Federal government addresses Laurentian University's controversial use of CCAA

Laurentian's use of the Companies Creditors Arrangement Act admist bankruptcy has sparked conversation about the legality of this resource from community members, the CUAT and federal government

In February 2021 the leadership of Laurentian University made the decision to file for creditor protection from the Companies Creditors Arrangement Act amidst bankruptcy. The CCAA allows large corporations facing insolvency to receive guidance, including plans to restructure their corporation. As a federal law, the Government of Canada introduced this act to help companies proceed with their work as they manage their internal finances. The university has since exited insolvency and terminated their protection under the CCAA as of Nov. 2022.

A review done in 2022 by then Ontario Auditor General Bonnie Lysyk found that since the incitement of the CCAA, 195 university staff and faculty lost their jobs.

With the protection of the CCAA, they were not required to honour agreements previously made with labour groups, such as senior staff firing and severance. Additionally, 76 academic programs were cut, impacting roughly 932 students.

CTV news coverage shared their firing had been done through zoom, where Laurentian University’s Vice President of Academics promptly exited the call after sharing the news.

To protect the release of this information reaching the public for review, Laurentian university has spent $30 million in advisors and lawyers.

A statement and commissioned report by the Canadian Association of Universities Teachers shared that they believe that the decision made by Laurentian can become a precedent for others if access to CCAA is not legally halted. The CAUT stated that it is important to prevent public universities to file for bankruptcy in the same manner as commercial businesses.

Following these demands for prevention of public universities to utilize resources like CCAA, the Canadian federal government released statements. In Nov. 2023, they shared that they will be taking active steps to change CCAA so that public universities can no longer utilize this tool amid financial hardship. The exact steps taken are yet to be released and are awaited by many in 2024.