Planning is now underway across Queen’s to help the university address its challenging financial situation and a series of new measures will be put in place for the next few years to reduce expenditures across the university, including a reduction in budget allocations to all faculties and shared services portfolios.

As announced in May, the university is facing growing financial pressures and this year the operating budget deficit is projected to be $62.8 million. It’s being covered with existing reserves (carry-forward funds) but ongoing reliance on these funds is not sustainable. To date, the impact of the provincial government’s 10 per cent tuition cut for Ontario students in 2019, and subsequent tuition freeze, has cost the university $179.4 million. Ongoing inflationary costs and a decline in international student enrolment in the aftermath of the pandemic have added to the budgetary strain.

“As we look ahead to the next two budget cycles, it’s important we are being as financially prudent and responsible as possible, while also protecting our core academic mission,” says Donna Janiec, Vice-Principal (Finance and Administration). “Starting now gives us all an opportunity to work together and find effective and innovative solutions to help return the university to a balanced budget position by 2025/26.”

In addition to the hiring freeze implemented last month for full-time operating budget positions not already posted, the new measures include a 1.5 per cent reduction on allocations for all units for 2024/25 and 2025/26.

Faculties are also being directed to reduce their structural deficits to no more than five per cent of their operating budget allocation for 2024-25, followed by a balanced budget for 2025-26. Shared services will need to balance their budgets in each of the next two years.

Funds from these combined measures will be held for subventions and strategic investments, where funds are needed to ensure our academic and research missions are not compromised.

“We know that improving our financial situation is not going to be easy and some difficult decisions will need to be considered,” says Teri Shearer Interim Provost and Vice-Principal (Academic). “There is already promising work underway across campus to make sure we can adjust and adapt at the right time and in the right way. Overall, it’s important to remember that Queen’s remains in a strong position, thanks to our positive enrolment numbers and overall financial health.”

For the upcoming academic year for example, Queen’s received more than 55,000 applications for 5,000 available first-year spots. As well, each year the university is rated by two external credit rating agencies. The recent AA rating issued by Morningstar DBRS and the AA+ rating issued by Standard and Poors each provide an independent and objective assessment of the university’s strong overall financial performance. Exceptional student demand, effective management practices, and the university’s strong academic profile were all cited as strengths contributing to a consistently strong balance sheet.

As a next step, more information on these new measures is being made available across the university, with units now receiving updated Shared Services and Faculty Budget Guidelines to facilitate more detailed planning in their areas.