Poor management, new buildings led to Laurentian University insolvency, Ontario AG's preliminary report says
CBC
Laurentian University's capital expansions from 2010 to 2020, along with "poor management of its financial affairs," were big factors in the Sudbury school's insolvency last year, according to a preliminary report by Ontario's auditor general.
In her "Preliminary Perspective on Laurentian University," which was submitted to the Legislature on Wednesday, Bonnie Lysyk says Laurentian refused to seek financial assistance from the province and made a mistake when it opted to go through the Companies' Creditors Arrangement Act (CCAA) for restructuring.
"As of March 3, 2022, the university had incurred legal and other financial consultant fees associated with its insolvency of more than $24 million," the auditor general said in the document.
The Sudbury university announced it was insolvent in February 2021. On April 12 that year, it cut 69 programs, which affected an estimated 932 students. Laurentian also fired 195 staff and faculty members with little notice and severance.
Like all universities, Lysyk said, the COVID-19 pandemic affected Laurentian's finances, but its problems started long before, in 2010, when it went on a building spree to expand its Sudbury campus.
"There wasn't the revenue coming in to support the payment down of the principal and interest from those investments," Lysyk told CBC News.
She said there doesn't seem to be any intentional wrongdoing by Laurentian, and added its capital expansion plans were well meant. But she said the university's board of governors failed to provide proper oversight, and the Ministry of Colleges and Universities did not intervene in time when it was clear Laurentian was in financial straits.
From 2010 to 2020, Lysyk also found, Laurentian senior administration costs grew by 75 per cent, and in 2018 they peaked at more than $4 million annually.
In her preliminary perspective, she said the size of Laurentian's senior administration had been consistently larger than most other Ontario universities. As well, some senior administrators' salaries exceeded limits set by legislation meant to put a ceiling on public-sector pay.
Lysyk said Laurentian's solution to its financial problems, restructuring under the CCAA, was a mistake.
The CCAA was created as a tool for insolvent private companies to restructure, but it had never been applied to a public university like Laurentian.
"In this particular case, we do believe that Laurentian needed to pull together a stronger ask of the ministry and work with the Ministry of Colleges and Universities to pull together a plan, even a year ahead of time, to support them in their endeavours going forward," Lysyk said.
She noted that nearby Nipissing University, which is in North Bay, ran into financial difficulties in 2014. But Nipissing worked with the Ministry of Colleges and Universities early on to seek funding and improve its position.
In her preliminary perspective, Lysyk said she believes Laurentian was influenced by external parties to use the CCAA, up to a year before it announced it was insolvent.
Liberal leadership hopeful Mark Carney says he'd run a deficit to 'invest and grow' Canada's economy
Liberal leadership hopeful Mark Carney confirmed Sunday that a federal government led by him would run a deficit "to invest and grow" Canada's economy, but it would also balance its operational spending over the next three years.
The St. Anthony, N.L., Boys and Girls club is "starting to dream about what's possible to make the community even stronger" after its building was destroyed by a fire, said national CEO Owen Charters.
Groundhog Day: The Musical, based on the 1993 Bill Murray film, is having its Canadian premiere in Sudbury., following stints in London and New York.
A vacant north-end Halifax building that was previously described as an "immediate safety risk" by a fire inspector caught fire early Sunday.
This is part of a series called Ann's Eye, featuring the work of Ann Paul, a Wolastoqey content creator. You can see more Ann's Eye pieces by clicking here.
Olivier Soumis's green canvas tent sits in the middle of the frozen St. Lawrence River, providing a stark pop of colour against the muted tones of the snow and the open water in the distance.
A debate over how to adjudicate Treaty 4 rights was at the core of a federal court hearing in Manitoba this week.
Kael Flynn is the scion of a Saskatoon fashion dynasty, but the 22-year-old is more concerned with perfecting his curveball than selling suits.
The Regina Humane Society celebrated its first year in its new building on Saturday.
Beekeepers in Alberta's Peace region are watching nervously as the threat of a trade war looms.
In a world of shrinking margins and shuttered breweries, the last thing the craft beer industry in British Columbia needs is a tariff pushing up the price of the humble beer can.
Hamilton and the surrounding area is under a winter storm warning as up to 25 centimetres of snow is expected to accumulate Sunday, says Environment Canada.
With snow hammering Toronto overnight Saturday, Environment Canada is warning that the heaviest snowfall is still to come and travel conditions could "rapidly deteriorate" Sunday morning.