On March 9, the Academic Board met at Simcoe Hall. At the meeting, Professor Cheryl Regehr — vice-president and provost of U of T — presented the budget report for 2023–2024 fiscal year, as well as the long-range budget guidelines. 

The report noted that the lingering effects of the pandemic and current rates of inflation are straining the university’s budget, but the report still maintains that the university is financially healthy and is pursuing a few different strategies to mitigate the financial impacts of the pandemic. 

The budget is set to be approved at the March 30 Governing Council meeting. Here are some key aspects of the report.

Rising operating revenue due to rising tuition revenue 

The total budgeted operating revenue — which includes tuition, student fees, and provincial grants — for 2023–2024 is $3.36 billion, which represents a 3.9 per cent increase from the operating revenue for 2022–2023. Enrolment revenue, which comes from student fees and operating grants, is expected to increase by 3.3 per cent. This increase is largely due to rising tuition revenue from tuition increases for international and domestic out-of-province students, since the university expects operating grants to remain frozen. 

The budget assumes that domestic Ontario resident tuition will remain frozen for the next year, but acknowledges that there is a possibility that the government could make a “late announcement” allowing the university to make changes in domestic Ontario-resident tuition fees. If this happens, the university aims to increase those fees by three per cent, which would increase the operating revenue by about $15 million. 

The university plans to increase tuition for domestic non-Ontario residents in undergraduate programs by five per cent from last year’s tuition. For international students, undergraduate fees will increase by two per cent for students in the Faculty of Arts & Science. 

The tuition increase for other programs will vary according to “local factors,” the budget says. 

Other contributors to the operating revenue include investment income, endowment income, income from Canada Research Chairs — a government program which supports research and contributes towards researchers’ salaries at universities — funding for indirect costs of research, and sale of services. An endowment fund is income based on investment portfolios obtained from donations.

Investment income and other sources of revenue 

As of April 2022, U of T’s various benefactors had total endowments that were worth more than $3.17 billion since it was created. Endowment income will represent 2.5 per cent of the university’s total operating revenue in 2023–2024. However, endowment revenue intended for research and academic programs was not included in the operating budget. 

The university acknowledged that the investment landscape has been rocky in recent years due to the war in Ukraine, the lingering effects of the COVID-19 pandemic, high inflation, and rising interest rates. Investment returns to the university from May to November 2022, which were 0.8 per cent, were much lower than the target return set by the university, where the short-term rate of return was assumed to be 1.1 per cent in 2023. This return rate reflected this uncertainty expressed by the university. The university expects short-term returns to rise to 1.9 per cent in the next fiscal year. The medium-term rate of return is expected to remain at 3.02 per cent over the planning period from the 2022 budget. The budget does not mention long-term rates.  

An additional $166 million in revenue for the university is expected to come from application fee revenue, service charges from overdue accounts, licensing revenue from commercialization, and more. 

The budget noted that the university is pursuing recommendations set out by the Alternative Funding Sources Advisory Group, which was founded in 2017. The group exists to create alternative sources of funding for the university, especially amid declining funding from the provincial government. The university is working on shifting a significant source of its revenue to real estate investments. The “Four Corners Strategy”, which is the university’s real estate strategy to enhance the academic experience by building innovation spaces, student and faculty housing and more, plans to bring in $50 million per year by 2033 by developing new residential buildings, office space, and other amenities.


Total expenditures are projected to increase from $3.23 billion in 2022–2023 to $3.36 billion in 2023–2024. 

$2.09 billion, or 62 per cent of the operating budget expenditures, goes toward salaries and benefits. Out of this, 50.7 per cent — or $1.059 billion — will go toward academic compensation, 45 per cent — or $942 million — will go toward staff compensation, and the remaining $85 million towards the pension risk contingency, which is a fund created to alleviate solvency risk by the University Pension Plan (UPP) which manages employees’ pension funds for several universities. The creation of the UPP was announced in 2017, and the plan was meant to account for increasing life expectancy, which creates additional payouts to retired employees, and future funds to current employees. 

Each division at U of T receives an expense budget that is equal to the net revenue they generate annually. Divisions also receive an allocation from the University Fund, which provides academic divisions with a non-formulaic allocation of funds. Academic divisional plans include the hiring of tenure and teaching stream faculty, enhancement of student services, and more. 

Students, affordability, access, and outcomes

The budget’s section on “Students, Affordability, Access & Outcomes” is mainly focused on tuition issues. The university’s tuition fees for domestic and international students are determined by several policies, including the university’s Tuition Fee Policy, the Statement of Commitment Regarding International Students, and the provincial government’s Tuition Fee Framework.

For undergraduates, the U of T Advanced Planning for Students (UTAPS) program — which fills financial gaps for full time university students which government aid, like OSAP, is unable to cover — will be redesigned, separating its need assessment process from OSAP’s need assessment policies. This will allow development of a flexible and efficient system of financial support, which will accommodate students according to accurate living costs in Toronto. 

Priority investments

The budget’s section on “Priority Investments” details the financial constraints that the university is currently facing due to provincial tuition and enrolment frameworks, as well as frozen operating grant funding.

To cover inflationary costs and improve academic programming and delivery, the Provost will allocate a total of $19.3 million to divisions for the 2023–2024 academic year. This allocation will fund five categories of university activity: building inclusive cities and societies, reimagining the undergraduate experience, defying gravity, investing in divisional priorities, and driving scientific discovery. 

Within these categories, $2.3 million will be allocated to diversity in academic hiring, $2 million to classroom renewal, and $1.3 million to frontline gift officers needed to meet the goals of the Defying Gravity fundraising campaign. Additionally, $3.6 million will support divisions facing budgetary challenges, and $5.9 million will support large-scale research.

The divisions plan to invest in new faculty hiring; equity, diversity and inclusion; academic programming; and enhancing undergraduate research experiences. These funds will be used to launch several new programs, including a Master of Arts in Kinesiology and a Master of Public Health focused on Black Health by various academic divisions.


Inflation is a large focus of the budget’s section on “Risk,” with the Consumer Price Index (CPI), which measures the average change in prices for consumer goods, for Toronto having peaked at 7.5 per cent in July 2022. The CPI has remained above five per cent since. 

The Ontario government is projecting a deficit of $12.9 billion for 2022–2023, which may result in continued spending restraints for post-secondary education.