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Editorial: The painful but necessary reckoning of Laurentian University

The university needs to change and the creditor protection process is the best avenue to give it new life
The Parker Building at Laurentian University. (File)

Laurentian University is a school with too many programs, too many instructors, too many managers and too few students. And not enough money.

The school’s lawyer, DJ Miller, told the court something similar on Feb. 10. The Laurentian University that comes out the other side of its insolvency proceedings will likely be far different from the university of today. That it must go through a CCAA (Company Creditors’ Arrangement Act) process says it simply cannot survive otherwise.

There will be blood. In fact, there probably has to be blood.

LU has posted a budget deficit nearly every year of the past 10 years. To attract more students, it has taken on tens of millions of dollars in new debt in an effort to modernize and expand its infrastructure. This effort largely failed, as evidenced by the data Laurentian filed, and the hoped-for increase in the student population never occurred.

Student levels are important because students mean tuition. Attracting more students (especially international students who pay a premium) is always the goal, but it becomes more important when governments both freeze tuition fees and reduce them, as Ontario did in 2019 and 2020 as it attempted to rein in its deficit.

Clearly, Laurentian University has been in a financial spiral for years. Its year-over-year deficits for nearly a decade demonstrate costs were routinely outstripping revenues. We have to wonder how the board of governors and administration could have let the problem persist for so long.

It is possible successive boards (often plum patronage appointments) were simply ineffectual at holding the administration to account or incapable of serving as a functioning bulwark against empire building (as Lakehead economist Livio Di Matteo put it in a Feb. 16 blog post) and overspending.

It is equally possible the board of governors did the best it could with the information that was provided by the administration. It is impossible to fix a problem if you do not understand its full scope. Was a too-trusting board kept compliant and ignorant by being fed rosy, and incomplete, data by the administration?

Although there are calls for the province to bail the school out, the government has been silent and, at least for the moment, appears content to let LU go through this CCAA process. As Di Matteo pointed out in a recent blog post, Laurentian is far from the only Ontario university with financial problems. The Ontario government may be playing wait-and-see, using LU as a test case for what other universities in this province might soon be going through.

No other university has gone through a CCAA filing before, a process up until now generally reserved for private businesses. And while the uniqueness of the situation might make the outcome seem hard to define, we have seen what the process has done to, and for, other troubled enterprises.

Essar Steel in Sault Ste. Marie is a good example. After entering CCAA protection in 2015, the troubled steelmaker emerged three or four years later as Algoma Steel, healthier, leaner and hiring. And profitable.

The steelmaker’s CCAA process was long, arduous and painful. Sacred cows had to be slaughtered. But it was also necessary and ultimately fruitful.

It is now Laurentian University's turn to go through the fire. It will be painful. There will be bleeding. It seems likely that programs will have to be sacrificed. There will be job losses.

But Laurentian as an institution is more important than any one program. Sudbury would not be the regreened city is today without Laurentian. The research at SNOLAB would not have happened, and subsequently a Nobel Prize won, without Laurentian. Northern Ontario would not have a medical school or an architecture school without Laurentian.

The students who come to the North — or more importantly, stay in the North — and contribute to the vibrant Northern Ontario culture of our city come, in part, because of Laurentian.

The school is an important part of our past and, we believe, an important part of our future, too. 

Sudbury needs Laurentian. It is woven into the fabric of our community. But Sudbury needs a Laurentian that is healthy and robust.

The CCAA process is a crucible. Laurentian University will come out the other side changed by its time in the fire, changed, we hope, into a more nimble, more focussed institution, one that does not try to be all things to all people, one that concentrates its efforts on what it can do well.’s editorial position is determined by an editorial board.


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