The Federal Government recently announced that it will move to prevent universities from filing for CCAA protection in the event of insolvency. This decision is a response to the insolvency of Laurentian University in 2021, which resulted in program cuts and staff eliminations.
However, lawyers familiar with the Laurentian situation agree that universities, colleges and public institutions need different treatment than regular businesses, emphasizing the need for more oversight to prevent another post-secondary school from repeating Laurentian’s mistakes.
Eugene Meehan, K.C. is quoted in Canadian Lawyer Magazine, calling the CCAA “an extremely heavy sledgehammer” that is not the appropriate tool for every situation and agrees with the government’s decision to prevent the CCAA from being applied to post-secondary institutions. Instead, he suggests creating an oversight body with “realistic” powers to better align with how educational institutions operate.
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