Skip to main content

New law bans universities from taking advantage of bankruptcy laws

Share

To ensure the Laurentian University insolvency case never happens again, federal legislation has been passed to block public universities from using the Companies’ Creditors Arrangement Act and the Bankruptcy and Insolvency Act.

Laurentian declared insolvency in February 2021, leading to massive layoffs and program cuts, using the CCAA legislation.

It was the first time in Canada a public university declared the equivalent of bankruptcy.

“After years of advocacy, the Ontario Confederation of University Faculty Associations (OCUFA) and its allies have successfully secured passage of federal legislation that will exclude public universities from the CCAA and the BIA,” OCUFA said in a news release.

“OCUFA welcomes news that the House of Commons Bill C-59, which included the amendments to CCAA and BIA, passed the third reading in the federal Senate on June 19 and is awaiting Royal Assent to be passed into law.”

“Public universities are not businesses and should not be treated as such, and this bill is a crucial piece of legislation that will protect university students, faculty and staff from corporate-style restructuring policies that prioritize creditors over the public interest,” Jenny Ahn, executive director of OCUFA, said in the release.

OCUFA said LU’s bankruptcy “jeopardized the futures of nearly 1000 students. It also resulted in massive job losses for faculty and staff and disastrous ripple effects in Sudbury, Ontario, with an estimated economic cost of over $100 million.”

 “We saw to it that the catastrophe caused by Laurentian’s bankruptcy will never happen again. Years of OCUFA campaigning have paid off, and together with our allies, our advocacy has resulted in a more secure future for our vital public universities,” said Nigmendra Narain, president of OCUFA.

A separate news release from Sudbury MP Viviane Lapointe said that “more than 100 professors and 70 staff members lost their jobs.

Legislation cites Sudbury

“A total of 24 programs were cut. Students who were mid-program had their education and future prospects put in jeopardy,” the release said.

“The bill included an important reference to Sudbury. Citing the cuts that happened at Laurentian University when it underwent the CCAA process, the Liberal government took steps to amend the Act so that post-secondary institutions can no longer access the bankruptcy act as a means of dealing with financial hardships.”

“We needed to ensure that when a situation like the Laurentian University financial mismanagement arises, and in this case, where the province of Ontario failed to intervene, that other communities do not become subject to this failure to act,” Lapointe said in the release.

“In my ongoing discussions with university officials, faculty, unions, and community members, they all stated there is a need to ensure this never happens again. I brought this message to Ottawa and worked with the government to get this done. I want to thank all those who engaged with me and our government to ensure a successful outcome.”

CTVNews.ca Top Stories

Here are the signs you're ready to downsize your home

Amid the cost-of-living crisis, many Canadians are looking to find ways to save money, such as downsizing their home. But one Ottawa broker says there are several signs to consider before making the big decision.

Stay Connected