Mohawk College expecting $50M decline in revenue
Pandemic-related hit to the bottom line forces school into cost-cutting mode
Mohawk College is anticipating a $50-million decline in revenue because of the COVID-19 pandemic, according to an internal memo obtained by The Spectator.
As a result, the college is looking to slash a corresponding $50-million in costs — nearly 20 per cent of its operating budget last year.
The memo, sent to staff Wednesday, underscored Mohawk’s pressing need to manage expenditures and cash flow to mitigate the likely significant drops it forecasts in student enrolment rates.
“I understand that this is a very difficult situation with a great deal of uncertainty,” Mohawk COO Paul Armstrong wrote in the memo. “The impacts will be felt through all parts of Mohawk, and no one area is immune or exempt from finding cost reduction required to balance the budget.”
The college’s initial fiscal budget, which was slated to be presented to
the board of governors in April, is being adjusted by nine senior college staff who’ve made a commitment to present a revised budget by mid-June. According to Mohawk spokesperson Bill Steinburg, the college is bracing for a 20 per cent overall reduction in domestic and international student enrolments this fall.
The average tuition rate for two semesters for international students is $16,000 — a far cry from the roughly $2,700 domestic students pay over the same span.
Tuition accounts for approximately 40 per cent of Mohawk’s total revenue.
Steinburg said the college was initially anticipating more than 5,000 international students each semester in the coming year, up from the 4,500 they welcomed last fall and winter.
“But we are planning on significantly lower numbers based on the potential impacts of travel restrictions for the fall,” he said.
Federal rules require international students to physically be in Canada to begin their studies.
While those restrictions were relaxed in the spring and summer semesters as all classes were transitioned to online platforms, Steinburg said there’s “no indication” that will continue to be the case come September.
In addition, Mohawk has already seen a 10 per cent drop in domestic applicants and acceptance letter confirmations relative to last year. Steinburg said the reductions have been in line with what much of Ontario’s
college sector has experienced throughout the health crisis.
“The ambiguity of how colleges will be able to deliver programs in the fall is creating uncertainty with potential students,” he said.
The fallout from Mohawk’s budget-hole, and what it means for students and staff, remains unclear.
Steinburg said Mohawk has laid-off contract support and administrative staff, as well as faculty and student employees, and that “staffing levels may be further impacted” after the college revises its budget.
The cuts come nearly a year after the Ford government slashed $700 million from Training, Colleges and Universities in its provincial budget. NDP Leader Andrea Horwath is calling on the premier to announce emergency financial support for colleges and universities.
“The Conservative government has shown disregard to post-secondary education already,” Horwath said in an interview. “If they don’t step in and announce financial support for universities and colleges, the cuts to jobs, courses, opportunities for students and our research will be devastating.”
Meanwhile, McMaster University did not directly respond to questions posed by The Spectator concerning possible budget cuts or decreases in enrolment.
“The situation here and abroad is changing, and it’s too early to tell what impact (COVID-19) may have on the enrolment of international and domestic students,” said spokesperson Wade Hemsworth.
On April 2, the university said in a press release that temporary or casual employees would continue to be paid for work performed. It said as the situation developed, “there may be a need for leaves of absence or layoffs” for continuing and limited-term positions.
Hemsworth did not respond when asked whether any of the aforementioned staff had since been cut.