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Opinion: Non-essential fee opt-out would spell disaster for student societies

Student fees constitute substantial portion of most student groups’ operating budgets
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Alongside proposed changes to the Ontario Student Assistance Program and tuition fees, the Ford government has announced the Student Choice Initiative (SCI), which would allow students to opt out of fees outside of “essential campus health and safety initiatives.” With these changes, student societies across U of T could face significant declines in revenue that would hinder their ability to continue their basic operations.

While the kinds of services to be designated non-essential will be determined by universities, we can still speculate as to which services could face significant decreases in revenue, should students opt out of paying their fees.

University-operated services are almost certain to be marked essential. Kinesiology & Physical Education is responsible for the gyms and playing fields on campus, as well as a variety of sport programs. Hart House operates its titular facility, from which a number of student organizations operate. UTM and UTSC students pay dramatically reduced fees for these two programs, but also pay for athletic fees on their campuses. Student Services provides Accessibility Services, Health Services, Career Services, and a wide variety of other similar services.

Last year, the aforementioned services levied about $840, just over half of an average Arts & Science student’s levy. It’s hard to imagine the university designating any of these services as non-essential, as they are critical for maintaining campus facilities and providing basic services to students. Furthermore, and on a more cynical note, the university will be experiencing a revenue shortfall with the proposed 10 per cent tuition cuts for certain domestic students, so why would it give students the opportunity to opt out of additional sources of revenue?

As the largest student-run political bodies on campus, student unions seem likely to fall under the category of “organizations [students may] not support” targeted by the SCI. The University of Toronto Students’ Union (UTSU) and other campus unions make up the bulk of the remaining fees for Arts & Science students. Through these unions, students pay about $330 for health and dental benefits, out of which they can already opt out.

Assuming that these are classified as non-essential, the UTSU and the University of Toronto Mississauga Students’ Union’s fees currently represent 94 per cent of a UTM student’s non-essential fees, while the Scarborough Campus Students’ Union fees represent 91 per cent of a UTSC student’s non-essential fees. The percentage that the UTSU’s levy comprises of a UTSG student’s non-essential fees varies according to their college, and ranges between 17 to 63 per cent.

Fees for college student societies — which include college-specific student unions — vary dramatically, with Trinity College and Victoria College collecting yearly fees over $400 per student while other colleges average about $70. Colleges’ unique student societies would also likely be categorized as non-essential by the provincial government.

So what does a large-scale opt-out look like? Since the SCI has no real precedent, it’s hard to estimate how many students would actually choose to opt out of fees, or which organizations they would choose to continue financially supporting. While students can already refund levies to some organizations, the majority do not opt out — whether they are unaware of the option, or feel that it is too much of a hassle to do so.

With the SCI, there is certainly some incentive to opt out — the average Arts & Science student at UTSG could save $450 should they opt out of all fees that might presumably be deemed non-essential, out of $1,500 in total incidental fees. If most students opt out, then student unions and societies would be forced to come up with new revenue sources and slash services.

Let’s use the UTSU as an example in a worst-case scenario and make some predictions using its 2017–2018 actuals about a revised budget. In 2017–2018, student fees — including optional Health and Dental fees — represented $17.9 million, or around 95.3 per cent, of the UTSU’s overall revenue.

What kind of measures would need to be taken if it all disappeared? In 2017–2018, the union had a net income of around $409,000, but had its levy been opt-out, it could have had a net loss of $1.4 million instead. What’s more, if UTM students vote for the UTMSU to separate from the UTSU, an additional source of revenue would be lost.

While it is unlikely that all students currently paying the UTSU’s levy would actually opt out of paying were the option available, one would expect the UTSU — and other student societies — to take preemptive action to guard against potentially significant decreases to revenue if their services are deemed non-essential by U of T.

The UTSU could stop funding clubs entirely, which, in 2017–2018, would have saved it approximately $241,000. Removing all financial assistance programs saves another $101,000. Payroll cuts, decreases in advocacy and government work, and debt could potentially bridge the remainder, assuming the UTSU can maintain its current revenue sources. Even with all these drastic — and improbable — measures, the union would still struggle to break even on potential losses.

All of this is not to mention the capital costs involved in the Student Commons project. Continuous delays mean the union have been unable to charge an operating levy, which would have generated approximately $250,000 in revenue in 2018–2019. Based on these projections, had the Student Commons opened last September, the UTSU estimates that it would have yielded a net income of around -$47,000. Without student fees, this would have been around -$778,000. Although this is a worst case scenario, students opting out of the Student Commons make it increasingly likely that the union could have to default on the project, meaning that the U of T administration would seize control of the building.

The UTSU, with its operating surplus last academic year and alternative sources of revenue, is already in a far better position than most smaller student societies, but even then, an opt-out option would lead to significant financial struggle. Without incidental fees, most student societies will have difficulty carrying out their basic functions, and it is not difficult to envision many of them ceasing to operate altogether.

U of T can already feel lonely and isolating — if the student societies that bring us together fall apart thanks to the SCI, we will all feel even less connected.