Laurentian University in Sudbury, Ontario, is attempting to restructure under Canada’s Companies’ Creditors Arrangement Act, seeking protection from creditors as it faces recurring budget deficits.
It’s the first time in recent memory a Canadian university filed for protection from its creditors, according to Radio Canada International. Canada’s Companies’ Creditors Arrangement Act is generally available to large organizations owing significant sums of money. It’s similar in some ways to Chapter 11 bankruptcy protection in the United States, which allows organizations to reorganize and continue as a going concern.
Laurentian struggled amid declining demographics in northern Ontario, recurring deficits, pandemic-related costs and a provincial tuition reduction and freeze from 2019, according to its president, Robert Haché.
“Despite everything we tried last year, Laurentian is in insolvency,” Haché said in a statement.
The university will continue recruiting new students. Current students will not experience changes in day-to-day university operations, Haché said. Ernst & Young is set to be a court-appointed monitor in the legal proceedings.
Meanwhile, Ontario’s minister of colleges and universities floated the idea of giving the province more oversight of university finances “to better protect the interests of students and Ontario taxpayers.”