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In newspaper articles three former chairs of Laurentian University’s board of governors (BOG) and the former president insisted the school’s financial problems were due to the Ontario government decreasing revenues, the Saudi Arabian government recalling its students and the COVID-19 pandemic.
Alas, the problem also lay on the other side of the ledger with expenses and deficits.
The deficit problem goes back three decades when in 1987 a president of Laurentian (LU), Dr. John S. Daniel, persuaded the BOG to establish a small arts campus near a village called Villefranche in the south of France with the expectation that students would flock there. They didn't.
Google LU and Villefranche to find that only 200 students participated over a nine-year period which did not cover the overhead costs thus leading to deficits. It was closed in 1996 for "financial reasons."
Five years later, with a new president, John R. Watters, and board, another campus was developed in Barrie. Google LU and Barrie for details. Space was rented from Georgian College and according to the co-ordinator of this program, no costs were incurred to the Sudbury budget from 2001 to 2008 as faculty were gradually hired.
In 2009, a new president, Dominic Giroux, a person with no experience in university administration, urged the board to build a campus in Barrie and plans were drawn up to do so. Fortunately, the government stopped this project. Competition from Lakehead University operations in Orillia led to a decrease in enrolment at the Barrie campus.
When the Barrie campus was closed in 2019, some Barrie staff were given severance packages and others moved to the Sudbury campus where their services were not needed, incidentally. This move impacted budgets already in deficit since 2014, reported Alan Harrison, the special adviser appointed by the Ontario Ministry of Colleges and Universities of Ontario. The BOG insisted that these budgets were in balance.
When the campus in Barrie didn't happen, Giroux and the BOG went on a building spree on the Sudbury campus, possibly under the belief that "if you build them, the students would come." Again, they didn't.
Mortgages and construction costs mounted even though fundraising for specific projects happened leaving a major hole in the capital budget. Nobody seemed to notice the further increase in deficits due to increased overhead costs for these new spaces and extra payments to the capital budgets.
At the same time as this flurry of building activities, Giroux expanded the administration by 30 per cent, particularly in the research area, again increasing the deficit.
Also during the Giroux era, low enrolment courses expanded. Although these courses provided a breadth of university experience similar to that of larger universities, they were not financially sustainable. Vice presidents and deans under the guidance of an experienced president would have focussed on fundraising for these courses, instead of building buildings.
Finally, on Dec. 12, 2005, the provincial government passed a law allowing retirement to be deferred past the age of 65. A cohort of such faculty and staff grew to 60 by 2020 with a cost to the budget in the range of $6- to $9 million. See the LU sunshine lists. This cohort skewed the salary structure, as noted by Harrison in his report to the province.
Unfortunately, the hubris of this group had the unintended consequence of denying a new younger generation of faculty and staff to be hired over the past 15 years.
Thus, on being appointed president of LU in 2019, Dr. Robert Haché was warned of the accumulating deficit problem. He was faced with a fat administration, an ageism problem, excess staff from Barrie, a pile of low enrolment courses, and a huge negative capital budget from the building campaign.
Negotiations with the unions LUFA and LUSU in 2019 and 2020 went nowhere probably because no one could or would address the ageism issue. In the fall of 2020, the senate of LU rejected a request to eliminate some of the low enrolment courses.
The clincher to these woes came when the vice-president administration revealed the university had been commingling funds from research, scholarships and the Founders Fund of NOSM to pay for ongoing operations, and the funds were running out. Budget projections for the next few years showed continuing deficits. In 2020, first-year enrolment was down by 15 per cent. Haché informed the BOG of these matters.
So, in the late fall of 2020, Haché and the BOG met with provincial and federal representatives and though the Ontario government offered $12 million to help, the university refused the offer as too little. Haché then consulted with the BOG and his former associate from the University of Calgary, Harrison, the provincially appointed adviser. They decided to invoke the CCAA process, letting the remaining funds of the university run down so that by Feb. 1, 2021 only a month of funding was available.
It seems from the outside that by invoking the CCAA process, the ageism cohort, the fat administration, the excess staff from Barrie and the low-enrolment faculty could be all legally dealt with, without consultation with the faculty and staff unions. Hence, the bizarre and shameful method used to fire nearly 200 people via Zoom and in large groups to avoid questions about age and the seemingly arbitrary decisions made by the CCAA committee.
However, the monitor for the CCAA process, Ernst and Young, in their third report of April 26 recommends further cuts ( page 28, section 141 ). With a 30-per-cent drop in first year for 2021 and a possible similar drop over the next few years because of the impact of the recent McLean ratings, the CCAA process will now continue into the spring of 2022, which will allow them to know what the first year fall enrolment of 2022 will be.
This process could lead to another round of cuts, in my opinion.
How to assess responsibility for this debacle? The BOG for straying from their Northern Ontario mandate in Villefranche and Barrie, for ignoring deficits and claiming balanced budgets, and for allowing a blizzard of building without adequate funding. The administration for not developing
a retirement policy with the unions to address the ever-increasing ageism issue. The vice-president administration for the commingling of budgets. The deans and VP academic for not using business plans and fundraising for low-enrolment courses. And Giroux as much occurred under his watch.
The central issue of ageism has been danced about, but not openly addressed. As our society continues to age more people will opt not to retire. Governments, administrations and unions need to deal with the problem before it balloons into a major crisis.
The tragedy is that over 60 years a university serving Northeastern Ontario was developed and will only survive in an altered form, as discussed in my previous letter to Sudbury.com. However, this survival will require a rebuilding of trust and respect between the various parts of the university and that will take a complete change in leadership of these groups.
Dr. DE Goldsack, PhD, is an emeritus professor and the dean of Science and Engineering at Laurentian University from 1980 to 1992.
