Queen’s University is reporting that it’s projected operating budget deficit from the past academic year has declined more than $12 million from the deficit projected in March.
The university says projections now point towards an operating budget deficit of $28.2 million, attributing the change in projection largely to a one time $10.7 million grant from the province meant to support STEM education.
When Queen’s first announced the deficit a year ago and made it known that cuts were on the horizon, the school’s projected deficit was $62.8 million, and the university says cost saving measures implemented to this point have mitigated that.
Since the deficit was announced however, Queen’s Coalition Against Austerity (QCAA) has maintained that the university has a tendency to overestimate deficits, and that has likely come into play with the decline as stated.
Elaine Power, from QCAA and the Queen’s Schools of Kinesiology and Health Studies, says while there may be savings from the measures that have been in place, staff have not been kept in the loop on what cuts have been made and how they’ve impacted the deficit projection.
“To my knowledge, we have never seen any actual numbers for what those cost savings have been or how many people have already been laid off,” Power said.
“And what the savings have been as a result.”
QCAA argues that not only is the budget less than anticipated, but there is actually an operating surplus.
In a blog post in the Queen’s Gazette, the university shares that the income from the Pooled Investment Fund (PIF) was a staggering $64.6 million more than the $5.2 million projected, but reiterated that due to the unpredictability of markets, that figure can’t be relied upon.
“PIF returns are volatile and should not be relied on to support ongoing operating budget expenditures beyond the operating budget allocation,” Queen’s report to the Board of Trustees reads.
“The PIF has experienced losses in two of the last four fiscal years.”
In their response to Queen’s budget update, QCAA says the university emphasizes those PIF losses, but fails to acknowledge that losses have been minor while gains, like those made this past year, have been immense.
“The amount of investment income the university plans to use from the Pooled Investment Fund (PIF) has remained the same since 2016-17. This is despite the fact that the fund has more than doubled in value over this time,” QCAA wrote.
“While administrators highlight these losses, they do not mention the fact that these recent losses have been quite small while investment returns have often been significantly larger.”
For the 2024-25 school year, Queen’s is planning for an additional $10.3 million from investment income as part of their budget and will apply some of those funds to the deficit, but the majority will still be put towards things like capital investments.
In the blog post from Queen’s, Vice-Principal of Finance and Administration Donna Janiec tried to equate the millions of dollars of spending decisions to personal finance terms.
“If you were to compare it to personal spending, you could say that we’re spending more on expenses like housing, food, and transit than our paycheque brings in each month,” said Janiec.
“This might tempt you to spend investment income earned by your RRSP, but that’s a short-term solution that can’t be sustained. You will have to reduce what you are spending to live within your means, so you don’t end up in an even worse position in the longer term.”
Power said that explanation from the university felt patronizing, and frankly is a little misleading.
An RRSP is meant to save for retirement, but Power and QCAA say there’s obviously no plans for Queen’s to retire, so what exactly are those savings for?
“That comparison just feels so last century and it does feel patronizing, misleading, and inaccurate, and it makes no sense,” Power said.
“If we’re really going to push that metaphor, that analogy, it’s like you’re kicking people out of the house because you want to put in a hot tub or something.”
In the report, Queen’s also projected an operating budget deficit of $35.7 million for the upcoming 2024-25 school year, but QCAA says like this past year, they expect that will be an overestimate.
While both sides agree that underfunding from the provincial government is the driving force behind the issues at hand, faculty say the surplus this year demonstrates that the cuts don’t need to happen in such a dramatic and hasty fashion.
Power says that staff shouldn’t bear the entire weight of the cuts, and that things just feel like they’re being rushed and not properly communicated.
“it just seems to me that there are other places that could be cut rather than on the ground,” Power said.
“Especially given the budget surplus, couldn’t we do it over a longer timeline and and actually have a plan that we have some confidence in?
