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Angus introduces bill to prevent CCAA use by public institutions

‘The decision to use the CCAA at Laurentian was without precedent, and it had disastrous consequences,’ says Timmins-James Bay MP
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Timmins-James Bay MP Charlie Angus (NDP).

In the wake of Laurentian’s exit from court-protected insolvency restructuring this week, Timmins-James Bay NDP MP Charlie Angus has introduced a private member’s bill that, if adopted, would prevent another publicly funded institution from using the same tactic when faced with financial challenges.

His bill would prevent all public institutions from seeking creditor protection under the Companies’ Creditors Arrangement Act (or CCAA), which is federal legislation. 

Laurentian finally exited the CCAA Nov. 28, 22 months after it declared insolvency. 

The CCAA process, which Ontario Auditor General Bonnie Lysyk said Laurentian never needed to enter in the first place, included mass layoffs and program cancellations, the severing of ties with federated universities operating on campus (resulting in even more layoffs and program cancellations) and a plan of arrangement that will see LU creditors receive only roughly 14 to 24 per cent of what they’re owed over the next three years.

With Laurentian being the only public university in Canada to attempt to restructure its operations using a process designed as a last resort for private companies, the situation has attracted national media attention and resulted in damage to Laurentian’s reputation.

Angus held a press conference Dec. 1 ahead of introducing his private member’s bill in the House of Commons.

“The decision to use the CCAA at Laurentian was without precedent, and it had disastrous consequences,” he said.

“It is essential that we have legislation in place that ensures that no institution that receives federal or provincial funding can be subject to the Companies’ Creditors Arrangement Act, or CCAA, if they find themselves in financial difficulty.”

Angus added that a university is “not a department store, it is not a widget factory.”

“A university is a multi-generational project on the part of the public to provide opportunity, hope and societal advancement,” he said.

“Decades of work went into building the programs at Laurentian University, and they transformed the lives of people across the North and Canada. It is unconscionable that the students, the staff and these world-class research programs were treated as discarded items at a garage sale. This must never be allowed to happen again.”

Paul Lefebvre, formerly the Liberal MP for Sudbury and now the mayor of Greater Sudbury, also introduced a bill to amend the CCAA in 2021. 

But Angus explained that the bill died due to the federal election in the fall of 2021, in which Lefebvre did not run for re-election, and was not reintroduced.

 “The difference between what that bill was and my bill is, is I'm not just focusing on universities, because this could be used against other public institutions like health centres or hospitals,” he said.

Angus said his bill would ensure that no public institution that receives public money is "subject to the ruthless provisions” of the CCAA.

The Timmins-James Bay MP was joined at the press conference by Fabrice Colin, president of the Laurentian University Faculty Association (LUFA) and Peter McInnis, president of the Canadian Association of University Teachers (CAUT).

Colin said the CCAA is “entirely inappropriate” for a public institution. 

“However, as it is written, it allowed Laurentian’s administrators to dismantle the university as we know it,” he said.

Colin went on to say, “I hope that now that we clearly understand how the CCAA was misused at Laurentian, all parties and all members of the Parliament will support this bill.”

McInnis thanked Angus for bringing forward the bill “and continuing these conversations to avoid any repeat of this tragic situation that befell Laurentian University.

“We hope all parties will support this legislation, because the risk to universities and colleges and the vital research and learning they provide around to our nation is simply too great to sit back and do nothing.”

Heidi Ulrichsen is Sudbury.com’s associate content editor. She also covers education and the arts scene.