THUNDER BAY — The Ontario government's decision to make the Northern Ontario School of Medicine an autonomous university has led to some additional expenses for NOSM U.
The new university, which faces a potential strike by faculty and professional staff, is now pursuing an additional $4 million in base annual funding from the province.
One of the reasons for the request is the higher cost of using classroom and lab facilities at Lakehead University that were built for NOSM when it was a medical school run jointly by Lakehead and Laurentian University.
That arrangement began in 2005, and continued until NOSM became a stand-alone degree-granting institution in 2022.
According to NOSM U CEO Dr. Sarita Verma, instead of the nominal $2.00 annual lease payment that was to be in place for 30 years, Lakehead now requires NOSM U to pay about $800,000 a year.
In an interview Tuesday, Verma referred to it as an "occupancy cost" rather than rent, saying that's because there were 15 years left on the lease, and NOSM U still considers the lease to be valid.
There were 15 years remaining on the lease when NOSM became independent.
Verma has previously stated that the buildings constructed for the original medical school were purpose-built for NOSM, using provincial taxpayers' money.
She's suggesting now that, without additional funding from the government to cover the cost of operating independently, NOSM U will have to look at alternative measures, potentially including layoffs.
"Well, we have to consider all kinds of mitigation measures, right? I mean, being a fiscally-accountable board, and an institution that has to be fair and equitable. We have all kinds of challenges, and like any corporation, we'll have to make difficult decisions if we don't have the funding."
NOSM U, which relies on the province to fund 85 per cent of its operations, is embarking on a significant expansion of enrollment over the next few years.
Verma said it's had "great support" from the government, but "you can't start a new university, then expand medical education when we really need doctors, and expect that we will be able to do that on a shoestring."
She said the university has received no additional funding for the cost of delivering medical education since 2010.
"That's almost a 29 per cent increase that we've had to pay for by not hiring people and having to cross-subsidize things like increased occupancy costs at Lakehead. That means we can't actually do the business we need to do."
Lakehead University provided TBnewswatch with a statement on behalf of Kathy Pozihun, vice-president administration and finance.
"The fact is that with the passing of the provincial legislation last year, NOSM U has become separate and independent from Lakehead University... Lakehead has many tenants who rent space from the university. Lakehead University cannot use taxpayer dollars and student tuition fees to subsidize other entities," the statement said.
It added that now that NOSM U is independent, it is required to sign a new lease to rent space on campus.
"We are optimistic that we will be able to find a solution going forward, and remain hopeful that NOSM U will renew a lease... and maintain its presence in Thunder Bay."
Lakehead said it wants to build a relationship with NOSM U, "which is why we have offered them a fair lease agreement at a discount from market rates consistent with other non-profit organizations that lease space on our campus."
Verma cautioned earlier this year that if NOSM U is to remain on the Lakehead campus, "it is up to them."
In the interview Tuesday, while referring to both the Sudbury and Thunder Bay campuses, she said "it would be nice to own our own buildings."
But she insisted that she's still optimistic that the disagreement with Lakehead can be resolved.
"I have a great relationship with President [Gillian] Siddall, and I have begun speaking with her and her team, and we want to stay at Lakehead. Lakehead very much likes us to stay with them."
NOSM U continues to pay only $2.00 a year for staying on the Laurentian campus.
According to Verma, under arrangements for resolving Laurentian's insolvency, the NOSM facilities in Sudbury are among those that are to be sold, possibly to the Ontario government.
"And then what we don't know is the government either will assume the lease at $2.00 a year, or you know, we've also suggested to the government that it would be nice if they just gifted the building to us."
According to information provided by NOSM U, the university has one of the highest physician recruitment and retention rates among Canada's 17 medical schools.
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Written statements were also provided to TBnewswatch by NOSM U and Lakehead U as follows:
NOSM University was established by the Government of Ontario as a strategy to increase the number of physicians and improve access to health care in Northern Ontario. NOSM University's distributed education model places learners in over 90 communities annually. It is highly effective as more than half of the Northern Ontario population is cared for by a NOSM University trained family doctor. Additionally, hundreds of medical specialists who trained at NOSM University provide care to hundreds of thousands of patients closer to home. The unique distributed education model relies on the Government to fund 85% of its operations. With increased costs due to inflation and other factors, NOSM University will need at least $4M in increased annual funding to maintain its existing model. (NOSM U)
Lakehead believes students deserve to have access to quality medical education right here in the North and have long advocated for medical education to be provided in Thunder Bay. That is why Lakehead joined with Laurentian University more than 15 years ago to create NOSM.
The fact is that with the passing of provincial legislation last year, NOSM U has become separate and independent from Lakehead University.
There has always been a lease agreement in place between Lakehead and NOSM. Now that NOSM U is an independent university, it is required to sign a new lease to rent space on Lakehead’s campus. Lakehead has many tenants who rent space from the University. Lakehead University cannot use taxpayer dollars and student tuition fees to subsidize other entities. Lakehead has been clear and transparent at every step of the journey with NOSM since the NOSM U Act was passed that we are focused on the future and want to build a relationship with NOSM U on our campus. This is evidenced by two separate research agreements that Lakehead entered into with NOSM U last year, and which is why we have offered them a fair lease agreement at a discount from market rates consistent with other non-profit organizations that lease space on our campus. By working together, Lakehead and NOSM U also found a solution to address their space needs on Lakehead’s campus this year. We are optimistic that we will be able to find a solution going forward and remain hopeful that NOSM U will renew a lease for the premises on the Lakehead campus and maintain its presence in Thunder Bay. Lakehead continues to strongly support medical education in Northern Ontario, and particularly Northwestern Ontario. (on behalf of Kathy Pozihun, vice-president/administration and finance, Lakehead U)
