Four years after filing for creditor protection, enrolment is up, finances are healthy and the university is on its way to recovery, Laurentian’s new president Lynn Wells said in an interview.Stephen Leithwood
When Canadian postsecondary schools run into financial trouble Laurentian University is often invoked as the worst-case scenario.
In 2021, after years of budget deficits and a costly campus expansion, Laurentian became the first publicly funded postsecondary school in Canada to file for creditor protection. What followed was a painful dismantling that cost hundreds of jobs and eliminated dozens of programs but allowed the institution to survive.
Laurentian is starting to emerge from that difficult past. Four years later, enrolment is up, finances are healthy and the university is on its way to recovery, Laurentian’s new president Lynn Wells said in an interview.
At a time when other universities and colleges are plunging toward potential crises of their own, Laurentian’s experience is a cautionary tale. As the university discovered, surviving a severe crisis can mean job losses, program cuts, the sale of assets and millions in government bailouts.
“We know that Laurentian University sometimes is held up as a model of what can go wrong, but we are also working to become the model of what can go right,” said Dr. Wells.
Over the last several months, universities and colleges across the country have been raising the alarm about their own financial situations: McGill, Concordia, Dalhousie and Simon Fraser all have projected deficits, as have nearly half the universities in Ontario. Colleges are announcing program closures and hiring freezes, and in some cases have closed a satellite campus or are considering it.
The main trigger was the series of federal government announcements that cut the number of international study permits by 35 per cent in 2024, and by a further 10 per cent in 2025.
At Ontario universities that policy change is expected to mean a loss of nearly $1-billion in revenue over two years. Ontario colleges, anticipating an even larger revenue drop, have reduced their spending by $752-million this fiscal year, according to figures from a government spending watchdog.
The Ontario government has also maintained a tuition freeze for domestic students since 2019 that has severely strained institutional budgets.
Although these factors are also at play at Laurentian, the university ran an operating surplus of $37.9-million in 2023-24, and full-time enrolment increased nearly 10 per cent in the fall of 2023, to about 6,300 students. New enrolments were also up for fall 2024.
But getting there came at significant cost to its campus community. More than 340 staff and faculty lost their jobs in 2021. The Northern Ontario School of Medicine, which sits on its campus, was carved out from Laurentian (it was run in partnership with Lakehead University) and became a stand-alone university. The federated universities that also share the campus space – Thorneloe, Huntington and Sudbury – were cut loose and now run independently.
Laurentian’s survival required a financial bailout from the Ontario government, which pledged to buy more than $50-million of Laurentian’s real estate and then lease some properties back to the university, as well as loan the university more than $30-million.
That allowed Laurentian to repay some of its creditors under the Companies’ Creditors Arrangement Act (CCAA), federal legislation that allows insolvent companies to attempt a restructuring.
In 2024, the federal government passed legislation to prevent other publicly funded universities from using the CCAA, citing its inappropriate use in Laurentian’s case. Should another financial crisis of that severity arise the process may be different, but the outcome – job losses, program cuts and the need for a bailout – would likely be similar.
Dr. Wells was installed as Laurentian president last April and so didn’t experience first-hand the worst of the financial crisis. She said she hopes no other postsecondary institution has to go through it. The school she inherited has been surrounded by community support that has been vital to its resilience, she said.
She attended a Greater Sudbury Chamber of Commerce event in September where she asked how many were Laurentian alumni or had a family connection to the university. Nearly every hand in the room was raised, she recalled.
“It just shows the deep engagement and significance that Laurentian has for this community.”
Laurentian hired 24 professors last year, Dr. Wells said, and is in the process of drafting its new academic plan. She said she would like to see the university rebuild in areas of the humanities, including literature and philosophy, that were sacrificed in the restructuring but are integral to a university. The school is also restoring its bachelor’s degree in Indigenous studies, she said.
A recent follow-up report from the Ontario Auditor-General’s office found Laurentian had fully or partly implemented more than 80 per cent of the recommendations it made after the insolvency.
“We went through the difficult decisions. Obviously, there was capacity lost in terms of human resources, but we’re now in a position where we can start to rebuild carefully,” Dr. Wells said. “To expand the great programs we have, restore some capacity that we lost, improve our brand and our reputation nationally and internationally.”