), » he wrote, adding « even if this could be achieved outside of a procedure under CCAA, this would require years of attrition of voluntary departures, (which may not ultimately be the same people deemed most suitable) and substantial termination obligations.

A few days later, on February 1, CCAA proceedings began and ended on Monday.

The Laurentian University Faculty Association said the newly released letters contain « shocking details of university senior management’s plans to cut 124 faculty and more than 50 programs, whether or not they received government support or CCAA protection ».

The association said “the unsealed documents confirm that the university administration intended to impose cuts and circumvent LUFA and the democratically elected university senate in the process.

A recent report by Ontario Auditor General Bonnie Lysyk found that senior management at Laurentian spent years planning to exploit the CCAA to cut programs and faculty positions at the university. The Auditor General found that 932 students and their degrees were affected by the restructuring, as well as the loss of 341 faculty and staff positions. The school had had deficits since 2009 and relaxed its policies to allow it to take on more debt.

Lysyk said the university expanded its campus without knowing if it would lead to an increase in enrollment and that it was making do with a line of credit it could not afford.

She called Laurentian’s use of creditor protection « inappropriate and harmful. »

The school said in a statement that now that the creditor protection process is behind it, « this step allows Laurentian to continue working with its key stakeholders to rebuild from a solid financial foundation. »

Liz Tuomi, Press Secretary to Colleges and Universities Minister Jill Dunlop, said, « Since Laurentian University began its restructuring process, our government has been committed to ensuring that students have the support they need and to help Laurentian chart a course for success so that it can continue to serve students, parents, teachers, staff and the community.

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