Managing key budget risks

The university maintains a proactive approach to risk mitigation and focuses on long-term strategic planning and decision-making to sustain financial responsibility. Overall, this budget presents low to moderate risk based on the likelihood and potential consequences of major factors. Our main budget risks and corresponding mitigation strategies include:

• Achieving enrolment targets: The university typically meets its enrolment projections within +two per cent. However, government caps on international students introduce uncertainty. We have lowered our revenue forecasts tied to international enrolment and will rely on any surplus if needed.

• Achieving SMA4 performance targets and accountability measures: The university risks losing part of its funding if we fail to meet annual performance targets. While the performance pot is growing to 45 per cent the loss of funds if a target is missed is based on the metric percentage and the percentage missed; therefore, the annual reduction should not be material. Further most metrics have multi-year data points that we can be prepared to address.

• Maintaining academic quality and student success: Investments in student well-being and academic support continue to grow, but as our student body diversifies, demands often outpace resources. Through a values-based approach, we will invest in high-impact initiatives while acknowledging the individuality of our community members. This year, we allocated additional funds for faculty, staff and teaching assistant support. As enrolment increases, we are investing in processes and systems to achieve economies of scale.

• Financial indicators: In the 2023-2024 fiscal year, the Ministry of Colleges and Universities implemented a University Financial Framework, defining metrics and thresholds in liquidity, sustainability, performance, and credit rating. We currently carry a medium-risk rating, mainly due to high-debt obligations affecting sustainability ratios. With a balanced budget and reserved fund by March 2025, we anticipate no major changes to these ratios in 2025-2026.

• Aging equipment: Budget reductions for equipment repair and replacement in recent years heightened the risk of equipment failures. While we have allocated more than $1M in unit-specific equipment needs, this covers less than half of the requests. We maintain a general contingency of about $1.5M for emergency repairs, but significant equipment failures could disrupt business continuity.