Queen’s will run $62.8 million operating deficit in 2023-24

In the 2023-24 fiscal year, Queen’s University will run a $62.8 million operating budget deficit.

Interim Provost and Vice-Principal (Academic) Teri Shearer said in a phone call that it is the second year in a row the university has run a deficit. “We ran a deficit in this year that just ended. And I’m sure if you looked back there would be deficit budgets here and there, but generally speaking, and for the last number of years, Queen’s has been running surpluses, which is why we have carried forward reserves we can now draw on to cover the deficit.”

The provincial government’s 10 per cent tuition cut for Ontario students in 2019 and subsequent tuition freeze, which the university says has cost it $179.4 million to date, is mentioned in a release as one of the pressures the university has been unable to withstand.

To put that in context, explained Shearer, “in 2019, the province cut tuition by 10 per cent, and it’s been held steady at the 10 per cent cut level. This budget year is the fourth consecutive year of no increases. And that 10 per cent cut and the fact that there have been no increases since has cost the university very nearly $180 million in forgone revenue.”

On top of this, she went on, grant funding provided by the province of Ontario, which is intended to share the cost with students, is the lowest of any province in Canada. So “in real terms,” that funding is actually decreasing “because it hasn’t been increased for years — and on top of that, the total amount is capped. And so we have [many] students for whom we are not even receiving any grants. And that’s another [estimated] $24 million a year in forgone revenue.”

Shearer pointed out, “It is important to note that our domestic applications and acceptances remain among the strongest in Ontario. Acceptances this year are up 17 per cent compared to this time last year, and demand for Queen’s remains strong among prospective students, with 55,000 applications for 5,000 available first-year spots.”

However, the university relies heavily on international student dollars, and “difficulties with international mobility during the [COVID-19] pandemic and then the visa processing delays that we’ve experienced after that have meant that international student enrollment has not returned to pre-pandemic level,” said Shearer.

This past fiscal year, Queen’s distributed $22.5 million in assistance for students who had financial need, Shearer noted. “About $9.5 million of that was from our operating budget, another $13 million is from donors provided funding for needs-based assistance,” she said, nothing that the university “also provided another $5.9 million in merit-based awards.”

“Just this last year, we went through all of our student assistance and reduced the amount that we allocate to merit and reallocated it to needs-based… We’re trying really hard to ensure that any student who earns a place at Queen’s can afford to accept it,” Shearer said.

Recently-struck committees led by the Deputy Provost and including representatives from faculties and shared service units are examining international student enrollment growth along with cost containment and revenue generation strategies. They will seek to address the fiscal challenges so that Queen’s can continue to deliver on the university’s strategic goals and academic mission, according to the Interim Provost.

As well, “the university has been fortunate to build up reserves to help weather difficult financial situations, but ongoing reliance on these reserves is not sustainable,” admitted Donna Janiec, Vice-Principal (Finance and Administration), in a statement, noting she hopes that “acting now to mitigate our in-year deficit will provide a runway to collaborate with the community on the difficult task of achieving a balanced budget by 2025-26.”

As an additional interim measure, Queen’s is imposing an immediate hiring freeze for full-time operating budget positions not currently posted or advertised. The measure will be accompanied by a process through which critical hires can be advanced on an exceptional, case-by-case basis. 

The temporary measure will have an immediate impact by reducing the university’s in-year deficit and providing a starting point to explore other cost containment options, stated Shearer. “It’s really a proactive measure on the part of the university to prudently manage the drawdowns on our reserves… By putting the hiring freeze in place as a temporary measure, we’ll be able to reduce the in-year deficit… We want to be able to continue investing where appropriate in our strategic objectives so that we can continue to advance the strategic plan.”

Shearer concluded, “We are confident that by working with our campus committees, faculties, and shared services to identify and implement the appropriate cost-containment measures, we can continue to deliver on our academic and research mission and create an exceptional education experience.”

This process will be led by the Provost and the Vice-Principal (Finance and Administration), in consultation with the Principal and Vice-Chancellor. Further details will be shared as they become available, according to Queen’s.