Add ‘school potentially going bankrupt’ to the list of reasons we’re happy we’re not in college anymore, alongside gruelling mid-terms and questionable dining hall food.
Driving the news: Queen’s University’s provost (basically its CEO) warned that the prestigious institution faces a $48 million deficit this year and could go out of business if it doesn’t straighten up, balance the books, and slash outstanding expenses.
- The news shocked faculty, considering a Morningstar DBRS report from last year determined Queen’s could survive tough financial times without drastic cuts.
Why it matters: Budget problems aren’t just an existential threat for Queen’s. Universities across the country are tightening their belts due to revenue dips, higher expenditures, and decreased government support.
- Ontario government funding dropped by 4.2% from 2021 to 2022 as pandemic support ended, and federal funding was down 18.8% in the same time frame.
- In Ontario, nearly half of universities are now running deficits and will make cuts unless the provincial government approves a plan to raise tuition by at least 5%.
- To make up for the difference, schools are boosting enrolments, particularly from international students who are charged much higher tuition than their domestic peers.
What’s next: Budget cuts, layoffs, and, potentially, the closure of entire departments. As STEM and business programs draw in more students (and cash), the humanities could get the axe. Between 2012 and 2022, enrolments in these programs dropped by nearly a third.
Zoom out: On the whole, Canadian universities still operated on a budget surplus in 2022, but financial indicators signalled choppy waters ahead. The recent news of a planned cap on their favourite cash cow — international students — spells even more fiscal trouble.—QH