The current financial woes that have thrown Sudbury's Laurentian University into turmoil could have been avoided had they accepted financial assistance from the Ministry of Colleges and Universities in lieu of choosing to file for creditor protection.
This, according to a Preliminary Perspective on Laurentian University report tabled by Auditor Bonnie Lysyk in the Ontario Legislature today in which she also asserts that immediate cuts to programs and staff could have been avoided.
“We believe that these immediate cuts and the impacts they caused the Laurentian community could have been prevented if the university had accepted help from the Ministry,” Lysyk said.
“These financial decisions should have been about the students, professors and other staff, first and foremost. That was clearly not the case.”
A media release issued by the Office of the Auditor General of Ontario today notes that Laurentian strategically chose to file for creditor protection under the Companies’ Creditors Arrangement Act on Feb. 1, 2021, and soon afterwards made cuts to programs that affected students, faculty and other staff.
The university’s decisions beginning in 2009 to pursue multimillion-dollar capital expansion plans were the primary cause of their financial woes, Lysyk said in the release.
This expansion required increased debt to finance capital projects “without a realistic plan to raise the revenue needed for repayment,” according to the release, which noted the rising cost to finance and repay the debt were significant and impacted the university’s finances.
“A publicly funded university seeking creditor protection is unprecedented and should concern everyone,” Lysyk said. “There have been huge impacts on the Laurentian community, and it could serve to impact the confidence people have in our public institutions. People should know the full story of why and how this happened to prevent it from happening again.”
The Auditor General conducted this review at the request of the Standing Committee on Public Accounts, and Lysyk said she hopes to finalize and release a comprehensive special report “in the near future.”
“We hope Laurentian can emerge from the CCAA proceedings as soon as possible with a Plan of Arrangement, and with a strengthened foundation it can use to attract and educate future students, recruit top educators and conduct world-class research.”
Sudbury.com is following this developing story and will publish a more thorough report on the Preliminary Perspective on Laurentian University later today.