Brock University, 2025-26 Annual Financial Report

We acknowledge the land on which Brock University was built is the traditional territory of the Haudenosaunee (ho-din-anish-shonee) and Anishinaabe (A-nish-shin-aaabee) people, many of whom continue to live and work here today. This territory is covered by the Upper Canada Treaties and is within the land protected by the Dish with One Spoon Wampum agreement. Today, this gathering place is home to many First Nations, Métis and Inuit, and acknowledging reminds us that our great standard of living is directly related to the resources and friendship of Indigenous people. brocku.ca/indigenous

Introduction

This Annual Financial Report focuses on fiscal results and discussion and analysis of the numbers. This report provides fiscal transparency to our stakeholders, recognizing Brock is a publicly funded University. This report includes a comprehensive analysis of the financial results of 2025-26, including an overview of the budget to actual variances, and year-over-year changes in the revenues, expenses, assets, liabilities, and net assets. A review of Brock’s treasury portfolio, financial health metrics, pension plan, endowment, capital investments and University Risk Management is also included. Lastly, this report presents the University’s 2025-26 audited financial statements.

Brock University continued to advance its strategic priorities and strengthen its impact across the Niagara Region and beyond during the fiscal year. The University celebrated continued academic excellence among its students and student-athletes, expanded research and innovation activities, and advanced major sustainability projects aimed at significantly reducing campus greenhouse gas emissions and modernizing infrastructure for the future. While these accomplishments reflect Brock’s resilience, innovation and long-term commitment to its mission, the University, like many post-secondary institutions across Ontario, continued to face significant financial pressures during the year, resulting in an operating deficit reflected in the accompanying audited financial statements.

Revenues continued to be impacted by international student enrolment declines and frozen domestic tuition rates, except for a few programs where tuition anomaly increases were allowed. Expenditures continue to be influenced by global events causing inflationary pressures and collective agreement settlements. Brock’s excess of expenses over revenues was $19.2 million which is slightly higher than the prior year’s actual results, yet $10 million better than budget due to achieving significant mitigation to end the fiscal year with only a $0.6 million funding shortfall. The funding deficit required a $0.6 million withdrawal from the contingency reserve, resulting in a cumulative total of $1.25 million drawn from this reserve over the past three fiscal years to address the funding deficits. For the upcoming year $6.7 million in contingency funds remain available, which is slightly more than the 2026-27 funding budget shortfall (mitigation target) of $6.1 million. That said, the mitigation strategy approved by the Board of Trustees plans to achieve in-year mitigation to balance the fiscal results for 2026-27 without further drawing on our limited contingency reserve.

Thank you to our faculty, staff, students, donors and community partners for your continued dedication and support throughout the year. Your commitment to Brock University’s mission and future success remains essential as we continue to navigate a challenging financial environment while investing in the long-term strength of the institution.

Financial results

The following table illustrates the financial results of the University presented on a funding basis as well as in accordance with accounting standards for not-for-profits (NFPS). A reconciliation between the two presentations can be found starting on page 24.

Figure 1

Statement of operations metrics

Figure 2

student headcount

(1) Calculated using financial information from 13 other comprehensive universities. Certain 2024 metrics have been updated due to revisions in certain universities’ financial statements.

Brock’s tuition is slightly below the average; however, grant revenue per student continues to be well below the sector average. Naturally, Brock operates more efficiently given the below-average government funding, and this is seen in the lower personnel costs per student. As seen across the sector, personnel cost per student are trending upward due to inflation and pressures from collective agreements. Interest and investment income metrics are in line with Brock’s financial health metrics, as detailed below.

Financial health metrics

Refer to page 32 for explanations of the debt-related financial health metrics.

Workday finance has significantly enhanced Brock’s ability to understand and report on the financial transactions of the University. The following Workday facts only scratch the surface of the information available to users of the University’s financial information.

Figure 26: 2025-26 spending on External Research Grants by type ($000s)

AB C D E F G

A

B

C

D

E

F

G

*External research grants spending includes the funding of Canada Research Chairs’ salaries recorded in operating.

28: 2025-26 spending on expense reports by type* (%)

Figure

29: 2025-26 spending on expense reports by funding source* (%)

See Figure 49 for detail of what units are included in the

In planning for the future, it can be useful to look back and ask: “How did we get here?”

Figure 4 details the historical audited financial results since 2012-13.

Figure 4: 2012 to 2026 historical audited financial results ($ millions)

Note: The figures were obtained from the audited financial statements of Brock University, which were prepared in accordance with Canadian Accounting Standards for Not-For-Profit Organizations.

Figure 32

The following are the average values of transactions for 2025-26:

Council

Brock Plaza Corporation

Enbridge Sustain

Indigenous-led organization spending Figure 33

Consistent with the University's Strategic Plan, Brock remains committed to supporting indigenous partnerships. We are a Canadian Council for Indigenous Business (CCIB) Champion – increasing opportunities for Indigenous businesses to partner with Brock in our supply chains.

Expense reports – $694

Supplier invoices – $11,413

Ad hoc payments – $861

Total active purchasing cards as of April 30, 2026 was 1,103

with spending on purchasing cards totalling more than $20.2 million in 2025-26.

34

Total spending* to NIAGARA REGION suppliers for 2025-26 was more than $42.5 million TO 454 suppliers

In 2025-26 as part of our commitment to supporting CCIB as a Champion, we increased our spending with indigenous-led organizations 69%.

Total collaborative buying in 2025-26 was $33.3 million, through the following collaborative organizations: Figure 35:

OECM – Ontario Educational Cooperative Marketplace

NPPC – Niagara Public Procurement Committee

CAUBO – Canadian Association of University Business Officers

SO - Supply Ontario (formerly MPBSD)

OUPPMA – Ontario University Professional Procurement Management Association

Kinetic GPO

CANCOLL - Canadian Collegiate Buying Group

OCUL – Ontario Council of University Libraries

CRKN – Canadian Research Knowledge Network

Canoe Procurement Group of Canada

The average spend per supplier was more than $93,000.

Funding results

Overview

This past year has been marked by significant achievements. As in previous years, the accomplishments of our students, alumni, faculty, and staff are extensive and worthy of recognition. These successes continue to be strengthened by the University’s ongoing commitment to strategic resource allocation. The following sections provide a closer look at the financial activity of the University. Figure 37 illustrates the financial results of the University compared to the budget and prior year actual. The information is presented on a funding basis, which represents the commitment of cash and the audited Financial Statements prepared in accordance with accounting standards for not-for profits (NFPS). A reconciliation between the two presentations can be found starting on page 24, with commentary on the funding actual results starting on this page and commentary for the NFPS actual results on page 26.

Financial results – funding basis

The following section explains the 2025-26 results on a funding basis, not to be confused with the audited Financial Statements, which are prepared in accordance with accounting standards for not for-profits (Part III of the CPA Handbook NFPS). The funding basis represents committed cash. A positive balance, or funding surplus, represents uncommitted cash, and a negative balance, or funding deficit, represents overcommitted cash.

When the 2025-26 funding budget was initially established, we estimated that a $13.6 million mitigation target would be required to achieve a balanced funding result. This year’s mitigation efforts successfully addressed the majority of the required target. We ended the fiscal year with a small $0.6 million funding deficit which was offset by drawing funds from the contingency reserve. To the entire University community, congratulations and thank you for your ongoing contributions to our strategic priorities.

Review of overall revenue

Actual revenue for 2025-26 was $19.0 million higher than budget, with all revenue lines exceeding budget – student fees by $2.6 million, grant revenue by $4.3 million, inter-fund revenue by $2.8 million, including $0.6 million from the contingency reserve, internal chargebacks by $0.9 million and other revenue by $8.6 million. These variances will be fully discussed in the following sections.

Tuition and enrolment

Student fee revenue for 2025-26 fiscal year was $180.9 million. This is slightly lower than the student fee revenue in 2024-25. Looking forward, the University is focusing on improving our enrolment outcomes to support Brock’s fiscal sustainability. Figure 38 details the breakdown of student fees between credit and non-credit tuition revenue and fee revenue.

Figure 38: Student fees

(1) Represents ‘all-in’ headcount which includes degree seeking, letter of permissions, non-degree, auditors and certificate students. (2) Represents full-time equivalent (FTE) students. For a definition, refer to page 85 of the 2026-27 Budget Report.

(1) Figures based on the Faculty of major. (2) Includes letter of permission, non-degree students and auditors.

Tuition related to for credit programs –compared to budget, shows a positive variance of $1.8 million, as detailed in Figure 40, and is the result of strong undergraduate enrolment performance compared to budget. Domestic undergraduate student headcount is 657 students higher than budget and international undergraduate headcount is 92 students higher, driven by the Faculties of Applied Heath Sciences and Education as well as the Goodman School of Business. Domestic graduate headcount is 54 students higher than budget, while international graduate enrolment is 95 students lower than budgeted enrolment. The lower overall graduate enrolment is driven by the Goodman School of Business, accounting for 78 of the student variance. Figure 41 shows enrolment by Faculty compared to budget. The enrolment variances resulted in higher domestic tuition of $3.5 million offset by lower international tuition of $1.7 million, as shown in Figure 40.

Tuition related to for credit programs –compared to prior year actuals, shows a negative variance $2.1 million. The lower international tuition of $11.1 million was offset by increased domestic tuition of $9.0 million. Domestic student headcount versus 2024-25 shows an increase of 656 students, with growth in both undergraduate and graduate students. International student headcount enrolment is down by 411 students versus 2024-25, with lower undergraduate and graduate students, as shown in Figure 39. These enrolment numbers are shown by Faculty in Figure 9 on “The big picture” pullout. As compared to 2024-25, the Faculties of Mathematics and Science, Humanities and Social Science and the Goodman School of Business enrolment decreased, with 100, 47, 45 and 30 fewer students, respectively. The Faculties of Education and Applied Health Science experienced increases of 265 and 250 students, respectively, as compared to 2024-25.

(1) 'All-in' includes degree seeking, letter of permissions, non-degree, auditors and certificate students.

42: For credit program billings by session ($millions)

Tuition related to non-credit programs, was $4.2 million in 2025-26, shown in Figure 43. As compared to budget, Continuing Teacher Education, English as a Subsequent Language (ESL) and Professional and Continuing Studies Programming showed positive variances to budget of $0.7 million, $0.06 million and $0.03 million respectively. This is offset by Goodman Group showing a $0.3 million negative variance to budget. As compared to 2024-25 actuals, tuition related to non-credit programs is $1.4 million higher, with growth shown in all types of programming. Note, Goodman Group revenue in 2024-25 was reported as part of Other revenue in Sales and Services.

43: Tuition related to non-credit programs (1)

Figure 42 shows the distribution of tuition from credit programs in 2025-26, with 12.9 per cent in Spring/ Summer and 87.1 per cent in Fall/Winter. The Spring/ Summer share declined slightly from 2024-25 due to lower international enrolment, partially offset by approximately 3.0 per cent increase in domestic participation, reflecting successful efforts to boost Spring/Summer engagement.

(1) Represents tuition related to enrolment not included in Ministry reporting. (2) Starting in the fall of 2024, Continuing Teacher Education is reported as part of Professional and Continuing Studies. Prior

Figure 44: Grant revenue

Grant revenue

In 2025-26, Brock recorded $123.3 million of grant revenue, of which $87.8 million related to the Core Operating Grant and the Differentiation Grant Envelope, as detailed in Figure 44. This is consistent with the 2025-26 budget as well as the actuals received each year since 2019-20.

The Ministry of Colleges, Universities, Research Excellence and Security (MCURES) Postsecondary Education Sustainability Fund (PSESF) 2025-26 revenue consists of a base $4.4 million ($2.6 million in 2024-25) and $3.0 million top-up funding ($6.1 million in 2024-25).

The Special Purpose Operating grant envelope is $2.1 million higher than budget mainly due to additional MCURES funding for Teacher Education, which had a budget of $1.2 million based on what was received in 2024-25. This funding had not been confirmed for 2025-26 at the time of developing the budget. In May 2025 the Province communicated that Brock would receive one-time Teachers Education funding of $2.3 million over two years ($1.4 million in 2025-26). In June 2025 the Province increased the commitment by an additional $2.93 million over two years ($1.8 million in 2025-26), resulting in a total $3.2 million in 2025-26, $2.0 million more than the budget.

Other MCURES and specific purpose grants were higher than budget by $1.8 million, due to increased funding for the Nursing grant, related to higher-than budgeted Nursing enrolment. Additionally, funding for 2024–25 undergraduate Concurrent Bachelor of Nursing/Master of Nursing (BN/MN) students was received this year, despite earlier uncertainty regarding this funding.

The Facilities Renewal Program Fund, provided by MCURES was also higher than budgeted, by $0.2 million. In addition, 2025-26 actuals include a number of other special purpose grants that were not expected at the time of the budget, including funding from Cooperative Education and Work-Integrated Learning Canada Innovation HUB and increased funding for the Ontario Council on Articulation and Transfer (ONCAT) grant.

Other revenue

Total other revenue, was higher than budget by $8.6 million, driven by higher than forecasted investment income, sales and services revenue and ancillary revenue. The higher sales and services revenue of $3.6 million compared to budget was driven by Canada Games Park consolidated revenue of $0.7 million; higher unclaimed student credit balances of $0.6 million; higher Brock Sports Medicine health service billings of $0.3 million; higher athletic teams fundraising and fee revenue of $0.3 million; higher Ontario University Application Center (OUAC) revenue of $0.2 million and increased health insurance reimbursements of $0.2 million. In addition, sales and services includes a one-time provincial sales tax rebate claim from 1995-2001 being settled for $0.6 million in 2025-26.

Figure 45: Other revenue

Investment income exceeded budget by $3.1 million, more fully described in the Treasury section of this report.

Total ancillary revenue was higher than budget by $1.9 million. Conference Services revenue generated a positive variance to budget of $0.6 million. Parking and Dining revenues were $0.5 million and $0.2 million higher than budget, respectively. Housing services fees were higher than budget by $0.3 million with overall residence capacity at 96.6 per cent in 2025-26, as compared to 97.0 per cent in the budget, with the increase in revenue a result of a housing mix variance. As compared to 2024-25, ancillary revenue was lower by $3.9 million; due mainly to the outsourcing of the Campus Store to Follett Canada as of May 26, 2025. The outsourcing results in reduced Campus Store sales offset by lower cost of sales and other operating costs. Conference Services also saw a decline in revenue because of the additional revenue in 2024-25 related to the World Rowing championships.

Internal chargebacks and inter-fund revenue

Internal chargeback revenue was higher than budget by $0.9 million in 2025-26. Inter-fund revenue was higher than budget by $2.8 million. The increase in inter-fund revenue was mainly due to a transfer of proceeds from the sale of the Hamilton Campus, allocated through the Strategic Fund, to support a $2.8 million payment under an agreement with the City of Burlington for renovations to the Burlington Campus. Inter-fund revenue also includes funding of $0.6 million from the Contingency fund to achieve a balanced funding result.

Operating costs

Personnel costs

Our people are what make everything possible at Brock University. Figure 46 illustrates the actual 2025-26 personnel costs versus budget and prior year by personnel group. Overall personnel costs, on a funding basis, were under budget by $3.2 million. Figure 47 shows overall part-time teaching by Faculty for 2025-26 of $25.4 million, which is $0.8 million more than budget and $1.0 million less than 2024-25 actual. The growth in Faculty and Professional Librarians personnel costs was mitigated as a result of a faculty retirement incentive program that concluded with savings materializing in 2025-26.

Figure 47: Part-time teaching by teaching Faculty (1)

(1)Includes salaries and benefits for the following: CUPE 4207 Unit 1, CUPE 4207 Unit 3 – temporary, CUPE 4207 Unit 4, CUPE 4207 Unit 5, BUFA overload, nonunion instructors and stipend transfers.

Non-personnel operating costs

Overall operating costs were $8.6 million higher than budget, as detailed in Figure 48. The following represent the largest variances to budget:

• Scholarships and fellowships were lower than budget by $0.8 million. Higher undergraduate and domestic graduate student enrolment led to above-budget spending on the undergraduate Brock Scholars program and domestic graduate fellowships. In addition, employee benefit student tuition waivers were higher than budget. Offsetting these variances, was lower than budget spending due to student mix in relation to the requirements of the Student Access Guarantee (SAG), an initiative that requires all colleges and universities that

receive public funding to provide enough financial aid to cover a student’s assessed needs for expenses directly related to his or her program that are not fully met by OSAP. In addition, spending related to discretionary bursaries was below budget due to mitigation measures. International graduate fellowship expenditures were also below budget, reflecting lower international enrolment.

• Repairs and maintenance and capital replacement were higher than budget by $3.1 million. Of this, $2.8 million relates to Brock’s partner contribution to the Burlington Campus location. The majority of the remaining $0.3 million variance is related to increased equipment purchases, seen in computer equipment, software and licenses, furniture, laboratory equipment, and athletic equipment.

• Purchased services were higher than budget by $1.7 million, driven by higher-than-budgeted contracted services mainly related to the Energy-asa-Service (EAAS) instalment payment, food services, maintenance contracted services and professional fees for physicians offset by lower student recruitment commissions.

• Utilities were higher than budget by $0.8 million, mainly driven by higher-than-budgeted electricity and natural gas rates.

• Other operating expenses were $3.4 million above budget due to higher bad debt estimates, increased travel spending, foreign exchange losses, and other costs across the University.

Funding results by unit

Figure 49 presents the budgeted revenue and costs of each of the University’s responsibility centres, based on each unit’s responsibility for establishing their respective budgets. The division of the responsibility centres is not meant to measure each unit’s total revenue impact or fully loaded costs. As such, revenue shown in the Faculties does not include an allocation of global tuition or operating grant revenue. Revenue shown by the responsibility centre only reflects the tuition, fee and grant revenue specifically budgeted in the respective centres as well as any other revenue generated within each centre.

Total costs, as shown in the responsibility centres, include salaries, benefits and direct non-personnel costs (operating costs). Support service costs have not been allocated in these figures. For example, the majority of utility costs are shown collectively as part of the Utilities, Taxes and Insurance responsibility centre and the majority of scholarships, bursaries and fellowships are reported as part of the Scholarships, Bursaries and Fellowships responsibility centre.

As detailed in the Revenue and Expense allocation model section of this report, the revenue and expense allocation model has been developed and allocates all budgeted revenue and net operating costs of the

University, including support service costs, to each of the six Teaching Faculties. The Provost, working with Financial Services, is utilizing this model as a planning tool.

Externally funded research revenue is recognized as grant funds are spent. These revenues and related expenses are excluded from the budget, as requiring researchers to forecast spending would create an unnecessary administrative burden and have no net impact on the budget, since revenues and expenses offset each other. However, a portion of the overhead funding associated with external grants is included in the budget.

With mitigation efforts still in place throughout the year, we note that Teaching Faculties closed out 2025-26 with a $1.5-million positive variance to budget. Student Specific units were under budget by $0.9 million, with savings across several units including the Office of the Registrar and Enrolment Services and Brock International. Ancillary and Housing Services’ net contribution to the University for 2025-26 was $10.4 million, showing strong performance and resulting in a net contribution $2.3 million higher than budget. Shared Services were also positive to budget with savings mainly seen in University Marketing and Communications and Information Technology Services.

Funding budget by responsibility centre

Figure 49 details the funding budget by responsibility centre, which in turn are grouped into one of the following categories:

Teaching Faculties, Academic Support, Student Specific, Ancillary, Shared Services, Space and Global.

Figure 49: Funding budget by responsibility centre ($000s)

(1) Includes the following: the offices of the President; the Provost and Vice-President, Academic; the Vice-President, Research; the Vice-President, Administration; the Vice-President, External; the Vice-Provost and Associate VicePresident, Academic; the Vice-Provost, Teaching and Learning; and the Associate Vice-President, Students.

Revenue and expense allocation model

The revenue and expense allocation model was developed through a consultative process with allocation methodologies approved by the Deans and Provost. The model has three key functions to support academic and financial planning of the University:

• Enhances the understanding of how revenues are generated and how costs are incurred and allocated at the Faculty level in a transparent manner.

• Supports longer-term resource allocation and decisionmaking for academic units.

• Establishes an incentive mechanism to ensure yearend surplus funds are allocated to the Faculties and to support institutional strategic priorities.

The third purpose refers to the funding of the Deans’ Strategic Funds, which are allocated based on a two-envelope basis. The first envelope recognizes the contributions of the Faculties that have a positive contribution margin (i.e. expenses less than revenue) after space costs, recognizing this contribution margin level reflects expenses Faculties have direct control over. The second envelope provides an incentive for year-over-year improvements in contribution margin, after space costs, for all Faculties through a method that allocates a share

of the surplus based on the year-over-year improvement. The use of these funds are bound by the terms of reference with the Provost and are to support the institutional strategic priorities.

Figure 51 reports the full actual funding results for 2025-26 using the Revenue and Expense Allocation Model. Figure 50 is a visual representation of the 2025-26 actual results versus budget, detailing expenses as a percentage of revenues allocated by each Faculty and in total. The actual results identify four Faculties generating net positive contributions, and two Faculties requiring additional funding from these positive contributions to support their operations. Through guidance from the Academic Leadership Team, this model reports all tuition allocated to the course students take and the Faculty the course belongs to, regardless of a student’s home Faculty. Taking a student-centric approach, allocating tuition based on a 100 per cent students-in-seats model, facilitates the ongoing review of academic program requirements and supports increased flexibility in programs for students to take additional elective credits.

Going forward, the model will continue to be evaluated and adjustments to the model will be made, in consultation with the Academic Leadership Team where appropriate, to ensure the model is meeting its goals and supporting the Institutional Strategic Plan.

(1) See page 21 for units included in Space Costs. Note: Space Costs are allocated directly to Faculties in this section. The space costs related to Academic Support, Student Support and Shared Services units are included in the respective lines in the allocation model. (2) Excludes Research Support Fund grant revenue as shown separately as part of revenue. (3) See page 20 and 21 for details of units included in these categories.

NFPS results

Funding basis reconciled to the Financial Statements

A full reconciliation of the differences between the audited NFPS basis of accounting and the funding basis will follow; however, there are two key observations regarding these differences. The funding basis accounts are a subset of the audited NFPS accounts, which represent operating/unrestricted activities of the University and the unrestricted fund. The Examination of the Net Assets section, starting on page 27, describes each of the funds of the University.

The largest difference between the funding basis and the NFPS basis is the treatment of capital transactions. On a funding basis, all principal payments on debt and all fund transfers into separate capital funds to purchase capital and related costs are considered expenses. The function of transferring the funds into separate capital

fund accounts is a mechanism to ensure cash is actually set aside to cover capital and related costs. Therefore, when the cash is transferred to separate capital funds, the funding basis treats the transfer as an expense. On a NFPS basis, capital purchases are not expensed, as they result in an asset, and are included on the Statement of Financial Position. These assets are subsequently expensed through the process of amortization over the useful life of the asset. This is similar to an individual who might purchase a home where the home becomes part of an individual’s net worth statement, net of any loans used to purchase the home.

Figures 52 and 53 reconcile the 2025-26 financial results from a funding basis to the NFPS basis. The adjustments represent differences in reporting between the NFPS basis and the funding basis and are primarily for noncash transactions and timing differences. Each of these differences are described below.

Figure 53: NFPS Adjustments

NFPS adjustments

1. Course fees – Course fee revenue, along with the offsetting spending, is included as part of the NFPS Financial Statements. This revenue and spending is not recorded as part of the funding basis as it is externally restricted. The 2025-26 actual course fee spending, along with the offsetting revenue, represents the adjustments.

2. Capital grants – The Facilities Renewal Program funding is received by the University and is used for capital purchases. It is included as part of deferred capital contributions in the NFPS Financial Statements and later amortized over the useful life of the capital item it funded. However, on a funding basis, this grant is recorded as revenue when it’s received. The actual Facilities Renewal Program Funds, received in 2025-26, represents the adjustment.

3. Research, including fellowships – Research grants for restricted purposes and the offsetting research expenses, including fellowships, have not been included on a funding basis. However, they are included as part of the Financial Statements. The actual research spending and related revenue represent the adjustments.

4. Amortization, net – Amortization is a non-cash expense and is therefore not included in the funding basis. For Financial Statement purposes, the capital asset amortization is recorded to reflect the usage of capital assets, and amortization of deferred capital contributions (restricted external donations and grants) is being amortized over the useful life of the assets they have funded. The 2025-26 actual amortization figures are added as part of the adjustments.

5. Endowment and trust spending – Spending in the endowment fund and non-endowed trust fund, mainly in the form of scholarships, is included as an expense with offsetting revenue as part of the NFPS Financial Statements. This spending is not recorded as part of the funding basis (with the exception of inter-fund transactions). The 2025-26 actual endowment and trust spending, along with the offsetting revenue, represents the adjustments.

6. Principal payments – Principal payments of long-term debt are recorded as an expense in the funding basis and are not considered an expense in the NFPS Financial Statements as they represent

a reduction of a liability. The 2025-26 actual principal payments represent the adjustment.

7. Non-capital purchases in capital and related project fund – Non-capital purchases (including personnel costs) made in the capital and related project fund are reported as an expense in the NFPS Financial Statements but are not recorded in the funding basis as the expense would have been recognized in the funding basis upon funding the capital reserve. The 2025-26 actual non-capital purchases represent the adjustment.

8. Capital purchases in operating – Capital purchases made as part of operating spending are recorded as an expense on a funding basis, while they are recorded as an asset in the NFPS. The 2025-26 actual capital purchases made as part of operating spending represent the adjustment.

9. Post-retirement benefits – This amount is actuarially determined and represents the actuarial adjustment to employee future benefits related to current service. An adjustment is required because this amount represents an expense in the NFPS Financial Statements. Since it doesn’t reflect a cash outflow, it is not recorded in the funding basis.

Internally restricted funds activity

Activity, including expenses and revenue, in the internally restricted funds are recorded as part of the NFPS Financial Statements but not reported in the funding results. The actual activity in these funds is reported in Figure 52.

Internal chargebacks and inter-fund transfers

The internal chargeback revenue and expenses represent internal charges between departments within the University and are eliminated for the NFPS Financial Statements. The inter-fund revenue and the inter-fund expenses represent transfers between unrestricted, internally restricted and externally restricted funds. These transfers are reported on a funding basis as they represent committed cash transactions. These transfers are also eliminated for NFPS Financial Statements as they only represent internal movement of funds.

Financial review of the audited Financial Statements

Revenues

Revenues increased to $409 million, up 1.0 per cent over prior year. Student fees increased $0.3 million (0.1 per cent), due to a 3.8 per cent increase in domestic enrolment and higher international tuition rates, offset by a 20.8 per cent decrease in international enrolment. Government grants grew $6.5 million (5.8 per cent), driven by increased MCURES funding for STEM ($4.4 million), Teacher Education ($2.0 million) and Nursing ($1.9 million), partially offset lower Postsecondary Education Sustainability Fund (PSESF) funding of $1.3 million and the absence of one-time Efficiency and Accountability Funding ($0.5M) received in 2024-25. Ancillary revenue decreased $4.0 million due to the Campus store transition to Follett Canada in May 2025, and lower Conference Services revenue related to the World Rowing conference held last year. Increases were seen in Housing Services, Parking and Dining. Sales and service revenue increased $0.9 million (4.1 per cent), mainly from Brock Sports Medicine services, a provincial sales tax rebate claim related to 1995-2001 and higher Youth University fees. Investment income decreased by $1.4 million due to declining interest rates and declining reserve balances, while research grant revenue increased $0.6 million.

Expenses

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Expenses increased to $429 million, up 1.8 per cent over prior year. Salaries and benefits increased $8.1 million (3.0 per cent), driven by $6.2 million in Faculty/Librarian collective agreement salary rate increases, partially offset by savings of $2.9 million as a result of the retirement incentive, net of new Faculty/Librarian hires during the year. Other operating expenses were flat to 2024-25. Scholarships, fellowships and bursaries decreased $1.5 million (5.2 per cent), due to the flowthrough of the changes to the Brock Scholar program implemented in 2023-24 and lower graduate international enrolment. Expendable equipment, repairs and maintenance increased $3.6 million (25.1 per cent), mainly from a partner contribution to the Burlington Campus. Utilities and taxes decreased by $0.5 million (4.5 per cent), with lower natural gas (27 per cent) and Carbon and GHG federal taxes, partially offset by higher water and sewer (2 per cent) and electricity (97 per cent). Cost of sales decreased due to outsourcing of the Campus Store.

Assets

Assets decreased to $780 million, or 3.2 per cent, compared to last year. Capital assets additions were $18.0 million, including furniture and IT equipment for the Burlington Campus and Engineering renovations, which were offset by $36.0 million in amortization. Current assets were down $8.0 million compared to 2024-25 mainly seen in cash and cash equivalents and government grants receivable. Restricted investments increased $8.4 million and the employee future benefit asset decreased $7.3 million.

Liabilities

Liabilities decreased to $569 million, or 0.9 per cent from last year. Accounts payable and accrued liabilities decreased $3.0 million (7.3 per cent), primarily due to a decrease in accruals for construction projects. Deferred revenue decreased $1.1 million (5.0 per cent) due to a decrease in deferred externally restricted donations, offset by increases in deferred spring tuition and student fees. Deferred contributions increased $2.5 million (22.2 per cent) and deferred capital contributions increased $0.5 million (0.2 per cent).

Net Assets

Net assets decreased to $220 million, or 8.3 per cent from last year. The funds included in the endowments, and internally restricted and unrestricted reserves are all supported by cash or restricted investments.

Examination of net assets

The University is split into a number of different funds, which constitute the University’s net assets. The funds and a related description are as follows:

• Unrestricted – On a funding basis, activity runs through the unrestricted fund. In fact, the balance of this fund represents the sum of historical surpluses and deficits on a funding basis, which also represents the uncommitted cash balance of the University. If the balance is positive, the University has uncommitted cash, and if it is negative, it has over-extended by spending or committing more cash to projects than it actually has. The net uncommitted cash of the University at April 30, 2026 is $0.104 million.

• Internally restricted – This fund represents funds set aside and committed for future use and is the sum of a number of funds as follows:

Capital and infrastructure projects and reserves (capital and related project fund) – This fund was established to transfer funds from the unrestricted fund and other funds into the capital and related projects accounts. As items are capitalized, they are transferred to the Invested in Capital Assets Fund.

Operating project accounts – This fund includes support for ongoing strategic initiatives normally funded out of the unrestricted fund, including the unspent portion of the funding of the Dean’s Strategic Funds, and ensures these funds can be made available in future years if unspent. Research funds with no external obligations – For the most part, unspent research funds are captured under deferred revenue on the Statement of Financial Position in the NFPS statements. This occurs when there is an external restriction to spend the funds on specific activities or items. The research with no external obligations fund was established to recognize both internally and externally funded research that has no external restrictions.

Start-up funds – This fund includes all unspent startup funds awarded to faculty.

Professional expense reimbursement (PER) accounts – This fund includes all unspent PER and accountable allowance amounts provided to faculty and some senior administration.

Sinking fund – This fund represents a portion of the sinking fund principal contributions for repayment of the University debentures as well as the related investment income. The total sinking fund balance of $23.9 million is reported in restricted investments while the balance in the internally restricted fund is $16.4 million. The difference represents The Zone Fitness Centre expansion fees which, for accounting purposes, is not recognized as revenue and instead recognized as deferred capital contributions and therefore not included in internally restricted net assets.

Employee future benefit reserve – This fund was established to set aside funds to pay our employee future benefit liability. The liability on our Statement of Financial Position is $32.9 million as of April 30, 2026. It also includes the Pension Stabilization Reserve, which was established in 2017-18.

Contingency reserve – This fund was established to cover potential unanticipated costs with current or previous projects and any future litigation, as well as to address mitigation. The majority of the additional funding in 2025-26 is related to section 211 input tax credits for Public Service Bodies (PSB). Given that this tax credit is subject to change-inuse-rules, whereas the University could be required to repay all or a portion of this rebate in the future, it has been the practice of the University to reserve these credits for contingency and support of the financial position of the University. $0.6 million of the reserve was used in 2025-26 to achieve a balanced funding result.

Canada Games Park Capital Reserve – As part of Canada Games Park, the University will contribute annually its proportionate share of an amount equal to 1.5 per cent of the initial hard costs of constructing the facility into a capital reserve fund held by the Niagara Region for future capital repairs and improvements. The fund balance represents the annual contributions plus interest income and less any spending of the reserve.

Strategic initiative fund – This fund represents the unspent portion of funds established to support institutional, academic and research priorities with one-time funding. In 2025-26 $2.7 million was used to support Engineering. In 2025-26, there were no additional discretionary appropriations (deposits) made to this fund due to the funding deficit. See Figure 60 for a breakdown of the balances in this fund.

• Invested in capital assets – This fund represents the balance of capital assets net of long-term debt, deferred capital contributions and debt payments. In year, the activity in the fund relates to funding, debt or deferred capital contributions and capital assets purchases. The majority of capital assets that were purchased were transacted through either the funding budget, recorded in the unrestricted fund discussed above, or the capital and infrastructure projects and reserve, which is included in the internally restricted fund, also discussed above.

• Endowments – The endowment fund represents the activity and balance of our endowments.

• Employee future benefits – This fund is the sum of the pension asset and post-retirement obligations. Unlike the other reserve funds, the post-retirement benefits in this fund remains unfunded. The Board of Trustees approved a plan to reserve $0.9 million annually for a number of years which ended in 2018-19 due to fiscal constraints impacting Brock’s capacity to continue adding funds to this reserve. A further $1.6 million was established in 2017-18 as a pension stabilization reserve. Investment income on this reserve remains restricted for employee future benefits.

Figure 59 details the balances of a number of the internally restricted funds, as of April 30, 2026, by teaching Faculty as well as the Library.

Reviewing the numbers

Taking a closer look at some of the numbers

The following section provides additional information regarding Brock’s treasury portfolio, financial health metrics, pension plan, endowment and capital investments.

Treasury: portfolio commentary

Yield on operating investments for 2025-26 was 3.73 per cent (4.81 per cent 2024-25). Operating investment income was lower than prior year mainly due to declining interest rates, with some decline attributed to a lower average investment balance driven by declining reserves. The cash deposit rates are linked to the Bank of Canada overnight target rate plus an adjustment factor. As at April 30 2026, the deposit interest rate was 2.95 per cent which represents a 0.35 per cent decline compared to April 30, 2025. As at April 30, 2026, $72.4 million was invested in guaranteed investment certificates (GICs) with an average yield and duration of 3.9 per cent and 1.6 years respectively ($37.2 million with 5.4 per cent yield and 2.3 years duration respectively in 2024-25). In comparison, Government of Canada two-year bonds had a yield of approximately 2.96 per cent at year-end (2.47 per cent at April 30, 2025).

The Mawer Balanced Fund used for investing the University sinking funds and Employee Future Benefits Reserve earned a 10.65 per cent return in 2025-26 (10.49 per cent return in 2024-25). The sinking fund requires a compounding 5.0 per cent

rate of return to achieve the target $93 million by December 2045. The Fiscal Framework provides for annual contributions of $0.4 million which commenced in 2024-25 fiscal year growing by another $1.95 million in 2028-29 when the Sunlife residence loan funded from Ancillary Operations revenues is repaid. It is expected, given the asset mix of the balanced fund, that returns will experience short-term volatility. Mawer’s Balanced Fund has historically generated exceptional returns, earning an annualized return of 7.9 per cent before management fees (0.25 per cent) over the last 13 years since the establishment of this investment. Mawer is under review for their Pension and Endowment investment management mandates to determine if their funds remain appropriate for Brock’s investment needs. A second sinking fund with the same investment strategy was established in 2021-22 to fund the $125 million series B debenture repayment. Additional information on this strategy is outlined in the Financing section of the Budget Reports. A deposit of $2.4 million consisting of funds from the zone construction ancillary fee and funding allocated from Ancillary Operations revenues as part of the series B debenture repayment strategy was added to the investment balance in 2025-26.

Figure 61 summarizes the investment income yearover year and versus budget, Figure 62 graphs the cumulative monthly investment income performance, Figure 63 details the monthly cash flow over the past five years, Figure 64 represents a year-over-year variance analysis of investment holdings and Figure 65 is an analysis of fees for investment management.

(1) Average balance does not include externally restricted trusts with separate investment strategies. Brock currently has three externally restricted segregated trust investments with income of $0.11 million not included in the figures above.

Figure 65: Analysis of fees for investment management

Financial health metrics

These financial health metrics compare us to other universities in the comprehensive category as detailed in Figure 66.

(1) Calculated using financial information from 13 other comprehensive universities. Certain 2024 metrics have been updated due to revisions in certain universities’ financial statements.

The metrics can be explained as follows:

• The primary reserve ratio refers to the amount of cash available to cover operations. At April 30, 2026, Brock has approximately 74 days (2025 – 77 days) of expendable reserves.

• The next two ratios (debt burden ratio and interest burden per cent) describe how Brock utilizes a greater proportion of its annual operating expense to fund debt obligations.

• The interest coverage ratio measures the ability to fund interest charges from cash generated through operations. The ratio has fallen below the 2.0 target set by the Board of Trustees due to reduced earnings before interest, deprecation and amortization (EBIDA). The ratio considered to be the minimum standard by Morningstar DBRS, the University's credit rating agency, is 2.5 for an A (High) rating.

• The viability ratio is how much of the institution’s debt could be paid off with expendable resources. The average institution in our category could pay off all of their debt with expendable resources. Brock can pay off 35 per cent and therefore is comparably more vulnerable to unplanned events.

• The net operating revenues ratio provides an indication of the extent to which we are generating positive cash flows in the long run to be financially sustainable.

• The employee future benefits per student metric acknowledges certain obligations are owed to certain employees in the future when they retire or cease employment. The negative balance here represents the fact that the obligation is larger than the actual cash set aside to pay these benefits. Despite the fact that we are in a deficit position, Brock compares favourably to our peers on this metric.

• The endowment per student is an indicator of external support for the institution. Endowments provide relief to the operating budget as a source of additional funding to support areas of the institution’s mission. Our endowment per student has seen some growth but still remains less than our peers.

The comparative April 2026 figures of the other universities in the comprehensive category were not available at the time of writing this annual report.

Our debt

Figure 67 details the current and projected external debt of the University.

On February 20, 2026, Morningstar DBRS changed the trends on the Issuer Rating and Senior Unsecured Debentures credit rating of Brock University to Negative from Stable while maintaining the credit ratings at A (high). The last time Brock’s trend was changed to “Negative” was March 10, 2021 and it returned to “Stable” the following year. The press release for the last trend change stated that “DBRS Morningstar’s understanding that Brock has been disproportionately affected by the Coronavirus Disease (COVID-19) pandemic as a result of increased competition for domestic students. This, in turn, has resulted in a weaker enrolment outlook. This warning reflects the potential of persistent affects of COVID-19 on university finances, including on Brock, and observed through recent developments in the sector.” The February 20, 2026 press release states “the trend change to Negative from Stable reflects the University’s sustained operating deficits and a material new capital lease obligation which will increase Morningstar DBRS’s measure of

(1) Fiscal full-time enrolment (FFTE). For a definition, refer to page 85 of the 2026-27 Budget Report (2) 2027 and 2028 sinking fund values represent the targeted sinking fund balances.

debt. Collectively, this points to further deterioration in financial risk assessment metrics, specifically debt-per-FTE and expendable resources-to-debt, which weighs on the current credit ratings. Although the Province’s recent funding announcement should support better fiscal performance at Brock, this is more than offset by the expected increase in debt. Brock’s credit ratings remain underpinned by the University’s position as a midsize comprehensive university in the Province of Ontario (rated AA with a Stable trend) and its track record of strong fiscal management.”

The existing sinking fund for the Series A Debenture issued in 2005 continues to trend ahead of schedule due to strong investment returns. As at April 30, 2026 the balance of the sinking fund was $12.8 million which exceeds the expected value of $10.2 million based on the growth schedule for the fund. The additional funding is due to a fund rate of return since inception exceeding the five per cent required rate of return. A second sinking fund was also established in 2021-22 to fund the repayment of the Series B 2020 Debenture issued in 2020. The funding of this sinking fund is sourced from student ancillary fees established for the zone fitness centre and ancillary services revenues consistent with the business cases for the student experience infrastructure projects funded by the debenture. The balance of the second sinking fund as at April 30, 2026 was $11.2 million which exceeds the expected value of $10.1 million based on the growth schedule for the fund.

Pension plan

The actuarial valuation on the pension plan completed as at July 1, 2025, indicated the plan was 101 per cent funded on a going-concern basis (99 per cent as at July 1, 2022 valuation) and 106 per cent on a solvency basis (105 per cent as at July 1, 2022 valuation). The going concern improved slightly due to higher interest rates increasing the discount rate that reduces the present value of the liabilities. The actuary sets the expected rates of returns based on industry best practices guided by the Canadian Institute of Actuaries. The University has no control or influence over these assumptions used by the actuary. The going concern surplus of $4.5 million (deficit of $5.3 million as at July 1, 2022 valuation) has eliminated the required special payments into the plan of $0.5 million representing an annual savings compared to the last valuation. Current service cost payments for the plan total $16.7 million annually. Employees also contribute to the money purchase component of the plan (defined contribution) an additional $9.7 million resulting in an employer to employee funding ratio of 1.7 to 1.0. An updated valuation is required before the next triannual valuation date of July 1, 2028.

Additional information on the pension plan may be found at brocku.ca/human-resources/pension/

Figure 68: Pension Plan as of June 30 pension year end ($000s)

Endowment summary

The endowments of the University continue to grow. Figure 69 summarizes the activity of the last six years. Figure 70 details the Top 10 endowments by size of investments as of April 30, 2026.

Figure 69: Endowment activity

Figure 70: Top 10 endowments 2025-26

Capital investments

The University purchased $18.0 million in capital additions during 2025-26. These additions represent investments in facilities and information technology supporting a number of projects, including Engineering renovations at 3401 Schmon Parkway and on the main campus, the Research Farm – Clean Agriculture for Sustainable Production (CASP), costs related to the Burlington campus, computer purchases, nursing clinical education equipment, as well as other smaller capital items. Typically, one of the main sources of funding for these projects, other than external debt, donations and government grants, is from the Capital and Infrastructure Projects and Reserves Fund (capital fund). Figure 71 illustrates the 2025-26 activity

of the capital fund, which makes up a component of the internally restricted net asset balance in the audited NFPS Financial Statements. As detailed, $10.4 million of funding from the capital fund supported the information technology purchases ($5.5 million) and facilities management purchases ($4.9 million) during the year. During 2025-26, $9.7 million was transferred into the fund from operating. In year, an additional $0.2 million in funding was added to the fund from the strategic reserve, $0.01 million from internal research and operating projects. The key to the capital and infrastructure projects and reserve fund is that funding transferred into the reserve is held at year-end for spending in the following year(s). This recognizes that capital and related projects may often span one or more years and could have timing delays due to planning or regulatory requirements.

71: Activity of the capital and infrastructure projects and reserves fund

Enterprise Risk Management

Enterprise Risk Management (ERM) continues to evolve and mature at Brock. ERM helps inform decision-making and supports the achievement of the University’s strategic objectives and priorities through the identification, assessment and management of principal risks. Brock’s ERM program does not seek to eliminate risk. Rather, the aim of ERM is to identify and understand both risks and opportunities and develop appropriate strategies –including mitigation and optimization – to help achieve the University’s goals.

Adapted from best practices and international standards, Brock’s principal risk assessment process below facilitates a structured approach for risk-informed decision-making and promoting innovative and collaborative solutions in support of Brock’s strategic plan. ERM must be fluid to adapt to the ever-changing environment and complex University landscape. Through the leadership and commitment of the University, ERM is positioned to continue to support the University in achieving objectives.

Risk management process

Financial Statements of BROCK UNIVERSITY

Year ended April 30, 2026

Statement of Administrative Responsibility

The Administration of Brock University is responsible for the preparation of the financial statements, the notes and all other financial information contained in this annual report.

The Administration has prepared the financial statements in accordance with Canadian accounting standards for not-for-profit organizations. The Administration believes that the financial statements present fairly the University’s financial position as at April 30, 2026 and the results of its operations for the year then ended.

In fulfilling its responsibilities and recognizing the limits inherent in all systems, the Administration has developed and maintains a system of internal control designed to provide reasonable assurance that University assets are safeguarded from loss and that the accounting records are a reliable basis for the preparation of the financial statements.

The Board of Trustees is responsible for ensuring that the Administration fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the financial statements. The Board of Trustees carries out its responsibility for review of the financial statements principally through the Audit Committee. The members of the Audit Committee are not officers or employees of the University. The Audit Committee meets with the Administration, as well as the external auditors, to discuss the results of audit examinations and financial reporting matters and to satisfy itself that each party is properly discharging its responsibilities. The auditors have full access to the Audit Committee with and without the presence of the Administration.

The financial statements for the year ended April 30, 2026 have been reported on by KPMG LLP, Chartered Professional Accountants, Licensed Public Accountants, the auditors appointed by the Board of Trustees. The auditor’s report outlines the scope of their audit and their opinion on the financial statements.

Lesley Rigg, Ph.D. President and Vice-Chancellor

Joshua Tonnos, MBA, CPA, CGA Chief Financial Officer & Associate Vice-President Financial Services

BROCK UNIVERSITY

Statement of Financial Position

As at April 30, 2026, with comparative information for 2025 (in thousands of dollars)

(note 3)

Liabilities and Net Assets

Commitments (note 13) Contingencies (notes 14 and 15)

The accompanying notes are an integral part of these financial statements.

On behalf of the Board:

Trustee Trustee

BROCK UNIVERSITY

Statement of Operations

Year ended April 30, 2026, with comparative information for 2025 (in thousands of dollars)

The accompanying notes are an integral part of these financial statements.

BROCK UNIVERSITY

Statement of Changes in Net Assets

Year ended April 30, 2026, with comparative information for 2025 (in thousands of dollars)

The accompanying notes are an integral part of these financial statements.

BROCK UNIVERSITY

Statement of Cash Flows

Year ended April 30, 2026, with comparative information for 2025 (in thousands of dollars)

Cash provided by (used in): Operating activities: Excess of expenses over revenues $(19,236) $(15,906) Add (deduct) non-cash items:

The accompanying notes are an integral part of these financial statements.

BROCK UNIVERSITY

Notes to Financial Statements

Year ended April 30, 2026 (in thousands of dollars)

Incorporated in 1964, Brock University (the “University” or “Brock”) flourishes through the scholarly, creative, and professional achievement of its students, faculty and staff. Offering a range of undergraduate and graduate programs, Brock fosters teaching and research of the highest quality. As a diverse and inclusive community, the University contributes positively to Canada and beyond through imagination, innovation and commitment.

These financial statements reflect the assets, liabilities, net assets, revenue, expenses and other transactions of all of the operations controlled by the University. Accordingly, these financial statements include the academic, administrative and other operating expenditures funded by fees, grants and other general revenue; restricted purpose funds, including endowment, research and trust; and the ancillary operations, such as residence and parking.

The University is a charitable organization and, as such, is exempt from income taxes under the Income Tax Act (Canada).

1. Significant accounting policies:

These financial statements have been prepared in accordance with Canadian Accounting Standards for Not-For-Profit Organizations in Part III of the CPA Canada Handbook. The financial statements include the financial results of the University and its investment in a joint venture (note 1(n) and note 19).

(a) Cash and cash equivalents:

Cash equivalents are held for the purpose of meeting short-term commitments and are readily convertible to a known amount of cash and are subject to an insignificant amount of risk of changes in value. Cash equivalents include money market funds and investments with maturities of three months or less from the date of acquisition. Cash and cash equivalents are valued at fair value.

(b) Inventories:

Inventories are stated at the lower of cost, which is determined using the weighted average cost approach, and net realizable value.

(c) Investments:

Investments are recorded at fair value.

(d) Capital assets:

Purchased capital assets are recorded at cost less accumulated amortization. Contributions of capital assets are capitalized at fair market value at the date of contribution. Capital assets are amortized on a straight-line basis using the following annual rates:

to 33 1/3%

Construction costs are capitalized as work progresses and amortization commences as work is substantially completed. The carrying amount of capital assets is tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized in the Statement of Operations when the asset’s carrying amount is not recoverable and exceeds its fair value.

(e) Works of art:

Contributed works of art are recorded as revenue and expense, at fair market value, at the date of contribution. If the fair market value is not determinable, the contribution is recorded at a nominal amount. Artwork purchases are expensed as acquired.

(f) Endowments:

Contributions restricted for endowments consist of restricted donations received by the University and donations internally designated by the Board of Trustees, in the exercise of its discretion. The endowment principal is required to be maintained intact. The investment income generated from endowments must be used in accordance with the various purposes established by donors or the Board of Trustees. The University ensures, as part of its fiduciary responsibilities, that all funds received with a restricted purpose are expended for the purpose for which they were provided.

Investment income on endowments that is available for spending at the discretion of the University or is available for spending as the conditions established by the donor have been met has been recorded in the Statement of Operations. University policy has been established with the objective of protecting the real value of the endowments by having an overall investment objective for endowments to earn, over time, a rate of return at least equal to the total of inflation plus spending and the costs of administering the funds. The spending rate is reviewed annually. Investment income in excess of administration costs and spending allocations will be added to capital. In the case of endowments where the original donation adjusted for inflation is higher than the market value of the fund, spending may be temporarily suspended in order to preserve donor capital.

(g) Internally restricted net assets:

The University internally restricts the use of portions of its unrestricted net assets for specific future use. Transfers to internally restricted net assets only occur once authorized by the Board of Trustees. When expenses are incurred, expenses are charged to the Statement of Operations and the balance of internally restricted net assets is reduced accordingly.

(h) Revenue recognition:

The University follows the deferral method of accounting for contributions. Unrestricted contributions are recognized as revenue when received or receivable, if the amount to be received can be reasonably estimated and collection is reasonably assured. Pledged donations are recognized on a cash basis since pledges are not legally enforceable claims. Contributions externally restricted for purposes other than endowments are deferred and recognized as revenue in the year in which the related expenses are recognized. Contributions restricted for the purchase of capital assets are deferred and amortized into revenue on a straight-line basis at a rate corresponding with the amortization rate for the related capital asset. Endowment contributions are recognized as direct increases in net assets in the year in which they are received. Student fees are recognized as revenue when courses and seminars are held. Sales and services and ancillary revenue is recognized at the point of sale or when the service has been provided.

(i) Employee future benefits:

The University provides pension benefits to employees primarily through a hybrid pension plan. Under this arrangement, the University and employees are required to make contributions based on a specific percentage of the employee’s earnings. The amount of pension benefits provided to

employees is based on the accumulation of contributions and investment earnings thereon, when the employee retires, subject to a guaranteed minimum benefit amount. Certain faculty are also members of the Teacher’s Superannuation Fund, a multi-employer defined benefit plan.

The University provides other non-pension benefits to most of its employees, including retiree medical and dental benefits until the age of 65, accumulating sick leave benefits, pre-retirement leave benefits, and for specific employees, a health-care spending account.

The University accrues its benefit obligations for these employee future benefits as the employees render the services necessary to earn them. The actuarial determination of the accrued benefit obligations for these employee future benefits uses the projected benefit method prorated on service. For purposes of measuring the benefit obligations, the funding valuation is used for the pension and the accounting valuation is used for the non-pension benefits.

The University recognizes the amount of benefit obligations net of the fair value of plan assets in the Statement of Financial Position. Current service and finance costs are expensed during the year, while remeasurement and other items, representing the total of the difference between actual and expected return on plan assets, actuarial gains and losses, and past service costs, are recognized as a direct increase or decrease in net assets within the employee future benefits fund. In years between valuations, a roll-forward technique is used to estimate the accrued benefit obligations.

The most recent actuarial valuation of the pension plan for funding purposes was as of July 1, 2025 and the next required valuation will be as of July 1, 2028.

The most recent actuarial valuation of the non-pension benefits for accounting purposes was as of April 30, 2026.

(j) Derivative financial instruments and hedge accounting:

The University is party to interest rate swap agreements used to manage the exposure to market risks from changing interest rates. The University applies hedge accounting for its interest rate swaps. Payments and receipts under the interest rate swaps are recognized as adjustments to interest expense on long-term debt.

The University’s policy is not to utilize derivative financial instruments for trading or speculative purposes.

(k) Pledges:

Pledges are recorded as revenue on a cash basis and accordingly are not recognized as an asset in the Statement of Financial Position. The total amount of pledges outstanding is $20,357 (2025 – $19,148) and is expected to be received as follows:

(l) Contributed services and materials:

Volunteers contribute an indeterminable number of hours per year as well as various materials used by the University in carrying out the provision of services. Because of the difficulty of determining their fair value, contributed services and materials are not recognized in these financial statements.

(m) Financial instruments:

Financial instruments are recorded at fair value on initial recognition. Freestanding derivative instruments that are not in a qualifying hedging relationship and equity instruments that are quoted in an active market are subsequently measured at fair value. All other financial instruments are subsequently recorded at cost or amortized cost, unless management has elected to carry the instruments at fair value.

Transaction costs incurred on the acquisition of financial instruments measured subsequently at fair value are expensed as incurred. All other financial instruments are adjusted by transaction costs incurred on acquisition and financing costs, which are amortized using the effective interest rate method.

Financial assets are assessed for impairment on an annual basis at the end of the fiscal year if there are indicators of impairment. If there is an indicator of impairment, the University determines if there is a significant adverse change in the expected amount or timing of future cash flows from the financial asset. If there is a significant adverse change in the expected cash flows, the carrying value of the financial asset is reduced to the highest of the present value of the expected cash flows, the amount that could be realized from selling the financial asset or the amount the University expects to realize by exercising its right to any collateral. If events and circumstances reverse in a future period, an impairment loss will be reversed to the extent of the improvement, not exceeding the initial impairment charge

(n) Joint venture:

The joint venture (note 19) is accounted for using the proportionate consolidation method. The University recognizes its proportionate share of assets, liabilities, revenue and expenses in the financial statements and eliminates any intercompany transactions and balances. Accounting policies of the joint venture are conformed to those of the University prior to inclusion in the financial statements.

(o) Use of estimates:

The preparation of financial statements in conformity with Canadian Accounting Standards for Not-For-Profit Organizations requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses for the period reported. Items subject to such estimates and assumptions include the carrying amount of capital assets, valuation allowances for receivables, valuation of derivative financial instruments, accrued liabilities and obligations related to employee future benefits. Actual results could differ from those estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in income in the year in which they become known.

2. Cash and cash equivalents:

The fair values of the cash and cash equivalents are comprised of:

3. Restricted investments:

The

of investments are as follows:

4. Capital assets:

Included in buildings and furnishings and equipment is $4,219 (2025 –$6,111) of construction in progress that was not amortized during the year.

The increase in net book value of capital assets is due to the following:

5. Deferred contributions:

Deferred contributions represent unspent externally restricted grants and donations for research and other restricted purposes. The changes in the deferred contributions balance are as follows:

6. Long-term debt:

Fixed rate instruments:

Earp student residence:

7.2% loan with certain residences and investments pledged as security, with monthly blended payments of principal and interest of $91, due on October 1, 2028

Lowenberger student residence:

7.2% loan with certain residences and investments pledged as security, with monthly blended payments of principal and interest of $72, due on October 1, 2028

Major capital projects:

Serial mortgage with fixed monthly principal payments of $83 and interest at 4.815%, due on June 3, 2029

3401 Schmon Parkway:

Serial mortgage with fixed monthly principal payments of $129 and interest at 3.91%, due on June 28, 2027

The following are the future minimum annual debt principal repayments due over the next five fiscal years and thereafter:

(a) Bank credit facility:

The University has available an operating line of credit of $20,000 that was not utilized at April 30, 2026. The interest rate on the operating line of credit, when drawn, is the Bank’s Prime lending rate from time to time minus 0.75% (the prime rate at April 30, 2026 was 4.45%). Amounts are due on demand.

(b) Interest rate swap:

The University has entered into interest rate swap agreements to manage the volatility of interest rates.

The University converted a net notional of $25,000 of floating rate longterm debt relating to Major capital projects. The fixed rate paid under the interest rate swap is 4.815%. The maturity date of the interest rate swap is the same as the maturity date of the associated long-term debt of June 3, 2029.

The University converted a net notional of $15,500 of floating rate longterm debt relating to the acquisition of 3401 Schmon Parkway. The fixed rate paid under the interest rate swap is 3.91%. The maturity date of the interest rate swap is the same as the maturity date of the associated longterm debt of June 28, 2027.

The notional and fair values of the interest rate swap agreements is as follows:

The fair value of the swaps are determined using the benchmark valuation methodology without consideration for non-performance or counterparty risk.

7. Debentures payable:

Series A debenture payable, bearing interest at 4.967%, $2,309 payable interest only semi-annually, due December 14, 2045

Series B debenture payable, bearing interest at 3.033%, $1,896 payable interest only semi-annually, due May 17, 2060

(2,381)

The fair value of the debenture payable due December 14, 2045 (Series A) is $91,444 (2025 – $95,319)). Fair value has been determined using the market quote of the debenture which as at April 30, 2026 was $98.33 (2025 – $102.49).

The fair value of the debenture payable due May 17, 2060 (Series B) is $84,007 (2025 –$86,245). Fair value has been determined using the market quote of the debenture which as at April 30, 2026 was $67.20 (2025 – $69.00).

The University has established two internal sinking funds for each of the Series A and Series B debentures and purchased units in the Mawer Balanced Fund with a market value of $12,779 (2025 – $11,107) and $11,164 (2025 – $7,831) respectively. It is the University’s policy to annually review the sinking fund investment structure and required contributions so that the ultimate proceeds of the investments will be applied against the Series A and B debentures payable.

8. Deferred capital contributions:

Deferred capital contributions represent the unamortized amount of donations and grants received for the purchase of capital assets. The amortization of deferred capital contributions is recorded as revenue in the Statement of Operations. The changes in the deferred capital contributions balance are as follows:

Balance, beginning of year $211,217 $210,787 Less amortization of deferred capital contributions (12,240) (11,397)

Add contributions restricted for capital purposes 12,763 11,827

Balance, end of year $211,740 $211,217

The balance of unamortized capital contributions related to capital assets consists of the following:

9. Employee future benefits obligation:

(a) Pension benefit plan:

The University sponsors a hybrid pension plan, which contains both a defined contribution component and a defined benefit component. The defined contribution component of the plan is funded by University and member contributions and provides a benefit to members based on their accumulated account balance. The defined benefit component of the plan is funded by University contributions and provides for a guaranteed minimum benefit. The latest actuarial funding valuation was performed as at July 1, 2025. The next required actuarial funding valuation will be completed on or before July 1, 2028.

The University measured its accrued benefit obligation and fair value of plan assets for accounting purposes as at April 30, 2026. A summary of the financial status of the plan is as follows:

The significant actuarial assumptions adopted in measuring the University’s employee future benefits obligation are as follows:

The contribution and the amount expensed for the University’s pension benefit plans are as follows:

(b) Other benefit plans:

The University has a number of non-pension future benefits that are available to most of its employees. These non-pension benefits include retiree medical and dental benefits until the age of 65, accumulating sick leave benefits and pre-retirement leave benefits and, for specific employees, a health-care spending account. The latest actuarial accounting valuation was performed as at April 30, 2026.

A summary of the financial status of the plans is as follows:

The University established an internally restricted reserve (note 12) for employee future benefits of $10,460 (2025 – $9,552).

The significant actuarial assumptions adopted in measuring the University’s employee future benefits obligation are as follows:

The expense for the University’s other benefit plans is as follows:

10. Endowments:

(a) Change in endowment net assets: The following were recorded directly to endowment net assets:

It is the University’s policy to endow any amounts not made available for spending during the fiscal year. These amounts are recorded as a direct increase to endowments as preservation of capital.

(b) Contributions restricted for endowments consist of the following:

(c) Ontario Student Opportunity Trust Fund, Phase One:

Externally restricted endowments include grants provided by the Government of Ontario from the Ontario Student Opportunity Trust Fund (“OSOTF”) matching program, Phase One to award student aid as a result of raising an equal amount of endowed donations. The OSOTF represents a portion of the endowment fund.

Schedule of Changes in Expendable Funds Available for Awards:

Schedule of Changes in Endowment Balance based on book and market value:

(d) Ontario Student Opportunity Trust Fund, Phase Two:

Externally restricted endowments include grants provided by the Government of Ontario from the OSOTF matching program, Phase Two to award student aid as a result of raising an equal amount of endowed donations. The OSOTF represents a portion of the endowment fund.

Schedule of Changes in Expendable Funds Available for Awards:

Schedule of Changes in Endowment Balance based on book and market value:

(e) Ontario Trust for Student Support:

Externally restricted endowments include grants provided by the Government of Ontario from the Ontario Trust for Student Scholarship (“OTSS”) matching program to award student aid as a result of raising an equal amount of endowment donations to an allocated ceiling. The OTSS represents a portion of the endowment fund.

Schedule of Changes in Expendable Funds Available for Awards:

Schedule of Changes in Endowment Balance based on book and market value:

11. Net assets invested in capital assets:

(a) Net assets invested in capital assets consist of the following:

(b) The change in net assets invested in capital assets is calculated as follows:

12. Internally restricted net assets:

Internally restricted net assets for allocation and spending in subsequent years consist of the following:

13. Commitments:

(a) As at April 30, 2026, the estimated costs to complete approved capital and renovation projects are approximately $14,200 (2025 – $16,235), which will be funded by government grants, donations, debt and operations.

(b) The following are the future minimum annual capital and operating lease payments due over the next five fiscal years and thereafter:

The University entered into an Energy-as-a-Service (“EaaS”) agreement on August 15, 2025. Sustainability, Performance, Adaptation, Renewal, Knowledge (“SPARK”) is a campus-wide infrastructure renewal initiative designed to reduce carbon emissions, enhance energy efficiency, and modernize the University’s physical systems.

SPARK is delivered through a unique partnership with Enbridge Sustain and the Canada Infrastructure Bank leveraging the Low Carbon Economy Fund and Enbridge’s technical expertise.

The improvements include:

– Modernize air handling units in five buildings

– Replace chilled water piping in tunnels

– Upgrade fume hoods in MacKenzie Chown H block

– Modernize the District Energy System to a low-temperature design

– Lighting retrofits

– Removal of pneumatic controls

– Use of artificial intelligence for building automation system

Enbridge is contracted to implement an approved construction package where they are universally responsible for procurements necessary to complete the work. During the implementation period Enbridge is considered a contracted service provider. During that time the fee is considered an expense in the Statement of Operations for their contracted services to manage the implementation of the project. The total implementation costs are estimated to be $8,271, of which $1,033 was expensed in 2025-26. The completion of the implementation period is anticipated by August 2028.

Beginning September 2028 for a term of 24 years, the University will pay a fee to Enbridge which will be recognized as a capital lease. The estimated present value of the assets is $101,338 with an implicit interest rate in the lease of 6.18%. The assets will be amortized based on the University’s capital asset policy for other similar fixed assets.

14. Canadian Universities Reciprocal Insurance Exchange:

The University is a member of the Canadian Universities Reciprocal Insurance Exchange (CURIE). CURIE is a pooling of the property damage and public liability insurance risks of its members. All members pay annual deposit premiums that are actuarially determined and are subject to further assessment in the event members’ premiums are insufficient to cover losses and expenses. No assessment has been made for the year ended April 30, 2026.

15. Contingencies:

The nature of the University’s activities are such that there may be litigation pending or in the prospect at any time. With respect to claims at April 30, 2026, the Administration believes that the University has valid defenses and appropriate insurance coverage in place. In the event any claims are successful, Administration believes that such claims are not expected to have a material effect on the University’s financial position. No provision has been accrued in these financial statements.

16. Accounts payable and accrued liabilities:

Included in accounts payable and accrued liabilities are government remittances payable of $5,433 (2025 – $5,442), which includes amounts payable for payroll-related taxes.

17. Research revenue and expenses:

The Statement of Operations consolidates all the revenue and expense activity of the University. The schedule below separates externally restricted research revenue and expense by financial statement line item for increased transparency of research grant activity.

18. Financial risks:

Financial risks have not changed significantly as compared to the prior year.

(a) Credit risk:

Credit risk refers to the risk that a counterparty may default on its contractual obligations resulting in a financial loss. The University deals with creditworthy counterparties to mitigate the risk of financial loss from defaults.

The carrying amount of accounts receivable is valued with consideration for an allowance for doubtful accounts. The amount of any related impairment loss is recognized in the Statement of Operations. Subsequent recoveries of impairment losses related to accounts receivable are credited to the Statement of Operations. The balance of the allowance for doubtful accounts at April 30, 2026 is $5,723 (2025 – $5,958).

(b) Interest rate risk:

The University is exposed to interest rate risk on its fixed and floating interest rate financial instruments. Fixed-interest instruments subject the University to a fair value risk while the floating-rate instruments subject it to a cash flow risk.

The University mitigates interest rate risk on its term debt through derivative financial instruments (interest rate swaps) that exchange the variable rate inherent in the term debt for a fixed rate (see note 6). Therefore, fluctuations in market interest rates would not impact future cash flows and operations relating to the term debt. There have been no changes in interest rate risk exposure as compared to the prior year.

(c) Currency risk:

The University is exposed to foreign currency risk with respect to its investments denominated in foreign currencies, including underlying investments in pooled funds denominated in foreign currencies because the fair value and future cash flows will fluctuate due to the changes in the relative value of the foreign currencies against the Canadian dollar. The University manages currency risk through monitoring activities and adherence to the investment policy. The University currently holds forward contracts to hedge 50% of its exposure to US dollar equity investments held in the endowment fund. At year end, the University had forward foreign exchange contracts to sell currency with an aggregated value of $17,412 USD (2025 – $17,573 USD). At April 30, 2026 there is a $92 (2025 – $185) unrealized foreign exchange loss resulting from the mark to market of foreign exchange contracts.

(d) Liquidity risk:

Liquidity risk is the risk of being unable to meet cash requirements or to fund obligations as they become due. Accounts payable and accrued liabilities are generally paid shortly after year end. For longterm debt, the University has established investments to provide for cash flow requirements (notes 6 and 7).

(e) Market risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a result of market factors. The University’s investment policies detail the objectives, management and guidelines of investment, as well as providing for an appropriate risk tolerance strategy.

19. Canada Games Park:

The University entered into a Consortium agreement with the Niagara Region, City of St. Catharines and City of Thorold (together with the University, the “Consortium”) for the construction of Canada Games Park, which was substantially complete on February 11, 2022. The facility is located on lands owned by the University and leased to the Consortium for a nominal fee until February 2060. A decision to either renew the land lease or transfer facility ownership to the University is scheduled for year 30 of the agreement in 2052. The University has a 25% ownership in the Canada Games Park facility and is a one-third operating partner of the facility. The financial results of Canada Games Park are proportionately consolidated with those of the University.

The amounts included in these financial statements, including the impact of eliminating entries, are as follows:

Statement of Operations

The University will contribute annually its proportionate share of an amount equal to 1.5% of the initial hard costs of constructing the facility into a capital reserve fund held by the Niagara Region for future capital repairs and improvements. The balance of the capital reserve as of April 30, 2026 is $1,697 (note 3).