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Message from the president: 'I thank you again for all your efforts on behalf of Concordia'

Graham Carr provides an overview of the 2020-21 operating budget.
May 21, 2020
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By Graham Carr

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I want to provide you with an overview of Concordia’s financial situation in the context of the COVID-19 emergency and to highlight the considerations shaping our decisions about the future. You will appreciate that universities across North America are facing a major test in terms of how we adapt our budgets to these unprecedented circumstances.

Special Authorization of Expenditure

Last night, the university’s Board of Governors approved a six-month Authorization of Expenditure that our leadership team had proposed to cover our anticipated needs for the period from May 1 to October 31, 2020. Normally, the May meeting of the Board approves the university’s budget for the following year, but that is not possible given the unprecedented financial uncertainties we face.

The Authorization of Expenditure approved by our Board has two parts: $300 million to cover basic operating costs — salaries and other expenses — and a $25 million contingency to help cover unanticipated costs related to COVID-19, and to position the university for recovery.

There is no escaping the pandemic’s consequences for our financial position. To date, we have allocated $12 million in one-time expenditures (net of savings realized since the beginning of the pandemic) — additional student support, increased IT capability for remote teaching and work from home, enhanced health and safety measures, and an internal funding envelope to help researchers regain their momentum — and to cover lost revenues from cancelled activities.

This $12 million figure does not include the significant costs associated with suspending research activities — costs both in dollars and lost productivity for researchers, research staff, graduate students and postdoctoral fellows. Read more about the Authorization of Expenditure.

Like all Quebec universities, Concordia has provided the Government of Quebec a summary of direct COVID-19 costs incurred and a request for relief. We await a response.

Future budgeting

In developing budget scenarios, we have more questions than answers regarding our anticipated operating revenue for 2020-21. In 2019-20, our operating revenue was $536 million and derived from three main sources: government grants (51.3%); student tuition (33.2%); and income from ancillary activities such as hosting external events, commercial leases and non-student summer rental of residence space (15.5%).

Ironically, the government’s budget of March 10, 2020, included a promising reinvestment in the university sector — mere days before the pandemic forced them to abandon it. With help from BCI, Quebec universities continue to advocate with government, but it is still too early to know how much funding we will receive, or when.

Similarly, although our summer registrations are strong and our fall numbers currently remain solid, given the volatility the world is facing, it is unclear what decisions students will finally take come September. Like other Quebec and many Canadian and U.S. universities, we have announced that our fall term will be taught almost entirely online. We must therefore proactively reach out to students to convince them that attending or returning to Concordia this fall is their best choice for higher education.

One thing we do know is that we will generate less revenue from ancillary activities. Campus access remains strictly limited to essential activities for the foreseeable future, and will require physical distancing after that. Both scenarios severely limit this revenue category.

What this means for Concordians

With so much still unknown, many of you will understandably be concerned about the implications for faculty, staff and students.

First of all, I can say that during this interim budget period we have no plans to touch full-time positions and that scheduled salary increases in collective agreements remain unchanged. Members of the executive team have agreed to donate any salary increases they were due to receive toward student support.

Other non-salary expenses will be temporarily frozen or undergo an enhanced review process as we await definitive information about our revenues.

As during past budget-constrained periods, we will continue to prioritize our academic and research mission, as well as student support, including graduate funding and undergraduate awards. Our commitments to innovation and to partnerships are vital as we redesign teaching to support online learning and explore new ways during the recovery to carry out our role as a responsible Montreal anchor institution.

Concordia’s solid financial track record

I wish I could provide you a rosier assessment of our budget situation and financial future, but for now that simply isn’t possible given the current situation and the limits of what we know and can control.

What I can say is that before the health emergency hit, Concordia was on track to record a balanced budget for 2019-20 after year-over-year Government of Quebec budget reductions to the higher education sector had forced us to run a deficit for years. Our enrolment growth, responsible fiscal management and consistent support from our Board made this important budgeting achievement possible.

While Concordia accounts for approximately 11 per cent of Quebec’s higher education budget, our structural, or accumulated, deficit is less than 4 per cent of the sector total, and our credit rating has remained strong despite the crisis’s significant impact. Our relatively strong financial position before the pandemic hit will be important to our ability to exit from this crisis.

Future updates

We will provide updates as our budget evolves with the circumstances. Later in the summer we will host a series of budget conversations for the community to share our understanding and answer questions.

COVID-19 is the greatest challenge our society has faced in decades and it is certainly disrupting the world of higher education. I thank you again for all your efforts on behalf of Concordia. Please rest assured that my team and I are very focused on budget stewardship as we work to manage the immense financial impact we are experiencing.


Graham Carr
President and Vice-Chancellor
Concordia University
 



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