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
Minister 'outraged' after AFN national chief's headdress taken from Air Canada cabin
The federal minister of Crown-Indigenous relations is calling on Air Canada to 'make things right' with the national chief of the Assembly of First Nations, who said her headdress was removed from an airplane cabin during a flight this week.
Sophie Gregoire Trudeau on navigating post-political life, co-parenting and freedom
Sophie Gregoire Trudeau says there is 'still so much love' between her and Prime Minister Justin Trudeau, as they navigate their post-separation relationship co-parenting their three children.
BREAKING Stranded orca calf swims out of B.C. lagoon where she was trapped for weeks
An orca whale calf that has been stranded in a B.C. lagoon for weeks after her pregnant mother died swam out on her own early Friday morning.
'Violation': CSIS had officer investigated after she reported a superior raped her
A CSIS officer's allegations that she was raped repeatedly by a superior in agency vehicles set off a harassment inquiry, but also triggered an investigation into her that concluded the alleged attacks were a “misuse” of agency vehicles by the woman.
'Too young to have breast cancer': Rates among young Canadian women rising
Breast cancer rates are rising in Canada among women in their 20s, 30s and 40s, according to research by the University of Ottawa (uOttawa).
'I was scared': Ontario man's car repossessed after missing two repair loan payments
An Ontario man who took out a loan to pay for auto repairs said his car was repossessed after he missed two payments.
Canada recognizes housing as a human right. Few provinces have followed suit
As more Canadians find themselves struggling to afford or find housing, the country's smallest province is the only one that can point to legislation recognizing housing as a human right.
Charlie Woods, son of Tiger, shoots 81 in U.S. Open qualifier
Charlie Woods failed to advance in a U.S. Open local qualifying event Thursday, shooting a 9-over 81 at Legacy Golf & Tennis Club.
Taylor Swift dons Montreal designer's dress in 'Fortnight' video
A pair of Montreal designers' work has now been viewed over 41 million times. Taylor Swift dons a Victorian throwback black gown in her latest music video, 'Fortnight', designed by UNTTLD due Simon Belanger and Jose Manuel Saint-Jacques.