‘The Path to Ruin’ Says AU President

The showdown in Athabasca just reached a sizzling level of tension.

The ongoing battle for control between Athabasca University and Alberta's advanced education minister has met a bellicose impasse, with the university's president warning that changes directed by the minister are irrational and could bankrupt the university.

At the root of the conflict is AU’s business model and approach to staffing. Right now AU is Canada’s largest online university. Most of its staff, faculty and 43,300 students live beyond the northern Alberta town of Athabasca, and almost all teaching is done over the internet.

Alberta Advanced Education Minister Demetrios Nicolaides has unilaterally ordered changes that AU president Peter Scott claims will harm the university’s successful strategic distance-learning plan. One of the most controversial is Nicolaides’ aim to move hundreds of professors and other staff to the town of Athabasca in an attempt to boost rural economic development.

On Friday, Scott made it crystal clear — again — that he believes the political directive makes no financial or educational sense for the distance-learning institution, established by the province in 1984.

“Athabasca University is a successful remote-work organization,” Scott said in a 12-minute video posted on the university’s website.

“It isn't clear to me why the minister would target an online digital university and tamper with, seek to micromanage its successful, cost-effective model.”

Scott said at a time when most organizations are looking at ways to accelerate hybrid work models to compete for talent, particularly specialized talent, “it seems counterintuitive to revert back to 1984 and an outdated, and for us irrelevant, place-based model.”

“These changes were made unilaterally by the minister without any consultation with our learners, our Board of Governors, the executive or our team members,” Scott said. “Those most impacted by the proposed sweeping changes weren't consulted or seemingly considered.”

Scott’s video statement was posted in response to a letter sent by Nicolaides to the university’s board of governors last Friday, and leaked to the media, as part of an escalating war of wills over the university’s purpose and future.

As first reported by the Canadian Press on Tuesday, Nicolaides threatened in the letter to stop operating funding to the university of about $3.45 million a month unless it acceded to his directive to move more staff to Athabasca.

That directive included Scott and other senior executives, who Nicolaides said must reside in the town of about 2,800, about 150 kilometres north of Edmonton, by April 1, 2025. Scott now lives in Edmonton.

Nicolaides had previously ordered the university to provide a new strategic plan by June 30 that incorporated his directive to move more staff to Athabasca.

In his most recent directive, the minister goes a giant step further, ordering the online university to abandon its near-virtual strategy by the end of August and provide him with a new strategic plan by Sept. 30.

In a statement to media Tuesday, Nicolaides said the university’s June 30 response was insufficient, and required “Alberta’s government to take substantive action.”

In an emailed statement Friday, Nicolaides doubled down. He said Scott does not have the authority to approve or reject the management agreement the minister has imposed and he said he expects the board to "take any appropriate actions to ensure their employee (Scott) follows the guidance and direction.

"This government will not waver in its support of AU as a key economic and social driver in the northern region, Alberta’s taxpayers deserve to see their millions of dollars in funding for this institution benefit the local community and Albertans alike," Nicolaides said.

In a statement to The Tyee on Wednesday, Scott said Nicolaides ignored the university’s request to meet to discuss its initial plan, and it received no feedback from either the ministry or the minister before it received the letter on Friday containing a revised mandate and a new investment management agreement.

In his video statement Friday, Scott said the minister’s directive would require the university to move about 65 per cent of its staff from all over Canada — about 500 people — to Athabasca by the 2024-25 academic year. That is in addition to the 295 staff who already live in the area.

“The disruption and cost associated with relocating 500 team members and their families is significant,” Scott said. “And it would have a huge impact on our learners’ experience, and of course our team members’ lives. It will add absolutely nothing to the university.”

Scott said the new investment management agreement Nicolaides seeks to impose “is unprecedented as it shifts AU's priorities away from work-integrated learning and graduate outcomes that are seen in the agreements of all other Alberta post-secondary institutions in favour of rural economic development for one town in the Athabasca region.”

“We love that town; it's our base,” he said. “But these directives are not what it needs. The minister is essentially taking taxpayer dollars and our learners’ tuition to fix something that is not broken.”

Scott said the university recently provided its team members who live in the Athabasca region the choice of returning to the office or working remotely. More than 92 per cent said they preferred to work remotely.

Scott pointed out that in 2015 the university was on the brink of bankruptcy. A third-party review helped create the university’s current strategic plan, which has successfully restored AU’s finances and has extended its global reach.

“Rural economic development programs are important and we acknowledge they have a role to play in supporting the community,” Scott said.

“But these types of programs belong elsewhere. The economic health of a community can't be the responsibility of one single employer. The minister’s unilateral changes to AU's vision, mission and mandate, and its investment management agreement is putting government control before financial accountability.”

No other post-secondary institution in the province has had its investment management agreement arbitrarily changed, Scott said, adding that it has been changed so significantly that the majority of its provincial funding “is now tied to metrics that support the economic development of a town of 2,800 people rather than a student body of 40,000.”

Scott stressed that it is up to the board to decide whether to implement the minister’s directives but he said he is concerned that Nicolaides has placed the university in an “unreasonable and untenable position.”

Even if the board agreed to implement the directives, the university can’t meet the tight deadline set by Nicolaides and so they will lose funding. If they don’t agree to sign the agreement, and they lose the $3.45 million in monthly funding, the university will eventually be bankrupted.

“But more importantly, signing this agreement may set the university back 40 years and put it on the path to ruin,” Scott said.

In an interview with The Tyee on Friday, Scott said “the minister has set the board an untenable challenge. Damned if they do, damned if they don't. It is a really difficult conversation for us to have.”

Scott noted that Nicolaides sent the letter to the university on a Friday before a long weekend when everyone is on holidays, and then gave media interviews.

“The minister gave us 22 working days from this week to answer his message, otherwise, he will cut off funding,” Scott said. “That is now 19 working days, so we're working very hard to get a board meeting together.”

Scott said there are 20 board members, five of which are new, which leaves 15 that supported the university’s original near-virtual strategy that Nicolaides has directed to be abandoned.

Even before COVID, the university had adopted a near-virtual strategy that allowed staff to work from anywhere in Canada. The pandemic codified and hastened the near-virtual strategy.

In an April interview with The Tyee, Scott said Nicolaides had previously approved of a plan that would allow the university to provide the best distance learning by recruiting the highest-quality professors and staff who could work from anywhere in the country.

Scott drew a sharp line in the sand.

“We will have a virtual campus,” Scott told The Tyee. “And our strategy to deliver the virtual workforce, to make the virtual campus work, has also been agreed to in a longstanding way.”

Nicolaides responded by firing board chair Nancy Laird, a Calgary oil and gas executive with more than 30 years experience. He replaced Laird with lawyer Byron Nelson, who had run unsuccessfully against Nicolaides for the United Conservative Party nomination in Calgary-Bow.

Laird was removed after she sent a letter to Nicolaides, obtained by The Tyee, in which she made it clear that the university had “no intention” of breaching its legislated authority to manage and operate the university according to its independent mandate.

“I trust that is not the intention you wished to convey to the AU board of governors,” Laird wrote. “And I trust that you have not made any directives that would substitute your ministerial decision-making authority for the legislated authority of not only the AU board but in fact all other (university) boards, as outlined in the Post-Secondary Learning Act.

“I look forward to your written confirmation of same,” Laird wrote. She received no confirmation but was instead summarily removed from the board through an order-in-council.

Laird’s letter to Nicolaides followed a March 24 town hall meeting in which Nicolaides and Alberta Premier Jason Kenney sharply criticized the board’s management.

No one from the university’s executive or board of governors was invited to the town hall meeting. It was widely viewed in the town as a campaign event for Kenney as he attempted to sell memberships for his ultimately unsuccessful leadership vote.

Kenney in May announced he would resign after receiving only 51.4 per cent approval of his leadership.

During the town hall meeting, Nicolaides had expressed “non-confidence” in the board and neither Nicolaides nor Kenney pushed back when members of the Athabasca University Faculty Association sharply criticized the board and the university’s management.

The blunt directives from Nicolaides are seen by many within the university community as an attempt to shore up political support for the UCP in the Athabasca region. A local advocacy group, Keep Athabasca in Athabasca University, hired lobbyist Hal Danchilla, who worked on Kenney’s original UCP leadership campaign, to lobby for more university staff in the town in order to boost economic development.

In the interview, Scott said he doesn’t know which way the board is leaning but he said it is his job, and the board’s job, to do what is best for the university — and not necessarily rural Alberta.

“If the government wants to invest in rural Alberta, which it really should do, there is another ministry that can do that,” he said. “There is a great deal of government money that should go into the economy of this province but it shouldn't come from the pockets of our students.

“I can't see a rational reason for this action. It is of no benefit to this university.”