UW forecasts a $95-million operating budget deficit for the 2024/25-2026/27 fiscal years, up $7 million from last year, as the university contends with increasing funding constraints.

“While it is important to recognize that many of these challenges have been developing over a period of years, it is also true that the challenges have recently intensified and that newly emerging factors with respect to tariffs and cross-border-trade will likely have a significant impact on provincial government capacity and spending priorities,” said James Rush, vice-president academic and provost.

Like many universities and colleges across the province, UW faces significant challenges to acquiring funding through its two major streams: tuition and government support. Factors like a provincial tuition freeze since 2019, inflation, limited provincial funding to universities, and a decline in international enrollment have hit UW’s finances hard for the past few years.

This year’s budgeting approach emphasizes cutting major expenses, enhanced integrated planning, and optimized efficiency as part of the university’s three-year-plan to balance the institution’s finances by the 2026/27 fiscal year. 

Forming the largest portion of operating expenses, salaries are facing a sweeping $43-million reduction, $38 million of which are anticipated to be achieved through UW’s hiring freeze. As part of the university’s plan to save costs and prevent extensive layoffs, the hiring freeze has been in place since November 2024. 

Salary reductions impact TAs, co-op students, part-time and casual roles, faculty, staff in faculties and academic support units, plant operations, and special constable services unions.

But salaries are not going down for everyone. The budget proposes raises for the president and provost, with the former receiving $515,000 after a four per cent increase and the latter receiving $400,000 after a ten percent increase in annual pay.

UW plans to utilize $146 million in centrally managed risk and transition funds to cover structural deficits from 2024/25 – 2026/27.

Despite the looming deficit, UW is proposing using its operating reserves to fund new building projects such as the $110 million Math 4 building. These investments in new building projects come at a time when UW faces over $800 million in deferred maintenance fees due to aging buildings and increasing cost of repairs. 

Students will also see a four per cent increase in co-op fees, from $786 per term to $817 per term. Additionally, student services fees for undergraduate students will rise $25 per term and $32 per term for graduate students.

The recommended operating budget report will be presented to the Senate and the Board of Governors for their review on April 7. The report can be found here https://uwaterloo.ca/waterloo-budget-plan/news/proposed-202526-operating-budget.