Laurentian University to spend millions on recommendations in second budget post insolvency, but nothing new to reopen pool

Laurentian University's board of governors approved a budget of just over $201.7 million for the 2024-2025 fiscal year on Friday. The school is predicting a small surplus of $500,000 in only its second budget following the end of its insolvency, with projected revenues of $201.7 million and expenses of $201.2 million.

The exterior sign for Laurentian University on March 6, 2024. (Angela Gemmill/CTV News Northern Ontario)

The school says it will also set aside $8 million to enact recommendations to bring the university up to modern operating standards following its insolvency.

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The $8 million operational update costs include $7.2 million in operating expenses and $800,000 in capital expenses for the 2024-2025 year, and includes the salary of a lead transformation officer that the university has yet to hire to lead the process along with money for information technology upgrades.

This comes after a cyber-security incident at Laurentian earlier this year.

This $8 million that was set aside will be used to respond to 52 recommendations from the provincial auditor general and Nous Group consultants will be segregated and not part of the school’s operating budget.

However, transforming the school’s operations may cost even more than the $8 million figure according to the budget documents, though. The projected financials for the costs of the first year of transformation implementation that is set to begin next month is $8.8 to $13.6 million.

Laurentian approved its operational transformation plan last year, one of the school’s legal requirements following its 2022 exit from creditor protection under the Companies’ Creditors Arrangement Act (CCAA).

Sylvie Lafontaine, Laurentian’s vice president of finance and administration, said the money for the transformation will be closely tracked on a monthly basis.

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The university’s new president Lynn Wells called the money a crucial investment.

Dr. Lynn Wells has been appointed Laurentian University's new president and vice chancellor. (Supplied/Laurentian University)

"We need to see this work as not only required by the government but critical to our future," she said during the board of governors meeting.

"By going through this transformation, by modernizing our processes, we will be much better positioned to invest in our academic programs, to hire more faculty, to support more research, to support our students better."

However, not everyone agrees with the costs associated with the transformation.

Senate representative, Dan Scott, who was not at the meeting, did send a statement that read in part:

"While I acknowledge we need to extend and overhaul these systems, board members must recognize this is a major opportunity cost for increasing the quality and quantity of the programs we offer."

In the statement, Scott also asked the board to watch this budget closely and attempt to stick to the lower estimate.

“Prevent it from ballooning for the sake of our responsibility as a publicly funded educational institution,” he said.

“I believe that Laurentian is uniquely positioned as we invest in our transformation, invest in supporting our strategic plan and priorities and start delivering that experience for our students and researchers,” said Lafontaine.

Lafontaine called the budget “solid” and “needed” for the university’s future.

The school has been on something of a hiring spree following its exit from insolvency as many employees chose to quit during the process on top of jobs that were cut as part of the CCAA.

The university expects to increase its workforce by the equivalent of more than 64 full-time positions next year – including about 34 FTEs in academic positions, more than 16 academic support FTEs and about 13 administrative FTEs.

“We need to address those critical staffing and operational needs,” said Lafontaine.

For the 2023-2024 school year ending April 30, the university has projected an $8.2 million surplus.

The audited financial statements showing how the university actually will be presented at a future meeting, normally in mid-fall.

The full 60-page budget document can be found on the school’s website.

History of Laurentian’s insolvency and the CCAA

The university declared insolvency in February 2021; the first public post-secondary institution to choose federal legislation meant to restructure commercial business in a financial crisis, the Companies’ Creditors Arrangement Act.

A Laurentian University in Greater Sudbury, Ont.ario. July 29, 2020. (File photo/Alana Everson/CTV News Northern Ontario)

As a result of restructuring, 69 undergraduate and graduate programs and 195 positions were cut at Laurentian.

In November 2022, the university exited insolvency and has been looking to rebuild.

Last year, the federal government introduced legalisation to prevent post-secondary institutions from using the CCAA process in the future.

Although Laurentian exited insolvency in 2022, it still has ongoing costs related to the CCAA process.

The 2024-2025 budget includes insolvency restructuring costs of $500,000 related expenses for Laurentian’s lawyers, the monitor and its legal representatives, the independent counsel for the board of governors along with fees and expenses in regard to the continued administration and implementation of the school’s approved plan of arrangement. <link>

Additionally, most of the creditors listed in the CCAA case have not yet been paid out. The creditors’ pool is to be funded by the sale of certain real estate assets to the province for up to $53.5 million.

According to the 2024-2025 budget documents “(Laurentian) does expect to complete the sale of some of these assets” this year.

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Jeno Tihanyi Olympic pool’s future

The 2024-2045 budget shows the school will spend $8.5 million on deferred maintenance but no new funding for the Jeno Tihanyi Olympic pool was listed.

An image of the Jeno Tihanyi Olympic pool prior to its closure in 2020. (Supplied/Laurentian University)

The future of the aquatic facility remains unclear.

The pool was closed in the spring of 2020 as a result of the COVID-19 pandemic and during the CCAA process, the university discovered leaks in the facility.

The pool has never reopened.

Last year the school set aside $300,000 to assess it with a final report to be tabled to the board in the fall.

Lafontaine said the university was looking at the minimum cost to reopen it but that there is no timeline for that to happen.

University officials said there is no hope that Laurentian would operate the pool independently because it simply cannot afford it.

"We need to work with our community partners," said President Wells.

"We need to find solutions that will bring funds to reopen the pool as quickly as possible through other means, rather than committing our operating dollars, or our quite scarce, in fact, deferred maintenance dollars."

Enrollment numbers, tuition fees

Many post-secondary institution are experiencing significant impacts on their enrolment as a result of the federal government’s decision to cut international student permits and similar caps imposed by the provincial government.

An undated file photo of the Laurentian University campus in Greater Sudbury, Ont. (CTV News Northern Ontario)

Laurentian University is expecting a smaller impact on its numbers as a result of the situation, predicting an increase in domestic enrollment of about 275 FTE students with a decrease of only 150 FTE international students as most of the school’s international students are at the graduate level.

Graduate students were not impacted by the cuts to international student permits.

Laurentian is also constrained by a province-wide domestic tuition freeze set to last until 2027 – with three exceptions for students in programs where the tuition was lower than other similar programs at other universities.

The province will allow Laurentian to increase tuition for students entering the undergraduate computer sciences program by three per cent and those entering the undergraduate engineering program and graduate architecture program by 7.75 per cent next year.

Additionally, international tuition fees along with out-of-province domestic tuition fees will be increased by three per cent in the next school year.