Laurentian was treading water financially until it started construction projects, auditor general says
Laurentian University was able to keep itself afloat until it began major building projects, Auditor General Bonnie Lysyk said Wednesday.
Lysyk is conducting a value-for-money audit of the insolvent university. While her work has been slowed by a dispute over access to confidential documents, she provided an overview of LU's finances between 2012 and 2020. In the last five years, she said the school has received an average of $85.9 million in funding each year from the province.
"Laurentian generated a net loss of $11.9 million in aggregate between 2012/13 and 2019/20," Lysyk wrote. "During this time, its debt ratio increased and approached the ministry’s benchmark maximum debt ratio of 35 per cent."
By April 2016, for every dollar it had in debt, LU only had 67 cents to pay them off.
"Laurentian was historically able to manage its cash flows because the university did not have a significant number of capital projects under active development and its cash flows from operating activities tended to break even over the last decade," Lysyk wrote.
"However … between 2014/15 and 2018/19 the university completed several capital projects which put significant strain on the university’s cash flow."
In that time, Laurentian opened the $45 million school of architecture, and announced a $63 million capital renewal plan. Officials at the university said they were able to manage until the COVID-19 pandemic hit in 2020, leading to a drastic reduction in fees from international students the school had been relying on.
The university declared insolvency Feb. 1 and is undergoing restructuring under the Companies' Creditors Arrangement Act (CCAA). That process has been costly, the auditor said.
"Laurentian has spent approximately $9.86 million from Jan. 30, 2021, to Aug. 13, 2021 on restructuring costs," Lysyk wrote.
"These are costs for services retained by Laurentian to conclude its CCAA proceedings. Including projections to Feb. 4, 2022, Laurentian is estimated to spend a total of $19.84 million on restructuring costs between Jan. 30, 2021 and Feb. 4, 2022."
CTVNews.ca Top Stories
Asking rent prices up 9.3% across Canada, Ontario sees only decline: report
A new report says the average asking rent for a home in Canada in April was up 9.3 per cent compared with a year ago, while a slight month-over-month increase was also recorded for the first time since January.
What is basic income, and how would it impact me?
Parliamentarians are considering a pair of bills aiming to lift people out of poverty through a basic income program, but some fear these types of systems could result in more taxes for Canadians who are already financially struggling.
'I may have some nightmares:' Man survives being bitten by 2 sharks in Bahamas
A man who was bitten by two sharks in the Bahamas said Thursday he's 'thankful that I'm here' while sharing his story of survival.
Magnitude 4.2 earthquake reported off Vancouver Island's west coast
A 4.2-magnitude earthquake was recorded west of Vancouver Island early Friday morning.
Mexico's president accuses press and volunteer searchers for missing people of 'necrophilia'
The administration of Mexico's president has accused the press and volunteer searchers who look for the bodies of missing people of 'necrophilia,' comments that drew criticism this week.
WATCH Expecting an interest rate cut in June? Don't bet on it after new jobs data
Canada's labour market rebounded in April, adding more than 90,000 jobs, a staggering number of new positions after four consecutive months of little change.
Out-of-control wildfire burning near Fort McMurray
As of 9 a.m. on Friday, the wildfire burning 28 kilometres southwest of the northeastern Alberta city was 25 hectares in size.
Prince William says wife Kate is 'doing well'
Prince William said on Friday his wife Kate was 'doing well' in a rare public comment about the Princess of Wales as she undergoes preventative chemotherapy for cancer.
'Irate male' assaulted Newfoundland officers with block of cheese, police say
Police in Newfoundland say patrol officers were assaulted Thursday by a "very irate male" wielding a block of cheese.