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Students, faculty shocked by Laurentian’s announcement it’s insolvent, filing for court protection

‘We were informed at the same time as anybody else,’ said the president of faculty association
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Laurentian University. (File)

Students and faculty at Laurentian University say they were shocked Feb. 1 after the university’s announcement that it’s insolvent, and will be restructuring under the Companies’ Creditors Arrangement Act.

“We were informed at the same time as anybody else,” said Fabrice Colin, president of the Laurentian University Faculty Association (LUFA), adding that he was as shocked as the rest of the community about the announcement.

“Obviously there are many concerns from people. Many were worried about what the future could be for the institution.”

Malek Abou-Rabia, vice-president of education with the Laurentian University Students’ General Association (SGA), said the announcement was “eye-opening and shocking for sure.”

“Naturally a lot of students were worried at first, but then realized this is not the end for Laurentian,” Abou-Rabia said, adding that student leaders will have a chance to give their input on the university’s future.

“This is a chance to evolve, as the document we received said, to turn Laurentian into Laurentian 2.0, and that really (the CCAA filing) won’t affect our studies at the end of the day, which is the most important thing for a student, right?”

A leaked Feb. 1 memo from Laurentian University president Robert Haché said it took the step of the CCAA filing because “despite Laurentian’s best efforts, the university has not been able to achieve the type of cost-cutting and restructuring measures to position it for future success outside of this type of formal proceeding. 

“This was a difficult decision and one that was not made lightly,” Haché continued.

“I want to assure you that we sought and obtained highly specialized legal and financial advice in coming to this decision, and determined that it was in the best interest of the university and our community. Further, it was made with the best interest of our students, and with a view to ensuring the long-term financial sustainability of the university. 

“Over the coming months we will work closely with our stakeholders and the court-appointed monitor on ‘Laurentian 2.0’ – which reflects our exciting plan to restructure and rebuild a stronger Laurentian. It will not be easy, we know that, but we are prepared to do the work to succeed.”

Colin said LUFA planned to meet with its members at 5 p.m. today about the situation.

“We have been in touch also with legal counsel, and we’ll be able to inform our members better on the next steps forward,” he added.

A press release from LUFA said that “as to how Laurentian got itself into this mess, the faculty association has repeatedly raised concerns about the increasingly secretive and non-consultative approach the university administration has taken to making important financial decisions.”

While there are some important questions to be asked, the press release said Colleges and Universities Minister Ross Romano has a responsibility to step up and provide Laurentian with the funding it needs, not just to survive for a few more months, but to secure the public institution’s long-term future.

“While being shocked by (the CCAA court filing) — it’s quite unprecedented in the sector — we raised over the years many concerns over the operations of the administration and the lack of transparency,” Colin said.

Colin said that LUFA has been asking for financial information from Laurentian for many months now as part of the collective bargaining process.

On Jan. 27, LUFA had put out a press release, demanding financial data from Laurentian, and threatening to make a bargaining in bad faith complaint to the Ministry of Labour if the university wasn’t forthcoming.

Through the CCAA filing, “it appears that finally we will be provided that information,” Colin said.

Asked if Laurentian will use the CCAA process to extract concessions from faculty, Colin said “for sure, in the process, if we’re going down that road, concessions will be asked for everyone.”

In the FAQ section of the website dedicated to the CCAA process, Laurentian addressed some issues related to faculty, staff and students.

It said that as part of the CCAA proceeding, Laurentian will need to make some difficult decisions to ensure its future financial sustainability. These difficult decisions will necessarily include lay-offs of certain employees.

Everyone employed by the university during the period in which the CCAA process is ongoing will be paid in the ordinary course from the proceeds of the $25 million in DIP financing that has been made available to the university.

DIP financing is a special form of financing for insolvent debtors while restructuring is ongoing.

The CCAA process is taking place as LUFA is in contract negotiations with Laurentian.

Laurentian said on the website that as part of the restructuring, it will seek the appointment of a mediator by the court as a neutral, independent party to assist Laurentian and and its faculty association (LUFA) to achieve a mutually-acceptable outcome, as the prior collective agreement expired and a new one has not been negotiated to date. 

Due to the nature of Laurentian’s operations and the need to prepare for the next academic year, and the availability and terms of the DIP financing available to the University, Laurentian and LUFA will need to reach a resolution on the terms of a new collective agreement by April 30, 2021, said the university on the website.

Responding to students’ possible worries, the website said the day-to-day operations of Laurentian will not change during this academic term, thus all classes will continue to completion. 

However, as part of the CCAA proceeding, Laurentian will be reviewing its program offerings to ensure that all classes and programs have sufficient student interest to justify their continued offering. 

Classes and programs with chronic low enrolment may be restructured to help facilitate Laurentian’s financial sustainability. 

The SGA’s Abou-Rabia said he is actually enrolled in a dual degree in entrepreneurship and international management. New enrolment to both of these programs was suspended by Laurentian in 2020.

“Both those programs have been suspended enrolment for the last six months, and I haven’t had any changes to my course offerings and my progression at this point,” Abou-Rabia said.

“I think a lot of students will be in the same boat I am now, but to be honest, I think Laurentian has already delivered on that promise for the students that are affected already. 

“I don’t really see that this can’t just happen at a greater scale.”

Abou-Rabia said he wants to emphasize that this is merely a bump in the road for Laurentian. “It’s a big bump, but the road goes on, I think,” he said.