Financial Overview

Queen’s largest revenue source is student tuition fees.

Domestic fees

Queen’s domestic tuition fees are set according to the Ministry of Colleges and Universities (MCU) Tuition Fee Framework and approved by the Board of Trustees. Ontario student tuition fees were reduced by ten per cent in 2019 and frozen until at least 2026, resulting in an estimated $180 million loss as of Spring 2024.

Tuition fees for out-of-province students follow the same framework but are not subject to the freeze. They are subject to a maximum allowed increase; in 2024 the maximum increase was five per cent.

International tuition fees

International tuition fees are not subject to the Tuition Fee Framework, and the provincial government reduces the base operating grant by $750 per international undergraduate and international master’s FTE student. This allows Queen’s to set its own international student tuition rates.

In 2024, the federal government capped international study permits for two years, aiming to reduce national intake by 35 per cent. They also set provincial quotas, which are then allocated to institutions by their province’s government. The cap on international study permits limits Queen’s ability to increase revenue through international student recruitment.

Queen’s receives annual operating grant revenue from the provincial government, which is determined by factors that include:

Domestic enrolment and the corridor funding model

Enrolment rates are the largest factor in determining provincial government funding. Weighted Grant Units (WGUs) provide varying funding levels for undergraduate and graduate students, with high-cost programs like engineering receiving more per student. WGUs ensure resources are distributed effectively by considering a range of factors that impact service delivery costs and needs.

Performance-based funding

The provincial government is introducing performance-based funding for Ontario universities. Under this model, part of a university’s grant depends on performance measures outlined in its Strategic Mandate Agreement (SMA) with the provincial government. The SMA allows institutions to assign metric weightings that highlight their strengths and unique roles in postsecondary education.

Special purpose funding

The provincial government provides special-purpose grants for specific projects, programs, or initiatives, rather than for general operational costs.

Queen’s receives federal funding primarily through the Research Support Fund (RSF), which helps cover the university’s operating costs associated with Tri-Agency sponsored research. Supporting research imposes significant costs for the institution—for example, each dollar of direct research support typically creates at least 40 cents in indirect costs.

Like many universities, Queen’s manages various financial investments to support strategic priorities and enhance its long-term financial health. The Board of Trustees has overall responsibility for the management of these investment funds.

Queen’s two main funds are the Pooled endowment Fund (PEF) and the Pooled Investment Fund (PIF).]

Pooled Endowment Fund

The PEF consists of donations to the university. The investment of endowment capital generates income, which can only be spent according to the terms of the donations—which are often designated for specific purposes, like scholarships, academic chairs, lectureships, and other student support initiatives.

Pooled Investment Fund

The PIF includes university equity, restricted expendable funds (research), general reserves, plant and building funds, and working capital.

The annual returns from this fund are allocated in two areas: the university’s operating fund and its capital reserve. Each year, $5.2 million in investment returns from the PEF is allocated to the operating budget, a figure agreed upon by the Board of Trustees to ensure sustainability over time.

In the past decade, the return from the PIF has been negative twice (2019-20 and 2021-22), but the same amount continues to be allocated to the operating fund even during low-return years. The remaining projected investment returns are typically directed to the capital reserve to support one-off investments, like maintaining academic and research facilities. High return periods help buffer against years of losses, as investment returns cannot be relied on as a stable source of funding.

Queen’s also maintains a Sinking Fund, aimed at accumulating funds to repay the principal amount on external debt at maturity, as well as a Short-Term Investment Fund, where cash surpluses not needed for operations or capital purposes are invested to earn interest income beyond what would be earned if held in corporate bank accounts.

As of April 30, 2024, the (unaudited) values of Queen’s main investment funds are:

• Sinking fund: $121.5M
• Short-term fund: $290.7M
• Pooled Investment Fund (PIF): $433.7M
• Pooled Endowment Fund (PEF): $1,599M

Queen’s receives a small amount of revenue from other sources, like donations and ancillary operations, which include business units that provide goods and services to the campus community, like residences and parking. These units are required to cover their full operating costs.

The operating fund supports day-to-day operation of the university and represents about 65 per cent of the university’s total revenues. The main sources of operating revenue include student tuition and government grants. The operating fund budget is approved annually by the Board of Trustees.

The ancillaries fund includes operations that provide goods and services, such as residences, food and beverage, and parking services. Ancillary units are responsible for covering their full operating costs, including indirect costs, and may also contribute to general operating expenditures.

Restricted funds include restricted donations and funding received from government or granting agencies that may only be used to fund an intended purpose and cannot be applied to pay for other university expenses. Each restricted contribution is recorded in its own fund and managed according to agreed-upon terms and conditions.

Funding for research is received from several sources, including the federal government, the provincial government, and various not-for-profit organizations.

The capital fund includes activity related to capital infrastructure on campus.

Salaries and benefits are the largest expense, making up over half of the university’s operating costs. Salary increases are influenced by collective agreement negotiations.

Queen’s spends the second-largest portion of its operating budget on goods and services needed for daily operations. These include laboratory, classroom, and office supplies, equipment, software licenses, computers, maintenance materials, food items, and others.

Queen’s reduces financial barriers, enhances access, and recognizes academic and extracurricular achievements through scholarships, fellowships, and bursaries.

Operating several large campuses with classrooms, labs, residences, offices, dining halls, and event spaces, incurs significant utility and insurance expenses. To reduce energy consumption, the university is seeking alternative energy sources, and major infrastructure upgrades and retrofits.

The university regularly engages external contractors for a range of work, including construction and infrastructure projects, legal fees, food services, consultancy, and others.

Revenue attribution

Queen’s allocates tuition and provincial operating grant revenue to faculties based on projected enrolment and program fees. Faculties set enrolment targets, which are approved by the Strategic Enrolment Management Group, the Senate Committee on Academic Development and Procedures (SCADP), and Senate. Midyear, projected figures are replaced with actual enrolment numbers, and faculty budgets are adjusted as needed.

Revenue attribution is also subject to a cross-teaching adjustment, which adjusts budgets based on undergraduate teaching service. The adjustment transfers 45 per cent of the registered faculty/school’s tuition and grant to the teaching faculty/school. Each faculty of school is allocated 100 per cent of the non-credit teaching revenue that it generates.

Expense attribution

Faculties cover their direct costs, such as salaries, and contribute to indirect costs for shared services like student affairs, human resources (HR), and senior leadership offices.

Shared service budgets are based on prior costs for those services, with a two per cent annual increase; increases paused for 2024-25 and 2025-26. Requests for increases beyond two per cent are reviewed by the Provost’s Advisory Committee on Budget (PACB), which advises the provost. The total cost of each shared service is split between faculties using specific cost drivers. For example, the cost driver for HR is based on employee headcount, so if Faculty A has 25 per cent of total employees, it is allocated 25 per cent of the total HR cost.

Currently, 25 cost drivers are used, with efforts underway to determine how the model can be simplified.

The University Fund supports institutional priorities, including teaching and learning, research, infrastructure (such as institutional IT initiatives), and student support. It is comprised of non-attributable revenues, such as ancillary overheads and unrestricted investment income, along with a percentage of faculty revenues (currently 4.5 per cent).

Under Queen’s Budget Model, academic and shared service units can retain in-year surpluses. These carry-forward funds may be used to offset future deficits or support priorities set by the unit’s dean, vice-principal, or manager.

The operating budget cycle starts each April when Queen’s Senate approves enrolment targets and projections.

For example, the 2024-25 operating budget process began in April 2023 and concluded in May 2024, having progressed as follows:

• April 2023: Enrolment targets and projects approved by Senate.

• September 2023: Shared service budget and staffing plans submitted to the provost.

• Fall 2023: Faculty and school budgets gross budgets are set, shared service preliminary budgets established, and shared service costs attributed.

• January 2024: Faculty and school budget and staffing plans submitted to the provost.

• January-February 2024: Faculty and school budgets and University Fund allocations set.

• March-May 2024: Preliminary operating budget submitted to the Board of Trustees, with the final budget approved in May.