The story of Laurentian University’s financial crisis is one of predictable evolution but unprecedented intensity. It chronicles Laurentian’s journey through its restructuring under the Companies’ Creditors Arrangement Act (CCAA), which brought a level of disruption and intensity previously unseen in Canada’s higher education sector.
When I was approached by the president and vice-chancellor of Laurentian to serve as interim vice-president finance and administration, I knew I was stepping into a complex and high-stakes environment. While I had experience supporting organizations through financial challenges, this was my first direct involvement in a court-supervised CCAA process—and certainly the first time I had seen it applied to a public institution like a university. Being asked to support Laurentian throughout the CCAA process offered an unparalleled opportunity to help a not-for-profit organization in serious financial difficulty.
The process was not without challenges. The application of the CCAA framework, designed primarily for for-profit entities, within an academic setting where decision-making norms are rooted in collegial governance was culturally problematic. The tension between the swift, directive nature of court-supervised decisions and the consensus-driven traditions of academia created unique obstacles.
Over nearly two and a half years, I worked alongside a team of dedicated board members and employees, navigating the immense financial, operational, and reputational trials that came with restructuring a publicly funded university. While the journey was far from easy, I believe that it has positioned Laurentian to succeed in delivering on its unique tricultural (Indigenous, English, French) post-secondary education mandate in Northern Ontario. The university emerged from the proceedings in a healthy financial position with much lower operating costs and collective appreciation of its role in the communities that it serves. While the process ultimately stabilized Laurentian’s financial position, it also left a legacy of unanswered questions and sparked critical conversations about institutional autonomy, governance, and the limits of existing financial oversight mechanisms in the public sector.
In writing this story, my goal is to contribute to ongoing public dialogue around governance and accountability in public-sector organizations. Through this account, I hope to address misconceptions about Laurentian, illuminate the complexities of the CCAA proceedings, and shed light on the broader implications for governance and public trust in higher education.
The Laurentian story is not just about a university’s financial restructuring—it is about resilience, adaptation, and the ongoing quest to balance financial realities with the core mission of post-secondary education.
The information and commentaries for this story came from court filings (e.g., CCAA Monitor Reports), audited financial statements and budget documents, government reports (including from the Office of the Auditor General of Ontario), Laurentian’s public board minutes, and various media articles.
I was directly involved in the financial restructuring process at Laurentian University and write from the perspective of an experienced participant. The views and interpretations presented in this article are solely those of the author and do not represent the official position of Laurentian University or any affiliated parties. This article is based on publicly available information, personal observations, and professional experience, and is intended to contribute to scholarly discourse on financial governance, institutional restructuring, and public-sector accountability. It should not be interpreted as legal or financial advice. (I would like to thank Dr. Sheila Embleton, interim president and vice-chancellor of Laurentian University, for her excellent insights and comments that contributed to writing the Laurentian story.)
Introduction
When I joined Laurentian in August 2021, the university was already deep into its restructuring under the CCAA. My mandate was to help navigate the institution through the remainder of the proceedings while supporting its ongoing financial and operational needs. Initially engaged for six months, I had my term extended many times to over two and a half years. The process revealed the complexities of applying an instrument like the CCAA to a publicly funded university.
Laurentian’s financial difficulties were the result of a combination of strategic decisions—including expansion plans for a satellite campus in Barrie and significant capital investments financed largely through debt—alongside external pressures such as a government-mandated 10 per cent tuition reduction and the COVID-19 pandemic. By February 2021, Laurentian could no longer meet its financial obligations and sought court protection under the CCAA.
The application of the CCAA to a publicly funded university was unprecedented in Canada and highly controversial. The directive, corporate-style approach of the CCAA clashed with the traditional culture of collegiality within academia, which created tensions among employees, creditors, academic partners, the community, and government stakeholders. Despite widespread assumptions, government intervention to rescue Laurentian did not materialize, a decision that surprised creditors, particularly the lending banks. The Laurentian case challenged the long-standing assumption that publicly funded universities in Canada were insulated from financial insolvency.
The controversy surrounding Laurentian’s use of the CCAA led to significant legislative changes. In June 2024, the federal government amended the CCAA and the Bankruptcy and Insolvency Act to specifically exclude public universities from utilizing these mechanisms in the future. These amendments, which followed extensive public debate and policy review, reflected the view that post-secondary institutions require sector-specific restructuring tools better aligned with their public mandates and governance structures.
The CCAA was a painful journey, resulting in the elimination of over 76 academic programs and a workforce reduction of nearly 25 per cent. The restructuring measures were accompanied by significant legal and consulting expenses exceeding $32 million, coupled with extensive negative media coverage that damaged the university’s reputation (all dollar amounts are in Canadian dollars). Nevertheless, the process achieved its critical financial milestones, including the recapitalization of the university’s balance sheet and significant reductions in operating costs.
Laurentian’s governance shortcomings were a focal point during the process. The Office of the Auditor General (OAG) criticized the university’s financial management and questioned how its finances could deteriorate so severely under the oversight of its board of governors. The OAG also raised broader concerns about the governance practices of publicly funded institutions.
In the end, Laurentian successfully negotiated a Plan of Compromise or Arrangement (hereafter called the Plan) and emerged from the CCAA as a financially stable university, albeit at a significant cost. However, it is expected that the financial conditions imposed by the Plan, ongoing frozen grant funding, capped tuition fees, and restricted international enrollment will continue to exert financial pressure on the university in the coming years.
The use of the CCAA for Laurentian was a double-edged sword. It enabled the university to address immediate financial challenges but came at a high cost in terms of reputation, employee morale, and academic offerings. Some have argued that a more traditional approach, such as invoking the financial exigency clause in the Laurentian University Faculty Association collective agreement, could have achieved similar outcomes with less disruption.
Ultimately, Laurentian’s experience serves as a cautionary tale for other universities. The need for robust governance, prudent financial planning, and clear contingency strategies is paramount. While the CCAA proceedings provided a path to financial stability, the broader implications of this landmark case will continue to shape discussions about the financial oversight of post-secondary institutions in Canada.
A Brief History
Laurentian University of Sudbury is located within the territory of the Robinson-Huron Treaty of 1850, on the traditional lands of the Atikameksheng Anishnawbek, and within proximity to Wahnapitae First Nation. For over 60 years, Laurentian has provided post-secondary education to students in Northern Ontario.
Laurentian dates back to 1913 as a Roman Catholic institution called the Collège du Sacré-Coeur and started granting degrees in 1957 under the name of the University of Sudbury. It evolved from a federation of various religious institutions representing the Roman Catholic, United, and Anglican churches and was incorporated as a non-denominational, bilingual institution in 1960. The federated religious institutions included the University of Sudbury College, Huntington College, and Thorneloe College, which joined in 1963. Other affiliated schools included the Collège Universitaire de Hearst in Hearst, Nipissing University College in North Bay, and Algoma University College in Sault Ste. Marie. Over the subsequent years, Algoma, Nipissing, and Hearst became autonomous institutions while the federated relationships with the University of Sudbury, Huntington, and Thorneloe were dissolved as a result of the CCAA proceedings.
Laurentian’s Financial Challenges
Laurentian faced persistent financial difficulties for most of its recent history, stemming from a combination of systemic challenges, external pressures, and governance shortcomings.
Between 2011 and 2020, Laurentian University reported operating deficits in eight of its ten fiscal years. These deficits ranged from $1.4 million (2013–2014) to $6.5 million (2010–2011), with minor surpluses of $0.2 million in 2013 and $2.1 million in 2018. The university’s inability to cover its expenses and generate reserves left it ill-equipped to invest in strategic opportunities or address unexpected events. By 2020, its available cash and short-term investments had plummeted to $4.5 million from $31 million in 2010.
Laurentian’s capital expansion program implemented between 2010 and 2015 amounted to approximately $120 million. Specific capital projects included a new student residence ($26 million) and campus modernization ($58.9 million), which were financed through unsecured external debt, provincial contributions, and restricted funds.
In order to partially fund its capital projects, Laurentian blurred the lines between restricted and unrestricted funds. Although it is an acceptable practice for universities to use unrestricted funds for the “internal financing” of capital projects, the use of externally restricted funds breached the covenants with donors and funding bodies.
As a result of Laurentian’s capital investments, long-term debt nearly doubled, rising from $24.7 million in 2010 to $89 million in 2020. While these projects were intended to modernize the university’s facilities and attract students, they were undertaken without a comprehensive risk assessment. The timing of these investments also coincided with declining student enrollment, which undermined the projects’ financial viability. To illustrate, the university experienced a steady decline in full-time equivalent (FTE) students, from 7,246 in 2015–2016 to 6,834 in 2019–2020,[1] affected in part by external factors such as the loss of Saudi Arabian international students in 2018. Tuition revenues stagnated. Provincial tuition policies further constrained revenue growth. The COVID-19 pandemic exacerbated these pressures.
The Barrie campus expansion was another costly investment. Approved by the board in 2014 with a $25 million commitment, contingent on receiving provincial and municipal funding, the project was ultimately abandoned when the necessary funding failed to materialize. The subsequent termination of Laurentian’s partnership with Georgian College in 2019 resulted in additional operating costs for the university.
The university’s governance failed to adequately assess and address the risks associated with Laurentian’s financial strategies. Despite recurring deficits and increasing debt levels, the board of governors approved significant capital expenditures while at the same time projections from the Ontario Ministry of Finance indicated a stagnant pool of 18-year-olds outside the Greater Toronto Area. The absence of a robust enrollment plan underscored the critical gaps present in Laurentian’s capital investment program.
Laurentian’s financial decline was not the result of a single factor but a confluence of untimely capital investment decisions, systemic enrollment challenges, and external economic pressures. While the OAG correctly identified capital expansion as a major contributor to the university’s financial crisis,[2] broader structural and regulatory issues amplified its impact.
The Decision to Invoke the CCAA
Despite efforts to balance its operating revenues and expenditures, Laurentian struggled with chronic operating deficits, a growing debt burden, and dwindling resources. These challenges were compounded by the global COVID-19 pandemic and a leadership change in July 2019.
By April 2020, Laurentian’s financial difficulties had reached a critical level. The university had only $4.5 million in cash and short-term investments to fund its operations and was heavily reliant on using an unsecured line of credit of which $14.4 million was drawn by April 2020. Coverage of the university’s long-term debt of $89 million further strained its resources, with unrestricted net assets at a negative $20 million.
Operating deficits were a recurring issue, with the 2019–2020 fiscal year showing a $3.1 million deficit. Preliminary estimates for 2020–2021 projected a $7.4 million deficit, which was later revised to $10.6 million due to additional COVID-19-related risks.
In July 2019, a new president and vice-chancellor was appointed amid growing financial concerns. The leadership changes also included losing other executives, which resulted in a significant gap in institutional knowledge at a critical moment for the university. While the new leadership aimed to address pressing financial issues, the lack of historical continuity complicated the decision-making process during the evolving crisis.
Recognizing the severity of Laurentian’s financial problems, senior management, the board of governors, and the Ministry of Colleges and Universities (MCU) engaged in numerous discussions between March and June 2020. These conversations highlighted the university’s deteriorating financial condition who sought urgent support from both the provincial and federal governments.
In June 2020, the board of governors directed the president to continue engaging with government representatives for financial assistance and to retain the services of external advisors specializing in restructuring and insolvency. To this end, Thornton Grout Finnigan—a leading Canadian legal firm specializing in insolvency—was selected as legal counsel and Ernst & Young Inc. was appointed to assess Laurentian’s financial situation, prepare restructuring options, and explore a potential CCAA filing.
The CCAA Proceedings
Laurentian’s decision to file for the CCAA was heavily influenced by the financial review conducted by Ernst & Young, who projected a $29 million cash shortfall over the February to April 2021 period. To address the immediate liquidity needs, the board approved debtor-in-possession (DIP) financing of $25 million to support operations during the restructuring. The actual net operating cash flow shortfall for the January 30 to April 16, 2021, period came in at $4 million, significantly better than the $29 million projected.[3] At the end of April 2021, the university had net cash availability of $12 million (excluding amounts drawn from the DIP financing).
Throughout the CCAA, Laurentian faced complex negotiations with various stakeholders and creditors, including negotiations with the unions to immediately reduce wages and benefits. In addition, the university had to contend with a special audit by the OAG, investigation by the French Language Services Commissioner on the termination of French programs, and questions about the university’s compliance with the provincial Lobbying Act and regulations.
Soon after filing for the CCAA, Laurentian undertook significant restructuring measures. Low-enrollment programs were eliminated or consolidated, affecting approximately 10 per cent of students, and the university worked to facilitate transfers for those unable to complete their programs. The negotiations with the Laurentian University Staff Union (LUSU) and Laurentian University Faculty Association (LUFA) resulted in the elimination of 42 LUSU positions and 117 LUFA positions, along with 37 non-union positions. Salary reductions, unpaid furlough days, and adjustments to pension entitlements were also implemented. Post-retirement and early retirement benefits were eliminated, and pension contributions were adjusted. Laurentian also terminated its agreements with the federated universities, eliminating approximately $7.7 million in annual transfer payments. These changes generated annual operating savings of approximately $40 million, roughly 20 per cent of Laurentian’s operating budget.
By November 28, 2022, Laurentian was ready to start implementing its Plan of Compromise or Arrangement (the Plan), which had been approved by 87.4 per cent of its creditors. Key financial aspects involved the replacement of the DIP loan with an MCU Exit Loan, and the sale of real estate assets to generate up to $53.5 million for distribution to creditors, representing a recovery of just under 28 per cent of approved claims.
Ultimately, Laurentian emerged from the CCAA as a financially viable institution. However, the process was costly and highly disruptive, with far-reaching impacts on the institution, its employees, students, and the community from program cuts, job losses, and enrollment decline. Legal, consulting, and administrative fees exceeded $32 million, excluding external stakeholders’ expenses. The application of the CCAA restructuring approach by Laurentian demonstrates the challenges of restructuring a publicly funded organization with an instrument more suitable to a for-profit organization. Key takeaways from the experience highlight the importance of balancing transparent stakeholders’ communication and the need for confidentiality during the proceedings. While the university’s future appears secure, the lessons learned from this unprecedented restructuring will resonate across Canada’s higher education sector for years to come.
The Auditor General of Ontario
The financial collapse of Laurentian and the decision to seek protection under the CCAA in February 2021 prompted the Ontario Standing Committee on Public Accounts to intervene. The Committee directed the OAG to conduct a comprehensive “value-for-money” audit of the university that covered the years 2010 to 2020. The audit aimed to identify weaknesses in governance, operational inefficiencies, and compliance issues that contributed to Laurentian’s insolvency.
The OAG’s audit looked at the following areas: capital expenditures, payroll and cash flows, financial sustainability and operational efficiency, banking and debt financing, use of research funds, governance and oversight, and human resources practices.
The OAG presented its preliminary findings to the Standing Committee on Public Accounts in April 2022 and issued its final report on November 22, 2022. The OAG concluded that “the poor management of the University’s financial affairs and operations was allowed to continue because of weak Board governance and Ministry oversight,”[4] which failed to adequately respond to warning signs of financial instability. The OAG report included 74 recommendations addressed to various stakeholders, including Laurentian’s administration and board of governors, the MCU, and the Office of the Integrity Commissioner of Ontario. Of these, 59 recommendations were directed specifically at Laurentian, covering areas such as board governance, human resources, financial operations, strategic planning, capital planning, external auditing, the Senate, legal counsel, and lobbying.
The OAG identified significant capital investments made between 2009 and 2015 and financed by borrowed money as the primary driver of Laurentian’s financial challenges. These investments placed a long-term financial burden on the institution, contributing to ongoing operating deficits and a deteriorating cash position.
The OAG report also strongly criticized the use of the CCAA as an inappropriate mechanism for addressing insolvency in public-sector organizations. The Auditor General raised concerns that the CCAA process lacks transparency and ignores labour agreements.
In response to these criticisms and broader concerns about the use of the CCAA by public institutions, representations were made to the federal government advocating for legislative change. In its 2023 Fall Economic Statement, the federal government proposed amendments to the CCAA to exclude public post-secondary institutions from its scope. These changes, enacted through Bill C-59, received Royal Assent on June 20, 2024. In the future, public universities will be explicitly barred from using the CCAA to restructure their financial affairs. The Bill specifically cites the layoffs, program cuts, and other impacts at Laurentian during the CCAA proceedings as evidence of the unsuitability of the mechanism for public-sector organizations.
The exclusion of public universities from using the CCAA option raises important questions about how insolvent institutions will address financial crises in the future. Without access to the CCAA, public universities will require a new framework for restructuring, likely involving provincial government regulations or other legislative solutions. Governments will need to play a more active and timelier role in supporting universities facing financial challenges though alternative restructuring mechanisms that balance the flexibility to address complex financial issues with public transparency and accountability.
The OAG’s findings and recommendations aimed not only to address the immediate challenges faced by Laurentian University but also to serve as a framework for preventing similar crises in other publicly funded institutions. The emphasis on governance, financial sustainability, and transparency highlighted systemic issues that require attention at both institutional and governmental levels. Future reforms will need to address these areas to ensure stronger governance, more rigorous oversight, and improved accountability mechanisms, while also emphasizing the importance of understanding institutional contexts when evaluating financial decisions.
Board Governance
Prior to the amendments to the Laurentian University of Sudbury Act, 1960, the university’s board of governors had 25 voting members. The membership distribution included six external members from the community, five members appointed by the government (LGIC), three representatives from student associations and alumni, and 10 representatives from the federated universities. The president served as an ex-officio member.
In December 2021, as part of requirements tied to the MCU financing, the majority of the board members resigned, and new members were appointed. On March 3, 2022, following amendments to the Laurentian University of Sudbury Act, the MCU proceeded to reduce the board to 16 members.
In its report, the OAG highlighted significant shortcomings in the oversight provided by Laurentian’s board during the university’s deteriorating financial condition. The report noted that the board failed to receive “sufficient and relevant” information[5] to adequately exercise its oversight responsibilities or assess risks when making strategic decisions. The Auditor General further emphasized that the board’s committees often lacked the necessary expertise, training, and resourcefulness required to effectively manage and oversee the university’s financial operations.
The observations from the OAG provide valuable insight into how Laurentian University’s finances were allowed to deteriorate over an extended period. University boards play a critical role in overseeing an institution’s operations, with primary responsibilities for strategic direction, financial oversight, and leadership appointments.
The OAG’s observations on university governance highlight a growing concern about the accountability of publicly funded institutions. A critical question emerges: to whom are university boards ultimately accountable?
The accountability of university boards is largely indirect, maintained through legislative frameworks and mandatory reporting requirements. This structure seeks to balance the competing demands of institutional autonomy and external oversight with the overarching goal of ensuring governance that aligns with the public interest. University boards bear critical responsibility for ensuring financial sustainability and fiscal integrity; setting and approving strategic directions, policies, and standards; and appointing the university president and monitoring the president’s performance.
Like Laurentian’s board, most university boards derive their authority and powers from provincial legislation, which prescribes their size, composition, and responsibilities. While some board members are appointed by the provincial government, providing a measure of public oversight, university boards generally operate with significant autonomy, and direct government intervention in governance matters remains uncommon.
Although roles and responsibilities are formally defined, recent experiences—such as those at Laurentian—suggest that existing accountability mechanisms may benefit from further review and reinforcement to support the financial and operational stability of public institutions.
In the case of Laurentian, external oversight failed to identify and prevent the financial crisis, which ultimately necessitated extraordinary measures. Laurentian’s ongoing financial deterioration should have been evident to anyone reviewing its audited financial statements.
While the university made some attempts to deal with the financial imbalance between revenue and expenditures through its “Plan to Regain Sustainability” in 2009,[6] it was insufficient in addressing the ongoing operating deficits. The board at that time also approved a major capital investment program that the university was not able to afford. Laurentian’s board decision in 2012 to rescind a policy allocating 1.5 per cent of its operating budget to deferred maintenance[7] should have been another red flag about the seriousness of Laurentian’s deteriorating financial condition. By 2021–2022, the deferred maintenance backlog at the university had reached $135 million, reflecting years of underinvestment. This situation posed a critical risk to the university’s academic and research functions. The urgency of addressing infrastructure issues became evident during the CCAA restructuring, with priority projects focusing on critical repairs, such as repairing roof leaks.
It is also important to recognize the lack of oversight by the MCU, which allowed these ongoing deficits to persist unchallenged. While the MCU began tracking universities’ key financial indicators in 2014–2015, there doesn’t appear to have been much follow-through with institutions showing declining financial capability. In response to these challenges, the MCU introduced a new Financial Accountability Framework in April 2023 to enhance financial accountability and transparency within Ontario’s universities. This framework establishes financial metrics, acceptable thresholds, and action plans, enabling the MCU to better monitor financial risks and take corrective measures when needed.
The governance issues identified by the OAG were also observed in other universities. In its November 2024 report on four Ontario universities, the Auditor General made similar governance recommendations such as strengthening board members’ financial literacy; reducing board size to improve efficiency; and enhancing participation in deliberations, information-sharing, and decision-making by board members.
These findings emphasize the need for systemic changes to governance structures across universities to prevent similar crises and ensure more robust financial oversight. To address these gaps, education and training sessions focusing on policy, financial management, and risk assessment should become integral parts of board workplans. Such sessions would equip members with a better understanding of the unique environment in which they are tasked to provide oversight and make strategic decisions.
From my experience working with university boards, I have often been struck by the lack of engagement by board members when addressing financial matters. I can recall numerous instances of presenting budgets worth hundreds of millions of dollars to the finance and audit committee or the board with minimal scrutiny. I firmly believe that management has a responsibility to provide the board with relevant information for members to be able to assess the financial risks involved in approving large operating budgets and capital investment plans, and that board members must be able to question the assumptions behind the numbers.
The Plan of Compromise or Arrangement
After 20 months of negotiations with creditors, unions, and the province, Laurentian successfully exited the CCAA process through a comprehensive Plan of Compromise or Arrangement. Supported by long-term financing from the province (Exit Loan), the Plan and Loan were finalized on November 28, 2022. The Plan required Laurentian, in addition to repaying creditors, to develop a new strategic plan, implement a comprehensive transformation program, and renew its board of governors and senior management.
As part of the board renewal, the Laurentian University Act of Sudbury was amended to reduce the board’s size from 25 to 16 members. The Plan outlined the repayment strategy for creditors, including the province’s agreement to purchase between $45.5 million and $53.5 million of Laurentian’s real estate by November 28, 2025. Specific properties totaling $53.5 million were identified during the Plan’s negotiations.
The Plan required the immediate payment of $6 million of priority claims, secured claims, and outstanding vacation pay as of the Plan’s implementation date. After settling these priority claims, the remaining funds are to be maintained in a distribution pool and allocated to approved unsecured creditors on a pro-rata basis.
The operational measures required to be adopted immediately following the Plan’s implementation date include the following: restructuring and transformation (including working with an internal Transformation Consulting Group to develop a detailed restructuring and transformation plan); a continuous improvement committee; a strategic plan; a board representation amendment; board governance enhancements; and financial controls.
Most of the Plan’s conditions came with strict timelines, such as 60 days or 120 days, particularly concerning the board and senior management renewal. These conditions to develop comprehensive strategic and transformation plans while simultaneously transitioning to a new board and senior management added a level of complexity to the implementation phase.
The repayment of the $35 million DIP financing was a key condition of the Plan. This condition was made easier by the MCU having assumed responsibility for the loan in January 2022. The Exit Loan contains several obligations for Laurentian over the loan’s duration, starting in fiscal year 2023–2024. In addition, the loan imposes strict financial controls over the financial management of the university, reinforcing the MCU’s enhanced oversight. While many of these conditions are standard in loan agreements, the limitations on making financial commitments and on the use of the operating surplus regardless of financial results achieved are unique and could significantly restrict Laurentian’s ability to manage its operations in the future.
Transformation Program
The Plan of Compromise or Arrangement required Laurentian University to undertake a multi-year transformation program. This program was shaped by the recommendations from the Auditor General of Ontario and the NOUS consultant engaged during the CCAA proceedings to conduct a review of Laurentian’s administrative operations.
Shortly after the adoption of the Plan, Laurentian selected Deloitte as the project management consultant to lead its operational restructuring and transformation efforts, starting with the development of a detailed plan. The primary objective of the transformation is to equip the university with the systems, processes, and policies to effectively support its academic and research missions.
To ensure robust oversight and informed decision-making, the transformation program requires ongoing executive, board, and government monitoring. Additionally, a Transformation Consulting Group comprised of representatives from staff and labour groups was established to provide input on the plan’s implementation.
Following the board of governors’ approval of the transformation plan in November 2023[8] and subsequent approval by the MCU in January 2024, Laurentian transitioned to the implementation phase. This phase included the creation of a Transformation Program Implementation Office tasked with delivering the outcomes specified in the program.
In developing the transformation plan, the university and Deloitte identified four foundational workstreams to serve as the pillars for implementation, namely human resources, finance, registration services & student affairs, and information technology.
The transformation planning phase went through extensive consultation and collaboration. Over 120 members of the Laurentian community were consulted, with specific deliverables validated against Deloitte’s subject matter expertise. Deloitte facilitated listening sessions with students, faculty, and staff to gather insights and feedback about their experiences with university operations. Weekly roadmaps, workplan validation sessions, and alignment workshops were conducted. Regular meetings with the Transformation Consulting Group ensured that developments were communicated effectively, and feedback was incorporated during the preparation of the transformation plan.
Deloitte worked closely with Laurentian leaders to identify and address potential roadblocks. This collaborative and inclusive approach laid a strong foundation for the transformation program’s planning and implementation phases.
A multi-year transformation program of this size involved significant planning and implementation risks, including possible lack of buy-in and support from leaders, staff, and faculty. Limited staff capacity and cultural challenges were identified as roadblocks to a successful implementation. The cost of the transformation program was estimated at $26 million to $32.5 million over three years.[9]
Laurentian’s transformation is intended to play a critical role in the university’s rebuilding efforts and aims to enhance operational efficiency and effectiveness. Following approval by the board of governors and the MCU at the end of 2023 and early 2024 respectively, the university established the Transformation Project Management Office to oversee implementation.
Strategic Plan
Following the exit from the CCAA and as a requirement of the Plan of Compromise or Arrangement, Laurentian undertook the development of a new Strategic Plan with the help of the consulting firm StrategyCorp. Considerable efforts were made to restore productive communication between the various stakeholders in an attempt to rebuild relationships strained by the CCAA proceedings. Over a seven-month period, more than 2,500 individuals shared their input and perspectives through strategic planning workshops, town halls, interactive drop-in sessions, online surveys, interviews, focus groups, and written submissions.
The Strategic Plan was presented to the university’s Senate on February 13, 2024, and subsequently approved by the board at its meeting on February 16, 2024. The Strategic Plan emphasizes the importance of Laurentian’s partnerships and collaboration with the community. The primary strategic directions and goals of the Strategic Plan focus on the following: enhancing our student experience, energizing our academic and research mission, building up the communities we serve, and valuing and supporting our people.[10]
Laurentian’s strategic directions and goals contain 27 specific initiatives under the responsibility of various working groups. The university is also working on developing key performance indicators in line with the OAG’s recommendations that the new Strategic Plan be accompanied by “key performance indicators that clearly measure the achievement of intended outcomes in the University’s strategic plan.”
Post-CCAA Progress
Laurentian left the CCAA proceedings in a solid financial position, with cash balances of over $110 million, compared to $13 million just before the CCAA filing back in January 2021. Throughout the CCAA proceedings, both the LUFA and the LUSU played an important and visible role in the negotiations. As non-secured creditors, Laurentian’s employees proved to be essential to the acceptance of the Plan considering that the major lenders abstained from voting on the Plan presented to the creditors on September 14, 2022. However, the Plan of Compromise or Arrangement contained several conditions that had to be completed soon after the Plan’s effective date of November 28, 2022.
The tight timelines created by the post-implementation obligations created a challenge for the university as a failure to meet these obligations could have created an event of default under the Plan, with uncertain outcomes. It is noteworthy that at that time, Laurentian was also going through a renewal of its board and senior management team with the loss of the president and provost, who had been extensively involved in the CCAA proceedings. Fortunately, the university was able to recruit two seasoned executives for the roles of president and vice-chancellor and provost and vice-president academic, who in early January 2023 quickly settled in to lead the post-implementation efforts and stabilize the university.
The strategic planning process was more straightforward. Although obligated by the CCAA Plan to complete a new strategic plan within a certain timeline, the university was able to select the external consultant, conduct extensive consultations and workshops during the summer of 2023, and come up with a final plan called “Laurentian’s Plan for Connection, Innovation, and Impact,” which was approved by the board on February 16, 2024.
The emergence from the CCAA in November 2022 also saw the resumption of Laurentian’s formal planning and budgeting process, which had been put on hold during the CCAA because the focus then was primarily on managing the university’s cash flow.
The planning process started in the fall of 2022, with a Planning Framework presented to the Finance and Audit Committee of the Board that involved managers from faculties and administration and labour representatives from the LUFA, the LUSU, and the Laurentian University Administrative and Professional Staff Association. Many meetings were held to discuss ongoing challenges and priorities and communicate the fiscal framework governing Laurentian’s planning and budgeting process.
The operating priorities for 2023–2024 were influenced in part by the CCAA restructuring, which had created critical capacity issues in many areas of the university’s operations. The priorities were also framed by the Plan of Compromise or Arrangement and Exit Loan Financing, which contained financial restrictions on future spending.
The objectives and priorities agreed to for 2023–2024 included investing in critical academic, research, and administrative services to support the university’s mission. More specifically, the priorities involved faculty renewal, securing and maintaining program accreditation, improving student enrolment, retention and experience, rebuilding relationships with research funding agencies, renewing campus facilities, and getting ready for transformation and the Strategic Plan.
One of the most demanding tasks for Laurentian is to rebuild the capacity of the university while managing the financial constraints of the Loan Agreement. The university has to address not only the reputational damage caused by the CCAA disruption but also the impact on its ability to recruit skilled employees due to previous cuts in salaries and benefits.
The first year post-CCAA was mostly about putting together the building blocks to strengthen Laurentian’s capacity through the renewal of senior management and the board, the development of a new strategic direction, planning for a multi-year transformation program, and recruiting key academic and administrative positions lost during the CCAA proceedings. In addition, the university and the MCU worked to set in place the framework for the sale of assets to pay off creditors by no later than November 28, 2025.
Looking to the Future
More than two years after emerging from CCAA protection, Laurentian University has made significant progress in rebuilding its financial footing but lingering structural pressures and new fiscal realities are testing the resilience of its recovery. While Laurentian held $174.5 million in cash and short-term investments as of April 30, 2024, operating expenses have increased sharply since exiting the CCAA—from $145 million in 2022–2023 to a projected $194 million in 2024–2025. This nearly matches pre-CCAA spending levels, which stood at $200 million in 2019–2020. In contrast, total revenue has remained relatively flat, rising modestly from $198 million in 2019–2020 to $202 million in the 2024–2025 budget. When adjusting for one-time gains from asset sales earmarked for creditor repayment, Laurentian’s long-term financial flexibility remains limited. This growing expenditure base, coupled with limited borrowing capacity under the Exit Loan agreement, suggests the university may face challenges in absorbing future financial shocks or addressing unexpected contingencies.
A significant driver of the increased expenses relates to salaries and benefits, which rose from $93 million in 2022–2023 to $119 million in budget 2024–2025. While the university has restored a considerable share of its CCAA staffing losses —with 117 budgeted FTEs added over two years (including 37 faculty positions), enrolment remains stagnant. Projected FTE student enrolment for 2024–2025 stands at 6,421, down from 7,090 prior to restructuring.
Many would argue that the cost reductions imposed during the CCAA negotiations were excessive and unsustainable. However, the sharp escalation of expenses over such a short period raises questions about the university’s capacity to deal with future financial emergencies, as the university will not be able to access the debt market for some time.
Conclusion
The consequences of Laurentian’s CCAA proceedings were far-reaching, affecting not only the university’s students, faculty, staff, and partners but also the broader Sudbury community and Canada’s higher education landscape. The process proved to be significantly longer and more costly than originally anticipated.
The university’s use of the CCAA set a precedent that reverberated throughout the sector and ultimately led to federal legislative changes that will remove this restructuring option for public universities—without offering a clear alternative for financially distressed institutions.
Laurentian’s deep-rooted structural and financial challenges—rising operating costs, capital burdens, and declining enrolment—were long-standing and well known. Despite the controversy surrounding its chosen path, the university succeeded in confronting its financial crisis and emerging with the stability required to rebuild and fulfill its unique educational mission in Northern Ontario.
Laurentian’s story is one of resilience, disruption, and institutional transformation. The hope now is that the lessons learned—about governance, oversight, and the realities of financial fragility in the public sector—will not be forgotten.
Bibliography
- Office of the Auditor General of Ontario. Special Report on Laurentian University. November 2022. https://www.auditor.on.ca/en/content/specialreports/specialreports/LaurentianUniversity_EN.pdf.
- Ontario Superior Court of Justice. In the Matter of the Companies’ Creditors Arrangement Act, S.C. 1985, c. C-36. and in the Matter of a Plan of Compromise or Arrangement of Laurentian University of Sudbury. Affidavit of Dr. Robert Haché. Court File No. CV-21-688366-00CL. January 30, 2021. https://s3.documentcloud.org/documents/23321050/exhibit-_eee_-to-the-hache-affidavit-sworn-january-30-2021.pdf.
- Ontario Superior Court of Justice (Commercial List). In the Matter of the Companies’ Creditors Arrangement Act. R.S.C. 1985, c. C-36. as Amended and in the Matter of a Plan of Compromise or Arrangement of Laurentian University of Sudbury. 1st Report of the Monitor (Ernst & Young Inc.). Court File No. CV-21-656040-00CL. February 1, 2021. https://documentcentre.ey.com.
— 3rd Report of the Monitor. April 26, 2021.
—10th Report of the Monitor. January 24, 2022.
—13th Report of the Monitor. May 27, 2022.
—14th Report of the Monitor. July 22, 2022.
—16th Report of the Monitor. September 28, 2022.
[1] Ontario Superior Court of Justice, 000 Report of the Proposed Monitor (January 30, 2021), 27.
[2] Office of the Auditor General of Ontario, Special Report on Laurentian University (November 2022), 21.
[3] Ontario Superior Court of Justice, 000 Report of the Proposed Monitor (January 30, 2021), 43.
[4] Office of the Auditor General of Ontario, Special Report on Laurentian University (November 2022), 9.
[5] Office of the Auditor General of Ontario, Special Report on Laurentian University (November 2022), 45.
[6] Jim Moodie, “Perfect Storm’ Led to Laurentian’s Woes: Board,” Sudbury Star, May 11, 2021.
[7] Office of the Auditor General of Ontario, Special Report on Laurentian University (November 2022), 29.
[8] “Laurentian University Moving Forward with Transformation Plan,” Laurentian University, November 2, 2023.
[9] Special Meeting of the Board of Governors, “For Approval: Laurentian University Transformation Plan,” November 1, 2023.
[10] “Strategic Plan 2024-2029,” Laurentian University, 3.
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