Budget sustainability

Yesterday, I shared an update at Senate, including our latest progress in finding cost reductions sufficient to balance the next budget, which is expected to be presented to the Board of Governors later this spring.

TRU must find $16 million to balance the budget. To date, budget holders (representing faculties and departments) have found $10.22 million, the result of finding five per cent in savings from each of their base budgets. As well, we have found $1.9 million in savings from reduced international agent commissions, and approximately $2.25 million from reduced UI costs, the closure of the Westgate residence, and the transfer of credit card convenience fees to users. See chart below

We still need to find approximately $1.6 million more to balance our budget, and we will look for cost-reduction opportunities with the least impact on our core mission.

As TRU moves through this budget cycle and into the next ones, we will look closely for new strategies to address projected deficits in the years ahead. A key part of planning will focus on how program and faculty innovation can help TRU meet emerging provincial priorities and develop sustainable enrolment strategies for domestic and international students.

We will continue to look for new revenue opportunities, ways to enhance program delivery and means to leverage existing strengths. Program renewal and development are critical in light of declining international enrolments and shifting provincial priorities. These efforts will require input, creativity, and collaboration across the TRU community.

We encourage everyone to stay informed and engaged with these discussions, including at the department level. Updates will continue to be shared through regular communication channels, and the budget sustainability website remains a valuable resource for information.

Thank you to all those who have provided feedback and ideas to budgetideas@tru.ca as we navigate this period of uncertainty together. By working together, we can address these challenges and ensure that TRU continues to serve our students and communities effectively.

Kukwstsétselp,

Gillian Balfour
Provost and Vice-President Academic

At the Board meeting, we told governors that TRU’s approach to balancing future budgets will be based on a three-pronged approach — we will search for new revenue opportunities, carefully build financial reserves and look for ways to cut costs.

We will need to go through this process from a position of compassion, knowing that what lies ahead will be disruptive to people’s lives. We need to be compassionate and empathetic. TRU has not been in this place before.

We advised the board that while TRU will see a surplus this year, we will face budget deficits starting next year and continuing until at least 2028/29. This year’s surplus will be set aside to help offset future deficits.

However, to achieve a balanced budget for 2025/26, TRU must reduce expenditures by approximately $20.4 million, or 7.4 per cent. Several strategies have been proposed to meet this target, including:

• A one per cent reduction in non-compensation budgets across all faculties, schools and departments, yielding $2.7 million in savings annually.
• Closure of the Westgate student residence, saving $700,000. Westgate was temporarily established in 2021 to address a pressing demand for student housing.
• Passing on transaction fees for credit card transactions to end users, saving TRU $800,000 annually.
• A reduction in agent commissions related to international student recruitment, resulting in $1.5 million in savings.
• Savings of $2 million to $5 million through adjustments to sessional/contract instructor teaching loads caused by fewer course registrations.
• Savings of $7 million to $10 million by looking closely at existing vacancies lists and eliminating 70 to 75 unfilled positions that will not be needed.
• Other targeted non-compensation reductions could yield $6 million to $10 million in savings.

While these changes will have multi-year impacts on our costs, additional reductions of approximately five per cent annually will still be needed in 2026/27 and 2028/29 to keep TRU’s budget balanced.

As we move through this difficult period, which we know will impact our people, we remain committed to our mission and strategic priorities. While reductions will be necessary, we will continue to invest in high-priority projects such as TRU Wildfire and other academic initiatives critical to TRU’s future growth. We will also explore opportunities for new revenue streams and strategically develop new or renewed academic programming to address enrolment challenges.

We encourage all employees to continue contributing ideas and feedback through budgetideas@tru.ca. Your input is invaluable as we identify ways to meet these challenges collaboratively. Regular updates, including FAQs, will be available on our budget sustainability website to ensure you remain informed about developments.

These next few years will require careful planning, creativity and collaboration across TRU. We are confident that working together will help us meet these challenges while ensuring TRU’s long-term sustainability and continued ability to serve our community.

Kukwstsétselp,

Gillian Balfour
Provost and Vice-President Academic

Matt Milovick
Vice-President, Administration and Finance

The group, which comprises deans, AVPs and other senior leaders at TRU, was advised, based on current forecasting, that the university will post a budget surplus of $14 million for the 2024-25 year. Nine million dollars of the surplus will be placed in an operating reserve as we plan for future years and significant budget declines. The remaining $5 million surplus will support strategic investments in key areas and select capital projects.

However, leaders were also told that this is the last year of surplus budgets for some time as TRU, as with other universities, is entering into a period of instability due to sharply declining international enrolment. Based on the federal government’s policy changes and the damage done to Canada’s reputation as an educational destination, we expect international student enrolments will continue to fall until relevant new programs are established at least three years from now.

Significant, immediate action will be required to balance the 2025-26 budget. TRU’s leaders were told that budget reductions of approximately seven to eight per cent will be required to achieve financial balance for the next fiscal year, with more reductions expected for the next three years. This is based on current modelling and could change if external factors change.

The guiding principles and processes for identifying how reductions will be made will be set out in the coming weeks. There are several areas where reductions can be made.

In a recent planning exercise, department leaders were asked to identify ways to save one per cent from their annual non-compensation budgets. Those proposed cost savings will be adopted and implemented shortly. In addition, travel expenses for all areas will also be reduced by 15 per cent.

Another area we are reviewing is our significant number of unfilled vacancies. We will look carefully at these positions and future vacancies and how they are managed to determine which can remain unfilled and which are critical to TRU’s mission. In some cases, we may also need to consider reducing existing positions. TRU is not considering an Early Retirement Incentive Plan for any employee group.

TRU will continue to invest in high-priority strategic projects such as TRU Wildfire and other similar academic initiatives, as these projects are critical to TRU’s future growth. We must continue to focus on strategically important objectives. We will examine every opportunity for new revenue and continue to invest in high-priority projects, including new or renewed academic programming.

These next years will present TRU with unprecedented challenges, similar to what most Canadian universities now face. We are confident, however, that with proactive action, strategic decision-making and pan-institutional collaboration, TRU can emerge from this financial crisis stronger and better able to serve our societally important mission.

Further to last week’s update, we’d again like to thank those who have sent questions and suggestions to our dedicated budgetideas@tru.ca email and continue to encourage others to take up the opportunity. We value your feedback.

We will continue to provide updates as information becomes available. Regular updates, including FAQs, will also be made on our budget sustainability website. We encourage you to visit the page to stay informed.

Kukwstsétselp,

Gillian Balfour
Provost and Vice-President Academic

Matt Milovick
Vice-President, Administration and Finance

As I have said before, changes to the federal government’s immigration policies — which have significantly reduced international student enrolments at Canadian universities, including TRU — will have lasting effects on our budget.

In the weeks ahead, we will need to make decisions to invest in some areas while reducing in others. At this time, budget holders (from faculties, schools and service units) are considering measures to get us to a balanced budget for 2025/26. Apart from a targeted reduction in new hiring, no other decisions have been made. Current planning by budget holders will inform future decisions.

As provost and chief budget officer, and with the support of university leaders, my focus is to make decisions that thoughtfully consider our people, our students and the university’s long-term mission and sustainability.

Updates will be provided through Senate and Board of Governors meetings and TRU Connect as new information becomes available. Regular updates, including FAQs, will also be made on our budget sustainability website. I encourage you to visit the page to stay informed.

Kukwstsétselp,

Gillian Balfour
Provost and Vice-President Academic

TRU is not immune to these effects. Our incoming enrolment numbers this fall have already declined by 35 per cent, and we expect even greater declines beginning in January 2025. In the case of many programs, these declines will not be temporary. Overall numbers will not rebound until or unless new programs are in place that meet new federal requirements, a process that typically takes several years.

These enrolment declines are expected to have significant impact on TRU’s budgets.

TRU will continue to invest in high-priority strategic projects such as TRU Wildfire and other similar academic initiatives, as these projects are critical to TRU’s future growth. We must continue to focus on strategically important objectives including development of new and revitalised programs.

At the same time, TRU needs to reduce costs for 2025-26. Provost Gillian Balfour and Vice-President Finance and Administration Matt Milovick are leading this process and have begun talking to budget managers about measures that will be required, which will include hiring restrictions.

We know that this kind of uncertainty may cause people concern. I want to assure you that our key priority is to support our community, ensuring that decisions are made thoughtfully and with respect and understanding for your work and the students you serve. While difficult choices might lie ahead, please know that these will always be made with care and consideration, keeping the well-being of people as well as the long-term stability of TRU in mind.

In the coming weeks, you will receive more detailed updates about our plans and the steps we will take to ensure financial sustainability. We will post updates and information about the budget process and financial sustainability on this web page as well, to ensure all can stay informed. We will also create opportunities so that you can share your concerns, ask questions, and provide feedback. A dedicated email address – budgetideas@tru.ca – has been created to receive comments and questions.

My hope is that we can find a way through this period in a way that addresses the immediate challenges while strengthening our community for the future. This will require the effort, commitment and involvement of all who work at TRU, and I look forward to working with you to find the best course.

Sincerely,

Brett Fairbairn
President and Vice-Chancellor

With on-campuses classes having started a few weeks ago, the campus is a buzz of activity, yet interest from international students compared to previous years is down sharply. A primary factor, which will be felt for years to come, is the number of federal policy changes that have affected international student interest and access to Canada.

Brett noted that with fewer international students comes fewer dollars — a reality TRU will need to face to avoid future deficits while balancing the need to invest in new, strategic programs to attract new students.

Sincerely,

Brett Fairbairn
President and Vice-Chancellor

TRU’s budget consists of revenues from various sources (e.g., grants, tuition, fees, ancillary operations) and is expected to pay for the university’s annual expenses. The university’s expenses include compensation (faculty and staff salaries and benefits) and non-compensation (all other expenditures required to deliver programs and operate the university including classroom supplies, utilities, security, etc.) Compensation represents the largest expenditure, at about 64 percent of all expenditures (including capital, research and specific purpose funding) based on the last 10 years.

This number changes over time and depends on numerous factors including inflation, collective agreement increases, and how many programs and services TRU has in place. The 2024-25 budget as approved by the Board of Governors in March 2024 estimated expenditures at approximately $305 million.

There are two primary sources of revenue: student fees (tuition) and government grants. Together, these represent about 86 per cent of TRU’s funding sources to cover day-to-day operations (with international revenues accounting for 34 per cent of the 86 per cent). With a significant increase in international enrolment since 2018, student tuition has exceeded government grant revenue as a proportion of total revenues. However, with a sharp decline expected in international student numbers starting in Winter 2025, this proportion will change. Provincial government grant funding for TRU has remained stable.

The number of students attending TRU has a direct link on TRU’s annual budget..

While, domestic student education is partially subsidized by the province, international students pay for the full cost of their education.

Any reduction in enrolment numbers has an impact on tuition and fees not just in the first year it happens, but in the following years; essentially the time it takes a student to complete a program at TRU.

It takes years to plan for and secure money for capital projects. TRU has benefitted from having a robust plan for capital funds as seen through significant renovation projects and new buildings, including the new Indigenous Education Centre and the Low Carbon District Energy System which are completely funded by TRU’s historic surpluses. It is important TRU preserve capital dollars for their intended purposes.

Over the past two years, because of challenges within the post-secondary sector, that provincial government has permitted institutions with surpluses to restrict a portion of their grant prior to year end to deal with deficits in future years.

TRU has initiated strategic hiring restrictions to ensure financial resilience amid a significant decline in international enrolments caused by recent federal policy changes. This action allows us to conserve resources as we evaluate the full impact of enrolment changes on our 2025-26 budget. We will continue to prioritize hiring for essential and high-growth areas that support core academic and operational needs.

TRU has adjusted its capital spending by reducing funding for certain internal projects by $5 million to build reserves and support future financial stability. Key projects that align with TRU’s long-term goals, such as the Indigenous Education Centre and the Low-Carbon District Energy System, are still moving forward with previously secured funding.

TRU has seen reduced interest by way of applications and actual enrolment from international students. As anticipated, enrolment for the winter term (January 2025) is down compared to last year, with this trend expected to continue for the spring, summer and fall terms.

With international tuition representing a sizable portion of our revenue, the decline in international enrolment will impact TRU’s budget for the coming years, requiring the university to implement thoughtful, strategic adjustments to ensure continued financial stability.

TRU is proactively building financial reserves, implementing targeted hiring restrictions and adjusting some capital spending. We are looking at other strategies to submit a proposed 2025-26 balanced budget to TRU’s Board of Governors in the spring.

Given current information, the post-secondary sector can expect further declines in international enrolment for a few more years before proactive responses, such as new programs and enhanced recruitment, can have substantial impact. As a result, we anticipate having to reduce costs again for each of the next couple of years. This is what we are currently planning for, again, based on information known today.

TRU is not contemplating such a program at this time; we are focused on finding cost reductions as outlined above, and through efficiencies. Updates on such efforts will be provided to faculty and staff regularly through employee updates.

TRU is committed to transparent, two-way communication regarding budget decisions. Faculty and staff can share feedback or ideas by emailing budgetideas@tru.ca. This channel allows our community to contribute directly to the budget discussion, helping us make informed, collaborative decisions that support TRU’s vision, mission and values.

To counter the effects of enrolment declines, TRU is preparing to invest strategically in new academic programs that meet student needs and government policy requirements or directives, ensuring TRU remains competitive and attractive to prospective domestic and international students. Such initiatives include TRUly Flexible (which envisions more flexible program delivery options for students) and TRU Wildfire (which will offer wildfire-related programs). For more information on TRUly Flexible, click here. For information on TRU Wildfire, visit tru.ca/wildfire.