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Our revenue is predominantly tied to student registration numbers, including associated funds such as grants, tuition and ancillary fees, all of which are controlled by the provincial government—with the exception of international student tuition. The result is that without further enrolment growth, total revenue is projected to increase by a mere 1 per cent on an annual basis due to international tuition increases.

Given the current freezes on our grant and domestic tuition levels, we must continue to increase, broaden and stabilize our revenue base to accommodate escalating expenses. This involves realizing additional revenues from growth in student enrolment in existing and new programs of study, meeting our Strategic Mandate Agreement (SMA3) performance targets with the provincial government, and raising funds from alternative sources (e.g. philanthropy).

The Integrated Academic-Research Plan explicitly articulates that Ontario Tech’s overall student enrolment will grow to 18,000 students by 2030, including near-term enrolment commitments, as set out in our current SMA3. Our strategic enrolment management (SEM) tactics, supported by an increasingly popular new brand, have resulted in record applications in 2021 and 2022. However, the road ahead will require an integrated SEM plan, one that equally encompasses increased student recruitment and retention to realize our differentiated growth goals.

Ontario Tech must specifically focus on capturing a larger share of the traditional direct from high school domestic undergraduate market, particularly the Greater Toronto Area (GTA), as it is unlikely that overall university participation by this cohort in the province will see significant growth in the coming years. Traditional student recruitment will hinge on the development and launch of sound new program offerings and existing program repackaging efforts to attract students from new markets and to enhance our competitiveness in the post-secondary landscape. Making co-operative education, experiential, and work-integrated learning opportunities available for all students is necessary, as is an investment in data-driven tools (e.g. early alert systems) designed to support the success and retention of our students.

We will continue to make significant investments in recruitment and inter-institutional partnerships to ensure the continuation of international student inflows. This is necessary as post-pandemic participation by international students in the province’s post-secondary sector has yet to fully recover to pre-pandemic levels. Furthermore, the current global political climate may have negative, long-term implications for Canada’s appeal as a study destination. 

The university intends to grow international enrolment closer to the provincial system average of 20 per cent. This includes increased growth in undergraduate and graduate student admissions in the coming years. To achieve this, it will be imperative that we communicate our value proposition as a highly ranked access university to the international community. In the long term, we will reinforce this proposition with increased budgetary commitments to fund international scholarships, advocacy for and identification of affordable housing options, and the creation of concurrent work opportunities.

We have opportunities to expand course-based master’s programs, positioning us to attract new cohorts by responding to local and global labour market demands. These programs hold strong appeal for students, particularly international students, as they offer pathways to both post-graduate work opportunities and expedited routes to permanent residency. These enrolments will allow us to work within our existing domestic graduate student allocation while allowing for strategic growth.

Part of this differentiated growth in international students will result from effective recruitment strategies. However, these strategies must be closely aligned with our mandate and reflect a firm commitment to student success and retention. With the development of a new university retention plan underway, Ontario Tech can work towards achieving increased student persistence of our new and current students, positioning our university for robust enrolment performance in the future.

Government-funded enrolment-related grants are expected to remain stagnant as the provincial funding levels have remained frozen since 2012. This represents a 32 per cent decrease when adjusted for inflation. Furthermore, we continue to be limited to receiving our 2016 enrolment corridor funding, even though our number of domestic students has increased over those targets. Our strategic decision to grow domestic enrolment is motivated by the tuition revenue and the expectation that the government will eventually resume grant funding for all students.

Targeted grants

Government funding is increasingly becoming more focused, with additional dollars being issued as targeted grants allocated to specific activities rather than for the purposes of broad institutional support. For example, in 2023, the university received an extra $800,000 specifically for facilities renewal. These funds were designated for covering capital costs related to existing buildings. In essence, Ontario Tech, like all other universities, has no flexibility in reallocating these funds to areas of greater need. This funding is also subject to strict accountability and reporting measures.

Enrolment-based funding formula

In 2016, the provincial government introduced an enrolment-based funding formula where institutions receive a fixed operating grant if their five-year moving enrolment average remains within 3 per cent of an established target (or corridor mid-point). The new funding model aimed to provide equitable, predictable and stable funding for all institutions, enhancing planning certainty.

Performance funding approach

In 2019, as part of the SMA3, this fixed operating grant became heavily tied to provincially defined performance measures. Due to the pandemic, the government suspended this plan during the 2022-2023 fiscal year. However, this performance funding approach was activated in 2023-2024 (i.e. Year 4 of SMA3) at 10 per cent. More recently, the government has further deferred its implementation for 2024-2025 pending the outcomes of the Blue-Ribbon Panel review.

Tuition fee levels for our undergraduate domestic students are currently approaching, yet are still below, the median for Ontario universities. In February 2019, the government announced a 10 per cent cut to domestic student tuition fees for the 2019-2020 academic year and a subsequent tuition freeze for domestic students. When accounting for inflation, this represents a 25 per cent decrease in tuition revenues over the past four years. For Ontario Tech, this resulted in a cumulative annual revenue reduction of $62 million for the same time period, relative to what we might have otherwise expected. In 2023-2024, the Ministry of Colleges and Universities approved our application for tuition anomaly adjustments for three of our degree programs for incoming students, resulting in an annual increase of about $640,000 in domestic tuition fee income. However, the broader tuition freeze remains in effect, and at present, we do not have any information on the domestic tuition framework for future years. Universities are currently urging the government to discontinue its tuition freeze policy; however, we assume the domestic tuition freeze will continue for the 2024-2025 budget year.

For 2024-2025, we have assumed a 5 per cent increase in international undergraduate tuition fees. Our international tuition fees remain below the Ontario system median. However, due to competition for international students, we are closely assessing the potential impact of this assumption. We must balance increases and investments in student support, as noted below.

The remaining revenues received via student fees fall under the category of ancillary fees. Ancillary fees are designated for pre-specified approved activities (e.g. recreation services, health services, student learning). These student-centred supports represent about 12 per cent of total student fees. These fees are subject to a provincial fee protocol that allows for an annual inflationary increase based on the Bank of Canada Consumer Price Index (CPI) (September over September). The current CPI is 4 per cent. However, with student affordability in mind, the 2024-2025 budget considers a more conservative 3 per cent increase in total ancillary fees for the coming year.

Our objective in this area (e.g. parking, food sales, and facility rentals) is to maintain an overall financial balance. The university will allocate any surplus realized from these commercial revenues to capital reserves for future investments, with the prior year’s reserve covering any anticipated deficit. This approach ensures the core operating budget is not impacted by supplementary services.

We have received feedback from campus community members who want enhanced services such as extended food service hours and more parking spaces. These pose challenges as we would require further investments from our operating to address these asks. The extended food hours in the past did not achieve enough sales to offset the additional expenses. It could require an additional investment of more than $500,000. For parking, the lots are frequently not at full capacity during the week, even though they can reach capacity at other times. Our 2015 Campus Master Plan promoted sustainability through initiatives such as encouraging more bus and ride-share programs, but we are contemplating options to address the current demand. One option may be an additional investment of $750,000 to build 200 spots, with a break-even point expected after five years; however, this requires upfront funds.

Research and innovation funding at Ontario Tech continues to increase, more than doubling in four years to surpass $26 million in 2022-2023. This upward trajectory is expected to continue, a noteworthy achievement given the limited federal funding for research and graduate students that is causing a great deal of budgetary pressure.

While research granting councils face annual budget reductions, our university secures funding from diverse sources, including an increasing percentage from industry and innovation funding, primarily linked to entrepreneurship and commercialization. The rise in research funding reflects the university’s commitment to research intensification, contributing to its enhanced reputation.

It’s important to note that research and innovation funding primarily flows into restricted accounts, supporting new and unique learning opportunities for undergraduate and graduate students. The funds do not constitute operating funds, however, they are a key measure of success for the Integrated Academic-Research Plan.

In support of the university’s strategic priorities and the Integrated Academic-Research Plan, the Advancement department is leading the university’s comprehensive ‘Tech with a Conscience’ campaign’, anticipated to debut in Spring 2024. In 2022-2023, $4.5 million was raised and this has more recently grown to $9.5 million in new gifts and pledges. This upcoming campaign stands as our most ambitious to date and as the largest in Durham Region’s history. The university will see significant growth in fundraising revenue over the next several years, which will continue to be progressive. We will generate campaign revenue through a combination of one-time gifts and multi-year pledges, with a commitment to maintain and nurture relationships beyond the campaign’s conclusion.

Overall revenue assumption outlook

In Ontario, the proportion of total revenue from government grant funding has decreased while income from tuition fees, especially international tuition, has grown. In 2020-2021, our tuition and student fees represented 50 per cent of our total revenues. With grants remaining frozen, the percentage of revenue from student fees is estimated to grow to 58 per cent by 2025-2026 (Figure 2). Further, we see international tuition growing from 25 per cent to almost 35 per cent in the same period. This highlights not only our budget’s increasing reliance on student fees, but also the potential risk associated with this approach when enrolment targets are not realized. This trend is not unique to Ontario Tech, as other universities share a similar pattern. The provincial system average for the proportion of operating revenue from fees ranges from 40 to 70 per cent, and Ontario Tech is within that range estimating a 55 per cent proportion for 2024-2025.

Figure 2: Ontario Tech revenue source percentages
Column chart showing percentage of operating revenue from grants, tuition and fees, and other revenue sources. The proportion of total revenue from government grant funding has decreased while income from tuition fees, especially international tuition, has grown. In 2020-2021, our tuition and student fees represented 50 per cent of our total revenues. With grants remaining frozen, the percentage of revenue from student fees is estimated to grow to 58 per cent by 2025-2026. Further, we see international tuition growing from 25 per cent to almost 35 per cent in the same period.