Can Canadian Universities Survive COVID-19?

As some students entered the campus of universities in Canada, they could not stop themselves from gushing over their luck. Finally, they were back to learning and enjoying the time they are going to spend here.

But, a few minutes down the line, they noticed the post-COVID-19 difference. The students had to provide answers to questions like whether they had symptoms or had travelled abroad. They were also asked if they had contact with a person infected with the virus.

After the questioning, the next step was, seeing Plexiglas barriers and signages asking people to wear their masks wherever they were going. However, not many students till now are aware of the financial loss of their University.

Signs of these losses are easily noticeable. The parking lots are empty, food counters and athletic centres closed. Not to mention that the residences have been full only till half the capacity of the total. Signifying that it would take some time for things to become normal.

Despite this, some jobs are mandatory. The campus needs maintenance from snow and grass mowing, and you cannot ignore regular cleaning jobs. All of this implies exceeding expenses, which many countries are unable to meet.

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Impact of Corona on Canadian Universities

This health crisis has brought life at Universities in Canada to a standstill. All schools have two revenue sources, i.e., public grants and tuition fees.

A large per cent has reduced both of the sources. Students are willing to take a gap year, whereas the Government is controlling its spending.

Any additional income coming from parking fees and Corporate sponsorships are also negligible. Apart from that, the arrival of international students is not happening. Hence another source of earning has been compromised. Students from abroad were a significant proportion of the learning population. Since the majority are skipping the year, it reduces the revenue from them.

The country’s post-secondary schools took quick measures like hiring freeze and deferring maintenance, but they are still struggling. An example of this is the University of British Colombia, which faces a massive loss of $138 million through tuition. This academic year the University is staring at a deficit of $225 million for the first time.

Schools are investing money into some temporary measures, but they are unsure whether doing this would benefit. The advent of the pandemic has led many to wonder if the Universities can survive this time.

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Problems before the pandemic

Before the COVID-19 entered their lives, the authorities were tackling financial sustainability issues. The financial crisis that came in 2008 had taken the school model for a toss. Investments, public funding, and endowments all had suffered because of the same.

When the crisis was over, other issues became paramount. This included matters like pension deficit, increase in salary, maintenance hike, and others. Apart from that, the reality had sunk that there would never be massive enrolments happening in the country.

The authorities believed that the country would rebound from this rut in 2018, but it would not happen. Expenditures continued to increase as thanks to increased salaries paid to teachers. A recent study conducted by Statistics Canada reveals an increase in spending from 2016-17 to 2017-18 academic year.

This hike in salary happened partly because they removed the Government’s rule of mandatory retirement age. Plus, the focus shifted to research because of which fewer staff were present for teaching. Naturally, new teachers had to be hired, which meant an increase in salaries expenditure.

Lastly, the costs increased because specific courses started getting importance. These courses, though, were expensive to sustain in the long run. The money that the Government’s side provided continued to remain the same.

In a study conducted in 2019, Canadian Universities shifted from being publicly funded to public aided. This means that the gap between the expenditures and the grants received was widening.

Since decades post-secondary institutions were receiving decent grants from the Government. However, these grants have reduced to just 47% in the 2017-18 academic year. A majority of these funds were received from supporting operating and capital costs and provinces, while the Government would support funding for research purposes only.

Public funding reached its peak at $22 billion in the year 2010-11. But, this figure dipped to $21 billion n 2016-17. The drop to provincial financing was nearly about 15%, which is a significant figure.

As per sources, the cuts were nothing major. The started with small deductions like freeze in operating grants or a halt in construction programs implemented. Despite this, when all the figures added up, it was a considerable loss to the education industry.

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University Revenue and International Students

A large portion of University revenue comes from tuition and is around 28%. However, considering the low population growth in Canada, it is highly unlikely that the domestic enrollments would be down. This signifies a decline in the revenue earned.

Alongside there have been regulations putting a cap on the domestic tuition. Universities looked at International students to cover up for the rest of the lack of revenue. In 2019-20, Mc Gill’s international student’s count was 30% of the student body. A majority of the students came from countries like China and Saudi Arabia. In fact, these students pay around four to five times the money paid by their Canadian counterparts.

Though international students prove to be a god-sent gift for Universities, it can be a significant loss if something happens to them. The absence of international students has impacted the financials of many schools and colleges.

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Conclusion

Experts have criticized the strategy of using international students for a long time. The only way that these students are not used as cash machines is to increase grants from the Government. Since the Government is also has been encouraging international enrolments, experts them to intervene once again.

The empty campuses are proof that all is not well in the Canadian Universities. If the country wants to combat the virus appropriately, it needs to pay attention to this aspect. Hopefully, with intervention and grants, most colleges would be able to come out of the rut they are in.