St. FX, King's to get millions in extra funding to pay down deficits
'It's not putting any of our universities on Easy Street, by any means,' says Kousoulis
The province is giving millions of dollars in extra funding to St. Francis Xavier University and the University of King's College to pay down the schools' deficits.
St. FX will receive $3.95 million and King's will get $2.2 million this fiscal year — in addition to the amounts they have already received as part of their annual grants from the provincial Labour and Advanced Education Department.
Minister Labi Kousoulis said the funding will help get both schools back on stable financial ground.
"It's not putting any of our universities on Easy Street, by any means, but it makes them manageable," he said.
The cash will give the schools "breathing room" to focus on long-term goals rather than managing their day-to-day cash flow and taking on more debt, Kousoulis said.
Deficit and debt at St. FX
St. FX president Kent MacDonald said the money will go directly toward paying down the school's $3.4-million deficit.
"This takes St. FX away from that financial ledge that we were on," MacDonald said. "Had this investment not occurred, it would have had a real negative effect on us. We just couldn't continue to operate with this type of deficit. So this will allow us to get back to a balanced budget and in a much better fiscal position moving forward."
The extra $550,000 will be directed toward recruiting efforts, including recruiting international students.
MacDonald said the school found itself with a deficit as a result of an inability to raise tuition, which is regulated by the province, and annual increases in expenses, such as labour costs for faculty and staff.
The one-time boost in funding is roughly equivalent to the 10 per cent dip in provincial funding St. FX saw several years ago, MacDonald said.
St. FX is also carrying a significant debt, which Kousoulis estimated to be upwards of $90 million. That debt resulted from the construction of a residence that was funded by bank debt rather than a capital campaign — something Kousoulis said "wouldn't happen today."
Declining enrolment at King's
King's president William Lahey said he's "very grateful" for the funding, which will cover the school's $2.2-million deficit.
Lahey said the school suffered from a dramatic decrease in enrolment at the same time that there was a "significant drop" in funding from the province.
Like many similar schools offering primarily arts and humanities programs, King's has seen steady enrolment decreases, with enrolment dropping from 1,161 in 2013-14 to 875 in 2017-18.
The school is also carrying debt of about $12 million, incurred to cover the deficit and to fix buildings that needed immediate maintenance to prevent water damage.
But Lahey said the university has benefited from a new master's program in fine arts and a small increase in enrolment this year.
"Fundamentally, we continue to be convinced that our undergraduate programs … are unique programs in Canada and that we will benefit when interest in humanities education and journalism education recovers," he said.
Negotiating next agreement
Acadia University is among the post-secondary schools that have previously received bailouts from the province. Kousoulis said it's possible that universities will continue to require extra help in the future.
Funding from the province to universities is laid out every few years in a memorandum of understanding. In the last agreement, universities received increases of one per cent each year for four years.
St. FX's grant this year — before the top-up announced Friday — was $29.7 million and King's received $5.99 million
Schools and the province are now negotiating the next agreement, which will cover five years and take effect on April 1. Kousoulis said he doesn't expect the grants to universities to decrease in that agreement.
The universities are a crucial economic driver in Nova Scotia and are worth supporting, Kousoulis said.
"They are an asset to our province, every one of them," he said. "The money we invest in universities definitely has a return. I think without them we would be in a bleak situation in this province."