Faculty and staff who lost their jobs as a result of Laurentian University’s insolvency want to know whether anyone will be held accountable for the disastrous decisions that pushed the university into creditor protection.
Ontario’s Auditor-General Bonnie Lysyk concluded in a special report released last week that Laurentian’s insolvency was caused by years of mismanagement, poor planning and weak oversight that led to overspending on capital projects.
She also said that the insolvency process, never before used by a Canadian public university, could have been avoided if administrators had worked with the provincial government to stabilize Laurentian’s finances, potentially saving millions in legal and other fees.
Many of the more than 340 faculty and staff whose jobs were sacrificed to save the Sudbury university are now asking whether there will be consequences for the leaders responsible for the mess.
The Laurentian University Terminated Faculty Committee is calling for a public inquiry into what happened. It says university administrators failed to act in the public interest and should be held to account.
Dominic Giroux was Laurentian president from 2009 to 2017, a period when overspending on capital projects and other financial problems began to take hold. Robert Haché was president from 2019 until retiring earlier this year, the period when the decision to declare insolvency under the Companies’ Creditors Arrangement Act (CCAA) was made.
Mr. Giroux declined an interview request. He now leads Sudbury’s regional health centre, Health Sciences North, and was recently elected chair of the Ontario Hospital Association. Mr. Haché did not respond to a request for an interview.
Fabrice Colin, president of the Laurentian University Faculty Association, which represents current faculty, said the group’s lawyers have already filed a Directors and Officers claim to recoup funds from the university’s insurers, and they’re exploring other options for legal redress. His members feel both vindicated by the Auditor-General’s findings and betrayed by university leadership, he said.
“It’s absolutely shameful what happened,” Prof. Colin said. “People are devastated. They’re angry. Rightfully so, because in the process, the administration spent a lot of effort scapegoating, ignoring and gaslighting faculty.”
Tom Fenske, president of the Laurentian staff union, said the union is considering legal action of its own.
“Someone needs to hold these people accountable, and it can’t just be the unions. Where is the government?” he said. “I would hope the government would do something. If they do nothing, the message they’re sending is ‘Just don’t get caught.’”
The Ministry of Colleges and Universities said it is examining the Auditor-General’s report.
In order to prevent a repeat of Laurentian’s troubles at other universities, the ministry said it plans to immediately implement “a robust reporting and risk framework to identify institutions that are experiencing financial strain.”
Réal Fillion was a professor at the University of Sudbury, one of the three federated universities that had agreements with Laurentian severed after the insolvency. He was among the nearly 150 people employed at the federated universities who lost their jobs. It has been frustrating to see his career end prematurely, he said
“Is anyone going to be held accountable?” Mr. Fillion asked. “I would welcome some kind of inquiry into the use of this mechanism to gut a university,” he said, referring to the insolvency process.
The Auditor-General’s report pays particular attention to decisions made in the years when Mr. Giroux and Mr. Haché served as president. The campus construction that took place primarily in Mr. Giroux’s time is described as a risky “build it and they will come” strategy. There was insufficient evidence that new buildings, which went up between 2009 and 2020 at a cost of $168-million, would bring in enough additional revenue to pay for themselves, Ms. Lysyk wrote.
As its debt levels rose, the university improperly used millions of dollars in restricted research grants, donations and employee health benefits to pay for capital costs, the report said.
The university ran persistent deficits during Mr. Giroux’s tenure, but the size of its senior administration continued to swell, with associated costs rising by 75 per cent. Senior administrators were compensated more than legally allowed, the Auditor-General found. The university also hired 10 special advisers to the president, more than twice the average number at other Ontario universities, with an average salary of $155,000 a year.
Mr. Giroux had what the report described as “an unusually advantageous” contract at Laurentian. When he left he received more than $286,000 in severance, paid in installments over three years, which did not appear on public salary disclosure lists, the report states.
By the time Mr. Haché became president, the university needed to address its deteriorating financial situation. Ms. Lysyk said that rather than work with the province, as other faltering universities have done, Laurentian, based on the advice of counsel, strategically chose to enter creditor protection.
Under the CCAA, it was able to bypass collective agreements and cut faculty and programs without recourse, she wrote. More senior professors were targeted for termination, contrary to provisions in the collective agreement, and they received only a fraction of the severance they were due, Ms. Lysyk said.
The Auditor-General’s report said board members described Laurentian’s insolvency lawyers as “giddy with excitement to try something new.”
“Laurentian’s approach held extraordinary consequences,” Ms. Lysysk wrote.
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