Brock University, 2025-26 T1 Report

May 1, 2025 to August 31, 2025

Executive summary

Brock’s 2025-26 academic year is off to a great start with strong enrolment numbers materializing as students return to our beautiful campus to begin the fall term. In fact, total enrolment is forecast to exceed budget by 479 students or 2.6 per cent highlighting the strength of Brock's reputation.

Brock began the fiscal year with a mitigation target of $13.6 million, up from $10.1 million the year prior. The persistent fiscal pressures result from reoccurring years of government policy restricting the University’s capacity to increase revenue. Brock has found ways to ensure it remains financially sustainable year to year with successful mitigation efforts to date. The results of the Trimester One Forecast show there is more work to achieve fiscal balance by year-end recognizing we have reduced the mitigation target to $8.7 million which is a significant achievement during the first 4 months of 2025-26.

Reviewing the fiscal results of Trimester One, we note that student fees, while still a moving target at the time of writing, are forecasted to be down versus budget by $0.9 million or 0.5 per cent. The student fee revenue shortfall as compared to budget is in contrast to the overall enrolment headcount results. This is attributed to a revenue shortfall from the spring/summer term and Goodman School of Business international graduate enrolment forecasted lower than budget. These combined revenue shortfalls were mostly offset by higher than budgeted enrolment for the Fall/ Winter terms resulting in student fees falling just short of budget. Grant revenue is favourable to budget $2.7 million due to the grants related to nursing, teacher education and facilities renewal. Investment income and ancillary revenues are also ahead of budget resulting in other revenues exceeding target by $3.1 million or 5.1 per cent.

Work is underway to address the remaining shortfall, with the goal of achieving balanced fiscal results by year-end. As we look forward to budget planning for 2026-27 and beyond, the process will be informed by a new multi-year budget planning initiative launched through the Provost Office, meaningful community consultation and support from our government partners. Brock’s budget is significant, and we certainly recognize that it allows us to achieve great outcomes. We also recognize that our budget is constrained. We will continue to work together to ensure our budget is allocated to affect maximum impact towards achieving our strategic priorities.

This report contains certain forward-looking information. In preparing the Trimester 1 Report, certain assumptions and estimates were necessary. They are based on information available to management at the time of preparing the forecast. Users are cautioned that actual results may vary.

Throughout the text in this report, financial values have been rounded to the nearest thousand unless otherwise stated.

Financial results

The following table illustrates the trimester one revenue forecast for the University compared to budget. The information is presented on a funding basis, which represents committed cash, and based on the audited financial statements prepared in accordance with accounting standards for not for-profit organizations (NFPS). A reconciliation of the two presentations can be found on page 16

Figure 1

(1) For NFPS purposes it was assumed mitigation would be found in offsetting expense reductions. Funding operating costs were not forecasted as part of trimester one. As such, the 2025-26 budget was used.

Taking a closer look at some of the numbers

Overview

The 2025-26 trimester one (T1) forecast estimates an updated budget mitigation target of $8.7 million based on a positive revenue variance as compared to budget of $4.9 million. Overall, the results forecast in T1 are positive for 2025-26 and moving in the right direction but there is still work to be done.

Input and recommendations for future budget decisions are encouraged and may be emailed to budgetreport@brocku.ca

Review of overall revenue

As shown in Figure 2, overall revenue is forecast at $385.1 million versus the budget of $380.2 million, showing a favourable variance of $4.9 million, driven by forecasted gains in grant revenue, investment income and ancillary revenue, offset by a shortfall in student fee revenue. These variances will be discussed in the following sections.

Figure 2: Revenue ($000s)

Figure 3: All in student headcount related to for credit programs – by type (1)

(1) Represents student headcount full-time (FT) and part-time (PT) 'all-in'' and includes degree seeking, letter of permissions, non-degree, auditors and certificate students.

Figure 4: All in student headcount related to for credit programs – by Faculty (1)

1) Represents student headcount full-time (FT) and part-time (PT) ''all-in'' and includes degree seeking, letter of permissions, non-degree, auditors and certificate students.

Student fees and enrolment

Student fees include tuition related to for credit and non-credit programs as well as fee revenue. Tuition is forecast to be $167.2 million, $0.9 million less than budget, as detailed in the following sections. Fee revenue is forecast to be $10.2 million, consistent with the budget.

Tuition related to for credit programs

As shown in Figures 3 and 4, overall enrolment is forecast to be higher than budget, with student headcount forecast 479 more than budget and slightly higher than 2024-25 actual enrolment, by 16 students. Proportionally the largest positive variance was seen in undergraduate international students, with student headcount forecast 8.0 per cent higher than budget or 84 students. Undergraduate domestic and graduate domestic headcounts were also forecast higher than budget by 2.7 per cent or 423 students and 4.6 per cent or 56 students, respectively. Offsetting these positive variances is a negative variance compared to budget in graduate international enrolment of 16.3 per cent or 84 students. As shown in Figure 5 on the following page, the T1 forecasted enrolment translates

into forecasted total tuition related to credit programs of $163.5 million which is $0.9 million below budget. The positive variances in enrolment results in positive forecasted tuition vs. budget for domestic and international undergraduate and domestic graduate. These positive results are offset by the lower than budgeted graduate international tuition, mainly driven by Goodman School of Business' international Master of Business Administration (MBA), with enrolment forecast at 184 students as compared to the budgeted 251, resulting in a shortfall of 67 students and $2.7 million in tuition.

Figure 6 on the following page details the split of tuition related to for credit programs between Spring/Summer and Fall/Winter sessions for the last three years. Total forecasted Spring/Summer tuition showed a negative variance as compared to 2024-25 actuals of $1.0 million. It’s important to note that the budget included an additional $2.6 million over 2024-25 actuals related to an effort to increase enrolment during the Spring/Summer term which was included as part of the budgeted undergraduate domestic tuition. As such, Spring/Summer tuition is forecasted to miss budget by $3.6 million. Although

Figure 5: Tuition revenue related to for credit programs (1)

there was success in increasing enrolment for Spring/Summer year over year, there was a significant decline in international student enrolment mix that resulted in the revenue shortfall. Spring/Summer remains a priority for increased revenue generation and while revenue targets were missed due to challenges with international enrolment we are seeing positive momentum with building Spring/Summer programming.

(1) Represents tuition related to enrolment which is included in Ministry reporting. The figures are based on Faculty of Major. (2) Includes letter of permission,

Tuition related to non-credit programs

Figure 7 shows non-credit tuition of $3.7 million forecasted relatively flat to budget. Continuing Teacher Education tuition is forecasted higher than budget offset by forecasted lower than budget tuition related to English as a Subsequent Language (ESL) and other Professional and Continuing Studies programming.

Grant revenue

Figure 8 details grant revenue. Grant revenue is forecasted to be higher than budget by $2.7 million, as a result of variances related to three specific grants.

Initial Teacher Education grant: The budget for the Initial Teacher Education grant is $1.2 million based on what was actually received in 2024-25. It is important to note that this funding had not been confirmed by the MCURES for 2025-26 at the time of developing the budget. In May 2025 the Province communicated that Brock would receive one-time funding of $2.3 million over two years ($1.4 million in 2025-26) and in June 2025 the Province communicated a commitment to 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, shown as part of the Special Purpose Operating Grant Envelope in Figure 8.

Nursing grant: At the time of budget preparation uncertainty still existed on how much funding for nursing students would be available in 2025-26. It was budgeted that Brock would be fully funded for all undergraduate enrolment in Nursing which resulted in a budgeted grant of $8.0 million. As of T1 the forecast is $0.5 million more than budget as a result of higher than budgeted enrolment. One caveat to this variance is that as of the time of writing $5.3 million of the Nursing grant remains in a receivable from prior years and MCURES has acknowledged this; however, has not provided an explanation for payment delay or any estimate of when funding will be transferred.

Facilities Renewal Program (FRP) funding: Lastly, communication regarding the provincial FRP funding for 2025-26 was not received at the time of budget preparation. Consistent with prior years where FRP funding has been relatively flat, the budget assumed the same funding received in 2024-25 at $4.2 million. It was subsequently announced by the province that the sector-wide funding would be increased for 2025-26 resulting in Brock’s allocation increasing by $0.2 million. The funding related to the FRP and the Nursing grant are shown as part of Other MCURES and specific purpose grants in Figure 8.

Other revenue

Other revenue, as shown in Figure 9 is forecast to be $63.3 million, $3.1 million more than the budget of $60.3 million. Stronger than budgeted investment income accounts for $2.7 million of this positive variance, which is further discussed in the Treasury section of this report. Ancillary revenue is forecast higher than budget by $0.3 million, driven by Conference Services, forecasted $0.2 million higher than budget and Housing Services forecasted $0.1 million higher than budget.

Revenue forecasts by unit

Figure 10 on the following page details the funding by responsibility centre by grouping the forecast and budget into one of the following categories: Teaching Faculties, Academic Support, Student Specific, Shared Services, Ancillary, Space and Global. As part of the T1 forecast, the units with significant revenue sources were asked to update their revenue projections. Therefore, only the budgeted and forecasted revenue by responsibility centre is included in this figure. Please note that Figure 10 includes certain reclassifications to the 2025-26 budget as compared to the figures presented in the 2025-26 Budget Report. All reclassifications will be fully reconciled in the future 2026-27 Budget Report, noting the changes did not impact the net reported budget.

Anticipated savings

Recognizing our approved budget plan for 2025-26 included a mitigation target of $13.6 million and noting that T1 still estimates an $8.7 mitigation target, Financial Services analyzed our budgeted expenditures to provide some assurance on our ongoing efforts to achieve a balanced fiscal result or better. With personnel costs contributing to approximately two thirds of Brock operating expenses our analysis focused in this area. The estimated personnel cost savings as of T1 is $2.9 million, which would leave a mitigation target of $5.8 million. Last year as of T1 the personnel savings was estimated to be $3.5 million and we ended the year with savings of $4.4 million. This variance has been narrowing as budget efficiency work continues, including removing positions that may not be filled for the entire fiscal year. For comparison, in 2022-23 the personnel savings as compared to budget was $11.9 million.

Treasury Operating fund investment scorecard

Operating investment income is trending ahead of budget as anticipated at the time of budget development. However, interest rates are markedly lower than the same time last year which has resulted in smaller positive variance to budget compared to the same time last year. At Aug. 31, 2025 the government of Canada benchmark two-year bond yield was 2.6 per cent which compared to a two-year bond yield of 3.3 per cent at the same time last year. The yield on the operating investment portfolio is currently 3.7 per cent with an average duration of less than 1 year (5.2 per cent yield and less than 1-year average duration at the same time last year). The cash deposit rates are linked to the Bank of Canada overnight target rate plus an adjustment factor. As at Aug. 31, 2025 the deposit interest rate was 3.3 per cent for general deposits and 3.45 per cent for the 30 day notice account which is 1.75 per cent lower than the same time last year.

Our operating investment income is on track to exceed budget by $2.7 million. A summary of investment holdings as of Aug. 31, 2025 is shown in Figure 14. Figure 12 outlines monthly investment income performance compared to 2024-25. As detailed in Figure 11, operating investments have achieved 79 per cent of budget as we reach 33 per cent of the way through the fiscal year. The sinking fund during the first four months of fiscal 2025-26 has experienced a strong return of 25.8 per cent annualized (19.4 per cent return at the same time last year). Short-term volatility is common and expected with this fund. We continue to support this fund as a long-term investment strategy to fund the 2045/2060 payout of the University's two debentures and the employee future benefits reserve. The fund requires a 5 per cent annual rate of return for the series A $93 million debenture and a 5.2 per cent rate of return for the series B $125 million debenture to achieve its goal and this rate of return is aligned with the asset mix and skill of the fund manager.

Our debt

Figure 15 details the current and projected external debt of the University, which is within financial metric ranges of the University’s current credit rating. The 2022-23 Fiscal Framework Update continued with the holistic approach to Brock’s capital financing strategy that allows for decisions to be made in support of strategic priorities in a fiscally sustainable manner. Maintaining the University’s credit rating at A (high) or better is a strategic priority that remains in the Fiscal Framework. The impact on the University’s credit rating will be considered for any new debt and will be supported by a complete repayment plan, including Board-approved assumptions for sinking fund strategies if required. Morningstar DBRS noted “the credit ratings are 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 credit ratings remain constrained by the current challenging operating environment, which can be characterized by the restrictive funding and tuition framework and recent changes to federal immigration policy negatively affecting international student enrolment.” Morningstar DBRS noted although unlikely, a positive credit rating action depends on a combination of sustained improvement in financial risk assessment metrics and an improvement in Morningstar DBRS’ assessment of one or more critical rating factors. “A negative credit rating action could arise from continued deterioration in financial risk assessment metrics.”

(1) Fiscal full-time enrolment (FFTE). For a definition, refer to page 84 of the 2025-26 Budget Report

Figure 16: Long-term debt

Debt retirement assets

Figure 17: Debt metrics

Pension

The actuarial valuation on the pension plan completed as at July 1, 2022, indicated the plan was 99 per cent funded on a going-concern basis (98 per cent as at January 1, 2020 valuation) and 105 per cent on a solvency basis (106 per cent as at January 1, 2020 valuation). The going concern deficit 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 deficit of $5.3 million ($12.7 million as at January 1, 2020 valuation) has required special payments into the plan of $0.5 million representing an annual savings of $1.0 million compared to the last valuation. In addition, current service cost payments for the plan of $14.1 million for a total cost to the University of $14.6 million annually. Employees also contribute to the money purchase component of the plan (defined contribution) an additional $8.2 million resulting in an employer to employee funding ratio of 1.8 to 1.0. An updated valuation is in progress and will be for the valuation date July 1, 2025.

Capital

University infrastructure investment is ongoing as we invest in new and current space and technology to support and improve the student, academic and research experience. Figure 19 illustrates the number of open capital and related projects. These projects include all 2025-26 projects as well as incomplete prior year projects. Note: the majority of the 2025-26 projects were opened prior to May 1, 2025. Figure 20 illustrates the activity to Aug. 31, 2025, with respect to

Figure 19: Status of capital projects as of Aug. 31, 2025

the type and dollar amount of projects. The established 2025-26 capital and related projects budget is $9.7 million (Information Technology Services Projects –$5.1 million; Facilities Management Projects – $4.6 million). As noted previously, the 2025-26 Facility Renewal Program funding from the Ministry has been increased by $0.2 million. This additional funding will be allocated to deferred maintenance projects already included in the approved capital plan therefore contributing to mitigation. This allocation may be revisited at year-end if Brock is in a surplus position.

20: Capital and related project summary

* AODA – Accessibility for Ontarians with Disabilities. (1) Funding revenue represents total expected funding and cash received. This amount is not reflective of all funding received to date.

Funding forecast presented in accordance with NFPS

Throughout this report financial information has been reported on a funding basis (sometimes referred to as committed cash basis). Figures 21 and 22 detail the entries and reclassifications required to convert the funding budget to be in accordance with the Canadian accounting standards for not-for-profit organizations (NFPS). Please refer to page 86 and 87 of the 2025-26 Budget Report for detailed explanations of all the adjustments, reclassifications and eliminations.

These adjustments, reclassifications and eliminations for the 2025-26 forecast were consistently applied with those of the 2025-26 budget. The forecast for NFPS adjustment #2 has been adjusted to reflect the forecasted FRP funding, adjustment #4 has been updated, and in addition the NFPS forecast also includes anticipated spending in the strategic initiative fund which is not recorded on a funding basis (adjustment #11). It is interesting to note that Brock is one of the only Morningstar DBRS rated University that fully reconciles and converts budget to NFPS.

Reserves

Figure 23 outlines internally restricted reserve balances that have been established for strategic priorities. As at Aug. 31, 2025, Brock has $36.1 million in unspent research, professional development and strategic fund support dollars for faculty and other units including the President, Provost and Vice-President, Academic, Vice-President, Research, Vice-President, Administration and Services, Vice-President, External and Faculty Deans. This amount compares to $40.4 million available in the same accounts at this time last year.

Figure 23: Balances by Faculty as of Aug. 31, 2025

(1) Allocated through the revenue and expense allocation model.

Appendix 1

Multi-year financial results on a funding basis