University of Guelph cutting costs amid tuition freeze and funding caps

Open this photo in gallery:

After three years of operating deficits, the University of Guelph has announced cost-cutting measures, citing the impact of a tuition freeze and government funding caps that are squeezing Ontario’s postsecondary system.

Guelph president Charlotte Yates held a town hall this week in which she outlined a plan to tackle the university’s finances. Guelph is projecting an operating deficit of about $19-million this year, after multimillion-dollar deficits in the two previous years. Although Guelph can draw on its reserves to compensate, that approach is not sustainable, Dr. Yates told The Globe and Mail.

Senior faculty are being offered incentives to retire, and about 16 graduate and undergraduate programs with low enrolment have been told they can’t accept new students. The university is looking for other targeted spending cuts and is creating a new strategic transformation office to manage a reorganization.

Some faculty have said they worry Guelph may be on the same path as Sudbury’s Laurentian University, which in 2021 declared insolvency and shed hundreds of jobs. But the Guelph faculty association, in an analysis of university finances released earlier this year, played down those concerns.

Dr. Yates said Guelph’s situation bears no similarity to the one at Laurentian. Guelph has high student demand, as measured by growing application numbers in recent years, she said.

The difficulties it faces stem primarily from a series of provincial government funding decisions that are putting pressure on universities throughout Ontario.

In 2019, Premier Doug Ford’s Progressive Conservative government mandated a 10-per-cent cut to domestic tuition fees. It has frozen those fees at the same level ever since.

At the time of the tuition cut, Guelph had experienced seven consecutive years of surplus. Without the freeze, the university estimates its revenue from provincially regulated domestic student tuition would have grown to about $189.2-million this year. Instead it’s taking in $151.6-million, about $16.5-million less than it did in 2018-19, while its costs have continued to grow with inflation.

In addition, Ontario’s previous Liberal government imposed “enrolment corridors” for each school, which function as a quasi-cap on domestic enrolment because they limit the number of students eligible for government funding.

“It’s a compounding problem across all levels of government that has contributed to underinvestment in the postsecondary sector by governments of all stripes. And it has put us in the crosshairs,” Dr. Yates said.

She added that she has advocated for changes to the tuition freeze, as well as the enrolment corridors.

Liz Tuomi, a spokesperson for Jill Dunlop, Ontario’s Minister of Colleges and Universities, said the provincial government has not made any decisions about a future tuition fee framework.

In March, the government appointed a blue-ribbon panel to advise on the financial sustainability of the postsecondary sector. The panel’s recommendations, which will include an examination of the tuition freeze, are expected in the fall.

The University of Toronto published its submission to the panel on its website this week. It illustrates many of the concerns throughout the sector.

U of T called for universities to be able to set their own fees, saying the current model is “neither balanced nor sustainable” and requires institutions to rely on international students for funding, because they pay higher tuitions than domestic ones. It estimated the tuition freeze would deprive it of $195-million next year.

Per-student funding from the provincial government, which is well below levels elsewhere in Canada, should be raised to levels in comparable provinces, the submission said, and the rationing of spaces via enrolment corridors ended.

Many universities have boosted international student enrolments to compensate for revenue shortfalls. Guelph has among the lowest rates of international enrolments in the province, and Dr. Yates said it had difficulties with recruitment during the pandemic, in part because of federal visa processing backlogs.

Dr. Yates said the university is shifting its international recruitment strategy and plans to increase international undergraduate enrolment from about 5 per cent of the total to about 12 per cent within five years.

Is a new online university a cure for what ails the humanities?

Although Guelph is not alone in the challenges it faces, addressing its problems publicly has fuelled internal debate at the university.

Joanne O’Meara, a Guelph physics professor, said she was “blindsided” by the announced pause on new students in certain programs, including three physics programs that attracted female students, as well as art history, European studies and environmental biology, among others. She said the decision made little sense from her perspective, because it would save a relative pittance in teaching costs and was done with little consultation.

The Guelph faculty association, in its analysis of university finances, said the university’s financial health is better than it appears, and that strong conclusions shouldn’t be drawn from the extraordinary years of the pandemic.

Philip Loring, a geography professor, said he’s concerned the cost-cutting measures could end up starving low-enrolment programs in areas that are crucial to a university, such as arts and humanities.

“If your philosophy is just bums in seats at a university, then that makes sense. But what is a university education without arts? Without physics?” he said.

Dr. Yates said the university is pausing enrolment in these programs to better align its use of resources with student demand. She said she will continue to advocate for changes from the provincial government, but that in the meantime the university has to find a path to sustainability.

“My job as president is to make sure that we are sustainable this year, next year, in five years and in 20 years,” Dr. Yates said.