Laurentian University could have worked with the Ontario government and its unions to resolve its financial problems instead of resorting to the Companies’ Creditors Arrangement Act (CCAA), according to the Auditor General of Ontario. Bonnie Lysyk made this assessment as part of a report commissioned by Ontario MPs that found the use of CCAA to be “strategic” and “planned”.
Laurentian University turned to the CCAA on 1er February 2021. The establishment was then facing significant financial problems, with a debt reaching more than 87 million dollars. By resorting to a law usually reserved for private companies, the university was able to eliminate 69 programs; 29 of them were French-speaking. In April 2021, the French Language Services Commissioner of Ontario, Kelly Burke, determined that the university had violated the province’s French Language Services Act by eliminating some of these French-language programs.
The Auditor General’s final report is months overdue. On April 13, about two weeks before Ontario’s parliament was dissolved for the provincial election, Bonnie Lysyk’s office released a preliminary report in which she came to similar conclusions. The document released today, however, is more substantial and details the Auditor General’s reasoning. The Standing Committee on Public Accounts had requested the audit of the establishment’s operations on April 28, 2021.
According to the auditor general, the idea of using the CCAA had been germinating for more than a year before the university officially called on it. External legal counsel presented the idea to the institution in mid-2019. In March 2020, the university re-engaged lawyers to review strategic options to resolve financial issues. On both occasions, however, “the emphasis was always on filing for protection under the CCAA”.
In August 2020, Laurentian directly informed the Ministry of Colleges and Universities that it was considering resorting to the CCAA. The department then reportedly offered a third-party financial review to explore ways to get out of its mess. The university suggested accounting firm EY conduct the review, but the company, which eventually became a monitor in the CCAA proceedings, withdrew. “Neither the ministry nor Laurentian has proposed another financial advisor to fill this role,” reads the Auditor General’s report.
Bypassed laws
In the two years prior to initiating the CCAA, Laurentian University or its staff allegedly circumvented or violated provincial laws. The post-secondary institution has not filed any lobbying registrations since 2010, although between 2020 and 2021, “a number of employees” have met with departmental staff for the purpose of influencing government decision-making or to obtain financial support. The Auditor General suggests that this contravenes the Lobbyists Registration Act.
Laurentian also “violated the provincial wage restraint law for employees in the broader public sector, compensating senior managers $389,000 more than the law allowed,” Bonnie Lysyk also wrote in her report of more than 100 years. pages. Moreover, the hiring of senior executives lacked fairness or demonstrable justification, according to the report. The creation of some senior positions was not clearly justified and support for the selection of successful candidates was “insufficient”.
Fight for transparency
Bonnie Lysyk’s office has had to fight tooth and nail to get the job done over the past two years. The Auditor General was seeking to obtain certain confidential documents to complete her audit, but Laurentian refused to give them to her. In January, the Superior Court ruled that the institution did not have to turn over the documents because the Auditor General Act did not allow the incumbent to access information protected by attorney privilege. -customer. Bonnie Lysyk appealed the decision to the Court of Appeal on Tuesday and is now awaiting her decision.
The restructuring process, which cost the jobs of 195 staff and faculty members and affected 932 students, all but ended two months ago. The establishment’s creditors voted in favor of a plan of arrangement which was subsequently recognized by the court. The majority of creditors will receive approximately 14-24% of the compensation due to them. Comptroller EY had hinted that the university could close if creditors vote against the plan of arrangement.
This story is supported by the Local Journalism Initiative, funded by the Government of Canada.