Between university-wide emails about new budgeting plans, as well as government announcements about admissions caps and university funding, there’s been a lot of talk about where UW stands financially so far this year. Just last month, the university projected a $75 million deficit for its 2024/25 operating budget. Hoping to reduce this number, the proposed operating budget outlined several measures, such as a limited hiring program and targeted cuts.
More information about the operating budget constraints was posted online in early March at the Office of the Vice-President, Academic and Provost. Here, some of the factors leading to UW’s deficit were outlined – the Ontario government’s 2019 mandate for a 10 per cent domestic tuition cut, ongoing tuition fee restrictions, constrained government grants, inflation, and declining enrolment numbers of international students. With the federal government announcing in January that there would be a two-year intake cap on international student permit applications, Ontario universities can anticipate even fewer international students in the coming years.
The implementation of a “limited hiring program” is one of the university’s most recently proposed measures. This program, which UW said last month would be effective immediately, aims to “realign work or find efficiencies” rather than hiring new employees when roles become vacant. As for roles within academic faculties, deans will work with the provost’s office to review hiring practices. Provost James Rush explained that the procedure “[adds] extra processes to what would normally be a fairly straightforward request to fill an open position.” It remains unclear, however, how these hiring decisions will affect students moving forward. Rush said that right now, it is “hard” to answer questions about whether the program will cause reductions in course offerings or decreased faculty members in certain areas due to many “local decisions” that would have to occur in each case. Rush also emphasized that the new hiring program would affect all university employees, not just those in faculty units.
The university has also proposed “one-time contributions” from faculties and Academic Support Units (ASUs) during the 2024/25 year in order to combat budget gaps. ASUs include offices such as the Writing and Communication Centre, the Centre for Extended Learning, and the Work-Learn Institute. These contributions would be equal to two per cent of each faculty or ASU’s ongoing budgets, which UW says would “translate into $12 million total.” A one-time contribution from central reserves would also be required to cover the remaining deficit.
While contributions from various offices will assist with the deficit, the operating budget also outlines areas where spending will need to be cut. One of the largest cuts would come through the 28 per cent budget reduction to what the university calls “centrally controlled operating resources,” such as the University Fund. This budget reduction would amount to about $15 million. According to Rush, the University Fund is a centrally-controlled fund that is meant to fund initiatives that “arise and need to be attended to,” rather than ongoing priorities. According to the Waterloo Budget Model, money from University Fund goes towards current year salary increases, benefit changes, research support funds, and costs associated with Affiliated and Federated Institutions of Waterloo. Rush explained that cutting central resources like the University Fund means that UW’s deficit won’t have to be covered entirely by separate units within the university. “But [it] comes not without challenges… [it] means there will be a lot of important things that can’t be done,” he concluded.
In addition to specific cuts and contributions, Rush stated the importance of what he calls “discretionary spending.” The operating budget referenced this approach, which calls upon university employees to “optimize individual practices.” Rush explained that this would “provoke [employees] to be considering at an individual level how they’re using the budgets that are allocated to them.” Rather than outlining specific areas where costs should be cut, this approach is aimed at shifting departments’ and employees’ focus when it comes to spending.
Other universities across Ontario have also been working to reduce structural deficits. In January, Queen’s University announced that budget cuts and an imposed hiring freeze reduced the projected deficit to $48 million, down from their 2023 projection of $62 million. Wilfrid Laurier University projected $11 million in losses, but has since stated that some of this has been mitigated through austerity measures.
When asked if there was anything else students should know about the university’s deficit, Rush wanted to emphasize that UW has been facing these kinds of financial challenges ever since the mandated tuition reduction in 2019: “We’ve had budget cuts and reductions before — I’d just like to emphasize [that] it’s always been a part of that high-level academic leadership narrative to protect the quality of the programming at UW.”
With files from Charlie Dickson.
