Waterloo universities say they need help as they face multi-million-dollar deficits
Ontario Council of Universities say it's time for government action and investment
Universities in Waterloo, Ont., say changing the way post-secondary schools are funded in the province is just one of the solutions needed to better support schools as they face multi-million-dollar deficits this year.
The University of Waterloo's (UW) vice president of student academic and provost James Rush told CBC Radio's The Morning Edition on Thursday the school is facing a $15-million deficit partly due to a "fundamental change" the province made in 2019.
"That was when the provincial government imposed a 10 per cent reduction in the domestic tuition rates that could be charged by Ontario universities and that effect has accumulated over those last five years," Rush said.
"It had to be absorbed. Universities have had to change the way they did business, they had to find efficiencies, they had to align things to deal with that."
And it all happened on the back drop of provincial grant funding staying the same over many years, Rush said, noting that universities are not in the business of making a profit. When there's a surplus, that money has to be spent on infrastructure, IT and services.
Provincial grants make up about a third of the operating budget for UW and Wilfrid Laurier University. Laurier is looking at a $11-million shortfall this year.
A domestic tuition reduction coupled with a freeze on provincial grant money since 2017 and inflation has put enormous pressure on university operating budgets, Lloyd Noronha, vice president of finance and administration at Laurier told CBC News.
"All universities in Ontario are facing the same issues and it's very challenging to meet the inflationary pressures when your revenue is remaining relatively flat or if your only other kind of revenue source is increasing international students," he said.
Both universities have seen a growth in student enrolment, which has helped off set some of the deficit, Rush said, but labour costs coming out of the province's Bill 124 wage cap has also added an extra wrinkle to the problem.
"With that bill having been found unconstitutional, with re-opener clauses having been proactively worked on by the university to provide fair compensation to our employees, that has put an additional financial strain," Rush said.
"And now, inflation is driving ... the price of everything that we buy and our labour costs."
Finding efficiencies
Rush and Noronha said the schools have had to find efficiencies within the operating budget over the last five years. Rush said there have been constraints and re-allocation of funds internally to try to buffer the impact.
Noronha said producing efficiencies at Laurier meant putting a hold on certain projects in the area of information technology and upgrading aging infrastructure.
"We have a digital strategy that we would love to implement fully, but we just don't have the financial resources to do that," he said.
"Some elements of that digital strategy would actually make us more efficient."
What needs to change
The Council of Ontario Universities said it urgently calls on the province to implement recommendations the Blue-Ribbon Panel released Wednesday. The panel was created by the Ministry of Colleges and Universities to look at the future sustainability of the post-secondary sector.
"The situation is becoming increasingly untenable, as universities can no longer continue to absorb cuts and freezes amidst rising inflation and costs, and many are facing deficits, with the growing risk of insolvencies," Steve Orsini, President and CEO of the council said in a release Wednesday.
The panel is recommending the province implement a three-year tuition fee framework and increase tuition by five per cent in the fall of 2024.
It's also recommending the province boost operating grants by 10 per cent and review the current funding cap on domestic student enrolment so schools can enrol more students in Ontario.
Rush and Noronha said those recommendations are key to better supporting schools and the services they provide for students and staff.
"We need a little bit of catch up based on the freeze that has occurred for quite sometime and we need reasonable and predictable revenue increases that keep up with inflation so we can keep up with inflationary pressures," Noronha said.