From the Provost’s Desk (February 2025)
Understanding the University’s budget
I hope everyone had an enjoyable reading week and that you are feeling refreshed and ready for the last push to the end of term. February is when the budget for our next fiscal year begins to go through governance, so I thought it might be a good time to talk about how U of T’s annual financial plan – and the academic priorities that it reflects – is developed and approved.
There have been many recent headlines about budget cuts and deficits at Ontario colleges and universities. U of T continues to be in a strong financial position, with a balanced budget, thanks to our continued excellence, which attracts outstanding students, faculty members, librarians, and staff; our budget model; and careful fiscal management. There is no doubt, however, that we are in a new environment compared to the past decade. Higher costs coupled with the slowing growth of revenues from government and from student tuition mean that we need to plan carefully and make the most of the resources we have. In challenging times like these, your involvement as a faculty member is extremely important.
Our budget process begins at the departmental and unit level. In our activity-based budget model, each campus or Faculty builds their budget from revenue generated from its programs as well as a share of institution-wide revenues. Using a detailed formula, each division also contributes to institutional expenses, such as centrally managed student aid programs and shared services like libraries and information technology. One of the strengths of this model is that it allows for a great deal of autonomy at the divisional level, ensuring that departmental and unit priorities are understood in terms of both the revenue and expenses of the division.
Another important feature of our budget is U of T’s University Fund (UF). The UF supports initiatives that align with the institution’s overall values and priorities as well as division-specific priorities. As an example, this year I have proposed a significant commitment from the UF to support the graduate student funding initiative that I wrote about last November.
You may wonder how individual faculty members can play a role in the budget process. The deans of our academic divisions and the principals of UTSC and UTM rely on chairs and department heads to bring forward ideas for new courses, programs, supports, and savings – and many of these ideas come from you: faculty who see a need for growth or change in their home departments and divisions. The deans and principals then work with vice-deans, associate deans and others to make decisions about their local needs, based on revenue and expense budgets. These discussions are for the most part highly collegial. They focus on determining the academic priorities that would support short- and long-term goals, fill gaps, and create new opportunities. Deans and principals also regularly consider questions about ways to be more efficient and stretch our resources further.
Once settled, the divisional budget plans then go “up the chain” and are brought into the broader University-wide budget. This is where we take into account economic factors, risk assessments, collective agreements, and provincial and University policies, particularly if there are competing ideas and/or limited capacity in the University Fund to support everything that is brought forward.
I encourage you to be active in your own departments and divisions. If you have proposals or suggestions, bring them forward: discuss them with your colleagues and chairs, or at department meetings. As faculty members, you have an important perspective on what is needed in our curricula, classrooms, and research programs, and your thoughts are crucial to shaping the services, experiences, and programs that U of T provides to our students and beyond. As I mentioned earlier, postsecondary institutions in Ontario are facing many challenges to their financial well-being due to the effects of the 10% tuition cut in 2019 and subsequent six years of tuition freezes, stagnant government funding, inflation and rising costs, and now caps on international student enrolment. Though we are in a comparably better condition than many of our peers, this complex fiscal environment will require us to make difficult choices. For instance, we will need to be more efficient, locate areas in which we can share resources, or implement more streamlined processes rather than cutting back on academic programs or student support. Your ideas, input, and robust discussion are vital as we look for creative ways to meet our future goals in this tough financial climate.