For Professor Ronald Venter, U of T is a unique place given the size of its campuses. “You could be here for five years and you still wouldn’t have seen this whole campus. There is always something new around this place that you ain’t touched yet.
Venter paints a rosy picture with brand new buildings popping up like daisies. But it’s not that simple.
In a Planning and Budget Committee meeting that took place on Feb. 3, Professor Vivek Goel, recently appointed as interim provost, reported that “On the capital front, the University had reached its defined borrowing capacity and would need to think carefully about the implications of each new project that came forward.”
The new projects that Goel referred to include buildings that have been or will soon be built across all three university campuses such as the Bahen Centre, the new construction at Sidney Smith, and Woodsworth residence.
Professor Venter is the Vice Provost of Space and Facilities Planning, which means he’s the person who oversees all of the building and space constructions at the university. The Planning and Budget Committee, one of the many committees of the Governing Council, is part of the Academic Board, which is responsible for admissions, curriculum, and budget plans, to name a few. Among these responsibilities of the Academic Board, capital plans are what concerns Venter.
Currently, there are 38 capital projects that have been completed or are starting construction. These fall within the time frame of 1998 to 2006 for an average of five constructions per year. Venter explains there are several reasons why U of T has undertaken such an ambitious agenda. “We’ve gone through a double cohort and the Mississauga and Scarborough campuses will grow to about 10,000 students each. That’s about 40 per cent increase for each campus and about 20 per cent increase at St. George.”
The second reason is that the Ontario Council of University (COU), sets out guidelines of how much space a university should have. “The COU sets out definitions of how big a professor’s office should be, and 13 square meters is a typical office size; graduate students need space, and if you have undergraduates, you need labs and classrooms. Think of the COU as the guideline and we ask how do we meet that guideline at St. George, Mississauga and Scarborough.”
While there looks to be a lot of land-especially at Mississauga and Scarborough, Venter says much of it can’t be used. “There are green belts you can’t build on. Scarborough’s got ravines, and you can’t build near them by law. So to answer the question ‘do we need space?’ Yes. “
Of course, new buildings come with price tags. The Woodsworth residence costs $32 million and the Bahen Centre costs $110 million. U of T gets funding to initiate these projects from donations, government aid programs such as Superbuild and the Canadian Foundation of Innovation (CFI) and last but not least, mortgages. “Think of the Woodsworth residence, all the revenues from the 380 student’s residence fees will go to pay down the mortgage and help to carry the building’s cost. But to start off, we’ve got to go out, borrow the money and set up a mortgage fund,” notes Venter. “Take the Earth Sciences building, built in the late 1980s, costs about $44 million and we had a mortgage. We are still paying off that mortgage because it a 20 year mortgage,” he adds.
Mortgages for buildings that were built from years before are what Venter calls “old debt” and total about $150 million. With the current capital plan, the approximate cost is around $810 million. “If you add the two together, it comes to about $960 million. Now is this all debt? No, it’s not all debt because we’ve managed to get a lot of money from the government to build a lot things.”
By subtracting government subsidies, that debt still stands at $620 million.
Last June, the Vice President of the Business Board at U of T forecasted conservatively that U of T should try to maintain the debt below the $620 million mark. Seven months later in last month’s meeting, Professor Goel stated U of T has now reached that mark.
But Venter stresses that it is not a fixed mark. He says if there’s a need for a new $18 million project, which will push the debt number to 638, U of T should be flexible. “It’s not a black and white line. Yes, we have reached a barrier [of 620] but it’s not solid. If there’s a need for [a new project], then let’s be sensible because that’s the way to look at things.”
But this rising debt could affect U of T’d credit ratings. “It’s an edge we don’t like to gamble,” cautions Venter.
U of T has three credit ratings done by three independent credit agencies, Moody’s Investor’s Service, Standard and Poor’s and Dominion Bond Rating Service, which look at U of T’s assets and debts. According to figures provided by Sheila Brown, U of T’s Acting Chief Financial Officer, U of T’s total assets are $2.4452 billion, its total liabilities are $1.181 billion of which $216.7 million represents long-term debt. This gives a capital (assets minus liabilities) of $1.2642 billion for the year of 2003.
Venter adds, “U of T’s ratings are good. People shouldn’t be so constrained and so nervous. Which company really always has enough money to do anything they want? We can’t freeze, we are the University of Toronto. But we’re not rich and the debt is serious. We’d rather not have this debt and I’m being very honest with you. I wish we never had this debt.”
