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Laurentian University debacle should be an election issue

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It’s provincial election season and important issues affecting Northern Ontario and Sault Ste. Married.
Of course, cost-of-living or “wallet” issues dominate the headlines, due to ever-rising commodity prices. This increased economic pressure is having a disproportionate impact on Northern Ontario communities, which is felt every time you fill up on gas or shop for groceries.
On May 10, the Federation of Northern Ontario Municipalities hosted a debate for provincial party leaders and provided insight into the issues that will characterize the election campaign.
Noticeably absent was any serious discussion of a debacle that has rocked Northern Ontario over the past two years: the bankruptcy and restructuring of Laurentian University in Sudbury.
By now the general details are familiar to many. Essentially, Laurentian was pushed to the brink of financial abyss by incredibly poor management and risky investments that ballooned its debt at a time when tuition fees were not rising (due to a provincial freeze) and a global pandemic was about to strike.
As a publicly funded institution, one would imagine the government stepping in with minimal help, to bring all the stakeholders together, assess the situation, and navigate a restructuring process that might be minimally destructive for Laurentian. .
This does not happen.
Instead, the province mirrored Laurentian with its own mismanagement and only exacerbated the crisis.
Laurentian floundered and relied heavily on paid consultants who unnecessarily directed them to the Companies’ Creditors Arrangement Act (CCAA), a bankruptcy protection process for private companies.
It was unprecedented, but I won’t go into all the heartbreaking details, including the devastating job losses and community-wide repercussions. If you are interested in a forensic analysis of what happened at Laurentian, one of the best analyzes was written by Ron Srigley in Canadian Dimension (available online).
For at least two reasons, what happened at Laurentian is a significant issue for Sault Ste. Married.
First, Sault Ste. Marie participated in the Laurentian debacle, so to speak.
The Minister of Colleges and Universities was the local MPP, Ross Romano. The Ontario government shifted its cabinet portfolio from colleges and universities in the wake of the Laurentian debacle to Government and Consumer Services, where it weathered more controversy due to the tumultuous launch of the Business Registry. of Ontario.
Romano’s political fortunes in this election should hinge on how voters rate his actual work history. Therefore, voters in Sault Ste. Marie can be an important accountability mechanism, if they so choose.
Second, although Laurentian is in a different city, it is still in Northern Ontario. One can only imagine the social and economic impact on Sault Ste. Marie if Algoma University or Sault College imploded the same way.
Northern Ontario has only four universities – Algoma, Lakehead, Laurentian and Nipissing – so eliminating just one will inevitably have a regional impact. In the north, where higher education opportunities and economic diversification are desperately needed, universities are both an important anchor and a sector worthy of investment and growth.
For those who doubt the economic merits of universities, I invite you to do your calculations for yourself. A recent report analyzing the impact of Queen’s University (where I am now) found that it was directly and indirectly responsible for more than $1.6 billion in the regional economy, of which about a tenth of all jobs and economic activity.
Romano has consistently told the public that he cannot reasonably comment on events at Laurentian due to the ongoing CCAA process. When asked when and what he knew about Laurentian, he changed his story. More recently, his office informed the public that he learned of Laurentian’s financial difficulties in January 2021.
It seems questionable.
Romano’s cabinet calendar — accessible via a Freedom of Information request — shows he had a phone call with Laurentian President Robert Haché on March 13, 2020.
It seems highly unlikely that Haché, by then deeply mired in impending institutional collapse, had not spoken to Romano about what was going on behind the scenes.
Fortunately, more clarity has arrived in the form of a short preliminary report from the Auditor General of Ontario.
According to Auditor General Bonnie Lysyk, the university’s management “has strategically planned and chosen to take steps to file for creditor protection.”
Among the “preliminary observations” of the report, two stand out, including:
1) “For its part, the Ministry of Colleges and Universities (Ministry), which is the lead ministry responsible for overseeing the financial health of post-secondary institutions, has not intervened proactively and in a timely manner to provide advice to help Laurentian slow – or ultimately respond to – its worsening financial deterioration.
2) “As Laurentian’s financial situation grew increasingly dire, the university failed to follow the normal precedent of the broader public sector in making full and clear efforts to seek financial assistance from the ministry. Instead, it focused on advocacy with elected officials and their staff, on the advice of external consultants. In August 2020, Laurentian raised the potential of the CCAA with the Minister of Colleges and Universities [Romano] but did not clearly define the amount of financial assistance required from the province to avoid a CCAA filing. An explicit request for funding from the ministry was not made until December 2020, when the demand was high and the response time was short.
In other words, none of this needed to happen.
To be clear, most of the blame can be placed on Laurentian’s incredible lack of management. But just when the government was supposed to exercise its good judgment and financial oversight, it completely abdicated its responsibility.
Despite Romano’s removal from his previous portfolio, the Ontario government did not bear any responsibility. The precedent that has been set – a publicly funded university facing bankruptcy proceedings under the CCAA – is not only a tragedy for Sudbury and Northern Ontario, it is something that could affect higher education across Canada.
People who have lost their jobs, whose programs have been interrupted or terminated, or who once had livelihoods indirectly tied to college have done nothing wrong.
They did not vote for those who disappointed them.
The rest of us did.

Dax D’Orazio is a Sault Ste. Marie native, a postdoctoral fellow at Queen’s University, now works and studies in Kingston. Find his blog on www.daxdorazio.com