Calling the university “insolvent,” the president of Laurentian University said a number of events over the past decade have put an increased strain on the operational and financial health of LU.
This as Laurentian announced today it has commenced a court proceeding under the Companies’ Creditors Arrangement Act (CCAA).
“These strains include a combination of factors such as historical recurring deficits, declining demographics in Northern Ontario, the closure of our Barrie campus in 2019 and the domestic tuition reduction and freeze that was implemented in 2019 and most recently various costs and revenue impacts due to the global pandemic,” said Laurentian president Robert Haché in a Feb. 1 statement.
The statement is published on a special website set up by Laurentian dedicated to the university’s financial situation, www.laurentianu.info.
Besides the statement from Haché, it also contains a FAQ section and documents related to the CCAA filing.
A source told Sudbury.com this afternoon that Laurentian found out this past December that a liability it thought was about $100 million was actually closer to $200 million, and the university wasn’t aware of the size of the challenge it was facing.
Read Haché’s full statement below:
“Let me begin by saying that our students and their post-secondary experience is the number one priority of Laurentian University. Our faculty and staff are critical to providing this student experience.
“I write to you today with a difficult but optimistic message. Laurentian University has commenced a court-supervised proceeding under federal legislation. It will not affect the day-to-day operation of the University or the student experience that defines Laurentian. All decisions that are made will continue to be made in the ordinary course, and will be done in the best interests of those who rely on us to provide a top-quality education.
Since our founding in 1960, Laurentian has strived to provide high quality education to the community of Sudbury and Northern Ontario. Our reputation as a leading university for Northern Ontario continues to grow and so does our international recognition. Our success rate with graduates is amongst the best in the province.
“Despite this long history of success, a number of developments over the past decade have put an increased strain on the operational and financial health of the University. These strains include a combination of factors such as historical recurring deficits, declining demographics in Northern Ontario, the closure of our Barrie campus in 2019 and the domestic tuition reduction and freeze that was implemented in 2019 and most recently various costs and revenue impacts due to the global pandemic.
“As we have communicated previously, we are facing unprecedented financial challenges and our financial health is currently amongst the weakest in the province compared to other universities. We intend to change that.
“Despite our best efforts over the last year, Laurentian is insolvent. This is a problem that can and will be addressed if all stakeholders work together to implement a vision for Laurentian that includes more financially sustainable operations.
“After much consideration, today the University, at the direction of the Board, commenced a proceeding under the Companies’ Creditors Arrangement Act (CCAA) which will allow the University to financially and operationally restructure while continuing to operate in all respects.
“As part of the CCAA proceeding and at the request of the University, Ernst & Young Inc. has been appointed by the Court as the court-appointed Monitor. The Monitor’s role includes assisting us to formulate and implement our restructuring plan under the supervision of the Court.
“We anticipate that the first, and most critical phase of this process will take approximately three months, at which time we intend to have a restructured framework for the University which provides a sustainable and clear path forward. We know you will have many questions. We will be transparent and will strive to answer as many questions as quickly as possible during this process. In furtherance of this goal, we will be providing frequent communications over the coming months to update you on the steps we will be taking and the progress we have made. In the meantime, the most up to date information is available on our website at www.laurentianu.info.
“All materials filed by any stakeholder in the CCAA process, including all Reports to the Court filed by the court-appointed Monitor Ernst & Young Inc. are available on the Monitor’s website at: https://www.ey.com/ca/Laurentian
“I know that this may be a stressful time of uncertainty for all. For those who may need help to address this difficult news, I encourage you to seek support through our available mental health services.
“You have my commitment that we will work hard to get through this process and to ensure that Laurentian continues to operate on a solid financial basis well into the future.
Thank you, Merci, Miigwech
Robert Haché, Ph.D
President and Vice-Chancellor