As the calendar year begins, work continues to draft the institutional budget for the 2024-25 fiscal year, which will be presented to the Board of Trustees for approval in May. With that time approaching, it is becoming increasingly clear that the next fiscal year will be unprecedented in the challenges it brings.

For the 2024-25 fiscal year, Brock is facing a $37-million operating deficit, representing roughly 10 per cent of the institution’s budget. With a mandate from the Board of Trustees to balance the annual budget and limited reserves to fund deficits, difficult decisions will need to be made in the coming months for Brock to remain financially sustainable.

Brock is not alone in this situation, as many universities in Ontario’s post-secondary sector have issued warnings in recent months over the devastating effects of current provincial government policy.

On the revenue side, the provincial operating grant per full-time equivalent (FTE) student has not been adjusted for inflation in almost 20 years. This is a decline of 31 per cent between 2006-07 to 2022-23.

To try to keep pace with growing costs, universities were forced to focus on tuition increases and enrolment growth, which has been challenging in the context of declining demographics, international student recruitment issues, and of course, the continuing effects of the pandemic. Additionally, the corridor system for provincial funding has limited the extent to which enrolment growth can generate revenue.

In 2019, the province cut tuition by 10 per cent and then froze it, a freeze that remains in place to this day, except for modest increases allowed last year in a select range of programs where Brock’s tuition is significantly less than others charge.

All these factors combined have led to a situation where most Ontario universities are dealing with a major structural deficit that puts them behind at the beginning of each fiscal year.

In Brock’s case, the structural deficit represents a $10-million annual shortfall, approximately 2.5 per cent of the total budget, before any new cost increases or expenditures are factored in. Despite enhanced recruitment activities for both domestic and international students, Brock’s enrolment growth has not been sufficient to make up this shortfall.

While Brock met its domestic enrolment targets last year, the landscape for international students still has not normalized since the COVID-19 pandemic. Given the higher fees paid by international students, the shift towards a higher proportion of domestic enrolments reduces overall revenue.

Student retention has also become increasingly challenging in recent years, and these two factors are contributing to reduced tuition revenues for 2024-25 at the level of $5 million.

And of course, Brock is not immune to other financial pressures. Several years of compensation restraint under Bill 124 has increased the pressure on employers to reach salary settlements that keep us competitive in the labour market and, coupled with the impact of global inflation, is resulting in higher compensation costs to the institution. For 2024-25, Brock will need to cover salary increases of $14 million, which includes recent settlements with faculty and staff.

Finally, there are increased costs to which Brock is committed through its Fiscal Framework for necessities such as research support, library acquisitions and capital projects. For 2024-25, these expenses total $7.5 million.

While there was hope that the Blue-Ribbon Panel struck by the provincial government might bring some relief, the Province has not indicated an intention to respond to the Panel in a way that would significantly affect outcomes for 2024-25. For this reason, we are not including any projected additional tuition or grant revenues for next year’s budget.

Over the years, Brock has found ways to remain financially sustainable, including through hiring pauses and budget reductions. But we cannot continue to operate as we always have. Finding $37 million to achieve a balanced budget will require new thinking, new priorities, new structures and, unfortunately, difficult choices.

It will require us to think about what we do best and what we can do sustainably, with the resources we have.

It will require us to align resources with those areas that most benefit our students, such as critical services, high-demand academic programming and new opportunities for revenue generation. We also need to continue to support Brock’s researchers, who are making a significant impact locally, nationally and globally.

With the support and collective effort of everyone — as well as substantial, multi-year commitments of government funding and flexibility on tuition — we will persevere through this difficult time and put Brock in a position for even greater success in the future.

Further updates on the budget process will be provided as they become available in the coming weeks and months.

Sincerely,

Tim Kenyon
Interim Provost and Vice-President, Academic