Operating Budget 2018-19
Message from Denis Cossette, Chief Financial Officer
Concordia has created significant momentum in becoming Canada’s next-generation university, and that is why we believe it is important to continue investing in our future.
To this end, the 2018-19 operating budget provides ongoing funding to support innovative and transformational projects under Concordia’s nine strategic directions. It also provides financial support to our Faculties as well as investments to enhance the student experience.
One of the key priorities in 2018-19 is to reduce our annual deficit. We believe a balanced budget is a necessity to support Concordia’s long-term financial sustainability. Our goal is to present a balanced budget in 2019-20.
Changes to funding formula
In 2018-19, the Government of Quebec is introducing changes to the funding formula for the Quebec university network.
This will affect the operating grant Concordia receives. For the most part, this grant is based on three distinct components: teaching activities, teaching support services and space-related services.
The good news is that Concordia will keep its relative share of the university sector, which is 10%.
There are also changes in the calculation of weighted full-time equivalents (FTEs).
The FTE is the basic unit of measure by which the Government of Quebec calculates its grants for all Quebec universities. For example, 1 FTE equals a student taking 30 credits or two students taking 15 credits each.
The government then applies a weighting factor, based on the student’s cycle (undergraduate, graduate, postgraduate) and the type of course.
Among the changes being introduced is a reduction in the weight factor by 45% for engineering students in cycle 2.
The government plans to support universities that will be highly affected by this change. Concordia will benefit positively from this.
Declining student enrolment has been identified by the Government of Quebec as an issue that needs to be addressed. While this is not the case for Concordia (we have experienced a growth of 6% in student enrolment over the past two years), we will be participating in discussions about a new financial model that will support those universities experiencing this decline.
Context of the 2018-19 budget
Since 2010-11, the Quebec university network has been strongly impacted by budget compressions. As a result, Concordia has experienced a cumulative loss of more than $90 million to its operating budget.
Despite some reinvestment from the Government of Quebec, Concordia’s funding has not returned to the pre-2010 funding levels.
Over the years, faculty and staff – across all Faculties and administrative sectors -- have worked diligently to keep expenses down while ensuring that we offer a quality education and enhanced student experience.
We’ve also welcomed more students and made significant progress in advancing our nine strategic directions – all within the context of a challenging fiscal environment.
I’d like to extend my sincere appreciation to the members of our community for their ongoing support in making this happen.
We can all take pride in the fact that Concordia has a strong and robust financial discipline that has served us well over time.
The 2018-19 budget continues in this vein. It sets a promising course for long-term financial sustainability, by making the reduction of our deficit a priority, and for our future as a next-generation university by making strategic investments.
Chief Financial Officer
Revenues and Expenses
- Total projected revenues for 2018-19: $496.9 million.
- Total projected expenses for 2018-19: $498.8 million.
- Like all Quebec universities, Concordia relies on grants from the Government of Quebec. This represents more than 64% of the total revenues of the university’s operating budget.
- Salaries and benefits represent 70.9% of our expenses; 69% of our resources are dedicated to teaching and research, compared to 65% in 2008-09.
- From 2008-09 to 2016-17, expenses for land and building decreased from 9% to 7% during a period when our footprint increased by 6%.
- Administrative expenses also decreased by 13% during the same period, from 14.3% in 2008-09 to 12.7% in 2018-19. When we consider a total operating budget of $498.8 million, this means Concordia has reduced its administrative expenses by $8 million per year, compared to 2008-09.
Tuition fee claw back
- Like all Quebec universities, Concordia has to remit a portion of the tuition fees coming from international and out-of-province students.
- Concordia represents about 10% of the total number of students in the Quebec university sector. However, we return a greater percentage to the Government of Quebec.
- Our $62 million annual contribution to the Government of Quebec represents 21% of the total clawback remitted by Quebec universities from international and out-of-province students.
Scholarships and Financial Aid
- Since 2008-09, tuition fees have increased by 28%. During the same period, the scholarships and financial aid supported by Concordia have increased by 65%.
- As result, the university is now investing $4.8 million more per year compared to 2008-09 for scholarships and financial aid.
Investing in our future
- The university will inject $8 million in new investments and funding, including a $3.9 million increase in the base budgets of the Faculties.
- These new investments will also include funding for scholarships and student services, and $1 million to support capital investments.
- Concordia remains committed to supporting its nine strategic directions and enhancing the student experience. To achieve this, we have created a strategic innovation envelope totalling $2 million to support next-generation projects and initiatives.
- We’ve also allocated funding to support The Campaign for Concordia, launched in the fall of 2017.
Reducing our deficit
- From a $9.3 million deficit in 2015-16, the 2018-19 budget is forecasting a deficit of $1.9 million deficit, a reduction of 80% over three years.
- Concordia is committed to presenting a balanced budget in 2019-20.
- Tuition fees for Quebec and international students in regulated programs will increase by 2.7%, as set by the Government of Quebec.
- Students from the rest of Canada, France and Belgium will see an increase in tuition fees of 3.28%, as set by the Government of Quebec.
- Concordia will increase tuition fees for students in international deregulated programs by 3.28%, the same as the increase for the rest of Canada, France and Belgium students, as set by the Government of Quebec. This is consistent with our practice in previous years.
1) What are the key things I need to know about Concordia’s 2018-19 operating budget?
- The 2018-19 operating budget includes strategic investments that build on the momentum we’ve created through our strategic directions initiatives, along with our growth in research funding and student population.
- The good news is that Concordia will inject $8 million in new investments and funding in the 2018-19 fiscal year.
- This includes a $3.9 million increase in the base budgets of the Faculties and new investments totalling $2.1 million for scholarships and student services and $1 million to support capital investments.
- While the 2018-19 budget projects a deficit of $1.9 million, we have reduced our deficit by 80% over the past three years. We are well on our way of achieving our goal of presenting a balanced budget in 2019-20.
2) Have years of budget compressions ended?
- Since 2010-11, Concordia, along with other Quebec universities, has been impacted by budget compressions.
- As a result, Concordia has had a cumulative reduction of more than $90 million to its operating budget since 2010-11.
- For the last two years, we have begun to see reinvestment.
- The government also recently announced changes to the funding formula for the Quebec university network. This revised model simplifies and updates the formula for establishing program revenues.
- Changes include reducing the weight factor for full-time equivalents (FTEs) by 45% for engineering students in cycle 2. The government will be supporting universities that will be highly impacted by this change.
- While Concordia will not be adversely negatively impacted by these changes, the reality is that the university’s funding for its operating budget has not returned to the same levels it enjoyed before the budget compressions in 2010.
3) Is Concordia increasing tuition fees?
- Tuition fees for Quebec and international students in regulated programs are set by the Government of Quebec. The government has announced that these will increase by 2.7% in 2018-19.
- The Government of Quebec also sets the tuition fees for students from the rest of Canada, France and Belgium. In 2018-19, the government will increase these tuition fees by 3.28%.
- Concordia will increase tuition fees for students in international deregulated programs by 3.28%, which is in alignment with the increase set by the Government of Quebec for the rest of Canada, France and Belgium. This is consistent with our practice in previous years.
4) What will Concordia do with these additional revenues?
- Like all Quebec universities, Concordia has to remit a portion of the tuition fees it receives coming from international and out-of-province students from Canada as well as from students from France and Belgium.
- In 2018-19, this means we will be giving the Government of Quebec more than $61 million.
- Concordia will continue to make investments increasing financial aid and scholarships to students.
5) How is Concordia reducing its deficit?
- Since 2010-11, we have implemented several measures to reduce administrative costs over the long term.
- This has included ongoing careful and rigorous financial management to reduce operating costs without compromising our academic mission or losing the momentum we have generated as a result of our strategic directions process.
- We also implemented a Voluntary Departure Program in 2014 and the Voluntary Retirement Program in 2016.
- While deficits made sense in the past to deal with unexpected budget shortfalls, we have been diligent in our goal of returning to a balanced budget, as illustrated from some of the measures outlined above.
- While the 2018-19 budget anticipates a deficit of $1.9 million deficit, this represents a reduction of 80% over the past three years.
- We plan to present a balanced budget in 2019-20.