Answers to your budget questions

As part of McMaster University’s ongoing commitment to sharing budget and financial information with faculty and staff, this page provides a Q&A with additional context around the budgeting process for the 2024-25 fiscal year, which begins on May 1, 2024.

On March 19, McMaster’s Provost co-wrote a message with the Vice-President, Operations and Finance, to emphasize the need for proactive measures to make sure all university areas have structurally balanced budgets. This will ensure that the revenue the university brings in each year can cover ongoing expenses and avoids going into deficit.

This page will be updated on an ongoing basis as more information becomes available. More information on financial planning and McMaster’s budget model is online on the Office of the Provost’s website.

2024-25 University Budget Q&A

1. Why are we talking about McMaster’s upcoming budget?

We need to act now to prevent the university from facing a budget shortfall as next year’s costs (May 1, 2024-April 30, 2025) are expected to be higher than the revenue coming in. To avoid this, McMaster’s Budget Committee is introducing measures across the university to ensure we can continue to advance institutional goals.

2. Why is there fiscal restraint when I read the university has a budget surplus?

While there was a small Operating Fund structural surplus of $8.2 million budgeted for the 2023-24 year, the financial pressures for 2024-25 are mounting and without reductions in spending our revenues will not cover next year’s expenses and the university will go into deficit.

3. The Ontario government recently announced nearly $1.3 billion in funding for the post-secondary sector in response to the recommendations made by the Blue-Ribbon Panel. Why is McMaster still going ahead with fiscal restraint measures?

With the tuition freeze remaining in place for at least the next three years, uncertainty around international enrolment and increasing operating costs, a strategy of fiscal restraint will help McMaster continue to operate without going into deficit.

While the funding from the provincial government is welcome, it falls far short of the panel’s recommendations. Of the $1.3 billion, $700 million will be divided between Ontario’s 47 colleges and universities over 3 years. An additional $100 million one-time funding has been announced for Ontario’s unfunded students in STEM. This is also welcome but will not cover all approximately 3,500 unfunded STEM students at McMaster (the university receives only tuition revenue and no government grant for these students). While this is important government recognition of this issues, the amount does not reflect the true cost of current unfunded students.

4. How are budgets being impacted for the next fiscal year at McMaster?

All faculties and support units have been asked to adjust their current year’s budgets to accommodate the shortfalls within their department. They have also been asked to balance their future year budgets, meaning they need to ensure revenue coming in matches their spending.

5. What actions are units and departments taking across McMaster?

Units and departments are making decisions based on their priorities. This includes finding efficiencies, reducing operating expenses such as travel or new projects, not filling some positions when they become vacant or delaying hiring. Identifying opportunities for cross-department and organizational efficiencies, including sharing resources will also be important. At all times, units have been asked to prioritize student, academic and research support while carefully considering any impacts on teams to prioritize critical work and manage workload.

Departments and units have also been asked to explore potential opportunities to bring in additional revenue, including exploring new revenue opportunities, applying for grants that can fund existing expenses, and optimizing procurement. We know many other options are currently being explored.

6. Should we expect further budget reductions in the coming years given the financial pressures faced by Ontario’s post-secondary sector?

We are currently focused on the next fiscal year but without significant additional government funding and flexibility on international student recruitment, it is realistic to assume that fiscal restraint will be needed in the foreseeable future.