Laurentian’s Financial Woes Are a Warning to All Canadian Universities

February 6, 2021 Updated: February 8, 2021

Commentary

If you want stability, a university is one of your best bets. Some of Canada’s oldest universities are well over 100 years old and still going strong.

Universities give significant benefits to the cities they are located in. They provide a large number of well-paying jobs, increase the local population by attracting students from other regions, and contribute to the local culture and intellectual life of cities. These are all good things.

This is why it was such sad news when Laurentian University in Sudbury, Ontario, announced that it was financially insolvent and had already filed for creditor protection. This announcement came as a shock to faculty, students, and community members.

Obviously, Laurentian administrators are trying to put a positive spin on a terrible situation. An official announcement on the university’s website explained that the restructuring of the university will ensure that students “will continue to have access to a high-quality post-secondary education at Laurentian for years to come.” The question-and-answer section on the website emphasizes that Laurentian plans to continue educating students for the long term.

Nevertheless, one cannot paper over the seriousness of Laurentian’s present situation. Declaring insolvency is a drastic step, and frankly it is an acknowledgment that the university cannot meet its financial obligations. Simply put, Laurentian University is spending far more money than it is taking in through government grants, tuition fees, and support for research projects. This cannot continue.

Hopefully, the restructuring process is successful. It would be a shame for northern Ontario to lose this university, particularly since Laurentian is such an important institution in the region.

Laurentian’s insolvency is a stark reminder that universities are not immune to market realities. They do not have infinite resources and they cannot afford to offer programs that interest only a handful of faculty members and students. While they receive public funding, that funding is typically contingent on the fees generated by student enrolment. If enrolment declines, so does a university’s income.

Unfortunately, Laurentian experienced a steady decline in enrolment in recent years, largely because of the declining number of high school students in northern Ontario.

Interestingly, the strategic plan on Laurentian’s website makes no mention of this reality. Instead, the plan extols lofty goals such as being a leader in the process of reconciliation, serving as a catalyst for vibrant Francophone cultures, and creating “interdisciplinary knowledge to offer compelling solutions for society’s complex challenges.”

To put it politely, it looks like there is a serious disconnect between Laurentian’s strategic plan and its fiscal reality. It’s all well and good to have grandiose plans about reconciliation, revitalizing a culture, and creating interdisciplinary knowledge, but a university must set attainable and measurable goals that it can afford.

In other words, instead of trying to be all things to all people in northern Ontario, Laurentian should prioritize academic programs for which there is student demand, and it must eliminate those programs that attract little interest from students, even if faculty members are committed to them.

Laurentian’s financial predicament should serve as a stark reminder to universities across the country that they too are not immune from fiscal reality. Universities that do not adapt to the financial constraints during these times could find themselves in a similar situation.

It’s also important for provincial governments to consider whether it makes sense to continue creating new universities at this time. For example, as of mid-January, the newly established Université de l’Ontario français, located in downtown Toronto, had just 39 student applications for its first academic year. They had been planning for at least 200 students this fall.

That is an embarrassingly low number, especially when we consider that the federal and provincial governments in 2019 pledged $126 million over eight years to support this university. Considering that Toronto is already home to several major universities, it would have made far more sense to use this money to strengthen Francophone programming in one of the existing universities.

Clearly, the Université de l’Ontario français was established for political reasons, not because of student demand. The simple reality is that students who want a Francophone education already have many options in Canada. There was no need to create another university in Toronto. It will not come as a huge surprise if this university closes.

COVID-19 has forced all Canadian universities into a period of adjustment. They should take this opportunity to make the hard choices that are needed to ensure they remain fiscally viable. Universities add considerable value to Canadian society, but, as we’ve seen with Laurentian, they are not immune to the present fiscal reality.

Michael Zwaagstra is a public high school teacher, a senior fellow with the Frontier Centre for Public Policy, and author of “A Sage on the Stage: Common Sense Reflections on Teaching and Learning.”

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.