The University’s facing scrutiny after its year-end financial statements raised concerns about fiscal management and sparked calls for greater transparency.
The financial statements, reviewed by the Board of Trustees on Sept. 27, were presented in a PowerPoint that highlighted key areas of concern. Following this, the Queen’s Coalition Against Austerity (QCAA) conducted an analysis, raising alarms about the University’s financial practices, some of which they described as “creative ing.”
According to the report presented to the Board, the University has been grappling with significant financial challenges. These include the provincially mandated 2019 tuition fee cut, a subsequent tuition freeze for Ontario students, a decline in international enrollment post-pandemic, and a cap on provincial funding for domestic students.
Just over a month into the 2024-25 academic year, the University’s projecting a $35.7 million operating budget deficit this fiscal year, highlighting the anticipated shortfall between expenditures and revenues. To address this, the University will need to intensify its efforts to return to a balanced budget.
READ MORE: Queen’s projects $35.7 million operating budget deficit
In May 2024, the Board of Trustees approved the 2024-25 operating budget, with a deficit of $35.7 million covered by a drawdown of reserves. According to the Annual Financial Report, the University remains focused on managing its resources responsibly to protect and advance its academic mission and strategic priorities amid significant financial challenges.
The provincially mandated tuition reduction and freeze, and fixed government grant introduced challenges to our ability to generate revenue growth after 2019-20.
As part of the Balanced Budget Plan, the University’s implementing a hiring freeze for full-time positions to increase savings. Additionally, voluntary retirement and exit initiatives are being introduced. For faculty, librarians, and archivists, a Voluntary Retirement Plan (VPR) encourages eligible to retire early, reducing salary costs and fostering academic renewal.
In the Faculty of Arts and Science (FAS), the Voluntary Exit Initiative (VEI) offers eligible staff a lump-sum payment for voluntary departures, with the possibility of extending the program to other departments if needed.
READ MORE: Buyouts begin as ArtSci gives staff incentive to leave
Despite these challenges, Queen’s maintained a significant year-end operating surplus of $20.4 million for the 2023-24 fiscal year, with an overall surplus of $76.2 million, according to their recently released financial statements.
A major contributor to the operating surplus is $89 million in investment income, $70.6 million of which comes from the University’s Pooled Investment Fund (PIF). However, in a move that may frustrate those hoping the funds would prevent spending cuts and job losses, the istration transferred $65.4 million of the investment income to capital reserves. This brings the total transfer from operating to capital funds to over $100 million in the past two years.
“Queen’s cannot rely on PIF investment income (cash not needed for the next three years) to fund annual operational costs due to the volatility of investment returns,” Vice-Principal (Finance and istration) Donna Janiec wrote in the Annual Financial Report.
In the latest financial statement, Queen’s introduced a new category titled “Operating deficit before investment income and one-time STEM grant,” which projects a deficit excluding both investment income and a $10.7 million one-time grant from the provincial government for science, technology, engineering, and math (STEM) projects.
The istration argues the STEM grant was a one-time occurrence and investment income is unreliable because they can’t guarantee they will receive it again. However, critics argue the same logic could apply to one-off expenses, such as a $25 million transfer from the operating budget for renovations to Duncan MacArthur Hall.
Duncan McArthur Hall, situated on West Campus, houses the Faculty of Education. Redevelopment of the building commenced in May 2024 and involves expanding the first floor into the area of the east wing.
“Budget allocations are based on predictable income, and as investment income from the PIF is unpredictable—with losses in two of the last five years—a conservative amount is allocated to the operating budget,” the report says.
Despite this, there are signs that resistance to the University’s austerity measures may be having an effect. The istration has acknowledged limiting the use of PIF investment income to $5.2 million for operational costs is “historical” and has agreed to review the practice. The QCAA hopes this review will result in more funds being directed toward Queen’s academic mission.
“Let’s not forget that there is room to manoeuvre, to make different decisions, and to the University’s academic mission through this challenging period. We must use every opportunity to remind one another—and our leaders—that another path is possible,” the QCAA stated.
As Queen’s enters another fiscal year, the debate over how to balance capital projects with operational needs remains at the forefront of discussions between faculty, staff, and students.
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