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Higher education facing lower returns in B.C.

As post-secondary institutions prepare for the start of the academic year, the full economic impact of COVID-19 on higher education remains unclear. 
The university’s budget estimates COVID-19 could cost UBC $138 million in tuition and $208 million in other sources of operating revenue. Photo: University of British Columbia (UBC) campus sign/Shutterstock

As post-secondary institutions prepare for the start of the academic year, the full economic impact of COVID-19 on higher education remains unclear. 

“To be honest, we’ve actually faired relatively well compared to what we had projected,” said Santa Ono, president and vice-chancellor of the University of British Columbia (UBC).

“If you look at other universities of similar stature and size, the projected deficit at those institutions is, I would say, two, three to five times greater than the impact on UBC.”

As of July, B.C.’s largest post-secondary institution is projecting a consolidated $225 million deficit for its 2020-21 fiscal year, down from a projected $60 million surplus, pre-coronavirus. The university’s budget estimates COVID-19 could cost UBC $138 million in tuition and $208 million in other sources of operating revenue, such as conferences, student housing and parking.

Ono, who was recently appointed to serve a second five-year term at the helm of UBC, believes the budget likely overestimates the economic impact of COVID-19. How long the pandemic will last and whether a second wave emerges in the fall remain uncertain, but enrolment has been strong, he said, and UBC is less reliant on revenue from varsity athletics or university medical centres than its collegiate counterparts across North America.

At the time of writing, international students who were issued a Canadian study permit after March 18 are not allowed to travel to the country. This fiscal year, UBC estimates it could miss out on collecting more than $76 million in student fees from international students.

According to Universities Canada, international students generate $21.6 billion in annual economic impact for the country – a contribution threatened by ongoing travel restrictions and concerns about a potential second wave of COVID-19.

“In straight business terms, universities are facing a real challenge when it comes to the future of international students in Canada,” Paul Davidson, president and CEO of Universities Canada, told BIV back in April, warning at the time that universities would face a significant challenge if Canada’s borders remained closed come fall.

“We have a growth target for the year. We definitely will not hit that growth target,” said Brock Dykeman, president of University Canada West (UCW), a Vancouver-based private institution that mostly caters to international students.

UCW deferred taking possession of two new buildings for the university’s new campus at Vancouver House. One will be ready for the fall semester, while the other will be ready for the January 2021 semester, which saves UCW paying rent on premises that can’t at this time be filled with new students.

“It’s managed to work out fairly well. I would say much better than we anticipated,” Dykeman said. “It hasn’t been quite as tough as we thought it was going to be.”

Immigration, Refugees, and Citizenship Canada amended its policies in response to COVID-19 to allow international students to complete up to 50% of their program online, prior to attending classes in Canada. That allows students abroad to take up to two years of online courses before arriving in Canada to complete a four-year degree program.

Most of UCW’s students are in a master of business administration program, and if taken year-round, a student could be halfway through his or her program after just one year.

“We’re already having to check: are some of these students coming up against that, and are they going to have to now put their studies on hold?” said Dykeman, adding that certain UCW students will find themselves in that situation if they can’t come to Canada for January.

Universities Canada is now recommending that Ottawa offset international student losses with a transfer to universities in its next budget to compensate for a decline in student enrolment.

It is also recommending that the federal government cost-share safe arrival and quarantine measures with universities and invest in branding, recruitment and visa processing efforts.

Phil Laird, vice-provost (Global) for Trinity Western University, said B.C. and Canadian universities and colleges have been aided by the federal policy changes made in mid-July that allow international students to take classes online from any location and have those hours count towards a post-graduation work permit.

“Some students feel they are more comfortable right now close to home, and that’s totally understandable, but there are a lot of students that continue to come into our pipelines. Our numbers of international students this fall are not down; the number we are tracking right now is at or even slightly higher than what we projected in terms of our early expectations.”

For TWU’s Laird, the fall semester will mean some compromises on the part of everyone, from faculty to students.

“The learning can generally be reproduced in an online environment. Some students excel in that kind of environment. What’s more difficult to recreate ... is that social, independent, being-on-your-own part of university life.”

Laird added that he isn’t worried about the reputation of B.C. schools and the long-term outlook post-COVID.

“The brand of Canada – when you compare it to, say, the United States, Australia and Great Britain – is safe, secure, stable and consistent high-quality education.… So I believe this pandemic has revealed the strength of Canada on the international stage, and people see us as a more positive destination than before. Students are asking themselves – if another COVID happens – where would they rather be? And the answer to that is often Canada.”

On Vancouver Island, the president of Camosun College – B.C.’s largest college – told BIV that enrolment numbers, while not final, indicate that domestic enrolment is comparable – maybe even better – than last year.

One of the financial challenges, said Sherri Bell, who also serves as board chair of BC Colleges, is that areas such as food services and parking on both campuses aren’t generating revenue the college would typically expect.

“That’s a worry for me as president and also for our board,” she said. “Financially, where are we going to end up?”

The college is preparing to welcome a bigger cohort of students back to campus in September after the summer semester. Should B.C. reverse course on its reopening strategy in the event of a second wave some time this fall, colleges and other institutions will again lose sources of revenue that require on-campus activity.

“We have to be ready for the unknown. It’s hard to plan for something you don’t know where it’s going,” said Bell. “But we’ve had a pretty good idea as a system, having gone through it in March, that that is the possibility again. Hopefully it won’t happen. But, you know, we have to be ready for it to happen.”

–With a file from Chuck Chiang



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