University of Waterloo projecting $15M deficit

The University of Waterloo is known for doing things differently. We run one of the biggest co-operative education programs in the world, we add more than $1.4 billion to Ontario’s GDP every year and our innovations, startups and spinoffs provide job opportunities to help advance the standard of living for all Ontarians.

But when it comes to our financial health, even innovation has its limits when facing the hard facts of university funding.

Waterloo will end this fiscal year with a $15-million operating budget deficit. This follows several years of restraint through budget cuts and hiring freezes.

If there are not changes in the way we are financed, we project that our annual deficit could rise to $100 million by 2027.

We’re not alone, either. Earlier this year, Queen’s University announced a deficit of approximately $63 million. Wilfrid Laurier University forecast an $11-million shortfall. The University of Guelph has experienced budget deficits for three consecutive years.

Something is clearly wrong with the way our sector is financed. Here’s how we got to this point.

Waterloo has lost $250 million in revenue since the province imposed a10 per cent cut to domestic tuition in 2019 and froze these rates every year since.

The basic operating grant the provincial government provides to universities has essentially been frozen for over a decade. That means that less than a third of our operating budget now comes from the provincial grant.

Right now, universities have an enrolment range for domestic students that we must stay within to receive the full grant — this is called the enrolment corridor. If we enrol more students than our allowed corridor, there is no additional funding from the government.

So — when we responded to the massive demand for our programs and admitted more students than our corridor allows, it translated to a $22-million annual loss in revenue.

These examples aren’t the end of it, either. The lacklustre federal funding for research and grad students is causing a great deal of budget pressure. We are dealing with expensive deferred maintenance projects, building new student residences to help with the housing crunch, investing in modernday technologies to support our students, and the effects of Bill 124 — the overturning of which has increased our annual salary bill by $16 million.

So what can be done?

To start, we need a one-time infusion of funding, which will help us close the gap that the past 10 years have created. Then, base funding and tuition needs to increase yearly to keep pace with inflation and the costs of increasing student demand. We need new revenue to provide the mental health, housing and career services that our students deserve.

The affordability of and access to a post-secondary education in this province is a top priority for us. We don’t look to impose a huge tuition hike that would hurt Ontario students. But we do need more flexibility on tuition.

We are also prepared to create university-level aid programs that integrate with OSAP. This would ensure both continued access and affordability for students with financial need and increased revenue for the university, which is necessary to fund the increased cost of operating.

Our goal is not to make a profit, but to train the next generation of problem solvers. We think outside the box, and we need our provincial partners to do the same.