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Ryerson’s financial crisis: $64 million owed

Government funding cuts, small classes contributes to debt

By Rob Granatstein

Ryerson is battling a huge cumulative deficit and capital debt and government cutbacks will make the battle tougher.

The university is projecting at least a $2.5-million cumulative deficit for the 1995-96 fiscal year and $64.5 million in capital debt. That could be called good news.

Government transfer payments to Ryerson will be cut at least 15 per cent for the 1996-97 year. This means a $10 to $12-million cut in funds. The worst-case scenario is a 20 per cent cut next year and 10 per cent in 1997-98, slashing close to $30 million from the school’s coffers.

Ryerson president Claude Lajeunesse said administration would continue to appeal to the provincial government to slow the cuts but also said there’s no reason for hope. 

“This is a government that cut welfare payments by 22 per cent and is closing 10 hospitals…There is no reason to hope that it will exempt universities,” Lajeunesse said.

But back to Ryerson’s current financial strain. Ryerson’s cumulative deficit for 1994-95 was $4.307 million, or $25,000 less than budgeted for the year. The university actually had a surplus of $1.9 million for the year. 

But that is where the good news ends.

Ryerson’s financial plans called for the deficit to be reduced to $1.2 million for this year and there is little chance of that happening. The deficit is expected to be at least twice that much.

Linda Grayson, Ryerson’s v-p Administration, cited two reasons for Ryerson’s deficit at an August RyeSAC board meeting. One was the reduction of government transfer payments, the other was class size. 

“Ryerson has made a commitment to keep class sizes low and that hurts the budget,” she said. 

While other universities hold classes of hundreds of students, with some watching lectures on television, Ryerson’s class sizes have not increased. That means fewer fees and less revenue. 

In three weeks, students will be asked in a referendum to pitch in an extra $50 a year in student fees to save student services. The school cannot afford to keep the services without that extra money. 

As for Ryerson’s $64 million-capital debt, it is a result of a number of new buildings on campus. 

The RAC, International Living Learning Centre residence (ILLC), Pitman Hall, Rogers Communications Centre, the Bookstore/parking lot and Sears’ land are all part of the debt payable. 

In a speech last month to the RyeSAC board of directors, Grayson laid it out as clearly as she possibly could. There’s no more money. The school is almost broke.

“We need some good news,” she said. 

That has lead faculty and students to question why money is being spent on renovations when the school desperately needs it for academics. The answer is that the money is designated for capital improvement projects by the government and if the cash is not used for that purpose, it will not be granted at all.

The university faces an even larger problem. If the deficit isn’t reduced the university will have to borrow money from the operations budget to pay the bills. That could mean more closures. But Lajeunesse told Academic Council on Monday that he does not want to make cuts to academic budgets. 

The 1995 debt payable consist of (in 000’s of dollars):
Ryerson Athletic Centre3,639
Pitman Hall26,500
Sear’s land 7,819
International Living and Learning Centre9,000
Bookstore/parking lot & Rogers C.C 12,77512,775
Equipment purchases4,797
Interest expense for year ending March 31, 1995: $5.7 million

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