Tuesday, May 4, 2021  |  Category: Eduvation Insider

Scorched Earth in Sudbury

Good morning, and happy Star Wars Day! (May the Fourth be with you!)

As promised, today we’ll take a look at the future of Laurentian U and its federation, following the disappointing court decisions released at the eleventh hour on Sunday night. (Check out the Insider Recap of Laurentian in Limbo for the whole story so far.)

Sorry if the details are depressing. It’s enough to make you wish you were in a galaxy far, far away…

 

 

Reactions in Sudbury

Although the ramifications of the Laurentian U insolvency will play out for months to come, the board won major legal battles Sunday night and moved LU into phase 2 of its CCAA strategy…

 

Upbeat President

Yesterday morning, within hours of the eleventh-hour court decisions that eviscerated the federated universities and left much of the community in shock, LU president Robert Haché released an upbeat message to the community. “I am pleased to say that the next phase of the CCAA process will allow for an increase in engagement with a wider variety of stakeholders as well as increased opportunities for communication at every stage.” He clarified that the termination of the federation agreement “is only with respect to the contracts for the delivery of courses and programs,” and that “Laurentian has not taken any steps that would extinguish the right of any of the Federated Universities to continue to exist, or to have a continued presence and create a historic legacy on campus.” Phase 2 will involve consultations, assessment of creditor claims (including employees hoping for pensions), and more “operational and financial restructuring initiatives.”  Laurentian

 

“Laurentian has not taken any steps that would extinguish the right of any of the Federated Universities to continue to exist, or to have a continued presence and create a historic legacy on campus.” – Robert Haché, president, Laurentian U

 

While LU is not preventing the right of the federated universities to “exist,” it has eliminated their right to deliver courses for university credit, cut off crucial government funding, and thereby triggered inevitable terminations of most faculty and staff.

 

Courses Cancelled

With Sunday’s decision, the federated universities cannot offer courses for credit this spring or summer. Huntington and uSudbury had previously announced the cancellations, except for the Gerontology program (reported “sold” to LU) and 6 courses in Indigenous Studies (to be taught by LU sessions, still to be hired). Except for Theology, all spring Thorneloe courses were cancelled yesterday without notice, including Ancient Studies, Religious Studies, and Women’s, Gender and Sexuality Studies.  Sudbury.com

 

Thornloe to Appeal

Thorneloe U announced immediately its intention to appeal the Ontario Superior Court ruling issued Sunday. “Unless corrected by the Court of Appeal, this decision is devastating to our students, faculty and staff as it enables Laurentian to move forward with its ill-conceived plan to close down the federated universities.” Sudbury Star

 

uSudbury Determined

uSudbury is “extremely disappointed” by the court decisions, but will wait for the release of the courts’ reasons before determining its next steps. Moreover, uS “will diligently pursue its commitment to become an independent Francophone university, so that it will be able to not only deliver the courses it currently offers in French, but to offer the French-language programs and courses that Laurentian University has ceased to offer or that it is inadequately offering to meet the needs of the Francophone community.”  Sudbury.com

 

Thanks for the Push!

The Assemblée de la Francophonie de l’Ontario immediately announced its “disappointment” with the court decisions ending the Laurentian federation, but “nevertheless thanks” LU “for pushing the University of Sudbury towards institutional autonomy,” and urges MCU to announce financial support.  AFO

 

“Malgré tout, l’AFO remercie la Laurentian University de pousser l’Université de Sudbury vers la voie de l’autonomie institutionnelle.” – Assemblée de la Francophonie de l’Ontario

 

 

Francophone Threat

Various legal experts suggest that MCU has the authority to declare LU an Anglophone university, and transfer the remaining 20 or so French-language programs – and provincial grants that accompany them – from LU to uS. The process would be complicated and could take time, but “if you can fly a helicopter on Mars, you can move LU programs!” The switch, some argue, would be a legislative gesture like granting Hearst autonomy, and would win the government points with the Francophone community, saving it “picking up a large bill.” Gilles Levasseur, a uOttawa prof of law and management, emphasizes that such a move would best take place before the CCAA cuts to infrastructure, programs and people are complete.  ONFR+

 

LU on the Defensive

For its part, LU promptly announced a “consent order” agreed to by AFO as “a platform for consultations and information-sharing” for proposals, restructuring and financial sustainability initiatives “that may impact the status or use of the French language” at LU. As always throughout this insolvency debacle, “these consultations will be subject to an appropriate confidentiality agreement,” are subject to the CCAA proceedings, and may include a court-appointed mediator. President Haché asserts that “La Laurentienne fully intends to continue to serve the Francophone population for many years to come.”  Laurentian

 

 

Worse to Come

Although LU and its insolvency advisors E&Y have offered only hints at what is to come in phase 2 of the CCAA proceedings, it is likely that the demands of creditors will force it to consider asset liquidations and even more cuts…

 

Provincial Audit

Ontario’s Standing Committee on Public Accounts passed a motion last week to have Auditor General Bonnie Lysyk conduct a “value-for-money audit” of LU’s finances from 2010-20, to look at the impact of PSE funding changes and “look for any wrongdoing.” The process is important to ensure public trust, while so much is occurring behind closed doors in the “opaque” CCAA process.  Sudbury.com

 

More Cuts Necessary

Ernst & Young, the “court-appointed” monitor for LU’s CCAA restructuring (who was actually hired by LU last October as financial advisor) praised the university in its report last week for finding $30M in annual savings through eliminating 116 full-time faculty positions and 79 staff, and negotiating salary rollbacks. Even assuming that the federation is resolved, “saving” LU another $7M annually, the monitor warns that “LU still requires additional savings” for a successful restructuring, and will need to negotiate with creditors and address repayment of its emergency loans. Next steps include “further implementation of workforce changes” and “exploring potential opportunities to realize on assets.”  Sudbury Star

 

“While the net estimated savings achieved to date is significant, LU still requires additional savings in order to potentially achieve a successful restructuring.” – Ernst & Young, court-appointed insolvency monitor

 

 

LU’s Fire Sale

So, what could LU sell? It plans to review its real estate holdings in phase 2 of the CCAA process, looking for opportunities to sell or lease properties to generate cash flow in a “fierce sellers’ market.” The most likely candidates include 2 million-dollar properties, the “President’s House” and the “Bell Mansion,” which houses the Art Gallery of Sudbury. Each could likely sell for more than $1M. LU also owns 283 hectares of largely “undeveloped bushland” surrounding its campus, “including some prime waterfront property.” LU might also look for buyers for its campus swimming pool, which has been closed for 2 years and ostensibly requires $10M in repairs. And then there is the land beneath the 3 federated colleges, who own their own buildings.  CBC

 

As I pointed out yesterday, it seems clear that LU could have turned to government loans to allow it to manage the process of restructuring and retrenchment without turning to a “lender of last resort” and the courts. LU could also have sold or leased some of its real estate assets in the first place, to fund its operations and permit an orderly transition, without the massive hit to its reputation…

 

 

Long-Term Fallout

By pushing Canada’s first public university into creditor protection, the board and administration at LU have thrown the university into disarray, displaced hundreds of students and faculty, disrupted research and misappropriated research funds. It has shredded its own foundational federation agreement, demonstrated a disregard for academic governance and even the pensions of its employees. And it has repeatedly insisted upon the need for secrecy and haste due to some unreasonable demands by its lender. The result will be permanent, lasting damage to the reputation and credibility of the university, but also of higher education in Ontario and Canada…

 

“University in Tatters”

American headlines report that LU’s insolvency left “a university in tatters” and put “program quality in jeopardy.” An early promise that students wouldn’t be significantly affected “hasn’t really panned out” as hundreds seek to transfer elsewhere. And LU’s commitment to Indigenous reconciliation is in question: replacing uSudbury’s Indigenous Studies program with general courses “including Indigenous perspectives” is “monumentally offensive” and “highly regressive.” Faculty questions have been met with “obfuscation” and excuses about legal confidentiality. Financial instability and risk is extended to CdnPSE in general: LU might just be the “canary in the coal mine.”  Inside Higher Ed

 

Institutional Reputation

Based on 3 decades’ experience measuring and monitoring institutional reputations in CdnPSE, I can assure you that the fallout of a 3-month faculty strike is typically YEARS of depressed applications and enrolments, and a measurable hit to the university brand. LU’s insolvency is a far bigger crisis, which will be replayed in the media for a year as we likely see ongoing lawsuits, creditor settlements, CAUT censure and the departures of faculty, researchers, and students for greener pastures. Ironically, for a university that was pivotal in the regreening of Sudbury’s infamous “moonscape,” the board’s decision to declare insolvency was a “scorched earth” policy that has undermined important relationships with Indigenous and Francophone communities. Academic talent and philanthrophy will think twice about Sudbury, and the campus will likely be permeated by distrust and anxiety for some time to come.

 

Somewhat atypically, I’ve taken a pretty strong editorial position on the LU implosion, particularly this week. (I expected to hear some complaints about that yesterday, but so far the only comments have been about the colour of the typeface I’m using…) I know the vast majority of people at Laurentian are innocent victims of circumstances. Obviously the current administration isn’t solely responsible for the bad financial decisions of a decade or more. It’s unclear whether MCU, the board or the administration ultimately pushed for the CCAA approach, and entirely possible that one or more have been backed into a corner by the others. As the full story gradually comes out, we will doubtless gain more sympathy and understanding for what look like astonishing neglect and poor decision-making.

For now, we can only look on in disbelief and astonishment…

 

 

#ICYMI

Researchers, faculty and students at Laurentian are likely to notice messages like this more and more in the months ahead…

 

See Yourself Here

 

Dalhousie U released a 1-min spot yesterday featuring beautiful drone shots of campus, city and the surrounding province, from yachts in Halifax harbour to young people hiking mountain trails and frolicking in the surf with whales. Touting its 200 programs, 11 student residences, and students from 115 countries, Atlantic Canada’s most research-intensive university looks like an upbeat, cheerful version of Northern Ontario. (I’m sure that wasn’t their intention.)  YouTube

 

 

 

As always, thanks for reading! Tomorrow, we’ll turn back to the pandemic for a weekly summary as the situation continues to evolve.

Meanwhile, please do drop me a line if you spot something interesting, thought-provoking or cool happening on your campus, or elsewhere in the world!

Stay safe and be well everyone!