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]

Hon. Lucie Moncion: Honourable senators, the important thing to note is that, proportionally, we are seeing the government steadily backing away from the post-secondary sector. This decline is largely what is behind the sector’s precarious financial situation.

Institutions are increasingly vulnerable to the ups and downs of Canada’s economy, and it is being left up to them to find reliable and sustainable sources of funding.

Then, on top of an already precarious financial situation, came the pandemic. According to the data collected by Statistics Canada and analyzed by the Library of Parliament, pandemic-related health measures have resulted in a significant decline in revenue for many universities, particularly from ancillary services. Examples include student housing, food services and parking.

Some universities anticipated deficits due to the pandemic and announced plans to cut operating costs. This was the case for the University of Ottawa, the University of Manitoba, Laurentian University, the University of Alberta and McGill University, among others.

In Ontario, tuition fees are replacing government funding as the primary source of revenue for colleges. In general, universities that rely heavily on international students for funding have suffered the most, such as those in British Columbia and Ontario.

In contrast, universities in Newfoundland and the territories are entirely publicly funded, shielding them from some of the negative impacts of the pandemic. Quebec’s universities are also predominantly publicly funded.

Clearly, larger institutions with robust funding structures and longer histories in communities able to support them have been faring better despite the pandemic. Typically, these are institutions serving the English-speaking majority.

[Translation]

I will now talk about funding for institutions serving official language minority communities. Things get more difficult when it comes to institutions that provide French-language programming in minority communities.

Canada’s 22 French-language colleges and universities face significant financial hardship. According to the Association des collèges et universités de la francophonie canadienne, or ACUFC, and I quote:

Structural challenges mean that French-language post‑secondary education in the FMCs does not benefit from conditions equivalent to those granted to the English-speaking majority.

The communities are waiting to see a move toward real equality in education.

Lynn Brouillette, Chief Executive Officer of the ACUFC, is asking us to come up with solutions to ensure the long-term sustainability of the sector. She said, and I quote:

Ad hoc measures are no longer enough to ensure the strength and well-being of this sector, which makes an enormous contribution to the vitality of francophone minority communities. The time has come to bring together those who care about the French-language post-secondary education sector in order to come up with sustainable solutions.

The president and lead researcher at Sociopol, Mariève Forest, who studied the French-language post-secondary education sector, said, and I quote, “Funding is the biggest challenge to the sustainability of French post-secondary education in minority communities.”

Volatile revenue is a threat to the sector’s long-term survival and has a direct impact on community vitality. The researcher noted that, in 2018-19, an estimated 30,000 francophones did their post-secondary studies in English, in part because of lack of access. At Laurentian University, the number of students wanting to study in French fell by 52% — 52% is a lot at Laurentian University — and that is for the northern Ontario campus.

Institutions serving francophones in a minority context are more fragile because they’re smaller. These institutions generally came along fairly recently, most of them in the 2000s, when the federal government introduced its Action Plan for Official Languages. Volatile revenue in that situation can mean the end of these institutions and especially the end of French-language programming.

Chiara Concini, a student in the second year of her B.A. at the University of Alberta’s Campus Saint-Jean, put it like this in an interview with Radio-Canada:

Now I can’t even finish my B.A. entirely in French. . . . Next year I’ll have to take some classes in English because they’re mandatory but not available at Saint-Jean.

[English]

This gap in the minority language education continuum is tragic. For francophones who have studied in French all their lives, being forced to study in English because of a lack of access is troubling.

The government’s increasingly hands-off approach forces a vision on post-secondary institutions that is strictly profit-driven, ignoring the other functions of post-secondary education that benefit communities. Institutions will, for example, focus on attracting greater numbers of international undergraduate students while neglecting to invest in research and less profitable programs, including French-language programs that typically have lower enrolment.

This growing privatization of post-secondary education is explained in the 2021 study on the “State of Postsecondary Education in Canada, 2021” by Higher Education Strategy Associates that I cited earlier. This is what the study says about the general trend towards privatization:

. . . Canada is moving further from a Western European model of a largely publicly funded system towards the model of other anglophone countries where postsecondary education may be mostly publicly owned, but it is ”publicly-aided“ rather than ”publicly-financed.”

[Translation]

This growing trend of relying on sources of private funding and tuition fees disproportionately disadvantages French-language minority institutions, which necessarily serve a smaller client base.

Charles Castonguay reminds us of the importance of demographics for the French fact in Canada. He said the following in his article entitled “L’intérêt particulier de la démographie pour le fait français au Canada,” or the significance of demographics for the French fact in Canada, and I quote:

The number shapes . . . virtually every aspect of life in French in Canada, from the quality of the spoken language to the availability of services in French, to the rate of anglicization and even to the way francophones perceive themselves and act as such.

I will step away from my text and tell you my story. I studied French my whole life, and I fought hard to study at university. I was living in the regions where we did not always have access to French-language universities. I took correspondence courses, I studied at Laurentian University, I moved to Sudbury to study in French.

During my French courses, when I was given books in English, I always complained saying, “I am taking a French course and the material is in English. Why is this material not available in French?”

I worked in a francophone community my entire life. That is very rare. I am a bit of an anomaly in the Ontario system. I’ve worked all over Ontario and always in French. I’ve tried to instill these values in my family, in the hopes that they would come to respect and understand the importance of the francophonie and the French language and also the importance of supporting our French-language institutions, through education, buying books, and so on. It’s such an important part of preserving a language. In my case, I was helping preserve the French language. I’m an anomaly in Ontario, I would say, since I’ve worked for 38 years exclusively in French. I don’t know whether there is anyone else in Ontario who has done that.

Universities and colleges in francophone minority communities do extra work to support the survival of the francophonie. To ensure that students can learn in French, it’s important that the university or college environment can foster linguistic security and that students can live a student experience in French outside the classroom.

However, the funding does not reflect the specific needs of minority communities and the long-standing catching up that needs to be done. In order to access additional funding, institutions must negotiate with their respective provincial governments. I will let you imagine how that works out with hostile governments or governments that don’t understand the challenges that francophone minority communities face. If you only knew how many university and college presidents are forced to lobby decision makers to get a little money so that the schools can meet the bottom line — it’s unbelievable.

Recruiting French-speaking students is also more complex. Francophone populations are often spread out and isolated. In terms of international recruitment, the centralized administrations of primarily anglophone institutions offering French-language programming do not always value or understand the importance of recruiting from francophone countries. This is a major challenge for Western Canadian institutions. The federal government also has a role to play here with respect to francophone immigration and recruitment.

Francophone communities are in the best position to understand their needs and challenges in post-secondary education. The example of Laurentian University has shown us that without the “by us, for us” approach, francophones risk being the worst hit when budget cuts need to be made. The restructuring of Laurentian University has been damaging in many ways, but francophones have suffered the most.

Let’s now turn our attention to the blind spot in post-secondary funding.

Researchers who study the issue of post-secondary funding and other stakeholders have long denounced, and with good reason, a lack of transparency and accountability with respect to federal transfers and provincial funding under agreements seeking to enhance the vitality of francophone minority communities.

[English]

It is important to understand that the financial picture of the sector I have presented is only a summary. It is incomplete not just to keep my speech from running too long but also in terms of academic and stakeholder knowledge. There are a lot of unknown variables, making it difficult to come up with solutions. We lose track of the funding when it is sent from the federal government to the provinces, and things get even murkier when it is sent to the various institutions.

For bilingual institutions in minority communities, we have no way of knowing whether, for example, federal money is actually being used to fund minority-language post-secondary education. Transfers from headquarters to the various programs or campuses are another unknown variable.

Funding earmarked for post-secondary education in the francophonie needs to be documented. The lack of transparency and accountability in federal transfers leaves many unanswered questions. This explains why the communities are reluctant to get excited about blank cheques sent to the provinces and why there were mixed reactions from the communities to the federal government’s announcement last August of $121.3 million to be invested over three years in support of minority-language post‑secondary education. Communities are calling for the ability to track the money and to hold governments accountable for the support they claim to provide.

[Translation]

Transparency and accountability are part of the solutions that can significantly help the financial viability of post-secondary institutions, and the federal government is fully aware of this. There is a way for the government to respect provincial jurisdictions while ensuring that its investments on behalf of the francophonie get to the right place, in accordance with its constitutional obligations.

At this time, I would like to speak to you about Bill S-215, which has two specific objectives.

First, it seeks to make the federal government responsible for finding solutions by requiring that it consult key stakeholders, specifically the communities and post-secondary institutions and, in particular, provincial governments.

Second, it seeks to prevent these institutions from having recourse to the Companies’ Creditors Arrangement Act, the CCAA, or the Bankruptcy and Insolvency Act to prevent situations similar to what happened with Laurentian University.

The bill proposes to require the designated minister to develop federal initiatives designed to reduce the risk that an institution becomes bankrupt or insolvent; protect students, faculty and staff in the event that an institution becomes bankrupt or insolvent; and support communities that would be impacted, if necessary. The minister must develop solutions in consultation with institutions, provincial and municipal governments, groups and associations of students, faculty and staff, and parties advocating on their behalf. Development of the proposal must be completed as soon as practicable, but no later than one year after the day on which it comes into force. The proposal must be tabled both in the House of Commons and the Senate and it must be made public.

The federal government could do the minimum or it could exceed our expectations. The provincial governments and the institutions must also be prepared to work with the federal government to find solutions. Stakeholders must all assume their responsibilities and work together in the best interests of the sector and their communities.

Second, the bill prevents the use of inappropriate legal tools, such as the CCAA or the Bankruptcy and Insolvency Act.

[English]

Facing insolvency, Laurentian University filed for protection under the Companies’ Creditors Arrangement Act on February 1 to begin a restructuring process. The fact that a publicly funded educational institution can use this act is appalling and sets a dangerous precedent.

However, Laurentian University’s situation is not unique. The case of Laurentian University is a wake-up call because this underfunding threatens the economic, social and cultural vitality of the communities as well as the constitutional rights of official language minorities.

To address this issue, the bill amends the Bankruptcy and Insolvency Act in clause 5 and the Companies’ Creditors Arrangement Act in clause 6 to exclude post-secondary educational institutions from the definitions of “corporation” and “company” under those acts respectively. The amendments to the BIA and CCAA only come into force on a day or days fixed by order of the Governor-in-Council, on recommendation of the minister that would be designated by the Governor-in-Council for the purposes of the act in clause 2. It would therefore prevent post-secondary institutions from using the BIA and CCAA when insolvent or bankrupt.

These legal tools are inadequate for this sector, more importantly, considering that their implementation — as we have seen with Laurentian University — is detrimental to the social, economic and cultural vitality of communities, especially in a minority context.

The bill provides a lot of flexibility to the government but forces it to act to address pressing issues. It also provides the government with a framework within to work and important elements to consider.

Among the possible solutions for the federal government to consider the ACUFC proposes the creation of a new permanent support program for francophone minority post-secondary institutions that would allow the federal government to intervene in needs categories related to areas under federal jurisdiction.

The government could also create a regime separate from the CCAA and the Bankruptcy and Insolvency Act to govern the restructuring of post-secondary institutions that run into difficulty. The restructuring process should consider the particular characteristics of the institutions concerned, including its role in serving official language minority communities and its importance to their vitality. It should promote a restructuring plan that considers the unique functions of post-secondary institutions and should include communities and other stakeholders in decision making. In other words, the interests of an institution that delivers programming in French cannot be represented by a Bay Street law firm that has no understanding of the language rights at stake.

Campus Saint-Jean is the only institution in Alberta that trains French-language teachers, a function essential to implementing section 23 of the Canadian Charter of Rights and Freedoms. According to counsel for Campus Saint-Jean, the right to an elementary and secondary education of a quality truly comparable to that of the majority is rendered meaningless if, in practice, the post-secondary infrastructure in place does not make it possible to train teachers and other staff needed to actually implement section 23.

[Translation]

Section 23 of the Charter guarantees a sliding scale of rights to instruction in the minority language. In her ruling regarding the Rose-des-Vents school in Vancouver, Justice Andromache Karakatsanis stated, and I quote:

What is paramount is that the educational experience of the children of s. 23 rights holders at the upper end of the sliding scale be of meaningfully similar quality to the educational experience of majority language students.

If we do not have teachers who have been trained in French‑language post-secondary institutions, how can we guarantee the exercise of these rights? We need to do everything in our power to keep Campus Saint-Jean from meeting the same fate as Laurentian University. The constitutional rights of francophones are in jeopardy.

To conclude, the bill that I am proposing seeks to make the federal government accountable and responsible for finding solutions and making decisions to help a sector in difficulty. The post-secondary institutions of official language minority communities are fundamental to their sustainability and survival.

Esteemed colleagues, we must act now if we are to protect the gains we have made with post-secondary education and to enhance the vitality of the Canadian francophonie. The survival of the linguistic and cultural heritage of our communities depends on it. Too often we end up preaching to the choir about the francophonie. However, we all have a responsibility to the Canadian francophonie and to the future of post-secondary education in French. The Commissioner of Official Languages wrote the following in a report entitled Learning from the Past, Shaping the Future: 50 Years of Official Languages in Canada:

Our unity is fragile, however. A lack of vigilance has led to complacency, which in turn has led to the erosion of language rights. And the less we talk about it, the more erosion will occur. But Canada needs to work on its own advancement as a nation. The recent actions of some governments are alarming, yet the greatest threat to Canada’s linguistic duality is indifference.

Linguistic duality is not just for Francophones, nor is it just for Anglophones in Quebec. It’s a valuable asset that belongs to all Canadians.

Colleagues, as senators, we have a duty not to remain indifferent to the needs of minorities. My Bill S-215 is a response to the heartfelt pleas from francophone minority communities. I am sharing the burden our communities have been carrying for far too long. Thank you for your attention.

Senator Moncion: Yes.

Senator Moncion: In the case of Campus Saint-Jean, if we look at the enrolment, there are currently close to 750 students, but it gets funding for only 450 students. The campus gets no funding at all for the other 300 students. It is already underfunded by the provincial government.

The other thing you asked is how the Bankruptcy and Insolvency Act can help. That’s the point of this bill. We want provincial governments to be accountable for their education responsibilities toward both anglophones and francophones.

Campus Saint-Jean’s situation is unusual because there is a main campus, which is anglophone and provides funding for the francophone group, but when there are cuts to be made all across campus, they cut deeper for the francophone campus.

One thing the University of Alberta can do is gradually reduce the resources available to Campus Saint-Jean so that it can no longer function. In the comments received from Dean Mocquais, we learned that they had no money to invest in infrastructure, so their laboratories are aging. Students want modern labs. Once they enter the labour market, they’ll be working in modern facilities. The campus doesn’t even have the money to improve its labs and its library. There are infrastructure problems. Campus Saint-Jean is being squeezed as much as possible, while the university keeps its funds for the main campus.

What can the federal government do? One of the solutions we propose is that federal government funding for francophone institutions go directly to the institutions rather than through the provincial government.

How can the Bankruptcy Act help Campus Saint-Jean? I’m not sure that it can, since Campus Saint-Jean depends on the University of Alberta, but by no longer being subject to the Bankruptcy and Insolvency Act, universities would no longer be able to use that mechanism to walk away from their creditors. The goal is to make provincial governments accountable and responsible. We also want to ensure adequate funding so that universities function optimally, so they can offer all the required services and so francophone universities get the funding they are due.

[English]

Senator Moncion: Thank you.

That is one of the elements. We would also like to ensure that the federal government is no longer able to use the mechanism through the provinces. There are certain areas, for example in health, where a sector receives federal money. A precedent was created, and we would like to see the federal government fund francophone initiatives such as Campus Saint-Jean so that the money is no longer channelled through the general campus.

That was one of the problems at Laurentian University, where there was a federation agreement. The main campus controlled the money and crumbs were given to partner campuses. There were three other campuses, including Huntington University and the University of Sudbury. The federation was dissolved and now four institutions are grappling with financial problems. However, Laurentian University continues to receive all the funding. We must find mechanisms for sending the money directly to the educational institutions.

We are also putting pressure on the federal government to ensure that funding for official languages programs is indexed annually so that post-secondary institutions will no longer be chronically underfunded.

Senator Moncion: Absolutely. This has been going on for a long time. Education in francophone minority communities is underfunded. There are no equivalents, including when it comes to infrastructure.

Earlier I talked about research laboratories. There is not a lot of funding for specific research in French. It is a poor community. Post-secondary institutions that provide education in French or have a French campus have been getting by with very little for a long time. They perform miracles, as far as I am concerned, since they continue to offer top-notch courses. They have few resources for expanding and gaining the recognition of major universities. They are the poor relations of education.

(On motion of Senator Plett, debate adjourned.)

On the Order:

Resuming debate on the motion of the Honourable Senator Carignan, P.C., seconded by the Honourable Senator Housakos, for the second reading of Bill S-229, An Act to amend the Language Skills Act (Lieutenant Governor of New Brunswick).