Laurentian University’s unprecedented bankruptcy has cast an uneasy suspicion across Canada’s largest province, with a public battle over document disclosures masking deeper questions over rural subsidisation and abandonment.
In a shock to its Sudbury community, Laurentian in February became the first publicly funded university in Canada to file for creditor protection. A year of layoffs and deep programme cuts ended with Ontario’s provincial parliament demanding in a bipartisan vote that university leaders surrender internal communications and financial records.
The legislature’s involvement reflects fundamental uncertainties about how Laurentian managed to hide its dire condition through nearly a decade of publicly reporting only minor budgetary stresses, and the degree to which other small institutions in Ontario’s northern regions might also be concealing threatening imbalances.
Lawmakers said they aren’t necessarily expecting to find more imminent bankruptcies in the province, but do want to understand the full reasons for the 5,000-student campus’ struggle to attract enrolment and manage its finances.
“Honestly, we don't know” how widespread such problems may be, said John Vanthof, one of the provincial lawmakers who voted to compel the disclosures by Laurentian. “The root of it, really, is that people don’t know how we got here,” said another, Jamie West.
Laurentian receives about C$9 million (£5 million) annually in public funding, and it surprised the province by suddenly announcing in February that it was struggling with C$300 million in debt. It cut more than 200 jobs, cancelled courses, began taking money from scholarship and research accounts to pay bills, shut down facilities to students and its neighbours, and began to talk of selling land and property to developers.
People throughout the Sudbury area are in shock, said Mr West, a lifelong resident. “How do you go from what looked like good fiscal financial practice to insolvent and people losing their jobs and the pool being closed and the green space potentially being sold,” he said in an interview. “How did this happen to us?”
On one level, the lawmakers said, the problem may be the private auditing firm that annually certified Laurentian’s financial condition, or perhaps someone within the university who might potentially have misled it. But more fundamentally, they and other experts said, Ontario and Canada may need to reconsider more seriously the cost and importance of maintaining their current levels of higher education infrastructure in the more remote parts of their country.
Even before the bankruptcy bombshell, some tenured faculty fired in Laurentian’s downsizing already were arguing that Ontario should direct more student subsidies towards encouraging enrolment outside Toronto and other urban areas in the southern part of the province.
In one analysis published this autumn but first circulated almost a year earlier, David Leadbeater – an associate professor of economics who was among those dismissed in the university’s subsequent staff cuts – argued that rural northern areas of Ontario have been disproportionately damaged by decades of provincial disinvestment in higher education.
Professor Leadbeater argued that the hardship created by that lost public investment has fallen heaviest on northern institutions such as Laurentian. That’s because the northern population is less able to afford higher tuition, he explained, and its remote location makes its institutions relatively less attractive to outsiders – including the foreign students whose tuition increasingly subsidises Canadian higher education – than those in the Toronto area.
While he awaits Laurentian’s compliance with the parliamentary order for years of financial records, Mr West acknowledges the bigger-picture desire in northern communities to have their remote lifestyles better subsidised. “I’m a good example of this,” he said. “I grew up below the poverty line – there is no possible way I could go to university outside of Sudbury if there wasn’t one in Sudbury.”
