U of T’s ancillary services are losing money, but the university has ambitious plans to turn a profit in three years’ time. The University Affairs Board met on Tuesday, March 17, to discuss the numbers for ancillary services, which cover residences, food and beverage services, parking, conference services, and Hart House.
With a forecasted net loss of $1.9 million for the 2008-09 budget, the university outlined plans to break even by 2011 and generate a net income of $1.5 million in 2012. Residences project a revenue growth of three to six per cent, with the exception of UTM, Innis College, and New College, according to the UAB report.
Ancillary services were once paid for by the university as part of its operating budget. In 1993, Governing Council approved the motion that these fees were non-academic and passed them on to students.
“It’s a bad idea because education is not supposed to be a commodity,” said UTSU president Sandy Hudson. “By downloading these costs onto students, they are saying that the university, and therefore, the government, no longer has the responsibility to pay for it. And by making a profit, they are saying that there is no expectation that the government should be giving them money.”
The UAB report says the planned 15 per cent revenue growth from 2010 to 2014 will be mainly due to revenue increases from residences and conference operations. Parking is expected to bring in $1.1 million, while Hart House has a projected net loss of $1.5 million.
APUS executive Joeita Gupta criticized the move to make ancillary services profitable. “You find there’s an increase in ancillary fees but a decrease in the amount of student space available for housing, because they took two floors of the [New College] residence and converted that to admin offices. So students pay more for less.” The 20 per cent rate increase at the New College residence bumped U of T’s 2009 revenue by $900,000.
The director of business services at New College, Ron Vander Kraats, said the conversion made residence more affordable. “If we hadn’t rented out that space, then students would have to absorb a higher fee increase for the financials of the residence to be the same. This is because the market value of downtown office space is higher than what we can charge our students for residence space.”
“Often profits of this nature go into general university revenue to benefit all of our students and not just those in residence,” added Vander Kraats, referring to the projected revenue.
Jason Marin, president of the New College Student Association said students should look to the province rather than U of T when it comes to fee increases. Hudson suggested a similar course of action, but said it will require a collaborative effort between students and the administration.
