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The main entrance to the Laurentian University campus on Feb. 1, 2021.Gino Donato/The Globe and Mail

Located in Northern Ontario, far from the province’s decision-making centres and big-name institutions of higher learning, Laurentian University does not typically get much attention from folks in the snobby south. But the Sudbury-based institution’s move to file for court protection from its creditors on Monday – the first time a publicly funded Canadian university has declared itself insolvent – has suddenly made it top of mind at Queen’s Park.

While many of the problems at Laurentian appear to be of its own making, the university is also a casualty of the business model that has increasingly come to dominate Canada’s postsecondary institutions in recent years. Faced with stagnant government operating grants and inadequate domestic tuition fees, universities and colleges have become reliant on attracting foreign students to survive.

Depending on the program, tuition fees for international students run upward of five times the rate paid by in-province students. Provincial governments have largely looked the other way as universities restructure their course offerings to cater to foreign “customers” and maximize revenues, increasingly at the expense of less-popular disciplines. Foreign students accounted for 15 per cent of total enrolments in 2018-19, double the proportion in 2009. In math and computer science, for instance, foreign students accounted for fully a third of the student body.

For a few institutions, such as the University of Toronto, this brave new world of university funding has been a bonanza. U of T now collects more in tuition fees from international students than it receives in annual operating grants from the Ontario government. But for smaller players with less global name recognition, the new math of Canadian university funding has been a disaster, leaving them especially vulnerable to sudden shifts in foreign demand.

At Laurentian, the withdrawal of more than 150 Saudi students after a 2017 chill in relations between Ottawa and Riyadh resulted in a one-quarter drop in foreign enrolments almost overnight. After that, the university set a goal of attracting 1,000 foreign students within five years, but it struggled to meet the target – even before the pandemic hit.

The result is that Laurentian, which bills itself as a fully bilingual institution, has found itself increasingly squeezed after Premier Doug Ford’s government imposed a 10-per-cent tuition cut for in-province students in 2019. Unable to make up the shortfall by attracting enough foreign students, the university began implementing cost cuts to stay afloat. Last year, it froze hiring and suspended admissions to 17 programs, including several catering to francophone students.

The university had seen ancillary revenues collapse with the pandemic, as the move to online teaching left student residences nearly empty and campus businesses closed. But while the pandemic certainly exacerbated Laurentian’s woes, it is not the cause of a financial crisis that had been unfolding well before COVID-19 struck. The new model of Canadian university funding has created winners and losers among postsecondary institutions – and Laurentian is among the losers.

Laurentian’s court filing appeared to catch Ross Romano, Ontario’s Minister of Colleges and Universities, off-guard, though the government could hardly have been unaware of the institution’s financial morass. He appointed a special adviser to help guide Laurentian’s financial restructuring through what he called an “unprecedented” situation, and warned that the province might even introduce legislation to give Queen’s Park direct oversight of the university’s affairs.

An investigation into Laurentian’s financial management in recent years is entirely warranted. But the Ford government also needs to accept responsibility for piling on by making it cut in-province tuition fees without putting in place realistic mechanisms for Laurentian to make up the shortfall. Expecting Ontario universities to simply turn to foreign students to boost revenues is a one-size-fits-all model that has forced some postsecondary institutions to increasingly sacrifice their core mandates in the name of survival.

The crisis at Laurentian coincides with the resignation of the head of the province’s new francophone university, the Toronto-based Université de l’Ontario français, after less than a year on the job. The UOF denied that André Roy’s departure stemmed from the revelation that the institution had received only 39 student applications for the fall 2021 session by last month’s deadline.

But the anemic level of student interest raises serious questions about whether the $126-million that the federal and Ontario governments have promised for the university over the next eight years might be better spent shoring up French-language programs at Laurentian or the University of Ottawa.

The Ford government has been in damage-control mode after alienating francophone voters early in its mandate by initially withdrawing the previous Liberal administration’s promise of funding for the UOF and abolishing an independent office for the province’s French-language commissioner. But reinstating funding for the UOF may not be the best way to make amends.

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