A while back, U of T decided to take a gamble. With stagnant government funding increasingly unable to finance the university’s dreams of international greatness, it decided to pursue those goals anyway.

But such dreams are expensive, and with no extra government money on the horizon, U of T chose to take some risks in order to fund them.

One such move was to take on riskier investments in the hopes of getting better returns. As a result, their investments tanked, losing a few per cent of their value, while the markets rose overall.

The second risk they took was to bank on future revenue increases to fund today’s high-priced projects. They put off several hundred million dollars worth of maintenance. Without enough money to finance construction projects, they went ahead with them anyway, borrowing $200 million dollars to do so. But expenses deferred and money borrowed can’t be put off forever. That money eventually has to be paid. The university banked on getting more revenue in the future to make up for it.

One might have thought the Liberal win in the provincial elections would provide the answer to this funding problem. It seems that’s not the case.

The Liberals promised to freeze tuition for two years. They seem intent on following through with that. But U of T had banked on raising tuition at least a few per cent in order to shore up its revenues. So either the Liberals have to cancel the tuition freeze, or pony up an extra $160 million per year for U of T alone. And it looks like the province won’t have the money to do so.

Even if the Liberals find a bit of extra money for the university, U of T is going to be in the red for at least a couple more years. That’s even without taking into account the deferred maintenance.

So there’s going to be a funding gap, and the question is: who’s going to pay? Where’s the extra money going to come from?

Recent history suggests students should be concerned. As per-capita provincial funding declined over the past five years, U of T made up for it by charging higher tuition fees and gambling on the stock market. But because of its recent investment problems, U of T has now adopted a new policy that restricts its asset managers to more secure, lower-yield investments. That leaves tuition increases or budget cuts as the only way to fill the gap.

As well, in U of T’s drive for international greatness, the quality of undergraduate education seems to be an afterthought. University officials keep careful track of the number of research prizes awarded to U of T profs and of graduate student satisfaction. But until now, they haven’t even bothered to track undergraduate satisfaction.

If push comes to shove-and it looks like it will-it seems unlikely that U of T will scale back its research goals. And that leaves squeezing undergraduates, either through increased tuition or reduced service, as a likely way out.

The next few months will be decisive. As students, we should be on our guard to make sure we don’t become a speed bump on the road to international competitiveness.