LaSalle College gets CCAA protection as $47 million Quebec dispute threatens fall term

Collège LaSalle, the Montreal-based private college at the centre of the global LCI Education network, obtained protection under the Companies’ Creditors Arrangement Act on August 24, 2026, after telling the Quebec Superior Court that approximately $47 million of disputed penalties and subsidy recoveries claimed by the provincial government had pushed the institution into an immediate liquidity crisis.

Founded in 1959, LaSalle is a non-profit, subsidized private post-secondary institution offering 55 programs from campuses in Montreal and Laval, including DEC, AEC and vocational programs delivered in French and English. It is the original institution in LCI Education’s network, which now comprises 11 higher education institutions and 14 campuses across five continents. Approximately 3,000 students were registered for the Fall 2026 semester, which had been scheduled to begin August 27, and LaSalle employed approximately 283 people when the proceedings began.

The filing follows a steep deterioration in LaSalle’s operating results. Revenue fell to $51.1 million in the year ended June 30, 2026 from $71.9 million a year earlier, while the college recorded an $11.8 million deficit, compared with an $8.9 million deficit in fiscal 2025. Management attributed much of the decline to falling enrolment following provincial and federal regulatory changes. Fall enrolment dropped from approximately 4,700 students in 2024 to 3,425 in 2025, while AEC enrolment fell from approximately 3,153 students in 2023-2024 to 1,491 in 2025-2026. International students historically represented approximately 35% of LaSalle’s student population, leaving the college exposed both to Quebec restrictions on English-language college enrolment and the federal cap on international study permits introduced in January 2024.

The largest pressure comes from Quebec’s Ministère de l’Enseignement supérieur. The ministry determined that LaSalle exceeded statutory limits for English-language AEC enrolment by 716 students in 2023-2024 and 1,066 students in 2024-2025, resulting in penalties of $8.8 million and $21.1 million, respectively. LaSalle is challenging those decisions through judicial review. Separately, its initial subsidy allocation for the 2025-2026 academic year was reduced from $29.2 million to $11.9 million after the ministry completed its final reconciliation, producing a further $17.3 million clawback. The ministry’s preliminary allocation for 2026-2027 is $31.8 million, but this amount also remains subject to reconciliation.

The strain is visible on the balance sheet. LaSalle reported assets of approximately $29.5 million and liabilities of $50.5 million at June 30, including $32.4 million of subsidies payable, $8.7 million of deferred tuition revenue and $5.0 million of salary and benefit accruals. It had no secured debt. Cash had fallen from approximately $1.7 million at June 30 to only about $0.1 million by August 20. A creditor list dated August 24 records approximately $57.2 million of claims, led by the Higher Education Ministry at approximately $47.2 million and student deposits of approximately $5.1 million.

LaSalle had already pursued cost reductions, administrative efficiencies, staffing cuts and discussions with Quebec over the penalties and clawback. The broader LCI Education group also retained Alvarez & Marsal Canada Securities ULC to assist with equity recapitalization and debt refinancing efforts and presented restructuring plans to its secured lenders on June 22, updated August 10. Those plans remain under seal and continue to be discussed with the group’s lenders.

The CCAA process is initially focused less on a sale process than on preserving LaSalle while negotiations with Quebec continue. A detailed restructuring strategy has not yet been finalized and could involve different alternatives depending on the outcome of those discussions. LaSalle intends to seek an order requiring the province to pay the full 2026-2027 preliminary subsidy allocation without setting off the disputed penalties or the 2025-2026 clawback. The college warned that without government support it may be unable to resume educational operations.

In the meantime, related LCI entities have agreed, with lender consent, to provide LaSalle with up to $2.3 million of intercompany advances during the initial 3-week forecast period.

Deloitte is the monitor, while Raymond Chabot is the financial advisor to the debtors. Counsel includes Rigaud Legal and Osler for LaSalle, Blakes for the monitor, Davies for RBC as agent, Fasken for EDC, and Stikeman Elliott for CDP Investments.