Inspired by Laurentian University’s unprecedented insolvency restructuring under the Companies’ Creditors Arrangement Act (or CCAA), the federal government has launched consultations happening over the next month.
Minister of Innovation, Science and Industry François-Philippe Champagne has launched a consultation seeking feedback from universities, experts, lenders and other stakeholders on how to better protect the public interest functions of public post-secondary educational institutions when they become insolvent.
Over the next 30 days, Innovation, Science, and Economic Development Canada will hold a series of roundtable discussions with specific groups. The government will then engage with provincial governments.
“What happened at Laurentian University has raised concerns as to whether our current insolvency laws are fit for purpose to help publicly funded post-secondary institutions resolve financial distress,” said Champagne, in a press release.
“The impact this insolvency had on staff, students and the whole Sudbury community, was troubling and we need to make sure we learn from what happened. I look forward to hearing from Canadians on how we can better support these organizations when faced with insolvency or restructuring situations.”
To learn more or to become involved, you’re invited to reach out to [email protected].
Sudbury MP Viviane Lapointe said she has been working closely with Senator Lucie Moncion and Minister of Innovation, Science and Industry Champagne to ensure that what happened at Laurentian does not happen to any other post-secondary institution or community.
Senator Moncion has authored a Bill which is currently before the Senate. The Bill aims to prevent post-secondary institutions from accessing the CCAA as a means of dealing with financial hardship.
“I have heard first-hand the lasting impacts Laurentian University’s insolvency has had on our community,” said Lapointe. “This consultation is a key step in advancing Senator Moncion’s Bill. Once the Bill is passed at the Senate, it will be presented to the House of Commons.
“The consultations are also important as it provides members of our community an opportunity to share their experience with Laurentian University and the CCAA process.”
The Ontario Confederation of University Faculty Associations (OCUFA) issued a press release, applauding the government’s announcement.
Following through on a 2021 Liberal election platform commitment, the Trudeau Government announced that the consultations will be held over the next 30 days with universities, experts, lenders and other stakeholders.
The move marks a critical step in the right direction towards protecting public institutions from inappropriate and destructive corporate restructuring processes, said OCUFA.
“The government’s decision to consult with stakeholders on this issue is welcome news for all Canadians who cherish public universities in this country, and this announcement indicates a commitment to helping our post-secondary institutions thrive in the future,” said Sue Wurtele, President of the Ontario Confederation of University Faculty Associations.
“Since 2021, OCUFA and our allies have been fighting for changes to the Companies’ Creditors Arrangement Act (CCAA) and Bankruptcy and Insolvency Act (BIA), which are meant for private—not public—entities,” she added. “It’s time to move forward and prevent another disaster like the one Canadians saw at Laurentian University.”
Late last year, following Laurentian’s exit from insolvency after 22 months, Timmins-James Bay NDP MP Charlie Angus also 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.
