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The Northern Ontario School of Medicine building on the Laurentian University campus on Feb. 1, 2021.

Gino Donato/The Globe and Mail

Laurentian University spent millions of dollars in research grants to keep the lights on because it had one main bank account where funds intended for academic work were mixed with money for operating costs.

The grant money was earmarked to support the research and livelihoods of dozens of academics, graduate students and lab workers. Now many of them are unsure of what the future holds and whether they will have the funds to complete their work.

Laurentian said last week that it is facing insolvency and has been granted creditor protection while it restructures. Many academics and staff at the Sudbury campus are still coming to terms with what that means. The university, which declined requests to interview president Robert Haché, has made clear in statements on its website that there will be layoffs, possibly even of tenured faculty. It also said it will continue to operate and that the process should have no impact on students.

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Pascale Roy-Léveillée, a scientist who studies permafrost, said she was shocked to learn dedicated research funds had been spent by the university on operating costs. It wasn’t until a courier company declined a payment to ship lab samples last week that she realized her research money was no longer hers to control.

“It’s just terrible,” she said. “The money’s gone.”

She recently accepted a post at Laval University but is still under contract at Laurentian and worries about the implications for her work, which may now be interrupted. She’s also concerned for colleagues and students who are facing uncertain futures.

“It’s not just myself who’s implicated in terms of my [work], my future credibility as a scientist and my ability to get funding, but also the students and research professionals who are involved in the research,” she said.

“A lot of the researchers are saying: How will Laurentian recover from this?”

Although it’s a relatively small university, with about 7,000 undergraduate students, Laurentian boasts a strong research program.

Prof. Roy-Léveillée said that in her case it involves about $115,000.

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It’s not clear if the university intends to cover her research expenses through the $25-million loan it secured for restructuring or in some other way. But there are labs with hundreds of thousands of dollars in grants and whole teams of graduate students and researchers who depend on that money.

Several of Canada’s key granting agencies, including the Natural Sciences and Engineering Research Council, are listed as unsecured creditors in the court filings. NSERC is owed $4.6-million, the Canada First Research Excellence Fund is owed $5.2-million, and the Social Sciences and Humanities Research Council is owed $1.6-million, the documents say. Both NSERC and the SSHRC said they are monitoring the situation and awaiting further information.

In a monitor’s report filed with the court, Ernst & Young wrote that research grants typically must be spent only in connection with the approved proposal and not for any other purpose; in most cases they “cannot be used to fund faculty salaries or university operating overhead,” the report states.

Laurentian had a practice of placing all incoming funds – tuition money, operating grants, as well as those with a restricted, designated purpose, such as research money – into the same operating account.

The report said it was not necessarily unusual for a university to do this, but most universities have sufficient funds to cover all expenses. After years of persistent deficits, Laurentian can no longer cover its research obligations, the report states. It was going to run out of cash in a matter of weeks before it sought creditor protection.

In December, the Laurentian board was told of the operating account situation and immediately stopped it. It created separate accounts, including an unspent research grant account and one for restricted funds.

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In a note on its website, Laurentian said research can continue, but a new policy means that all expenditures, even those with external funding, have to be approved by the research office and must be “critical to the delivery of Laurentian’s operations.”

Now even routine expenses such as the purchase of pipettes for lab work require oversight, said Adam Kirkwood, a PhD student in boreal ecology.

Mr. Kirkwood said he fears that the decision to not have a separate bank account for research is going to have a knock-on effect that could hinder his work and slow his progress toward his degree. His work requires costly trips to remote parts of Northern Ontario, and he also worries about his income as the university restructures. He asked questions of university administrators at a recent meeting of the senate but did not get the answers he wanted.

“The gist we got is that nothing is guaranteed,” he said. “The funds were so poorly managed. Why wasn’t there [an account] for research funding?”

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