Appendix A: 2023-2027 Budget cycle scenarios

In this scenario (Figure 5), the assumptions for intake (Figure 6) and total enrolment (Figure 7) estimate revenues exceeding $237 million for 2024-2025, representing an $11.8 million increase from the previous budget year. At the same time, overall, full- and part-time salaries and benefits are expected to increase by almost $10.3 million compared to last year. The result is that our entire estimated revenue increase is entirely consumed, or offset, by estimated expense increases. This forecast would yield a balanced budget for 2024-2025, thanks to minimal to moderate enrolment growth and delayed expenses, counterbalanced by already approved investments in support of the Integrated Academic-Research Plan’s differentiated growth agenda.

Historically, using this same conservative approach, Ontario Tech has been able to accurately realize (i.e. within +2 percent) its enrolment projections year over year. This approach relies on minimal to moderate, yet highly predictable, enrolment growth. For the coming year, it would yield a razor-thin $916,000 surplus (i.e. less than 0.4 percent of the total revenues) for allocation. However, this surplus would not include discretionary allocation. This amount would instead be designated as restricted revenues for use in areas such as facility renewal.

In the out years, this model creates even more budgetary uncertainty. For 2024-2025, this model includes a set aside for a modest $1.0 million academic priority fund and a $1.0 million capital fund to promote academic innovation and to address aging equipment needs, respectively. However, this budget does not show an annual surplus exceeding $3.0 million, which is necessary to build reserves for anticipated future deferred maintenance expenses. Consequently, in the out years, there would be no discretionary funds available for new expenditures followed by deficits.

In this scenario we assume the same enrolment data as seen in Scenario A plus a 2 per cent domestic tuition increase for the out years. While this tuition increase would not keep up with current inflation and is below the previous ministry policy allowance of a 3 per cent increase per annum, it is a number we are hearing as a potential increase. Each 1 per cent increase in the domestic tuition rate is estimated to result in a modest $470,000 increase in total revenues.

In the short term, we can mitigate the impact of the revenue restrictions by emphasizing growth. We have prepared an aggressive growth plan aligned with our Integrated Academic-Research Plan goals. In 2020, we increased our international enrolment targets, aiming to reach levels comparable to the Ontario university system average. This, coupled with reallocations (where possible) and delayed infrastructure investments, would provide at least a temporary solution to our budget challenges.

If we increase international undergraduate intake by 10 per cent in 2025 versus 5 per cent, coupled with the expansion of professional master’s programs, while at the same time experiencing a slight increase in undergraduate persistence, it would result in 115 more Full-time equivalent student (FTE) enrolments in 2025-2026 (Figure 8), and our forecasted surplus for allocation would be $5.6 million more (Figure 9).

It is anticipated that this approach would also require enhanced support to those areas demonstrating growth while some areas not experiencing the same would need to find more efficient ways to operate. Failing to draw this distinction could potentially impact the quality of support and education we provide to our students. More importantly, however, beyond providing a slightly more prolonged period of financial sustainability, this scenario only delays the inevitable structural impact on the budget.

In this scenario, we assume the same enrolment in Scenario C with the addition that all domestic students, not just those in our corridor, would receive full grant funding at today’s levels. It should be noted that the Blue-Ribbon Panel may make recommendations to the Ministry of Colleges and Universities (MCU) regarding grant funding for universities, but the details of these recommendations and the MCU’s response remain unknown at this time.