- Total General Operating Expenditure: $929 million (Up 98% since 2001, Up 29% since 2010)
- Academic-Focused component: $575 million (Up 82% since 2001, Up 23% since 2010)
- Operational Support component: $255 million (Up 112% since 2001, Up 37% since 2010)
- Student Services component: $100 million (Up 207% since 2001, Up 27% since 2010)
- Enrollment: 35,034 (Up 59% since 2001, Up 22% since 2010)
The General Operating (GO) budget accounted for over 61%* of total expenditures at the average Top 25 university in 2024, with Capital expenditure and Research accounting for most of the remainder. (* “Internal Sales and Cost Recoveries” have been removed from GO Expenditure for all the analysis on this site. They are internal adjustments used to differing degrees by some universities, and not at all by others. Including them would undermine comparability.)
The GO budget is allocated across eight functions: Instruction & Non-Sponsored Research (“Instruction”) – where the teaching happens, Non-Credit Instruction (mainly extension programs), the Library, Computing & General, Student Services, Physical Plant, Administration & Academic Support, and External Relations. (The last two – Administration & Academic Support and External Relations – are re-combined in this analysis as Central Administration, reflecting the structure in earlier years.) Descriptions of each function can be found in CAUBO’s comprehensive reporting guidelines HERE (pages 20-22).
General Operating Expenditures (“GOE”) are less prone to inter-provincial and inter-university differences and complexities than Incomes. However, universities do differ for a variety of reasons – size, location, academic program, age, physical condition, and other factors. Those differences may be reflected in resource allocations.
To facilitate the analysis on this site, each GO function is assigned to one of three categories, as shown below:
Academic-Focused: Instruction & Non-Sponsored Research, Non-Credit Instruction, Library
Operational Support: Computing & General, Physical Plant, Central Administration.
Student Services: Student Services
Prudently managing the expenditure split between these categories is critically important on two levels:
It is central in determining a university’s effectiveness, especially during a prolonged period of rising enrollment. Each dollar of income can only be spent once, and money spent on Operational Support is money that can’t be spent in the “core mission” Academic area. Maintaining tight control over costs in areas that are less enrollment-sensitive enables the university to maximize its delivery of funding to the areas that are most enrollment-sensitive, especially the academic programs; this maintains educational quality and minimizes student fee increases.
It directly impacts the university’s to withstand fiscal adversity. This is the crucial “Fixed versus Variable Cost” challenge referenced on the MORE page – the challenge that every university must successfully confront if it is to be able to absorb the impact of significant hits to its income base. (Fixed costs are not literally “fixed” but are not significantly impacted by changes in the organization’s activity level – that’s enrollment in PSE.)
The Operational Support functions are, for the most part, “Fixed Cost” functions – far less impacted by changes in enrollment (increases OR decreases) than direct student contact areas like Instruction and Student Services, where an enrollment change triggers a close-to-parallel workload change.
There may be a rationale for the cost of an Operational Support function to increase at a rate higher than inflation, but there is no credible rationale for them to track enrollment as well. Allowing them to do so would deflect funding away from the classroom, undermine educational quality, and trigger unnecessary student fee increases. It would also threaten the institution’s long term sustainability, should fiscal adversity arrive in the form of significant or sudden enrollment or income declines.
The chart below shows the change across the Top 25 since 2001 in “Real PSE Dollars” (adjusted for both inflation and increased enrollment). Positive values denote increases exceeding inflation and increased enrollment combined:
2 A) Changes in GO Expenditure Per FTE Student – By Category (Top 25)
2-A-Changes-v2-2024Download this table (Opens in new tab)
Essentially, most universities have done the opposite of what they should have done – and, in doing so, ignored important theory taught just across campus in their own Business faculties. During a prolonged period of rising enrollment, they haven’t kept cost growth in the less enrollment-sensitive areas below the growth in the “mission-critical” Academic-focused areas; they’ve allowed those costs to escalate at a much higher rate.
The advent of declining provincial support in 2010 magnified the importance of greater cost efficiency, but the disturbing pattern continued.
The disparity in resource allocation has caused significant changes in overall expenditure levels:
2024 Shares of Total GO Expenditure (Top 25):
- Academic-Focused expenditure – 61.8% (67.5% in 2001, 65.2% in 2010)
- Operational Support expenditure – 27.4% (25.6% in 2001, 25.8% in 2010)
- Student Services expenditure* – 10.8% (6.9% in 2001, 9.0% in 2010)
The relatively small share changes don’t convey the real significance of these shifts. A fall of just 1% in share of GOE amounted to $9.3 million at the average Top 25 university in 2024, and the share decline for the Academic area is substantially more than 1%.
The Key Efficiency Indicator and Relative Cost Impact table for the Top 50 since 2010 (see below) shows that the actual dollar consequences of these shifts (funds deflected away from the Academic area) can quickly reach tens of millions; the numbers for the Top 25 since 2010 show a negative impact exceeding $100 million for three universities.
Runaway Support Costs have long posed a major threat to the sustainability of our universities, but that threat deepened significantly with the arrival of federally-imposed caps on international student enrollment. Those higher levels of central cost, once taken on, are difficult and painful to shed. The universities have proven time and again that their preferred options for absorbing the impact of what they view as “income shortfalls” are to increase student fees and reduce funding levels for the Academic area. That can’t happen this time. International student fees are around four times larger than domestic student fees, so the fee increases and classroom cuts would need to hit unimaginable levels.
That approach stands deeply discredited. It hasn’t worked in the past (in fact, it has fuelled the inefficiencies) and it certainly won’t work now. As PSE consultant Alex Usher said, “it’s time to target efficiency for a change”.
Excessive Operational Support expenditure is an endemic issue, but the Efficiency Rankings show that some schools are much closer to unsustainable territory than others.
Efficiency Ranking
The underlying methodology for Efficiency Rankings can be seen HERE.
2 B) GENERAL OPERATING RESOURCE ALLOCATION: 2024 EFFICIENCY RANKINGS
2 C) 2024Download this table (Opens in new tab)
Key Efficiency Indicator and Relative Cost Impact
The underlying methodology for the Key Efficiency Indicator and Relative Cost Impact calculation can be seen HERE.
These measures are provided for the Top 50, with 2020 as the base year, and for the Top 25, with 2010 as the base year. The Top 25 table shows the major dollar consequences of the efficiency decline in that timeframe.
2 C) KEY EFFICIENCY INDICATOR AND RCI: 2024 vs 2020 – and – vs LATEST GROUP AVERAGE (TOP 50) – Opens in new tab
2 D) KEY EFFICIENCY INDICATOR AND RCI: 2024 vs 2010 – and – vs LATEST GROUP AVERAGE (TOP 25) – Opens in new tab