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Ottawa (12 May 2021) — The National Union of Public and General Employees (NUPGE) has called on the federal government to close a loophole in bankruptcy protection that is being used at Laurentian University in Sudbury to force through deep cuts with no regard for the needs of the community. In a letter to the Minister of Innovation, Science and Industry, Larry Brown, NUPGE President called on the federal government to amend Companies’ Creditors Arrangement Act (CCAA) and Bankruptcy and Insolvency Act (BIA) to prevent publicly funded institutions from using them.
Decisions about Laurentian University being made by creditors not public
Even though Laurentian University is a publicly funded institution, the decision of the university administration to use the CCAA means the public have lost any say over what will happen at the university. Instead, decisions about a publicly funded service are being made by creditors.
Not surprisingly, the priority for creditors is getting their money back rather than the needs of the community. The deep cuts that are being implemented as a result of the bankruptcy protection process include the elimination of over 60 programs. This will have a devastating impact on the education provided at Laurentian, people studying or hoping to study there, and on the people who work there.
When public institutions use bankruptcy protection, only creditors matter
In a democracy, decisions about publicly funded institutions are supposed to be made by elected officials or people who are accountable to them. That ensures that when decisions are made the needs of our communities are considered.
But when publicly funded institutions are allowed to use bankruptcy protection legislation, that accountability is lost. All that matters is what creditors want.
Governments dodge responsibility for under-funding post-secondary education
The 2 main reasons that Laurentian University is in financial difficulty are years of underfunding by both Progressive Conservative and Liberal provincial governments and poor decisions made by Laurentian University administrators to try and deal with the problem. But because Laurentian University is allowed to use the CCAA, those responsible for the problems at Laurentian won’t be the ones facing consequences. Instead, it will be students, staff, and Northern Ontario communities that pay the price.
No protection for workers and pensioners
Another problem with bankruptcy legislation — whether it is used by the private sector or public sector — is that workers and pensioners are treated as unsecured creditors. This means that, as has happened with Sears and many other companies, workers and retirees can lose their pensions and severance, while those responsible for the problems avoid the full consequences of their actions.
Time to speak out before your local hospital or college copies Laurentian
Under-funding is a problem in many publicly funded institutions in Canada, including hospitals and colleges. If the federal government doesn’t remove the ability of publicly funded institutions to use the CCAA and the BIA, we can expect more publicly funded institutions to try to use bankruptcy protection legislation to force through cuts without consulting the public.
It is important that people speak out. People need to contact their Members of Parliament. You can find more information to help speak out from the Canadian Labour Congress here.