Laurentian University professors and graduate students who secured tens of millions in research funds — to study wildlife in Algonquin Park, mineral exploration in northern Ontario or permafrost near Hudson Bay — worry their work is under threat because the cash-strapped school used the money to help pay the bills instead.
Professors call the situation a huge betrayal, even “highly unethical,” and warn it will have long-lasting impacts.
The Sudbury university, which applied for creditor protection last month, had until last December been “co-mingling” research grants in with general revenues and using them to “keep the lights on and pay our salaries,” said Prof. Albrecht Schulte-Hostedde, who estimates about $100,000 of research grants for his work in behavioural evolutionary ecology are at risk.
“I was as shocked as anyone — I would say there’s a sincere sense of betrayal by faculty,” added Schulte-Hostedde, who holds a Canada Research Chair. “The money is held by the university, but really it’s our money. And to have that used and gone, it’s disappointing and shocking and maddening.”
He plans to spend personal funds to purchase trapping, tagging and other field supplies to continue monitoring wildlife this May for his research with the Ministry of Natural Resources, with the hopes he’ll eventually be reimbursed.
Court filings say Laurentian estimates about $36.5 million that, “as a result of the current financial position of (the university), those funds have been spent and there are no funds set aside or available to satisfy the obligations represented by these deferred contributions,” which are grants that faculty and graduate students have applied for and have been awarded for specific research purposes.
“This is unethical, highly unethical … to use funds that were specifically intended for one thing and not fulfil contractual obligations,” said Carol Kauppi, who has studied homelessness in northwestern Ontario for two decades, and is now concerned about $200,000 in grants she was awarded.
She said she had no idea money was being put into the university’s general account, and was also upset that the school gave faculty no notice of the creditor protection filing.
“We simply don’t know” if any funds will be available after April 30, when the school restructuring is to wrap up, said Kauppi, director of Laurentian’s Centre for Research in Social Justice and Policy.
For now, professors have been told they can only apply for emergency funds, and they have no access to grants that have come in since last December even though they are being held in a separate account.
“We honestly don’t know what is going to happen,” she said. “We don’t know about the future of our research centre, and our research.”
For a university where professors spend 40 per cent of their time on research activities, the loss of funds has come as a huge blow.
Laurentian, believed to be the first public university in the country to file for creditor protection, has listed a number of research bodies as creditors, including the Canada First Research Excellence Fund (which is owed $5.3 million), Natural Sciences and Engineering Research Council of Canada ($4.6 million), Social Sciences and Humanities Research Fund ($1.6 million) and the Canadian Institutes of Health Research ($892,000).
According to creditor protection filings, Laurentian’s total debt is $321 million, which includes loans of about $107 million: $18.5 million in current liabilities, and $89 million in longer-term debt. It also has roughly $214 million in other debts and obligations to employees and other creditors.
“A key question will be who takes the losses for the Laurentian insolvency,” said Toronto-based chartered accountant Charles Smedmor, who specializes in forensic and investigative accounting and examined Laurentian’s finances at the Star’s request, based on publicly available documents.
“Exposed parties include: employees whose benefits and pension funds were co-mingled and applied to operations; research grant providers and certain donors whose funds were used for ongoing operation; trade creditors who provided goods and services in the expectation of being paid; and the banks with both unsecured and secured loans.”
Rahul Sapra, president of the Ontario Confederation of University Faculty Associations, said: “This should have never happened.”
One professor, who spoke to the Star on condition she not be named, said she was told by one research funding body that it does not want to funnel any grants to Laurentian.
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“That is a real concern,” she said. “That is not a hypothetical.”
Graduate students continue to be paid during the creditor protection process, as do professors.
As for worries from donors and students regarding scholarships, a spokesperson for the school said they will be distributed this school year.
Brenda Austin-Smith, president of the Canadian Association of University Teachers, said “this is what happens when there’s a consistent drop in funding” from the provincial and federal governments. “This is not something that happened last month or last week.”
New Democrat MPP Jamie West, who represents Sudbury — he attended Laurentian, as did his wife, and his two sons are current students — said the provincial government will have to provide the school, which serves the northern francophone and Indigenous communities, with some funding to ensure its future stability.
“Laurentian is well-established university, especially for how small it is, and the research grants are very important,” he added
An affidavit from president Robert Haché said the practice of mixing money into a main operating account “is not uncommon” among Ontario universities.
However, he added, “it is not an issue with universities that have sufficient cash. In this case, it is LU’s liquidity crisis and insolvency over a number of years that have caused the issue because LU used those research grant and award funds for operating purposes.”
He also said “this issue may impact LU’s ability to meet its research obligations as they become due, which may cause an event of default under certain research contracts it has entered into … LU’s access to research funding may be negatively impacted in the future if corrective actions are not taken to rectify these historical issues.”
The Ministry of Colleges and Universities, as well as the Natural Sciences and Engineering Research Council of Canada (NSERC), did not wish to comment as the situation is before the courts, though NSERC said it “will continue to monitor the situation, and its impact on the Laurentian community as the (creditor) process advances.”
Adam Kirkwood, a PhD candidate in the boreal ecology program, works in northern Ontario looking at permafrost degradation. He said he’s been unable to send samples for much-needed analysis. Right now, he’s making plans for summer field work even though he has no idea whether it will go ahead.
While relying on grant money that used to flow via his supervisors, he said ones he applied for personally were also put into general revenues and are also now lost.
Graduate students, he added, are worried about whether they’ll finish on time or even if their research programs will continue.
“And should we stay at Laurentian? That’s exactly the question,” he said. “Now that these funding agencies have been betrayed, or their contracts broken, are they going to continue to fund research at Laurentian? That is a huge unknown.”
Prof. Schulte-Hostedde said faculty are beside themselves with worry about the future of their students, and Laurentian, during this restructuring period.
“I hope the end result is worth the cost — and the cost is huge. The cost is to our reputation, there is a cost to our internal relationships and a cost to our relationships with the granting councils, with potential students both undergraduate and graduate, to our communities that we work with, never mind trying to recruit faculty,” he said.
“It’s difficult to see how we are going to overcome all of this.”
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