Carleton warns of 'significant measures' as deficit balloons

Carleton University will soon need to take "significant measures" to balance its budget, according to a letter sent out to staff and students on Friday. 

Carleton University's reported deficit was $50.1 million for the 2023-24 fiscal year.

The letter cites factors that have had a "destabilizing effect on Carleton's financial health," like frozen domestic tuition rates, operating grants that have "stagnated" and fewer international students.

The letter emphasized the international student numbers, which are significant because they pay substantially more tuition than domestic students. 

Aidan Kallioinen, associate vice-president of university and government relations with the Carleton University Students' Association (CUSA), said Carleton's financial issues aren't surprise to him.

The financial pressures have already had a "trickle-down effect" on the students, Kallioinen said, citing a referendum CUSA and Carleton held last year to ask if students wanted to add $25 to their tuition every semester to increase mental health and counselling services on campus.

Another will happen next week to ask students if they want to pay to expand the athletics facilities. 

"These services that normally could be funded through operating revenue are having to be funded through ancillary fees and passing those costs down to students," he said.

"It's no fault of the university's. They're frankly strapped for cash."

The end of the 'glory days'?

CBC reached out to Carleton University but did not get a response on the weekend. A spokesperson said Monday the university didn't have any comment beyond what was in the letter.

Despite its $50.1-million deficit for the most recent fiscal year, Carleton is estimating it will only face a $26 million deficit in the 2024-25 fiscal year, according to its operating budget report for 2024-25.

However, that same report is also projecting a possible $80 million base budget deficit by the time the 2028-29 fiscal year rolls around.

The report said Carleton may have to cut its base budget by six per cent each year for the next four years to avoid reaching that number. 

But it's not the only Canadian school struggling to balance the books, said Carleton University business professor Ian Lee.

Carleton's struggle reflects the end of the "glory days of the universities," said Lee, with both societal trends and government policy playing a part in the the emergency.

Universities are being affected by the declining birth rate, pressure on governments to fund health care, and a dramatic increase — then a decrease — in international student permits, Lee said.

But universities aren't blameless either, he added, with many having used international student revenue as a "cash cow" to replace missing provincial funds. Support staff numbers have also ballooned compared to teaching faculty members, Lee said, and salaries take up a large portion of the budget.

Lee emphasized he is not on Carleton's board of governors, has no access to confidential information from Carleton and does not speak on behalf of the university or the faculty.

But he said Carleton and other universities facing financial pressures will likely cut staff through layoffs or buyouts. Classes with fewer than 25 students could be particularly at risk, he guessed, and humanities subjects like philosophy and political science may also see big changes.

"I say this sadly and tragically because I think humanities are extremely important," said Lee, noting that provincial funding follows students — and most students enrol in STEM programs. "The problem is, I'm just an old boomer and young people don't agree with me."

Kallioinen said CUSA will keep advocating for students' interests in Carleton's future budgets.

"The best thing we can do is to make sure that this continues to be in the conversations in the halls of government and say, look, Carleton is not alone," he said. "And the way we do that is we highlight the student experience."