February 1, 2021
Laurentian University, a public university located in Greater Sudbury, Ontario with over 8,000 students, filed for protection under the CCAA on February 1, listing approximately $321.8 million in liabilities, including $71.6 million to RBC, $18.4 to TD, and $1.3 to BMO. The University cited widening deficits, declining enrolment, and costs related to the COVID-19 pandemic for its financial difficulties. Since the 2014-2015 fiscal year, the University has experienced operational deficits in the millions of dollars each year. With the exception of modest growth experienced in 2020, enrolment has declined each year from 2015 to 2018 and tuition fees remain low, while labour and debt servicing costs have grown substantially. The annual cost to educate each student at the University is approximately $2,000 higher than the average cost when compared to other Ontario universities, and there are far more faculty members than required. Although the University has made efforts to reduce administrative costs, this has resulted in a situation in which the reduced administrative staff has limited ability to focus on potential revenue-generating projects. As part of its efforts to address these operational and financial issues, the University intends to reduce the number of departments and programs it will offer, which cannot be accomplished in a timely manner outside of a CCAA proceeding. Since the University — as a publicly-funded entity — is subject to information requests, it will also be seeking an order that the stay of proceedings also suspends the requirement that the University respond to such information requests during the duration of the CCAA proceedings. During these proceedings, the University will be receiving up to $25.0 million in DIP financing from Firm Capital Mortgage Fund Inc. EY was appointed monitor. Counsel is TGF and Hicks Morley (labour counsel) for the University, Stikeman Elliott for the monitor, Fogler Rubinoff for the DIP lender, Blakes for RBC, Fasken for TD, and Chaitons for BMO.