Concordia’s budget for fiscal year 2024-25

Concordia is facing extraordinarily challenging times. Since the Board of Governors approved our last budget on May 18, 2023, several major developments have reshaped our operating environment, including:

• The cumulative decline of our student population since 2020-21
• The Government of Quebec’s changes to the tuition fees framework for out-of-province Canadian and international students
• The results of the funding formula review by the Ministère de l’Enseignement supérieur (MES)
• Continuing high rates of inflation

All these changes result in structural and recurrent budget challenges. Meanwhile, our capacity as a large institution to rapidly adjust our activities in response to these headwinds is limited.

Last fall, when it became clear that we would not meet our Board-approved deficit target of $19.4 million, we reforecasted our budget, implemented cuts of 7.8% and submitted a recovery plan to the Board and the MES to return to a balanced budget by 2028-29. As per that plan and with your help, we were able to keep the deficit for fiscal year 2023-2024 at $30.9 million.

Additional sources of financial pressure for 2024-2025

Given that we ended 2023-2024 with a large deficit, we knew the road ahead would be difficult. Now we face further challenges for this fiscal year, which come from the following sources: 

• The reduction in number of students this year, salary increases and inflation will add an additional $20.8 million to our expenses
• The new tuition fees framework is creating an additional negative impact of approximately $15 million

As the primary source of revenue from tuition and associated government grants, the reduction in the number of students is concerning. We are forecasting a drop of nearly 1,200 students for 2024-25, representing a decrease of 3.9 per cent in our student population. This is the first time in Concordia’s history that we have experienced such a large drop in enrolment.

The following table presents the provenance of our student population for 2023-24 and our forecast for the coming year:

The Quebec government released its budget on March 12, followed by its Règles budgétaires framework on April 24. In these financial statements, the MES announced an increase of 1.6 per cent in its total funding for universities. However, when we look closer, the university sector’s total year-over-year funding (before salary adjustments, which will be confirmed later this year) has decreased.

As we feared, the new tuition fees framework for out-of-province undergraduate and non-thesis master’s students and the reregulation of international students in undergraduate and professional graduate programs are adversely affecting Concordia’s finances. Contributions from universities and students to the postsecondary education sector have increased by 54 per cent, whereas the government has decreased its grants by 4.8 per cent:

*Amount that the government claws back from the tuition fees that is then redistributed across the Quebec university network.

Because the Quebec government is redistributing a greater part of the funding pool to the francophone universities, anglophone universities will account for 50 per cent of the claw back and receive 20 per cent in return, whereas francophone universities will benefit from an additional $116 million in funding.

Also, anglophone universities will no longer have access to funds to recruit and integrate international students, which represents an $8.5 million loss for Concordia.

Our proposed plan for 2024-25

Our 2024-25 budget has been prepared in compliance with the requirements of the approved recovery plan.

The increase of expenses is exceeding the changes in revenue in 2024-25. Without further actions to decrease our expenses, we estimate that, the end of the year, our deficit could grow to $78.9 million.

In order to achieve our goal of a 34.5M deficit, we will need to achieve 35.8M in cost reductions this year. We are therefore proposing a two-pronged approach :

1.     Budget adjustments (which mostly include cuts to expenses but also efforts to increase revenue), and

2.     Specific actions to optimize our university’s operations and finances.

Concordia’s 2024-25 financial situation is as follows ($M):

1. Distribution of budget adjustments

To meet our $34.5M deficit, we will unfortunately have to again make difficult decisions and are proposing the following distribution of adjustments: 

2. Optimization initiatives

We are instigating a planning process that aims to align our financial capacity with our institutional priorities. This will require collective input across all areas of the university to come up with ways to transform our operations.  Some examples of specific initiatives already underway are:

• Workforce management: We will maintain the hiring freeze and attrition plan implemented in 2023-24.

• Benefits management: We are evaluating the costs associated with managing and administering our benefits portfolio. The aim is to reduce the cost of administering our benefits plans while ensuring we maintain the portfolio’s long-term viability.
• Course and program delivery: Our faculties and schools are currently reviewing their course and program offerings as well as the number of sections they deliver. Deans are leading this activity, with the participation of department chairs and faculty members. We are also exploring opportunities to increase revenues through the creation of new professional education programs and strategic partnerships with other universities.
• Strategic enrolment management: We are embarking on an exercise to develop a comprehensive five-year Strategic Enrolment Management Plan. The aim is to enhance and streamline both recruitment and retention to make our enrolment more resilient to demographic and geopolitical volatility. SEM planning will also support work in course and program delivery to ensure that our course and program offerings align with our enrolment.
• Campus space: We are examining the use of campus space to repurpose office areas that are underused and reduce the existing space-management pressures on our campuses.
• Technology and digital transformation: We are performing a comprehensive review of our technology and digital portfolio to identify optimization opportunities and efficiencies.

Building capacity and resilience

The current financial context is among the most difficult Concordia has experienced in our first half century. Admittedly, we had hoped to celebrate our milestone anniversary under different circumstances.

While our path is not easy and there is much to do, we are confident that we will achieve our return to a balanced budget by 2028-29.

Each year will present new challenges yet, with the support of our community, we will implement innovative solutions, initiatives and improvements to help us move forward. This transformation will make us stronger and more resilient for the next 50 years of our history.