Auditor General report details administration mismanagement, lack of government action to help Laurentian

Print Friendly, PDF & Email

SUDBURY/TORONTO, November 17, 2022 – A new report from the Office of the Auditor General of Ontario confirms that senior administration at Laurentian University intentionally sought to enter the inappropriate and unnecessary Companies’ Creditors Arrangement Act (CCAA) process on the advice of private financial advisors and lawyers, leading to terrible consequences for students, staff, faculty, and the Sudbury community. The Auditor General wrote that Laurentian spent more than $30 million in fees for these private services, which could have been avoided if the university had not filed for CCAA and could have been used for educating students and paying severance to terminated employees.

“We are glad that the Auditor General’s office released this report detailing the gross mismanagement of funds and process at the senior leadership level at Laurentian and the lack of proactive intervention from current and past provincial governments that could have prevented much of this catastrophe from happening,” said Sue Wurtele, President of the Ontario Confederation of University Faculty Associations (OCUFA). “The report is clear that the CCAA process allowed the administration to be less transparent with the community, bypass key elements of collective agreements, and reduce its payment responsibilities to creditors, including faculty and staff unions. This should never have happened, and should never happen again in Canada.”

The report includes details about years of poor financial and strategic decisions by senior administrators at Laurentian, including the use of restricted funds for capital projects, a 75 per cent increase in administrative costs and unwise human resources choices at the senior leadership level over ten years, and a lack of long-term planning for financial sustainability despite incurring a total debt of $107 million by 2020.

Further, the report found that senior leadership did not work with faculty and staff unions to deal with the university’s financial conditions. Senior leadership ignoring calls from the Laurentian University Faculty Association (LUFA) to trigger the financial exigency clause in their collective agreement and delayed sharing financial information with LUFA until filing for CCAA protection. In the end, nearly 200 staff and faculty at Laurentian and almost 150 at federated universities lost their jobs.

“The scars of this catastrophe will be with the Laurentian and Sudbury communities for a long time, and this report shows that the provincial government could and should have stepped in earlier to help Laurentian solve these financial problems,” said Wurtele. “More robust government funding, transparency and accountability from leadership, and faculty input on university governance will be imperative to Laurentian’s success going forward.”

The Superior Court of Justice approved a Plan of Arrangement for Laurentian in October 2022 and the university has started the rebuilding process under new leadership—a development OCUFA campaigned for throughout the year. OCUFA is also part of a coalition campaigning at the federal level for an amendment to the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA) to ensure the exclusion of public institutions that receive transfer payments and government operating grants. It is OCUFA’s goal that the CCAA process never be used to address financial troubles at a Canadian university again.

Founded in 1964, OCUFA represents 17,000 faculty, academic librarians, and other academic professionals in 30 member associations across Ontario. It is committed to enhancing the quality of higher education in Ontario and recognizing the outstanding contributions of its members towards creating a world-class university system. For more information, please visit the OCUFA website at www.ocufa.on.ca.

For more information, contact:
Manisha Aggarwal-Schifellite, Communications Lead at 416-306-6033 or manishaas@ocufa.on.ca