A Canadian university has commenced a court proceeding for a formal restructuring after announcing that it is “insolvent” because of financial issues over the past decade.
Laurentian University, which is based in Ontario, said that the proceeding under the Companies’ Creditors Arrangement Act would enable the university to “financially and operationally restructure, and become sustainable long term”. The target date for completion of the key components of the restructuring plan is 30 April.
In a statement published on 1 February, it added that the “ultimate goal of the restructuring is to ensure that current and future students will continue to have access to a high-quality postsecondary education at Laurentian for years to come”.
Robert Haché, vice-chancellor of the university, which was founded in 1960, cited historical recurring deficits, declining demographics in northern Ontario, the closure of its Barrie campus in 2019, the domestic tuition fee reduction and freeze that was implemented in 2019 and the costs and revenue impacts associated with the Covid-19 pandemic as developments over the past decade that had “put an increased strain on the operational and financial health of the university”.
“We are facing unprecedented financial challenges and our financial health is currently amongst the weakest in the province compared to other universities. We intend to change that. Despite our best efforts over the last year, Laurentian is insolvent. This is a problem that can and will be addressed if all stakeholders work together to implement a vision for Laurentian that includes more financially sustainable operations,” he said in a statement.
He added that the restructuring process would “not affect the day-to-day operation of the university or the student experience”.
The university has appointed Ernst & Young to formulate and implement the restructuring plan.
