The following letter was sent to faculty, staff and students at Brock University from President Gervan Fearon on Jan. 21, 2019:
Dear fellow members of the extended Brock community,
At Brock, we are an engaged university community that values collegiality and collaboration in decision-making and development. Your engagement during times of significant change makes Brock stronger, and supports our shared effort to advance the University’s mission, commitment to students, and support for our faculty and staff.
On Jan. 17, 2019, the Ontario Government announced a 10 per cent reduction in college and university tuition based on the 2018-19 rates. The new rates are to be held for both 2019-20 and 2020-21, along with changes to the Ontario Student Assistance Program (OSAP) and to Student Association Ancillary fees. As a result, preliminary estimates suggest that Ontario’s 21 publicly supported universities will face an aggregate revenue reduction of about $360 million. These developments will have significant implications for all Ontario universities, including Brock.
For context, in May 2018, a balanced 2018-19 operating budget of $339 million was submitted to the Board of Trustees, after having been reviewed by Senate PPBAC to ensure the budget supported and aligned with the University’s academic mission. The 2018-19 budget included $116.3 million in revenues from students that fall within the government’s regulated tuition framework. A 10 per cent reduction in tuition rates, as prescribed by the government, represents an $11.6 million reduction in revenues. However, to cover increasing operating costs, tuition has been increasing at about three per cent per year, representing approximately $3.8 million. Thus, the impact on Brock’s budget is a shortfall of approximately $15.4 million for 2019-20, which extends in 2020-21 by another $3.8 million based on previously budgeted numbers.
In reflecting on these implications, it is important to understand the significant differences between operating and capital budgets, as well as between discretionary and dedicated or encumbered budget numbers. Capital budgets are used for long-term capital projects, such as student residences, which, like a house, may involve long-term mortgages. The cash-flow (generated revenue) on these capital assets means they often pay for themselves, and in fact may add net contributions to the University’s operating budget now and in the future.
Similarly, donors may stipulate the purpose of the funds they have contributed to the University (e.g., scholarship and bursaries), which can then only be used for those purposes, rather than for general operating purposes. It is important to make these distinctions, since members of the Brock community may very well see the University completing capital projects (the Rankin Family Pavilion or student residences, for example), even as we address any operating budget challenges that we face as of Jan. 17, 2019.
The Brock community has increasingly looked towards a transparent, inclusive and compassionate decision-making framework that is focused on fulfilling the University’s efforts to support its new Institutional Strategic Plan. This includes enhancing our transformational academic and student experience; expanding our research capacity; fostering a culture of inclusivity as well supporting our commitment to Indigenous educational initiatives; and having a positive impact on surrounding communities.
All Ontario universities face the challenge of aligning their operating budgets with the new tuition framework. The universities that can address these challenges in a co-ordinated and harmonious fashion — i.e., those that manage the necessary changes and adjustments while keeping focus on the type of university they are trying to establish for the future — will emerge from this period in a better position than those that take a divisive and siloed approach.
At the Jan. 16 session of Senate, I stated that Canadians have a tremendous capacity to deal with change and unanticipated events because of our weather. Specifically, we know that when we go into a skid due to poor road conditions, the best way to recover is to focus and steer in the direction you are ultimately aiming to go. We must keep our focus on the priorities of supporting excellence in teaching and learning; building our research capacity; supporting university-community engagement and regional community and economic development; and fostering an inclusive and respectful work and learning environment. The Ontario Government’s announcement of Jan. 17 does not make this task easier; however, it does inform our operating budget capacity, and constrains the rate by which we make progress in relation to these priorities.
We have already been in communication with the Brock University Students’ Union and Graduate Students’ Association, and will be co-ordinating meetings and discussions in the coming weeks. The Student Ancillary Fee changes included in the Government’s announcement could potentially have significant service and budgetary implications for the University and our students. We are awaiting further information on these and other components of the announcement, and will provide updates to the Brock community as we get additional information and at key milestones.
Over the next few weeks, we will be getting additional details regarding the Government’s announcement, and doing a full analysis of the implications across the Brock community. We will be developing a budget guidance framework that incorporates the new budgetary realities, along with requests for all units across the University to explore options for achieving the new budget numbers. Simultaneously, we will be looking at broad University initiatives that may further support either increased revenues or cost-saving initiatives, and will be looking to you for ideas, assistance and support throughout this process. We will be bringing forward discussion items to Senate and the Board to ensure that the University’s academic and administrative governance processes are fully engaged throughout these efforts.
We are a “people” organization in all that we do. We have to put our students, faculty and staff at the centre of our considerations as we endeavour to work within new operating budgetary realities facing the University.
Thank you for your assistance and considerations.
President and Vice-Chancellor, Brock University
Some related links on the Ontario Government’s recent announcement: