Planning is now underway across Queen’s to help the university address its challenging financial situation and a series of new measures will be put in place for the next few years to reduce expenditures across the university, including a reduction in budget allocations to all faculties and shared services portfolios.

As announced in May, the university is facing growing financial pressures and this year the operating budget deficit is projected to be $62.8 million. It’s being covered with existing reserves (carry-forward funds) but ongoing reliance on these funds is not sustainable. To date, the impact of the provincial government’s 10 per cent tuition cut for Ontario students in 2019, and subsequent tuition freeze, has cost the university $179.4 million. Ongoing inflationary costs and a decline in international student enrolment in the aftermath of the pandemic have added to the budgetary strain.

“As we look ahead to the next two budget cycles, it’s important we are being as financially prudent and responsible as possible, while also protecting our core academic mission,” says Donna Janiec, Vice-Principal (Finance and Administration). “Starting now gives us all an opportunity to work together and find effective and innovative solutions to help return the university to a balanced budget position by 2025/26.”

In addition to the hiring freeze implemented last month for full-time operating budget positions not already posted, the new measures include a 1.5 per cent reduction on allocations for all units for 2024/25 and 2025/26.

Faculties are also being directed to reduce their structural deficits to no more than five per cent of their operating budget allocation for 2024-25, followed by a balanced budget for 2025-26. Shared services will need to balance their budgets in each of the next two years.

Funds from these combined measures will be held for subventions and strategic investments, where funds are needed to ensure our academic and research missions are not compromised.

“We know that improving our financial situation is not going to be easy and some difficult decisions will need to be considered,” says Teri Shearer Interim Provost and Vice-Principal (Academic). “There is already promising work underway across campus to make sure we can adjust and adapt at the right time and in the right way. Overall, it’s important to remember that Queen’s remains in a strong position, thanks to our positive enrolment numbers and overall financial health.”

For the upcoming academic year for example, Queen’s received more than 55,000 applications for 5,000 available first-year spots. As well, each year the university is rated by two external credit rating agencies. The recent AA rating issued by Morningstar DBRS and the AA+ rating issued by Standard and Poors each provide an independent and objective assessment of the university’s strong overall financial performance. Exceptional student demand, effective management practices, and the university’s strong academic profile were all cited as strengths contributing to a consistently strong balance sheet.

As a next step, more information on these new measures is being made available across the university, with units now receiving updated Shared Services and Faculty Budget Guidelines to facilitate more detailed planning in their areas. 

Representatives of Queen’s Board of Trustees Investment Committee will host a virtual town hall for members of the Queen’s community to provide an update on Responsible Investment actions undertaken by Queen’s across its investment portfolios in the Pooled Investment Fund (PIF) and Pooled Endowment Fund (PEF).

Principal Patrick Deane and Queen’s Rector Owen Crawford-Lem will deliver opening remarks. Investment Committee members Todd Mattina (Chair), previous Chair Don Raymond, and Cathy Matthews will then provide an update on the Board-approved March 2022 responsible investing recommendations arising from the work of the Board’s Climate Change Action Task Force. The focus will be on Queen’s responsible investing commitments, highlighting the actions taken and an update on Queen’s carbon reduction progress, followed by a Q&A.

The virtual event using Microsoft Teams will take place on April 5, 2023, 10:30-11:30 a.m. (ET). Anyone wishing to watch the event can follow the Responsible Investing Guest Link.

To improve the experience for all attendees, advance submission of questions is strongly encouraged. Questions should be sent to vpfa@queensu.ca with the subject line “RI Town Hall question”.

Information on Queen’s Responsible Investing can be found on Queen’s Investment Services webpage.

In line with Queen’s commitment to make a real and lasting impact in the fight against climate change, Queen’s Board of Trustees has endorsed its Investment Committee’s Final Report on Climate Change Action Task Force (CCATF) Recommendations, which includes a commitment to lower the carbon footprint across the university’s investment portfolios.

The Investment Committee report set targets to maintain at least 25 per cent lower carbon emissions than the global equities benchmark by the year 2030.

“Queen’s University is deeply committed to making a global impact in advancing sustainability through its responsible investing,” says Jim Keohane, Chair of the Investment Committee. “We are aligned with students, faculty, staff and the administration in engaging on this issue. The recommendations we have brought forward will have a lasting positive impact on Queen’s and our planet.”

The targets set out in the recommendations are impactful and designed to align Queen’s with Canada’s net zero commitments. With a target of at least 25 per cent below the broader global market’s emissions, the university will decarbonize its portfolios ahead of the market and without singling out specific industries. The benchmark target reduction approach is aligned with those taken by many large best-in-class institutional investors.

“We will work closely alongside our investment managers to drive carbon reduction with all companies within our portfolios,” Keohane says. “We will ask a lot of our investment managers and we will be tough markers to effect real change.”

“We have recommended a holistic, collaborative and comprehensive approach to the de-carbonization of our investment portfolios because we believe it is the most effective approach, and simply the right thing to do,” says Don Raymond, who chaired both the CCATF and the Energy Transition Subcommittee that was tasked to look at how to implement the recommendations.

This approach will allow the funds to achieve strong, sustainable returns while enabling the university to do its part in working with other responsible shareholders to influence the companies in which it is invested to also decarbonize. The University Board and administration have listened to student input and reflected this in their decisions and actions.

“We believe the recommendations put forward and approved by the Board are a significant step for the University to be taking,” says Aria Goldin, Co-President, Queen’s Backing Action on Climate Crisis, a climate change activism organization run by Queen’s students. “We look forward to working with University Investment leadership to provide our input on the progress of these important commitments.”

The recommendations are notable in Queen’s broader strategy to tackle climate change, supporting Queen’s overall commitment to the United Nations Sustainable Development Goals (SDGs). 

The Board of Trustees approved the following three key recommendations of the CCATF final report:

1. Reduce the carbon footprint of the Pooled Endowment Fund (PEF) and Pooled Investment Fund (PIF) and sustain by the end of 2030 a public equity portfolio (and real assets and private equity where data are available) with 25 per cent lower carbon emissions than the equities benchmark.
2. Allocate at least 15 per cent of the PEF to a Queen’s Climate Action Allocation (QCAA) by the end of 2030, comprising investments across asset classes that are expected to outperform with the transition to a lower carbon economy. In taking this targeted allocation approach, the committee no longer recommends including the previously planned donor direction program.
3. Queen’s should become a signatory to the United Nations Principles for Responsible Investment (UNPRI).

A key to achieving the targets set out in the plan is the establishment of a Queen’s Climate Action Allocation (QCAA), made up of investments with significantly lower carbon emissions than the equities benchmark. The recommendations target an allocation of at least 15 per cent of the PEF into the QCAA by the end of calendar 2030. The QCAA was kickstarted in December 2020 with a US$30 million investment within the PEF into Pattern Energy, a private wind and solar company with operations in North America and Japan. That investment represents just over three per cent of current PEF assets.

Principal and Vice-Chancellor Patrick Deane noted the recommendations also complement many of the other initiatives undertaken by the university, including the commitments expressed in Investing to Address Climate Change: A Charter for Canadian Universities, to which Queen’s was one of 15 founding signatories in June 2020.

“This work undertaken by our former Board Chair and the subcommittee will be a lasting legacy,” says Principal Deane. “The recommendations signify real action to address our ongoing commitment to combat climate change and have placed Queen’s at the forefront of investment transparency.”

More information on Queen’s Responsible Investing can be found online.

Today’s decisions are just one of the ways Queen’s is advancing sustainability and responding to the world’s most urgent challenges. For more details on Queen’s contributions to the UN Sustainable Development Goals are available here.