ILAC: KPMG's reports tie the revenue slide to study-permit caps

The International Language Academy of Canada stopped teaching on the day it went bankrupt. It filed its assignment on September 18, 2026, and "As at the Bankruptcy Date, ILAC immediately ceased operations, with all classes and programming being cancelled with immediate effect," KPMG Inc. reports. Founded in 1997, the school "grew to become Canada's largest private English-language school with campuses in Toronto and Vancouver," in the trustee's description, offering English programs that included general English as a second language, advanced Cambridge, TOEFL and IELTS exam preparation, and University Pathways programs that let students meet academic language requirements before starting post-secondary degrees. It had about 185 salaried and 321 hourly employees, four multi-floor leased premises in Toronto, at 120 Bloor Street East, 425 Bloor Street East, 655 Bay Street and 255 College Street, three leased premises in Vancouver on West Hastings and West Cordova streets, and residential tenancies in both cities where students stayed while they studied, per the Trustee's Preliminary Report (ILAC), Oct. 8, 2026, p. 1.

KPMG kept 28 of those employees on. It retained them as the bankruptcy began, to handle student queries about academics, records and transcripts, to facilitate "transfer options and related matters for government agencies and regulators," and to help realize on the IT equipment, fixtures, fittings and equipment at the Toronto premises; the trustee estimates that most, if not all, of them will be needed for another two weeks, per the Trustee's Preliminary Report (ILAC), Oct. 8, 2026, p. 6.

When the case was reported here on September 30, the record held no trustee's report, and the statements of affairs gave the cause only as four ticked boxes beside a blank line for details. KPMG's reports to the first meetings of creditors of five of the companies, dated October 8 and 9, now give the trustee's understanding of the cause and an account of what is left, per the Trustee's Preliminary Report (ILAC), Oct. 8, 2026, pp. 2–3, 7 and the Trustee's Preliminary Report (ILAC BC), Oct. 9, 2026, pp. 2, 5. They also list a sixth bankruptcy: Tamwood International College Ltd., which assigned on October 1, 2026 in the Vancouver division, estate No. 11-3431894, with KPMG as trustee, per the Trustee's Preliminary Report (ILAC), Oct. 8, 2026, pp. 1–2 and the Certificate of Appointment (Tamwood International College), Oct. 1, 2026. Its statement of affairs lists $245,196.16 of assets against $135,569,082.18 of liabilities, and its first meeting is set for October 19, per the Notice of Bankruptcy (Tamwood International College), Oct. 5, 2026, para. 2; Statement of Affairs, p. 1. No trustee's report for that estate is in the record.

Caps, a work-permit rule and fewer attestation letters

On ILAC's internal results, as the trustee sets them out, revenue fell from $98.7 million in fiscal 2023 to $63.7 million in fiscal 2024, $45.7 million in fiscal 2025 and $41.3 million in the 11 months to August 2026. A net profit of $8.8 million in fiscal 2023 gave way to net losses in each period after it, which the report totals at about $23.2 million, with about 75%, or $17.3 million, in the latest 11 months. "The Trustee understands that net losses were primarily driven by a material reduction in revenue from $98.7 million in FY23 to $41.3 million in YTD26 due to the Canadian federal government introducing caps on international study permits resulting in a severe reduction in enrolments across ILAC's ESL courses," per the Trustee's Preliminary Report (ILAC), Oct. 8, 2026, pp. 2–3.

The report attaches a caution to those figures. The trustee understands that the group's financial performance "was historically managed and tracked on a consolidated basis," so that one company's results viewed on their own "can be misleading"; overhead reallocations of $12.6 million in 2024 and $17.9 million in 2025 lowered ILAC's operating costs in those years but had not yet been accounted for in the 11 months to August 2026, per the Trustee's Preliminary Report (ILAC), Oct. 8, 2026, p. 2.

The Toronto college company's revenue rose before it fell. ILAC International College Ltd. combined its own private career college programs with public-private partnership delivery of public college programs at ILAC's Toronto campuses, primarily with Georgian College and Fanshawe College. Its revenue climbed from $76.2 million in fiscal 2023 to $110.4 million in fiscal 2024, with net profits of $42.9 million and $45.9 million, then dropped to $53.1 million in fiscal 2025 and to $7.2 million in the 11 months to August 2026. The trustee understands the decline to be the result of the federal government's announcement on January 22, 2024 that students beginning affected public-college programs delivered through private curriculum licensing arrangements on or after May 15, 2024 were no longer eligible for a post-graduation work permit. That "severely weakened new recruitment," the report says, and revenue declined gradually as existing cohorts completed their programs, per the Trustee's Preliminary Report (ILAC ON), Oct. 8, 2026, pp. 1–2.

In British Columbia the trustee points to the province. ILAC International College (BC) Ltd., a Vancouver private career college, and Tamwood Careers Ltd., which offered career-focused certificates and diplomas, both served primarily international students, and both show a net profit in every period reported, though the trustee understands that neither company's figures for the 11 months to August 2026 carry an overhead allocation. The BC college's revenue fell from $5.5 million in fiscal 2023 to $3.2 million in fiscal 2025, and Tamwood Careers' from $4 million in fiscal 2023 to $1.1 million in the 11 months to August 2026. For each, the trustee understands the decline to be "the result of reduced British Columbia provincial attestation letter allocations which materially constrained new international enrolment and tuition revenue," per the Trustee's Preliminary Report (ILAC BC), Oct. 9, 2026, pp. 1–2 and the Trustee's Preliminary Report (Tamwood Careers), Oct. 8, 2026, pp. 1–2.

The fifth report is about costs. Canadian Edge International Corp. was "the group's legal entity for taxable ancillary services," including IELTS and CELPIP testing revenue, textbook and course material revenue, institutional commission revenue "and subsequently, sublease activity." Its revenue reached $11.6 million in fiscal 2025, and the report attributes its $1.6 million net loss in the 11 months to August 2026 primarily to operating costs that rose from $7.1 million in fiscal 2023 to $11.1 million "due to a reallocation of rent and occupancy costs in YTD26," per the Trustee's Preliminary Report (Canadian Edge), Oct. 9, 2026, pp. 1–2.

What the books held

ILAC's unaudited balance sheet at August 31, 2026 shows total assets of $150,811,000 against total liabilities of $155,346,000. Of the assets, $111,152,000 are intangible, consisting primarily of goodwill of $111.1 million; investments are $27,158,000; fixed assets, primarily leasehold improvements, IT equipment and software, and furniture, fixtures and equipment, are $10,282,000; and cash is $1,027,000. The investments include the subsidiaries, at a net book value of about $20.3 million, and a stake of about 15.2% in Edvisor Technologies Inc., which the report describes as "a centralized B2B platform connecting international education agencies, schools, and service providers," at a net book value of about $6.9 million, per the Trustee's Preliminary Report (ILAC), Oct. 8, 2026, pp. 3–5.

A lending syndicate for which The Bank of Nova Scotia acts as agent, and which also includes Fédération des Caisses Desjardins du Québec and National Bank of Canada, is owed about $133.1 million, the ILAC report says, and KPMG has not yet obtained an independent legal opinion on the validity and enforceability of the syndicate's security, per the Trustee's Preliminary Report (ILAC), Oct. 8, 2026, p. 5. Each of the four subsidiary reports adds that the company was a guarantor, under a credit agreement between ILAC and the syndicate, of a facility with about $133.1 million outstanding on August 31, 2026; the ILAC International College Ltd. report sets that guarantee against the company's positive book equity of about $20.7 million, per the Trustee's Preliminary Report (ILAC ON), Oct. 8, 2026, p. 3, the Trustee's Preliminary Report (ILAC BC), Oct. 9, 2026, p. 3, the Trustee's Preliminary Report (Tamwood Careers), Oct. 8, 2026, p. 3 and the Trustee's Preliminary Report (Canadian Edge), Oct. 9, 2026, pp. 2–3.