Financial Sustainability in Ontario Universities

1. Financial Sustainability in Ontario Universities Trudy Pound-Curtis CAUBO Conference, Saskatoon SK June 14, 2004

2. Current Environment in Ontario • No Inflationary Grant Funding. • Unfunded student spaces. • Tuition freeze. • Large growth in capacity due to double cohort. • Growth to continue in GTA due to demographics.

4. Current Environment in Ontario • Increasing pressures on Quality and Accountability. • No plan for growth in graduate enrolment.

5. While maintaining a high quality institution. Financial Sustainability – A Balancing Act Financial sustainability can only be achieved by: • Decreasing base expenditures • Increasing base revenues • Managing cost pressures

6. Increasing Base Revenues • Increase Government Grants • Funding Formula Review to ensure Equal and Full Average Funding for all students. • Lobby Government for Inflationary Grant Funding to ensure that Quality can be maintained. • Work with Government to maintain/grow Capital Funding for New Buildings and Facilities Renewal. • Increase in Indirect Cost of Research Funding.

7. Increasing Base Revenues • Tuition – in the face of a tuition freeze? • Regulated vs Deregulated. • Increase Visa fees, which are not covered by the freeze? • Increase offerings of Professional Development or Full Cost Recovery programs? • Use the increased fee revenues to cross-subsidize the programs whose fees are frozen.

8. Increasing Base Revenues • Fundraising • Undertake a comprehensive fundraising program to offset the increasing cost of scholarships/bursaries, faculty, research, etc.

9. Reducing Base Expenditures • Explore different program delivery methods; i.e. Distance Learning. • Adjust program array to reflect the new funding reality. • Renegotiate collective agreement clauses that restrict course delivery methodology or that create other inefficiencies. • Outsource some non-core services; i.e. Janitorial/Maintenance, Postal, and Food Services. • Utilization of Technology – Ontario buys Program. • Horizontal vs Vertical cuts.

10. Managing Cost Pressures • Normal inflationary increases. • Compensation costs. • Benefits and pension costs. • Impact of poor investment returns and lower projected spending rates on endowments. • Proposed elimination of mandatory retirement.

11. Real Risks • Deterioration of institutional quality. • Deterioration of faculty complement. • Deferred maintenance. • Deterioration of administrative staff complement.

12. Constraints • Speed of Change in Universities. • Gaining Consensus in a Collegial Environment. • Creating Attitudinal Change. • Strength of Collective Agreements.

13. Summary • In order to be sustainable, Universities must: • Get a commitment from the government on sustained full funding for all students. • Negotiate Capital Funding in order to sustain and renew facilities. • Reduce expenditures through changing the way that courses are offered and reducing the array of programs to reflect the funding environment. • Renegotiate collective agreements to gain the flexibility required to create efficiencies through outsourcing or other means.

14. Questions