Ontario University in Financial Trouble
February 20, 2021
Many organizations are enduring financial hardship because of COVID-19.
Many will have to adjust to post-pandemic times, and this could include ceasing to exist.
Laurentian University just filed for credit protection. The reasons for this action are not likely unique to this institution.
The hard reality of any organization is in order to keep the doors open the financial aspects of the organization must be sound. Otherwise, it could cease to exist.
Laurentian University is located in Sudbury and its president acknowledged having years of declining enrolment because of changing demographics in northern Ontario, recurring deficits and a failed attempt to expand with its Barrie location.
Added to their financial challenge was the 2019 decision by the provincial government to reduce tuition fees and freeze those fees for two years. Plus, as a result of persistent financial pressures they had built up debt of $90 million.
In summary, changing times meant changing financial stability. This can happen to any organization.
That is normal. It is part of the natural evolution of organizations that can result in restructuring, merging and in some cases ceasing to exist.
But this is not a normal period. COVID-19 is the most significant event since World War II and its ripple effect to many aspects of current day life is significant.
Consider COVID-19 as a catalyst. The rate of change and evolution has been dramatic. I suspect many of the changes of the way we live our lives will be permanent.
Do I think Laurentian University will be operating in Sudbury 10 years from now? Yes.
Do I think many other organizations will have to make hard adjustments in the years ahead? Yes.
The current financial problems of Laurentian University could be a signal of what lies ahead for other organizations.
Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com