financial sustainability in ontario universities trudy pound-curtis caubo conference, saskatoon sk...

Financial Sustainability in Ontario Universities

Financial Sustainability in Ontario Universities

Trudy Pound-Curtis

CAUBO Conference, Saskatoon SK

June 14, 2004

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Current Environment in OntarioCurrent 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.

Projected Population of 18-24 Year Olds in the GTAfor the Period 1999 through 2028

0

100

200

300

400

500

600

700

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027

Year

Pop

ulat

ion

in T

hous

ands

Source: Ministry of Finance, 2001.

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Current Environment in OntarioCurrent Environment in Ontario

Increasing pressures on Quality and Accountability.

No plan for growth in graduate enrolment.

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Financial sustainability can only be achieved by:

Financial Sustainability – A Balancing ActFinancial Sustainability – A Balancing Act

Decreasing base expenditures

Increasing base revenues

Managing cost pressures

While maintaining a high quality institution.

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Increasing Base RevenuesIncreasing Base Revenues

1.1. Increase Government GrantsIncrease 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.

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Increasing Base RevenuesIncreasing Base Revenues

2.2. Tuition – Tuition – in the face of a tuition freeze?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.

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Increasing Base RevenuesIncreasing Base Revenues

3.3. FundraisingFundraising

Undertake a comprehensive fundraising program to offset

the increasing cost of scholarships/bursaries, faculty,

research, etc.

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Reducing Base ExpendituresReducing 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.

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Managing Cost PressuresManaging 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.

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Real RisksReal Risks

Deterioration of institutional quality.

Deterioration of faculty complement.

Deferred maintenance.

Deterioration of administrative staff complement.

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ConstraintsConstraints

1. Speed of Change in Universities.

2. Gaining Consensus in a Collegial Environment.

3. Creating Attitudinal Change.

4. Strength of Collective Agreements.

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SummarySummary

In order to be sustainable, Universities must:

1. Get a commitment from the government on sustained full funding for all students.

2. Negotiate Capital Funding in order to sustain and renew facilities.

3. Reduce expenditures through changing the way that courses are offered and reducing the array of programs to reflect the funding environment.

4. Renegotiate collective agreements to gain the flexibility required to create efficiencies through outsourcing or other means.

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QuestionsQuestions