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Departures and new proposed plan make waves at Laurentian University

As two senior officials plan to leave their positions, a first attempt at a proposal for creditors is revealed.

BY JULIEN CAYOUETTE | SEP 07 2022

On July 21, Laurentian University filed its first proposed plan to creditors with Ontario’s Superior Court of Justice. Senior officials hope this plan will bring northern Ontario’s bilingual university closer to the end of its restructuring due to insolvency, under the protection of the federal Companies’ Creditors Arrangement Act (CCAA). Despite having detractors, the plan has received considerable support.

On the same day Laurentian filed its plan, board of governors chair Jeff Bangs announced the retirement of president and vice-chancellor Robert Haché and provost Marie-Josée Berger. The two officials will step down just before the end of the CCAA process they have been overseeing since it began on Feb. 1, 2021.

Since the restructuring began, faculty, staff, provincial associations and the Sudbury community have called for these officials to step down from their posts.

Laurentian University Staff Union (LUSU) president Tom Fenske said this is a necessary move if the university hopes to earn back the community’s trust: “This is the first step.”

Though these departures may seem like a win, they shouldn’t distract from the problems the two officials and their institution have caused, warned former University of Sudbury Indigenous studies professor Will Morin.

“Their departure is merely a smokescreen to divert attention from what [the institution has] done over the past 10 years,” he insisted, adding that their exit will simply distance them from the truth when it comes out.

Mr. Morin said that over the past 10 years, he’s watched Laurentian slowly try to appropriate content and money granted by the government for First Nations education. Laurentian heavily promoted the Indigenous content it was adding while undermining U of Sudbury’s Indigenous studies program, the second oldest in North America (until May 2021, U of Sudbury was affiliated with Laurentian).

“Their goal was to smother the competition and get more government funding. Their self-centredness will probably cause university education in northeastern Ontario to implode,” said Mr. Morin, adding that the university’s actions are nothing short of colonial.

Thierry Bissonnette, a former Laurentian professor in the department of French studies and one of more than 100 faculty laid off in April 2021, said these departures come as no surprise. “They found two people at the tail end of their careers to do the mercenary work,” he explained.

No date has been set for Dr. Haché and Dr. Berger’s retirements as it’s hard to know when the CCAA process will end. Mr. Bangs stated in the press release that “an interim president and provost will be appointed, and the formal search process to identify a permanent president, in consultation with the Laurentian community, will be commenced.” The university has declined to comment further.

Some creditors to receive 14 to 24 per cent

Laurentian’s affected creditors will vote on the proposed plan on Sept 14. On Aug. 16, around a month before the vote, the Laurentian University Faculty Association (LUFA), LUSU and the board of governors recommended in a joint press release that creditors vote in favour of the plan.

Only creditors who don’t stand to get all the money they’re owed will have the right to vote. Those who are guaranteed reimbursement under the CCAA – such as laid off employees with vacation pay compensation claims – will not be voting. But other faculty and staff with pending claims, such as scholarship fund holders and banks, have been informed of the plan and how to vote on it.

According to the documents filed by the university, these affected creditors can expect to receive 14.1 per cent to 24.2 per cent of what they are owed, far less than some were anticipating. A group comprised of a dozen terminated professors have sent a letter to their former colleagues explaining why they intend to vote against the plan and why others should do the same.

These professors say that it is unwise to accept an initial offer. Meanwhile, Laurentian insists this plan will be the only offer. If the plan is rejected, the university will be liquidated.

The terminated professors think this is just a negotiation tactic. They say creditors often vote more than once when an organization is trying to restructure. “We’re convinced there may be another vote, though it’s not guaranteed,” admitted Dr. Bissonnette, one of the professors who signed the letter.

“But we do think that the province didn’t go this far to save its long-term investment just to let it crumble in the end. They’re just threats.”

As the first publicly funded entity resorting to the CCAA, Laurentian’s case remains unique. Its funding options are limited.

Under the proposed plan, the only money going into the reimbursement pool is the $53.5 million in real estate assets the Ontario government has committed to buying from the university. For the plan to work as intended, the province must buy at least $45 million worth of property.

“All of the money invested by the government will go to creditors,” explained LUFA president Fabrice Colin.

Before deciding to support the plan, LUFA continued its negotiations to clarify two items. LUFA wanted a guarantee that it would be consulted to a greater degree in the management and governance re-engineering to take place after the CCAA process ends and that some teaching staff would be reinstated. Several other professors and employees have quit since the mass layoff in April 2021. Unlike employees, no professors on the recall list have been reinstated to a permanent position. According to the Aug. 16 press release, up to three tenure track positions will be created in 2023.

LUSU held an information session in mid-August to go over both possible outcomes. “I think voting against the plan could be quite risky,” stated Mr. Fenske. “It could lead to more issues than voting yes, but we’ll let our members decide.”

Adopting the plan to ensure Laurentian’s survival would allow the university to keep 600 jobs, hundreds of part-time positions and make sure students aren’t affected, he said.

Unions have also secured the right to sue the university’s senior officials once they are no longer under CCAA protection. They mainly intend to sue the directors and officers they believe are responsible for allegedly misusing the retiree health benefits fund. “They were supposed to hold that money in trust but they didn’t,” maintained Mr. Fenske. “They should be held accountable for what they did.”

If its creditors approve the plan, the university will seek court approval on Oct. 5, bringing Laurentian one step closer to the end of the process launched 20 months ago.

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  1. Ted Mansell / September 11, 2022 at 09:51

    How did the financial situation at Laurentian get so bad? Look at the good people that have to now suffer to keep this sinking ship barely afloat. How badly was this university being mismanaged into the ground without alarm bells going off at Queen’s Park much, much sooner? I’m sure there are many others and nor just myself asking this simple question. What an absolute travesty. Where was the Province (Ministry of Colleges & Universities) and what were they doing about it (or not doing) as this financial crash & burn was happening? Seems to me there’s been a lot of folks sleeping on their watch instead of coming to the rescue much, much sooner.

    Hindsight is always 20/20. I’m sure there are many players wishing much more proactive interventions were undertaken in a more timely fashion than the devastating hail-mary approach ie “some poor souls must now be thrown overboard to save the rest” response we are witnessing now. Wow.

    There should be an independant inquiry. Taxpayers deserve proper answers as do the unfortunate employees and retirees that now are asked to pay the biggest price for this unforgivable economic mismanagement. Its bad enough such mismanagement bankruptcies occur in the private sector but in the public sector with governmental funding, scrutiny (allegedly) and oversight? Absolutely shameful and indefensible.

    Lessons being learned the hard and painful way…

  2. Lorraine Gosselin / September 13, 2022 at 20:17

    It is a shame that the terminated professors get only 14 to 24 percent on their severance package…It is already hard enough to have your carrer terminated by mismanagement after so many years of hard work…it is a huge and unthinkable lack of human dignity from the government and the decision making people involved in the ccaa process for those terminated professors.