Provost: Tuition cuts to pack a budget punch

Lower base spending will have to take place at Western – both institutionally and at the unit level – as the impact of tuition rollbacks ripples through campus budget planning, Andrew Hrymak, Provost and Vice-President Academic, told university Senate Friday.

“We must have balanced budgets,” he said. “We will not carry deficits and figure out how to make it up later.”

Last month, the Ontario government mandated a 10 per cent tuition rollback next school year (holding steady at that amount the following year), new opt-out provisions for student ancillary fees and changes to the student loans/grants program through OSAP.

The tuition change’s impact on Western change is expected to be $35 million in 2019-20 and another $43.3 million the following year. That represents roughly 10 per cent of the university’s operating budget.

Earlier, the university had forecast that tuition rates might increase by 3 per cent to reflect the rate of inflation. Not only will Western not see that projected tuition increase, it must plan to absorb the tuition cut – all while continuing to focus on its strategic priorities.

Plans are under way to reduce base budget spending by 2.5 per cent in each of the next two years. Some reserves will be drawn upon to help manage the transition. A $10-million innovation fund is expected to be created, also from reserve money, to help with one-time restructuring costs.

“We must achieve structurally stable and balanced budgets both at university and unit levels,” Hrymak said.

There will also be increased emphasis on generating more revenue, including through international enrolments, professional master’s degree programs and online programs.

There are still many uncertainties, he said, including the long-term impact of tuition levels, the ripple effect of OSAP changes on students and budgets and the specifics of how opt-outs to ancillary fees might affect a variety of services. Nor does the university know what government grants will look like in 2019-20, he said.

“We still don’t have clarity on the government grant situation. It’s an active area of both speculation and discussion but all will be told as the government gets close to its budget declaration.”

Hrymak added other postsecondary institutions are facing similar pressures to plan well and balance budgets

“The next two years will be challenging (for Western), as it will be for all universities. We’re all in the same boat.”