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Expense assumptions

Since 2020, the university has prioritized growth and investment in its employees. While other universities were cutting budgets, we continued to invest in our people and our future. This investment was a deliberate choice which meant deferring investments in AI, reconfiguring spaces to accommodate competency-based learning, or capital infrastructure and not meeting our annual capital reserve targets. Increasing operating and tuition revenues will help Ontario Tech sustain our core programs and the services that students rely on, as well as to make important capital upgrades to our facilities.

The need to plan prudently is a must as inflationary pressures add an element of the unknown to our expense assumptions. As an illustration, consider that the salaries and benefits that make up our largest expense category (i.e., full-time and part-time labour combined) are currently increasing by approximately $6 million annually. Inflation and contractual obligations, moreover, will see this total (and a growing portion of our annual operating budget allocation) increase by about 10% in each future year. Therefore, assuming no further grant increases, the anticipated cashflow from recent changes to the funding formula would be totally consumed by our current labour obligations in less than four years.

Ontario Tech has historically managed its expenses using a hybrid budgeting approach. For the fixed or ongoing portion of our expenses (e.g., salaries, licensing agreements, capital costs, reserves, etc.), mandated incremental year-over-year cost increases are automatically added to and factored into the following year’s base budget. Inflationary increases for essential expenditures (e.g., utilities, essential laboratory supplies, etc.) experienced year-over-year are also factored into the base budget. Since 2021, it must be noted that inflationary increases for many essential expenditures have spiked into double digit percentages. These constraints limit the portion of the budget that can be allocated to fund IARP-aligned variable (or discretionary) requests coming forward from faculties and departments. Importantly, if revenues remain fixed but expenses rise, our ability to support new initiatives becomes extremely limited or nonexistent and may even lead to cuts.

In December 2025, faculties and departments were asked to submit new base and one-time-only (OTO) budget requests for consideration for the 2026–2027 budget year. At that time, no new funding had been announced by the province, and all units were asked to limit strategic requests to address only their most pressing needs. The following principles were used to inform strategic allocations:

  • Funding growth, where revenues follow enrolment to support instructional and infrastructure needs.
  • Increasing student financial supports.
  • Investing in our future capital needs.
  • Ensuring long-term financial stability and operational efficiencies.

In comparison to the last fiscal year, there are about $46 million of new or reallocated expenses. Overall, we are projecting total operating expenses of $306.4 million.

Labour costs: At 61% of the total budget

These costs represent the largest share of our annual budget and the most significant increase (i.e., $20 million) in expenses compared to last year. The key components are:

  • $16.8 million invested in annual contractual increases and the approval of 16 new faculty (i.e., with prorated hiring dates over an 18-month period) and 11 new staff members.
  • $3.2 million increase in part-time (i.e., sessional) instructors and teaching assistants.

Operating costs: At 30% of the total budget

These expenses are the product of several pressures, including inflation, rising costs for goods and services (e.g., software licenses, library subscriptions), and the necessary maintenance and repair of aging materials. Expenses have gone up about $10 million compared to last year. The key components are:

  • $2 million Academic Priority Fund which will be held for review and possible allocation in September.
  • $2 million investment in enterprise software and infrastructure upgrade (i.e., Banner).
  • $1.6 million in additional Financial Aid support.
  • $1.3 million for AI capital changes and implementation.
  • $1 million set aside for investment in energy related projects.
  • $600,000 start up for new hires.
  • $500,000 research software to aid grant processing and security.

With respect to financial aid, we are investing an additional $1.6 million to support students. The provincial government has announced major changes to the OSAP program that will transform it from being primarily grant-based (i.e., 85% grant–15% loan) to loan-based (i.e., 25% grant–75% loan). To limit the effects of this change on low-income students, the Government has enhanced the Student Access Guarantee (SAG). SAG requires universities and colleges to set aside funds to support low-income students when OSAP does not fully cover educational costs. Reflecting its long-standing commitment to access, Ontario Tech annually invests about $18 million in financial assistance.

Capital infrastructure costs: At 9% of the total budget

This year an additional $16.7 million is allocated to new and infrastructure repairs such as $2 million to increase cybersecurity and site licenses related to enterprise upgrade and $8 million to complete Shawenjigewining Hall to accommodate the expansion nursing labs, flexible classrooms, modern teaching and research labs, and collaborative spaces. Combined with the current base that is offset by grants, this brings the total capital investment to about $26.5 million.

The University has refreshed the 2015 Campus Master Plan to guide the long-term evolution of the campus. This update responds to a decade of change, incorporating new data, emerging trends, and insights from campus partners. It provides a renewed framework for a unified, accessible, and sustainable shared campus that serves as a centre for activity and inspiration.

The University has internal space standards for what we believe our teaching, research and student experience needs will be in the rapidly changing age of AI. With planned growth in student numbers, we are below where we want and need to be. There are several different strategic enrolment scenarios that could get us to 20,000 students. Each of these could have multiple space requirements depending on the type of program (i.e. engineering versus business), course offerings (i.e. lab based versus executive style on weekends), the discipline of the researcher and even the location of the building as one may connect well with existing utilities while another may need a large portion of the building dedicated to services. Using current metrics, the University aims to add at least 300,000 GSF of core teaching, research, study space to support our growth plans. In 2025 dollars this equates to over $250 million dollars in construction. The funding landscape requires us to plan to use operating, fundraising and partnerships for this build-out. For that reason, we know we will need to implement a phased in approach that corresponds with our offerings.

Today, the university stands at a pivotal moment: poised to evolve from a strong, young institution into a mature leader. The next step involves aligning the physical campus with the university’s strategic vision and growth trajectory. $75 million will be set aside over the next five years for a new academic building. Attention has been given to the site’s role as a campus gateway, its prominence along Simcoe Street, and its potential to function as a clear front door to the university. Advancing Ontario Tech’s next chapter of innovation, entrepreneurship, and purpose requires more than programs; it requires place – A Place Where Ideas Become Impact. Ontario Tech has built a powerful ecosystem, both physical and virtual; this project transforms that ecosystem into a visible, connected, and enduring destination. It is about making innovation tangible, giving form to the university’s ambition, and creating a place where ideas move decisively toward real‑world impact.

In addition, with this core space we will need ancillary services such as student housing and wellness spaces. The Wellness expansion is to be completed by September 2028, with $12 million from operating and the remainder funded through student ancillary fees. Modern health and wellness spaces are essential for student recruitment and retention, yet our current facilities are at or beyond optimal capacity. The expansion will support Ontario Tech’s commitment to providing a high-quality student experience, educating the whole student, and strengthening institutional excellence.