2015/16 Consolidated Financials FAQs

Last update: February 1, 2018


1. If UBC reported an operating surplus of $22 M for 2015/16, why are fees going up? Can’t the university use this surplus to manage fiscal pressures?

Like all universities, UBC is very prudent with regards to how resources are invested, and our Faculties are being very diligent in allocating their funds. This diligence can result in a time lag between the receipt of revenue and the ability to spend it, for example on new faculty member appointments. The resultant surplus may take a year or two to balance out.

Operating surpluses — the majority of which are held within the Faculties — are generally tied to faculty recruitment and invested in our academic infrastructure. Such investments are made to address the capacity pressures created by increasing enrolment, and benefit students, faculty and staff. Further investments are also made to enhance learning spaces and research facilities.

The costs of hiring faculty and attracting staff are rising — year on year — beyond the rates of inflation. We are relying less and less on provincial funding while competition for research funds increases, and domestic tuition is capped at 2%.

In response to these challenges, UBC has focused on exploring new revenue opportunities and identifying organizational improvements.

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2. Is the University relying too heavily upon revenues from international tuition?

The University has been relying on tuition received from international students, to help offset inflationary pressures as well as to allow for investment in strategic initiatives.

International students do not take the place of domestic students. We continually over-enrol domestic undergraduate students — beyond funding provisions from the Province. Additionally, international students meet the same high standards for admission as domestic students.

Because of our standing as an internationally renowned institution, and our geographic location, UBC is in high demand among top students from around the world.

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3. What is the difference between UBC’s consolidated budget and operating budget?

In addition to the annual operating budget, UBC’s consolidated budget includes funds that can only be used for specific purposes, such as research, capital and endowment. Investment returns from these funds are restricted and cannot be used to offset costs within the operating budget. The consolidated budget also includes the results of the University’s various subsidiary operations, such as the UBC Foundation and UBC Properties Trust.
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4. The audited 2015/16 financial report states that UBC ended the year with a consolidated surplus of $53 M. Why is this?

UBC completed the 2015/16 fiscal year with a consolidated surplus, which is similar to previous years. In most cases, the University completes the fiscal year with some level of surplus within its consolidated budget. However, it is important to note that the consolidated budget is separate to the University’s operating budget.

With regard to the consolidated surplus, this came about as a result of two key factors:

  1. How UBC invested its endowment funds over the year. Investment returns on endowment funds contributed to the surplus, but these funds are restricted and not available for spending.
  2. The timing differences related to ‘capital assets’. In both cases, the surplus reported as a result of these adjustments is not available to offset operating costs.

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