Concordia University facing $35M deficit, declining enrollment

Concordia University is implementing a salary freeze for its president and executives and will be dipping into its reserve funds in the face of what it calls “a difficult financial situation.”

Concordia also says it will continue a hiring freeze on non-academic staff until the end of the fiscal year as it looks to cut its overall spending by 7.8 per cent.

The university says it is facing a current deficit of approximately $35 million – well above the Board-approved deficit of $19.4 million for the 2023-24 fiscal year.

“As part of that agreement, we introduced a mitigation plan to keep the deficit at this manageable level. Unfortunately, although we have been applying the mitigation measures since the beginning of the fiscal year, the deficit has continued to increase due to several factors, most importantly a sustained decline in enrolment,” reads a letter sent to faculty and staff last week.

That steady decline in enrollment began in 2021 after what the university calls “approximately 10 years of strong growth.”

“While the overall decline has levelled off in 2023-24, the cumulative decrease has a significant impact on our revenues,” the letter reads.

While the Nov. 23 letter does not reference the Quebec’s government plan to double tuition for Canadian students from outside Quebec, Concordia University has previously warned of “devastating financial implications” if the plan goes ahead.

On Oct. 31, Concordia president Graham Carr said the new $17,000 tuition for non-Quebec Canadian students – among the highest rates in the country – will price the school out of the domestic market, potentially gutting out-of-province undergraduate registration by up to 90 per cent.

Carr said the university is staring down an $8-million revenue loss when the hike takes effect for new students in the 2024-2025 academic year. After four years, as more incoming students are subject to the new tuition rate, the annual revenue loss could reach $32 million, he said.

“Due to this drop in revenue, Concordia cannot meet its core operating costs, which consist mostly of salaries and the day-to-day operations that support teaching, research and student life,” the Nov. 23 letter reads.

The university also points to inflation, rising interest rates, employee benefits and salary costs as having a significant impact on its expenses. It estimates the deficit could soar to $65-$75 million if cost-controlling measures are not implemented.

“We have therefore arrived at a step where each sector must review its current expenses and identify how it will reduce its respective budget to achieve the required savings. While the nature of those adjustments will differ depending on the sector, the overall budget reduction is shared equally.”

Concordia says it will develop a comprehensive budget strategy to balance its budget in the next five years.

“The process will allow us to lay the groundwork for the Concordia of the future.”

–With files from The Canadian Press