Waterloo, Laurier concerned about financial sustainability

Provincial funding unlikely to solve long-term problems

The region’s two universities worry new provincial funding will not address the major funding shortfalls that have led both schools to post deficits this year.

Without major shakeups in the funding model, both the University of Waterloo and Wilfrid Laurier University have warned they could see budget deficits balloon in the years ahead.

This comes after the Ontario government announced $1.3 billion in new funding for the sector on Monday, including a $903 million onetime fund, with $203 million set aside for school’s with the greatest financial need. Other funding will go toward capital repairs and research, as well as larger reviews to ensure schools are operating efficiently.

It is not yet clear how the money will be divvied out to the province’s post-secondary institutions, though expectations are that incoming legislation will give more clarity.

“We will be looking closely at the details of the provincial government announcement to understand the implications of it for our institution,” said Waterloo spokesperson Rebecca Elming.

“We appreciate that the government has taken these first steps to address financial issues in our sector. However we remain concerned about long-term financial sustainability given the impact that many of years of a frozen operating grant and frozen tuition rates have had on our institution.”

In 2019, Ontario Premier Doug Ford slashed tuition costs by 10 per cent and instituted a freeze across the province.

Add on financial issues stemming from the COVID-19 pandemic, along with rampant inflation, and more than half of universities in the province posted deficits this past year.

In a fall budget update in November, Waterloo announced it was projecting a $15-million budget deficit for the 2023/24 fiscal year, which could reach up to $100 million in a few years if interventions aren’t taken.

Meanwhile, Laurier has found itself in a similar situation, originally

predicting an $11-million deficit this year, before announcing in January it was able to mitigate some of the costs due to austerity measures.

“While this announcement injects much needed funding into the system, the ongoing tuition freeze and uncertainty of the international study permit cap remain significant challenges for Laurier and the sector at large,” said Laurier spokesperson Aonghus Kealy.

Kealy said the university will continue to advocate with the government for a sustainable and predictable funding model.

He said the university is currently forced to take measures to ensure “lean and efficient operations.”

To add to the financial uncertainty, post-secondary institutions are still awaiting the decision by the Ministry of Colleges and Universities on how it intends to implement a 50 per cent reduction on international enrolment compared to 2023.

For Waterloo, for example, a universal 50 per cent reduction would mean dropping from about 8,000 international students to 4,000 students, representing a new shortfall of tens of millions of dollars compared to last year.

Laurier has a smaller international enrolment, but still stands to lose millions if the province were to target the entire sector in equal measure.

Neither of the universities are likely to see as dramatic an impact as Conestoga College, which had the most student visa applications approved in the province in 2023 with more than 30,000.

However, unlike Waterloo and Laurier, Conestoga is coming off a year where it posted a $106-million surplus, and had $682 million in cash reserves, according to its 2022-23 fiscal report.

A 50 per cent reduction for Conestoga would likely result in hundreds of millions in losses compared to 2023, though an investigation by OPSEU Local 237, a union that represents college counsellors, librarians and faculty, said the college would still be looking at a surplus around $40 million if it lost half its international enrolment.

That estimate has not been confirmed by the college.

“As key sectors across the province grapple with labour shortages, we’re pleased the province is making this initial investment in Ontario’s students,” Conestoga spokesperson Brenda Bereczki said of the new provincial funding.

“There is great demand for more graduates in several sectors including health care, early childhood education, construction, advanced manufacturing, engineering and technology. Provincial funding will help ensure employers throughout Ontario have access to a qualified workforce.”

In a statement issued by Colleges Ontario, the association that represents Conestoga and all of Ontario’s 24 public colleges, it said it supports the province’s focus on the most immediate pressures, rather than adopting a one-size-fits-all approach.

“While the investment announced today is a welcome first step, we expect further action from the province,” said Colleges Ontario president Marketa Evans.

“The future of the high-quality programs offered to students remains at risk.”

In a fall budget update in November, Waterloo announced it was projecting a $15-million budget deficit for the 2023/24 fiscal year, which could reach up to $100 million in a few years if interventions aren’t taken