Despite a challenging year for the post-secondary sector, Brock University has retained its A High credit rating from the Dominion Bond Rating Service (DBRS) Morningstar.
DBRS released its credit report on the University this week and gave Brock the A High rating for the fifth straight year.
It listed Brock’s strengths as being a stable revenue base, sound fiscal management and transparent financial reporting and relatively low post-employment benefit obligations.
For challenges, DBRS identified constrained provincial funding and policy uncertainty, salary and benefit pressures, modest expendable resources and competition for students.
Josh Tonnos, Associate Vice-President, Financial Services, said the credit rating is the result of a “community-wide effort to address the unprecedented 15 per cent revenue loss we experienced this year.”
“Reflecting on the efforts and outcomes of Brock’s faculty, staff and students over the past year, the results have been nothing short of extraordinary considering the challenges we’ve faced due to the global pandemic,” he said. “The pandemic has taken a toll on communities, and certainly the post-secondary sector has had its share of struggles.
“Although DBRS has signalled a negative trend in our credit rating, I remain optimistic looking forward because of our Brock community, which continues to rise to the challenge with marked progress on our strategic priorities within the fiscal boundaries we operate in.”
In the report, DBRS said “Brock prepares its budget on a consolidated basis in accordance with Canadian accounting standards for not-for-profit organizations, which allows for comparisons with audited financial statements. This contrasts with some other universities that may only produce detailed annual budget estimates for the operating fund and ancillary operations, thereby accounting for approximately 80 per cent of total spending.”
Tonnos said moving forward, Brock’s focus will need to remain on enrolment growth.
“We rely on enrolment growth to cover a portion of the inflationary increases on expenses,” he said. “This is due to the high level of restrictions on our revenues, including government-mandated tuition rates and operating grants remaining fixed.”
He said operating a deficit budget plan isn’t a solution as it would result in the use of restricted funds or increasing debt.
“Taking a deficit or ‘fix the problem later’ approach would force the University to plan for a future surplus to repay either these restricted funds or debt, which only makes future planning more difficult and greatly increases the risk,” Tonnos said.
To learn more about Brock’s financial information and to view a list of the University’s DBRS Morningstar debt ratings, visit the University Financial and Budget Information website.