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University of Sudbury also fighting termination of federation agreement with Laurentian in court

Federated university said it would have $4M in layoff costs while Laurentian keeps all of the provincial grants
190613_MS_University_Of_Sudbury
University of Sudbury. (File)

Another federated university operating on Laurentian University’s campus has gone to court to fight Laurentian’s plan to terminate the more than 60-year-old federation agreement going back to the university’s creation.

The University of Sudbury filed a notice of motion opposing Laurentian’s move with the Ontario Superior Court of Justice on April 14.

The federation agreement is between Laurentian and the three federated universities operating on the university’s campus — the University of Sudbury, Thorneloe University and Huntington University.

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.

But Laurentian announced April 1 it is terminating the federation agreement as of the end of this month, throwing employees and students at the federated universities into limbo.

Laurentian president Robert Haché said the termination of the agreement was necessary in order to ensure that millions of dollars paid by Laurentian to the federated universities each year relating to the delivery of programs and courses will remain within Laurentian, as part of its path to future financial sustainability.  

Thorneloe University has also announced it is fighting the termination of the agreement in court.

The University of Sudbury said in its notice of motion that the termination of the agreement “will likely cause significant financial hardship” to the University of Sudbury.

The document said the immediate effect of a termination of the federation relationship, effective April 30, would be to leave the University of Sudbury unable to take the myriad steps needed to convert itself into an independent university.

At the same time, the University of Sudbury would be required to pay for all of the expenses associated with the federation relationship and its termination.

This would include the layoff costs of termination of its 13 full time professors, 37 sessional professors and other employees, which could reach up to $4 million; the annual upkeep of its buildings on the Leased Lands of at least $400,000; and the substantial costs of transitioning the administration, email addresses and related mechanics of being a fully independent university.

All of the above expenses would have to be paid without the University of Sudbury receiving any revenue from grants or tuitions, all of which Laurentian would keep. By disclaiming the agreements, Laurentian would put itself in a position to keep 100 per cent of all student revenues, without making any allocation of those revenues to the University of Sudbury.

The court document said the original federation agreement with the three federated universities included a “stated intention for a permanent and perpetual federated relationship.”

As part of the federation arrangement between Laurentian and the University of Sudbury, the parties entered into a perpetual lease dated April 9, 1965 for an initial term of 99 years.

The court document added Laurentian is insolvent “because it saddled itself with capital costs and debt and bank loans that are independent of and are not a result of the Federation Relationship. “Laurentian’s insolvency is not caused by the Federation Relationship or the Agreements,” the document said.

“It would be inequitable and unjust to allow Laurentian to disclaim the Agreements and cause direct and significant financial hardship on USudbury in order to benefit Laurentian’s trade and lending creditors.”

The University of Sudbury announced last month amid Laurentian’s insolvency that it plans to become an independent francophone institution.

However, a letter from Laurentian University’s lawyer, D.J. Miller of Thornton Grout Finnigan LLP, which is included with the court documents, makes it clear that Laurentian does not plan to transfer any of its francophone courses to the University of Sudbury.

“Laurentian does not agree that transferring its French language programmes and services to US, ‘… promotes both the financial viability of Laurentian and at the same time ensures respect for the rights of the linguistic minority,’” said the letter from Miller.