Universities in Ontario have been feeling somewhat more
upbeat this year in the wake of provincial government measures to bolster the
sector. After years of essentially starving the sector with a tuition cut and
freeze as well as a continued freeze in operating grant funding, 2026 saw the announcement of
combined measures totalling nearly $6.4 billion (at least according to the
government’s accounting) to make the sector more sustainable. Not least of which was a move to finally
allow universities to once again begin increasing tuition rates on domestic
students by up to 2 percent a year.
While this will likely not make up the revenue drop from the decline in international
students, it is also being accompanied by increases in base funding to the
system.
The government finally moved on the university sector funding
issue because quite frankly the sector was at the end of its rope. However,
even with the new funding which has pulled the sector back from the “abyss”
it remains that in the end it is not so
much a rebuild as a halt to deepening
the financial pit. Even with the funding, universities remain in
austerity mode and with many continuing in deficit mode, they will still be
making cuts. And all this will be in
the face of what is anticipated to be rising demand and a projection that nearly
one million additional
university educated workers will be needed in Ontario between 2026 and
2035. This is not a surprise given that since 2018, Ontario has added nearly
two million people largely through immigration and immigrants being younger on
average than the general population have children who will be seeking education.
On top of this, a massive retirement boom is coming meaning numerous vacancies
will need to be filled.
Through all this flux and financial challenge, some universities
have managed to do better than expected this year financially and while one
always expects University of Toronto to do relatively well and balance its
budget, Lakehead is also expecting to balance
its budget for the 2026/27 fiscal year.
Lakehead appears to be holding its own quite well in attracting targeted
government funding for new initiatives whether they be a STEM Campus in Barrie
or a new veterinary school, on top of the coming increases in both government base
finding as well as higher tuition fees on domestic students. Lakehead indeed was fortunate in not being as
dependent on international undergraduates for its international student
enrolment as some other universities.
This comes on top of a relatively strong long-term financial
performance because of its gradual transformation away from being a university for
northwestern Ontario to a regional multi-campus Ontario university. Indeed, Lakehead with its three campuses of
Thunder Bay, Orillia and Barrie in one university has become the holy trinity
of universities. The Barrie campus will bring
special financial blessings as it is in the center of a compact CMA population of
250,000 meaning that ultimately its enrolment may even eclipse that of the
Thunder Bay campus. This will all build
on a rather successful tradition of prudent long-term financial management and soundness as
documented below. The data for the subsequent charts come from historical Institutional
Statistics Books accumulated for the 2000 to 2011 period (eg. Institutional
Statistics Book 2001/02) as well as annual university
financial statements.
Figure 1 plots revenues, expenditures and deficits annually
from 2000 to 2025. From revenues and
expenditures of just under $80 million annually in 2000, by 2025, Lakehead’s
revenues had grown to $246 million and expenditures to $231 million. In 2025,
Lakehead ran a surplus of $15.4 million which followed 2024 with a surplus of
$7.6 million. Indeed, Lakehead
has usually managed to run surpluses with deficits being incurred in only 6 of the last
26 fiscal years with an accumulated surplus since 2000 of $89.7 million.
The biggest deficit was of course pandemic induced in
2021-22 but surpluses have grown every year since. As a result, long term debt
has gradually been whittled down as Figure 2 illustrates. There was a surge in university long-term
debt during the 2000 to 2006 period as the Orillia expansion was started and
new buildings such as the ATAC constructed on campus. Long-term debt peaked in 2012 at $115 million
and by 2025 had declined to $94 billion.
The major revenue drivers during this period have been the
duo of government operating grants and student tuition revenue as illustrated
in Figure 3. However, government
operating grants were essentially flat between 2012 and 2024 at just over $60
million but then surged from $61 million in 2024 to $69.5 million in 2025. They
have nevertheless declined from a peak of 41 percent of university revenues in
2012 to 28 percent in 2025. Meanwhile, tuition
revenues, reflecting the rise in international students, have grown quite steadily
both as a share of revenues as well as in total. Indeed, in 2025, at $102 million, tuition fees
accounted for 42 percent of Lakehead University total revenues. Other revenues aside from operating grants and
tuition which together account for 70 percent of university revenues include
income from investments, ancillary fees and revenues (e.g., Parking) and restricted
government grants and funds.
Of course, the reason we are all here at Lakehead is because
of the students and no exposition of university finances would be complete
without looking at the trends in enrollment. Figure 4 plots total enrollment at
Lakehead (headcount of both full and part time students) from 2001 to
2025. There was rapid growth from 2001
to 2011 that saw enrolment rise by about 40 percent. Enrollment then levelled off for nearly a
decade but has begun to grow since 2022 and now sits at a headcount of just
over 9,000 spread out as it is across three campuses. It remains that over this period there has
been a decline in the share of Thunder Bay campus undergraduate enrollment
which has been made up by graduate enrollment across all the campuses and
undergraduate enrolment in Orillia in particular.
In the end, the university has managed to grow its enrolment
in a particularly challenging demographic environment given until recently stagnant population
growth in the region. Part of its financial management has
also involved restraining costs. In this
regard, Lakehead has been assisted by two factors. First, the total full time faculty complement
has remained relatively stable since 2010 while enrolment has risen reflecting
more intensive human resource use. In
that year, there were just over 300 full time faculty appointments at Lakehead
and in 2025, there were also just over 300 full time faculty appointments. While the number of full-time faculty has
remained essentially fixed since 2010, total headcount enrollment has grown
nearly 14 percent and as a result the average student headcount to full time
faculty ratio grown from approximately 25 per faculty member to 31.
Second, there was the impact of Ontario’s Bill C-124 which
was brought in in 2019 capping salary increases at 1 percent in the broader
public sector and was in effect until 2024.
Low salary growth rates combined with stable faculty numbers is an
effective cost management tool and the fruit is borne out by the charts
provided here. Lakehead has managed to
grow its revenues faster than costs over a sustained long-term period that has
seen balanced budgets or surpluses in three quarters of the fiscal years since
2000. It has also expanded its infrastructure
to encompass three campuses to recruit more students while at the same time
gradually reducing its long-term debt from a pronounced peak. In a
tough and competitive environment, Lakehead has managed to thrive, and its
financial state is a success story that should be celebrated.
