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Federated universities also in the crosshairs as part of LU’s CCAA process

LU already revised funding model for Thorneloe, Huntington, U of S in 2020, leading to cuts
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Laurentian University’s nearly-deserted campus is seen here on Friday, Oct. 30, 2020. (Heidi Ulrichsen/Sudbury.com)

Although not much attention has been paid to the topic so far, Laurentian University intends to “review and restructure” its relationship with the federated universities operating on campus — Huntington University, Thorneloe University and the University of Sudbury.

Laurentian is taking these actions after declaring itself insolvent and announcing plans to restructure with a deadline of April 30 under the Companies’ Creditors Arrangement Act (CCAA).

The intention to review Laurentian’s relationship with federated universities operating on campus is referred to several times in court documents and other materials related to the CCAA process.

Other goals include the review and restructuring of academic programs and the Laurentian University Faculty Association collective agreement, and plans to reduce Laurentian’s overall employee headcount.

We reached out to all three federated universities to ask for interviews with their leadership, but all three institutions declined our request.

Laurentian has also declined Sudbury.com’s requests for interviews on the CCAA process since it was announced Feb. 1.

The president of the University of Sudbury, Fr. John Meehan, has, however, released a statement on the institution’s website.

“We understand there are questions,” Meehan said.

“To be clear, the University of Sudbury is a separate legal entity that manages its own financial and human resources, and we have not filed for creditor protection.

“To our students: rest assured that we remain dedicated to you. Also note that operations, activities and courses are continuing as planned and this term is not affected, as Laurentian University also communicated.

“We will continue to closely follow this developing Laurentian University situation to understand potential impacts; seek the advice of our legal counsel; and appeal to the support of our stakeholders and community partners. We remain committed to listening to our students, faculty, staff, colleagues, and communities, and to communicating updates when we have more details.”

In the FAQ section of the Laurentian website dedicated to the CCAA process, the university addresses the question “what will happen with the federated universities?”

“Laurentian recognizes the historic significance of the Federated Universities (the University of Sudbury, Thorneloe University and Huntington University),” the website said.

“As part of Laurentian’s overall plan, it intends to re-assess its relationship with the federated universities. Laurentian will re-evaluate the federated universities model in such a way that recognizes and preserves their historic significance while ensuring that the relationship reflects the current financial realities of each organization. 

“There will be no impact on students who are taking courses offered by any of the federated universities this term.”

The CCAA court documents explain the relationship between Laurentian and the federated universities.

The entities are affiliated through a variety of historical relationships and contractual agreements. 

Each of the federated universities are separate legal entities and are each governed by a board of governors independent of Laurentian. They own certain buildings on land that is owned by Laurentian and is leased to the federated university by Laurentian. 

The federated universities do not recruit or register their own students, nor do they grant their own degrees. All federated university programs and courses are offered through Laurentian. 

The federated universities do not receive funding directly from the Province of Ontario, but historically, Laurentian has transferred a portion of the funding it receives from the province to each federated university according to a set formula.

In response to its financial challenges, Laurentian implemented various cost-cutting measures last year. 

That included revising the funding formula for the federated universities. Court documents say that on May 1, 2019, Laurentian amended and restated its federated funding formula. 

This amendment was intended to align the financial relationship of LU and the federated universities with the new funding model introduced by the province, to which LU was subject. The effect of this amendment decreased the amount of funding distributed to the federated universities.

That “amended and restated” funding formula has already had consequences for at least one of the federated universities.

Thorneloe University president John Gibaut told Sudbury.com last year it was one of the reasons behind Thorneloe’s decision to no longer operate its theatre arts and motion picture arts programs.

“This isn't a decision that any university ever wants to make,” Gibaut said last spring. 

“It was not made lightly by Thorneloe. It buys us time next year to continue to work on the deficit … so that the other programs that we have offered for the last 60 years almost in Sudbury, we can continue to maintain that presence at Laurentian and Sudbury.”



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