Laurentian University's Financial Troubles - Files for Insolvency/Creditor Protection

[DesiPikachu]

Didn't see a thread here about Laurentian University's financial troubles so I thought I'd post one. I think it's important for international students to read these articles for 2 reasons:

1. For any international student currently enrolled or plans to enroll in the future at this university - for obvious reasons you need to be aware of the goings-on at your institution, whether planned or current. By the way, Laurentian filing for creditor protection will not negatively affect their DLI status.
2. For all those with low marks or low CGPA or a lot of backlogs - all those agents discouraging by you saying that your low percentage won't even get you an admission let alone a visa are either lying or unaware of the financial stress that public institutions in Canada are facing. As you will read below, international student enrollment is massively down due to COVID all across Canada and on top of that many provinces have implemented a tuition freeze for domestic students which further impacts the institutions' finances.

While the articles below mostly relate to Ontario, I don't think the rest of Canada is in any better shape, financially. Don't know about Quebec, though.

What does that mean for international students? Obviously, relaxed acceptance norms. If you have low marks or a low CGPA or a ton of backlogs now is the time to apply. Don't allow agents to discourage you. Don't ask universities or colleges' international admissions either - they'll just pretend that everything is normal and nothing of this sort is happening. Just apply directly. Of course this doesn't apply to the top Canadian universities with brand recognition - don't expect to get admissions into UoT. But it does apply to institutions located in more rural areas, like Northern Ontario.

Use the outline.com or archive links if the direct link to the news article is paywalled. I'm quoting a few highlights from the article but I recommend you read them all in their entirety.

Laurentian University’s plight could be a grim warning of more financial distress to come at public institutions, insider fears.
Link | Archive | Outline.com

Laurentian University’s dire financial straits are raising concerns that other publicly funded institutions may also be unable to survive the pandemic intact.

“This could be the canary in the coal mine,” a Progressive Conservative insider warned Thursday.

“We could see other universities and colleges — or even municipalities — seeking relief from their pension obligation and labour contracts,” said the insider, who spoke confidentially in order to discuss internal deliberations.

“These things can really cascade,” he said, pointing to the 47-page Ernst & Young (EY) report filed to the Ontario Superior Court of Justice last Saturday as part of creditor protection proceedings, an unprecedented move for a post-secondary institution in Ontario.

Canada: Laurentian files for creditor protection as int’l enrolments falter
Link | Archive | Outline.com

Contributing factors include “historical recurring deficits, declining demographics in Northern Ontario, the closure of our Barrie campus in 2019 and the domestic tuition reduction and freeze that was implemented in 2019 and most recently various costs and revenue impacts due to the global pandemic”, he said.

Laurentian has long been aware that the number of high school grads in northern Ontario has been shrinking. Last summer, university spokesman Shaun Malley told the Sudbury Star that Northern Ontario was experiencing a decrease in university-aged student population due to changing demographics.
“[This] means smaller graduating classes in our high schools across the region and less students heading to university from our local catchment area,” he said.

Financial health of Ontario universities under scrutiny
Link | Archive

Institutions in Northern Ontario tend to be in the most difficult position when it comes to enrolment. They have shrinking local university-age population and often struggle to attract international students, Mr. Trick said.

Cheryl Sutton, interim president of Nipissing University, said the North Bay school is projecting a $5-million deficit this year, but knows it can’t run deficits continually, she said.
Nipissing has only about 60 international students among its 4,500 student body, but has a plan to increase that number by eight times over the next five years, Ms. Sutton said.

Laurentian University becomes a victim of a failing business model
Link | Archive

Depending on the program, tuition fees for international students run upward of five times the rate paid by in-province students. Provincial governments have largely looked the other way as universities restructure their course offerings to cater to foreign “customers” and maximize revenues, increasingly at the expense of less-popular disciplines. Foreign students accounted for 15 per cent of total enrolments in 2018-19, double the proportion in 2009. In math and computer science, for instance, foreign students accounted for fully a third of the student body.

[...] for smaller players with less global name recognition, the new math of Canadian university funding has been a disaster, leaving them especially vulnerable to sudden shifts in foreign demand.

Program, faculty cuts needed for Laurentian University to survive, court hears
Link | Archive | Outline.com

RBC, Toronto-Dominion Snared in Canada University Bankruptcy
Link | Archive

Laurentian had C$321.8 million in liabilities as of April 30, according to a report filed by the monitor in the case, Ernst & Young. It currently owes C$71.1 million to Royal Bank of Canada, C$18.5 million to Toronto-Dominion Bank and C$1.3 million to Bank of Montreal under a variety of credit facilities, the report said.

Martin Regg Cohn: Laurentian debacle shows Doug Ford has learned nothing about universities
Link | Archive

[...] the slow drip of government-controlled cash flow — grants are frozen and tuition fees were cut by Premier Doug Ford — leaves universities more vulnerable than ever to the vagaries of the coronavirus. And in need of a course correction.