A message from Tom Duever, Interim Vice-President, Academic and Provost; and Jacinda Reitsma, Vice-President, Administration and Finance
The Board of Governors recently approved Waterloo’s Operating Budget for 2026/2027. The budget report provides details of the projected revenues and expenses, as well as an update on the multi-year plan to return to a balanced budget. This message highlights key elements of that plan. A more detailed overview is also available through the Operating Budget presentation.
In February, the Government of Ontario announced a new funding model and updated tuition framework As a result, the University has adjusted the multi-year financial plan to reflect this additional funding. The announcement is a meaningful shift in provincial support for post-secondary institutions and provides welcome relief to ongoing financial pressures facing the University.
The provincial government’s announcement included several significant changes:
- An increase in the number of provincially funded enrolment seats.
- Increased funding for high-cost, priority programs as defined by the government, including STEM, healthcare, and education.
- Higher overall per-student grant funding rates.
- An end to the domestic tuition freeze, allowing tuition increases for Ontario domestic students of up to 2% annually for the next three years, beginning in 2026/27. Thereafter, tuition will increase by 2% or the three-year average of CPI, whichever is lower. We recognize that these increases, combined with the recent changes to OSAP, are a source of concern for students. The University remains committed to supporting our students and is working to help reduce their financial burden through scholarships, bursaries, and employment opportunities.
What this means for Waterloo
Provincial investments are not distributed evenly across program areas, and full details regarding allocations are still emerging. The 2026/27 Operating Budget and accompanying forecasts therefore incorporate the best available estimates based on what we currently know.
Preliminary estimates suggest that the new provincial funding model will increase our operating grant funding by $50.8 million in 2026/27. After accounting for other grant funding changes, this translates into an estimated net increase of $35.9 million over the 2025/26 Operating Budget. The announcement also signaled additional investment tied to enrolment growth in priority program areas. Details on this portion of the announcement are expected to be shared later this year.
Despite the welcome changes from the province, the University is still projecting a structural deficit of $33.7 million for 2026/27, and this deficit does not include new staff salary increases. As a result, we are planning for a $20 million reduction to our budgets in 2026/27 — smaller than previously anticipated, but necessary to support long-term sustainability and will help reduce the scale of expense reductions that would otherwise be required in future years. These cuts will reduce the operating deficit for 2026/27 to $13.7 million.
The multi-year financial outlook
The University’s original three-year plan, introduced in March 2025, aimed to eliminate the operating budget deficit by 2027/28. The three-year timeframe was chosen to balance the need to avoid more drastic short-term cuts with the risks associated with relying too heavily on one-time funds over a longer period. The provincial funding announcement means a more measured return to balance is now appropriate – one that protects essential operations and preserves institutional strengths.
Alongside efforts to achieve a $20 million reduction, the University is continuing to invest $11.4 million in initiatives aligned with institutional priorities. These investments support campus community and culture; renewal of campus infrastructure and supports; effectiveness and efficiencies, such as appropriate adoption of AI and digital innovation; and revenue generation to build long-term fiscal resilience and strategic advantage through innovative academic programming, philanthropy, community partnerships, and global engagement.
Transitioning to an ongoing staff hiring control process
With this reduced pressure on the operating budget, the University has now moved to a sustainable governance framework for hiring processes.
Although the hiring freeze implemented in 2024 was intended to be temporary, the financial and workforce planning challenges it addressed remain. Institution-level oversight of staff hiring will therefore continue, within a framework designed to support long-term sustainability rather than exception-based management.
The new staff hiring control process includes the following key changes:
- Executive Council (EC) review: EC members will review all requested positions and assess alignment with approved annual staff plans, portfolio priorities, and organizational structures.
- Institutional alignment: Where appropriate, EC members will consult with functional leads to assess institutional staffing levels and capacity, review UniForum benchmarking data and workload measures, and ensure alignment with the University’s organizational model of service delivery.
- Temporary contract approvals: Temporary contracts to backfill staff on leave will no longer require senior-level approval, improving operational flexibility.
- Streamlined approvals and guidance: The approval process has been streamlined, and detailed guiding documents on the new submission requirements will be shared with EC members, functional leads, and hiring managers.
The transition began on April 6, 2026, with implementation of changes related to temporary contract approvals. Supporting documentation will be distributed throughout April, with full implementation of the new process by May 1, 2026.
Progress on functional reviews
Progress continues on the IT, Marketing and Communications, and Finance functional reviews, all of which are nearing completion. Functional reviews of HR and Student Services have now begun, following the same change-management approach used in earlier reviews.
Functional Review Implementation Teams (FRITs), led by a dyad model of one Dean and one executive leader, are tailoring their approach to reflect the unique needs and priorities of each team and how they support the University. This work also aligns with HR’s new Talent and Performance Management Framework, helping ensure consistency in how roles and responsibilities are assessed across the institution.
While minimizing impacts on employees remains a priority, some layoffs may occur as part of restructuring. We understand that this uncertainty can be unsettling and we encourage you to use the supports available for our community if you need them, including the Employee and Family Assistance Program (for employees), Counselling Services (for students) and 211 Ontario (for people with no affiliation to the University).
Because FRITs are at different stages, each FRIT will communicate broadly with the University community once implementation plans are finalized. The IT FRIT will share updates on changes to IT functions shortly, and the Marketing and Communications FRIT will follow this spring. The Functional Reviews webpage will be updated as FRIT activities are communicated.
University community Q&A sessions
Two in-person Q&A sessions will be held for those who would like to participate in a discussion about the University’s budget and related activities. Both sessions will also be livestreamed.
Please register for one of the following sessions:
Q&A Session 1
Thursday, May 14, 2026
10:00 – 11:00 AM
Humanities Theatre
Q&A Session 2
Friday, May 15, 2026
9:30 – 10:30 AM
Humanities Theatre