The president of Laurentian University’s faculty association says a report on the insolvent university released by Ontario’s auditor general Wednesday is a “complete validation of pretty much everything we’ve said during the past 14 months.”
Although the report on the Sudbury university’s implosion is scathing, Laurentian University Faculty Association (LUFA) president Fabrice Colin said it’s good news in the sense that it sheds light on what happened.
“The truth is the first step toward a healing process … and a better future for Laurentian University,” Colin said.
Ontario Auditor General Bonnie Lysyk released a preliminary report April 13 summarizing the findings of her value-for-money audit of Laurentian University. A more fulsome report is to follow at a later date.
Laurentian University continues to undergo court-supervised restructuring after declaring insolvency and filing for creditor protection under the Companies’ Creditors Arrangement Act (or CCAA) more than a year ago.
The restructuring has included massive program and employee cuts, and the termination of ties with the federated universities operating on campus. Yet to come is a “plan of arrangement” in which Laurentian makes a plan to pay off its creditors, and finally exit the CCAA.
Among the conclusions in Ontario Auditor General Bonnie Lysyk’s report is that Laurentian did not have to file for creditor protection under the CCAA, and instead “strategically planned” this action at the advice of outside consultants.
The idea of filing for creditor protection under the CCAA was first floated by outside consultants in 2019, although it wasn't seriously considered until the spring of 2020, Lysyk said.
She determined that the primary cause of the university’s financial deterioration from 2010 to 2020 was its pursuit of poorly considered capital investments.
Lysyk said the poor financial management at Laurentian was allowed to continue in large part because of weak oversight by the university’s board of governors.
She also said prior to its CCAA process, Laurentian suggested a significant cause of its financial decline was “excessive faculty costs.”
However, she said her audit team found Laurentian’s overall faculty costs did not significantly surpass those of comparable universities, and found that it was high administrator salaries and expenses that negatively impacted Laurentian’s financial situation.
LUFA’s Fabrice Colin said every section of the report provides “a validation of what we’ve been saying.
“For instance, regarding the primary cause of the (insolvency) crisis, we mentioned that it was due to bad decisions made by the administration over the past decade,” he said.
“And it's clearly identified in the report that the primary cause of the crisis is the overspending on campus modernization that started in 2009.
“That was contrary to what appeared in (Laurentian President Robert Haché’s) affidavit. It was not due to the high salary of faculty members or relationships with unions.”
In a statement issued Thursday, the interim chair of Laurentian’s board of directors, Jeff Bangs, said Laurentian will "carefully examine" Lysyk's findings "as we build a new foundation for success and take steps to ensure Laurentian can never repeat the mistakes of the past.”
Colin said that since the province’s intervention at Laurentian resulted in changes to the university’s board of governors before Christmas — and in Bangs taking the reins as interim chair — there has been an encouraging “change in tone” from the board.
“It seems that there’s a commitment to more collaboration and more transparency,” Colin said.
Meanwhile, in the wake of the release of Lysyk’s report, the Canadian Association of University Teachers (CAUT) is calling for the immediate resignation of Laurentian University president Robert Haché and all senior administrators.
Laurentian’s faculty union has been calling for the same thing for the past year.
“Today’s report is a damning indictment of Laurentian University’s administration,” says CAUT executive director David Robinson, in a press release.
“The report shows that the administration intentionally delayed the disclosure of important financial information to the faculty association and ignored collective agreement provisions that would have avoided the costly legal proceedings over the past year.”
Laurentian University Staff Union (LUSU) president Tom Fenske said he had suspected much of what was in Lysyk’s report, but now it’s there in writing, for anyone to see.
“And it's just a preliminary report,” he said. “God knows what the actual report is gonna say.”
Fenske, who represents many of LU’s non-faculty employees, said he finds the timelines uncovered by Lysyk “disheartening.”
In the summer of 2020, when Laurentian was already considering a CCAA filing, LUSU renegotiated its collective agreement with Laurentian with the aim of cutting costs for the financially ailing university.
Fenske said LUSU went so far as to give Laurentian $450,000 to cover the cost of furlough days so its members would not be harmed.
“It is very frustrating to know that at a time when … we were stepping up to the plate to help the university financially, they were behind closed doors talking about going through credit arrangements,” he said.
“I can't think of a bigger betrayal to a union who's working with you to try to resolve a financial issue at this institution.”
The auditor general was tasked with a value-for-money audit of Laurentian by the Ontario legislature’s Standing Committee on Public Accounts almost a year ago.
Bonnie Lysyk said she’s only able to table a preliminary report on Laurentian at this time because of the university’s resistance — which has included legal challenges — to providing full information to her audit team.
“The delays have meant our office continued to receive and review information from Laurentian into April 2022,” she said.
Lysyk decided to table a preliminary report now “on what we’ve learned so far” because of the upcoming spring provincial election.
In the wake of the release of the report on Laurentian, local NDP MPPs France Gélinas (Nickel Belt) and Jamie West (Sudbury) introduced a bill in the legislature Wednesday to eliminate any future challenges to the role or powers of Ontario’s Auditor General.
Last year, Laurentian refused to provide privileged (confidential) information to Lysyk’s audit team.
Due to this dispute, Lysyk asked the courts for an interpretation of what is allowed for under the Auditor General Act. In January, a judge ruled that the act does not give AG the right to see privileged documents.
However, Laurentian did end up later having to hand over most of the requested documents.
This was after the Ontario legislature issued rare Speaker’s warrants demanding they produce the documents. Laurentian went to court to fight the enforcement of the Speaker’s warrants, but their request for a full stay was denied.
“For over a year, the Auditor General was trying to get answers about the root causes of Laurentian University’s bankruptcy,” said Gélinas, in a press release.
“What should have been a clear and simple audit of a publicly funded organization, overseen by the provincial government, ended up with many legal challenges. This is disrespectful to the people of Ontario and added large legal fees to an already bankrupt institution.
“In the end, it brought many delays before people were able to get answers to their questions, so they could turn the page and rebuild their trust in Laurentian University.”
The MPPs are bringing forward the bill shortly before the writ is to drop for the upcoming provincial election, which is to take place June 2.
Asked if there’s time to get the bill passed before the legislature dissolves, Gélinas said “a lot of bills are being put through quite quickly right now, so fingers crossed.”
As for the report itself, Gélinas said the last 14 months have been “pretty tough,” and during that time, people didn’t really know what was going on with Laurentian.
“So people sort of imagine the worst,” she said. “Now we have this report from an independent third party, that tells us that pretty much some of the worst that we had imagined is actually what went on, and that all of this could have been avoided.”
While the report said Laurentian turned down an offer of financial help from the province shortly before it declared insolvency, Gélinas said the provincial government knew that the university had maxed out its borrowing and was in a precarious financial position years earlier.
“The government never reacted proactively,” she said.
In her report, Lysyk recommends greater financial oversight of post-secondary institutions, something Gélinas agrees with.
While it would be difficult to bring such changes forward before the June provincial election, she said she will push for this to happen if she’s re-elected.
“I would argue that you can maintain academic freedom, but have strong financial oversight,” Gélinas said.
