Losses to U of T’s stock holdings from the recent market collapse could affect student scholarships and bursaries, and cut into department budgets if the downturn continues. The Globe & Mail reports that U of T lost nearly nine per cent in the third quarter on investment and endowment funds, but the administration is optimistic that better times are ahead.

U of T’s $5.5 billion in assets are managed by an independent subsidiary, the University of Toronto Asset Management Corporation. These assets include $2.8 billion in pension and $2 billion in endowment funds. According to VP business affairs Cathy Riggall, UTAM’s conservative policies helped avoid further losses seen by many other Canadian universities. The University of Victoria’s endowment also saw a nine per cent drop, with Waterloo already enacting a six-month hiring freeze.

A statement issued by Riggall and interim vice president and provost Cheryl Misak in response to the economic downturn says, “We have defined a risk tolerance and a target return that are appropriate over the long term. Our strategy also assumes that there will be some years of losses.”

Riggall said that student aid is not yet on the chopping block. “We’re not interested in cutting back on student aid unless we absolutely have no choice.” Riggall also emphasized that U of T has come through previous market downswings with endowments intact. In 2003, U of T lost more than $55 million on its investments.

She said that the economic conditions would not deter donors. “Over the past 80 years, there’s never been a year when donations have actually declined. They have slowed down,” she said, citing a lull in donations throughout North American in 1987 as an example. That was the year of the ‘Black Monday’ on which stock markets around the world crashed.

Thomas Felix, president of student group Investing in Integrity—which has been calling for reforms to the university’s investment policies—is cautiously optimistic about the current situation. “I think that by and large […] the market has shown that it’s slowly recovering.” Felix emphasized the importance of protecting student aid from the ravages of the market, but also thinks that UTAM’s actions are mostly in the clear. “If anything, what we’re facing is going to be across the board,” he said. “I don’t think we can pin this on U of T itself.”

UTAM has come under fire from I in I for its investments with controversial corporations such as oil giant Exxon Mobile and military contractor Lockheed Martin, amounting to $9.5 and $1.2 million respectively.