Hon. Lucie Moncion moved second reading of Bill S-215, An Act respecting measures in relation to the financial stability of post-secondary institutions.

She said: Honourable senators, I rise at second reading as the sponsor of Bill S-215, the Post-Secondary Institutions Bankruptcy Protection Act.

The post-secondary sector is an industry that generates $55 billion a year and represents roughly 2.4% of the national economy. The contribution of the post-secondary sector to Canada’s economy is considerable, and for francophone minority communities, it is colossal. Post-secondary institutions play an indispensable role in the economic, social and cultural development of communities. We must act now to save communities from the same fate as northern Ontario, with the restructuring of Laurentian University under the Companies’ Creditors Arrangement Act. The case of Laurentian University is a first. It sets a dangerous precedent, but above all, it is a call to action.

Well before the health crisis, many post-secondary institutions were in a precarious financial situation. We know that some of them have been suffering from chronic structural and operational underfunding for years. To cope with this situation, these institutions turn to volatile sources of funding and are often forced to make budget cuts that affect the programs they offer and jobs.

[English]

I am particularly concerned about the institutions serving francophone minority communities, which have the additional responsibility of fostering the vitality of the French language and francophone cultures across Canada. I’m thinking in particular of Laurentian University, Université de Moncton, the University of Alberta’s Campus Saint-Jean, Université de Saint-Boniface, Université de l’Ontario français, University of Sudbury, Université de Hearst and so forth.

The cuts at Laurentian University are compromising access to post-secondary education in French in northern Ontario. French programs that have been cut include engineering, political science, law, education, history, philosophy, literature, drama and midwifery.

Despite the emergence of institutions by and for francophones such as the University of Sudbury, which has clear unified community support, governments have been slow to act. For example, the Government of Ontario took over one year to intervene in the case of Laurentian University and only intervened because it was compelled to. Laurentian University was losing its operational funding, which would have accelerated the actual bankruptcy. This waiting game lasted a year with the Government of Ontario. In the meantime, the francophone community’s next generation is being undermined with devastating consequences to ensure that minority language communities have ownership and control over the institutions that support a strong and prosperous francophonie.

[Translation]

In an interview with ONFR+, Carol Jolin, president of the Assemblée de la francophonie de l’Ontario, reacted to the significant drop in applications to Laurentian University from francophones by saying, and I quote, “The message is clear: Our Franco-Ontarian youth have lost faith in Laurentian University.”

People no longer say “francophones at Université Laurentienne;” they just say “Laurentian University.” He also said, and I quote, “The exodus of northern youth to other parts of the province and the country has begun.”

I recently spoke to the president and vice-chancellor of the Université de Moncton, Denis Prud’homme. He explained that his institution runs a structural and operational deficit every year. Because of inflation, the Université de Moncton has to pay an extra $2 million to $3 million per year, which is not covered by the provincial funding framework. The deficit is already starting to affect programs, human resources, infrastructure and student services, including mental health. The Université de Moncton needs a solid funding base because project-based funding may be good for governments, but it’s not sustainable for small institutions. Competitions for federal subsidies have criteria that favour big universities because they have the capacity and resources to do large-scale projects.

For an institution that has few resources to begin with, project‑based funding requires additional effort to prepare and manage the project. Plus, it’s all temporary. He confided in me, saying:

It’s exhausting, destabilizing and unpredictable. We need core funding with cost-of-living indexing.

[English]

Looking at Laurentian’s situation, President Prud’homme told me that the only thing keeping the University of Moncton from a similar fate is the fact that every year, they take the difficult decisions to make cuts.

Out West, the situation at the University of Alberta’s Campus Saint-Jean is unsustainable. There, the money that the university gets in tuition is not based on actual enrolment numbers but instead on a quota. As a result, Campus Saint-Jean does not receive funding for at least one third of its enrolment. On top of the chronic operational and structural underfunding that has been going on for several years, the Alberta government announced budget cuts in 2019 and prohibits post-secondary institutions from using the reserve funds. For the University of Alberta, this is a cut of 34%.

For at least the past two years, the university has been going through a restructuring process and making several budget cuts that threaten Campus Saint-Jean’s very survival.

[Translation]

I recently spoke with the dean of Campus Saint-Jean, Pierre‑Yves Mocquais. He explained, and I quote:

There is a real trend towards centralizing the university, and this is constantly encroaching on the campus’ autonomy through a gradual erosion of its capacity to function as a francophone institution.

Campus Saint-Jean is treated as though it’s just another department, which is completely unrealistic considering its francophone mandate.

This crisis, which continues to this day, has led to civic action. The community is mobilizing to put pressure on governments through the “Save Saint-Jean” campaign. The budget cuts required to maintain the financial viability of the institution threaten the existence of entire programs and may force students to complete their degrees in English. The university has already laid off more than 1,000 people, and the layoffs continue.

In what the president of the Association canadienne-française de l’Alberta, or ACFA, described as a David-versus-Goliath battle, ACFA is advocating on behalf of the community to save Campus Saint-Jean by suing the Government of Alberta and the University of Alberta. To illustrate how lopsided this battle is, ACFA requested between $1 million and $1.3 million for the 2020 school year, while the Alberta government spent $1.5 million on legal fees to avoid providing this funding.

Several sectors have been affected by the pandemic, but it is too early to determine its actual impact on the financial viability of the post-secondary education sector in Canada. However, we have noted certain effects, particularly on the share of revenue generated by foreign students’ tuition fees, which dropped considerably because of the pandemic.

Bill S-215 seeks to prevent post-secondary institutions from becoming financially unstable and to improve the position of those on the brink in order to ensure the vitality and development of communities across the country.

[English]

In my speech today, I will first provide a general overview of post-secondary funding in Canada. I will then explain how funding issues are compounded when it comes to institutions providing French language minority education. I will bring attention to the problems with the legal status quo, including the ability of universities and colleges to make use of bankruptcy and insolvency law. This will provide context for my legislative proposal, Bill S-215, which calls for concrete and effective government action to address this crisis and prevent the use of inappropriate legal tools as part of the restructuring process. I will conclude by presenting some of the solutions proposed by stakeholders.

Funding the post-secondary sector. What does the sector’s funding look like and why is it cause for concern? The State of Postsecondary Education in Canada, 2021 report by Higher Education Strategy Associates reveals various trends seen in the sector over the past 20 years. Post-secondary funding comes from three main sources: government grants, tuition fees and private sources. Prior to the 2008-09 fiscal crisis, the three main sources of funding for post-secondary education grew by 5% per year on average. After the crisis, tuition fees, particularly those by international students, have played a significantly more important role. Tuition fees went from accounting for 19% of funding in 2000-01 to 29% in 2018-19.

What about government funding? Over the past 20 years, the portion of funding coming from provincial governments has decreased. Nationally, the provincial share, which was 43% in 2000-01, dropped to 35% in 2018-19. Federal funding has been stagnant since about 2008. In real dollars, funding for the Official Languages in Education Programs has been in steady decline.

The important thing to note is that proportionately, we are seeing the government steadily backing away from the post‑secondary sector. The decline is largely what is behind the sector’s precarious financial situation.

[Translation]