Canadian universities generated “record-high” surplus revenues of $7.3 billion during the 2020–2021 fiscal year, as Statistics Canada revealed in an August 9 report. The report, which looked into 148 Canadian universities’ finances, largely attributed universities’ increased earnings to “all-time high” investment incomes.
According to its financial report, U of T earned a net income of $726 million during the 2020–2021 fiscal year, despite increased expenditures to address public health measures and the shift to online learning, as well as decreased sales of ancillary services.
Considering the Statistic Canada report’s findings and the student experience of online learning, The Varsity broke down U of T’s finances during the 2020–2021 fiscal year.
Investment income and tuition fees
The Statistics Canada report highlighted an overall increase in income for Canadian universities. In the 2020–2021 fiscal year, universities saw a 12.8 per cent increase in income, for a total of $46.3 billion. Additionally, according to the report, the increase in income was accompanied by a 3.8 per cent decrease in expenditures, for a total of $39 billion.
The report credited the substantial rise in surplus revenues made by Canadian universities to increased investment income from real estate and the stock market.
In 2020–2021, these incomes amounted to $5.4 billion, compared to just $44.3 million in 2019–2020 when adjusted for inflation. The annual average of returns on investments over the previous five years was $1.4 billion.
According to Statistics Canada’s report, these large returns on investment coincided with the stock market’s strong performance during the 2020–2021 fiscal year.
However, the report noted that the largest sources of income for Canadian universities remained provincial funding and tuition fees at $15.1 billion and $13.3 billion, respectively.
In 2020–2021, U of T saw its net income increase to $726 million, a rise of 64.6 per cent from $441 million in 2019–2020.
According to U of T’s 2021 financial report, the university’s investment income more than doubled during the first pandemic year, from $178 million in 2019–2020 to $384 million. That investment income makes up almost 10 per cent of U of T’s total revenue.
In an email to The Varsity, a U of T spokesperson wrote that the university allocated this additional investment income to fund student residences, lab and classroom spaces, and faculty hiring, among others.
Aside from higher investment income, Statistics Canada also attributed a substantial proportion of universities’ revenue growth to increased tuition.
In 2020–2021, U of T saw an increase in tuition revenue of 10 per cent to $1.96 billion, a rise from $1.81 billion in 2019–2020. In total, student fees made up around 50 per cent of the university’s revenue. In particular, international tuition fees made up around 40 per cent of total revenue in 2020–2021.
Additional expenses caused by the COVID-19 pandemic
During 2020–2021, U of T’s expenses rose by 2.8 per cent, from $3.19 billion in 2019–2020 to $3.27 billion. Some of these expenses can be attributed to the university’s increased spending to implement public health measures and accommodate the shift to online learning.
The U of T spokesperson wrote that — to follow public health guidelines — the university established a quarantine program for students; developed UCheck; hired additional health and safety staff; and purchased air filtration systems, additional cleaning and maintenance services, sanitizers, and masks. The university spent $17 million on these measures.
Additionally, the U of T spokesperson wrote that the university moved almost 8,000 courses online in the first few months of the pandemic, for which the university had to hire experts and invest in new services and equipment. The spokesperson did not indicate the exact amount that the university had spent on these additional measures.
Moreover, U of T awarded $6 million in COVID-19-related emergency bursaries to students in 2020–2021.
Meanwhile, residence operations, food services, transportation services, and Hart House incurred a total net loss of $48 million in 2020–2021. In total, U of T’s sales, services, and sundry income decreased by $100 million compared to the prior fiscal year.
Partly because of decreased in-person campus life, U of T’s utility expenses also decreased by $3 million in 2020–2021.
Student experience during the pandemic
While the university successfully exploited the stock market’s performance during the start of the pandemic, U of T students encountered financial and technological difficulties throughout the period of online course delivery.
As U of T began shifting back to in-person course delivery in the 2021–2022 academic year, the fees returned to pre-pandemic levels.
Since 2020, students have cited various concerns with the new online learning environment.
With international tuition continually increasing students petitioned to freeze international tuition in 2020. The students explained that they do not have the same resources as domestic students, and that online course delivery was not sufficient to replace the missed in-person experience.
Students have also pointed to a loss of in-person experience, explaining that it is more difficult to engage with professors, remain focused during Zoom classes, and, for international students, to have to navigate different time zones for classes and exams.
Additionally, students have suggested that U of T should have ensured better support and flexibility in the online learning environment, and provided a better balance of asynchronous and synchronous courses.
Still, others have expressed optimism in online course delivery for improving university accessibility, cautioning that a successful online learning system would require additional consideration of the needs of students.
Editor’s note (September 8, 2022): A previous version of this article incorrectly attributed U of T’s investment income statistics to Statistics Canada. In fact, the figures are from U of T’s 2021 financial report.