Vancouver Island University — one of Nanaimo’s largest employers — passed a new budget this week in an effort to get on the path to financial stability as it continues to face a multifactor fiscal crisis.
On Tuesday, Vancouver Island University’s board of governors approved a slate of program cancellations as well as a budget that falls short of the $18 million in expense reductions mandated by the province, and has a projected $500,000 deficit.
“While a fully balanced budget may take a few additional years, the steps we are taking now are critical to laying the foundation for long-term fiscal health,” said acting president Emily Huner in her report on the budget.
Meanwhile, critics say program cuts and faculty layoffs are not the answer to the university’s financial crisis, asking VIU leadership to look at making cuts to administrative positions and calling on the province to better-fund programs and take action in the face of the crisis.
According to Huner, the university has reduced spending by $4.4 million from program cancelations and $3.5 million in other expenses.
“If we haven’t turned the corner, we are turning the corner,” said board chair James Cassels.
A statement from the Ministry of Post-Secondary Education and Future Skills said the deficit mitigation plan’s target of reducing spending by $18 million by March 2026 is a “necessary first step that VIU needs to take as it works towards longer-term financial stability.”
Under the University Act, the province has the power to remove members of the board at any time.
In a message to the community on Thursday, Huner said the university has achieved 35 per cent of that target, or $6.35 million. It did not say how the university plans to achieve the remaining $11.65 million in spending reductions by March 2026.
Huner said “difficult but necessary decisions” were made to reach that number, including closing the high school, ending VIU’s partnership with the Elder College, cancellation of academic programs, discontinuing VIU’s internal bus fleet service, staff reductions and revisions to administrative terms.
VIU cancels graduate programs to focus on undergraduate education
With convocation around the corner at VIU, some of its graduates may be some of the last in their disciplines to wear the cap and gown.
Claire Grogan, acting provost and vice president of academic, admitted that the academic side of university operations missed its mitigation target by $4.1 million, prompting the cancellation of a number of graduate programs and some undergraduate programs at the university.
“We are spread too thin,” she told the board, explaining why the deans chose to step back from offering graduate level education at the university to focus on delivering undergraduate courses and trades training.
“There’s no hiding the fact that cancellation is a pretty dramatic move and gesture,” Grogan said. “But we have come to it after we have used every other lever that we can see at this particular moment to reach our deficit mitigation target, and the hope is it will buy us time over the next 12 months to reconfigure.”
One challenge to operating graduate level programs at the university is that those programs operate on a cost recovery basis where there is no base grant funding from the provincial government. At the same time, the province restricts the amount that tuition can increase, leading to what Grogan calls “excellent” programs losing money that the university can’t afford.
“No one likes to close [programs],” said Cassels. “… but the situation that we find ourselves in is at least partly a result of not saying no a little bit earlier.”
A package of program suspensions that were withdrawn at the May 21 senate meeting will be returning to the Senate on June 5.
VIU posts surplus, but it is already spent
In 2024-25, VIU posted an $8.3 million surplus due to what Huner said was higher than anticipated one-time revenue from government grants, tuition, the sale of VIU’s building in Parksville and investment income. This is the first reported surplus since the 2018-19 fiscal year for the university.
Huner cautioned that at the same time, expenses exceeded the budget by $700,000 and that “most of the reported surplus has already been spent on operational needs such as payroll and grant-related activities.”
“This is not excess cash on hand,” Huner said.
The auditor’s report in the board’s agenda package on the VIU public document portal, says 97 per cent of the accumulated surplus is related to investments in buildings the university owns, endowments and controlled entities such as the VIU Initiatives Trust.
Faculty union president questions ‘artificial’ deficit mitigation target
Gara Pruesse, president of the VIU Faculty Association, told The Discourse that so far, 35 full-time faculty have been laid off in addition to non-permanent faculty. The union is just getting notices about layoffs from the programs that were cancelled by the board of governors this week.
“Vibrant programs are being cut in order to meet the reduced expenditure [targets] that the ministry is imposing on our university,” she said.
She said that while salary increases for faculty have gone up by 42 per cent in the last 10 years, the total paid to university administrators has soared by 67 per cent in the same period as the number of administrative staff have increased along with their salaries.
Pruesse said the data on increases to faculty salary was pulled from the Human Resources Database, but The Discourse was unable to independently verify those numbers.
In a presentation to the board of governors in December, the faculty association outlined that VIU increased administrative positions by six associate vice presidents, nine directors and one chief of staff between 2009 and 2023.
“The university could be looking at making its administration more efficient,” Pruesse said. “It has ballooned in costs just for administration over the last decade, and we’d like to see that go back to the kinds of levels that it was at in 2015.”
The university says it has saved $250,000 through revisions to administrative terms and conditions.
Pruesse said part of the challenge VIU faces is that its trades programs are “severely underfunded” by the province, which puts pressure on the academic side to reduce its costs to overcome the deficit from the trades programs.
Pruesse called the $18 million deficit mitigation target an “artificial” number imposed by the province and said that faculty should be permitted to continue to run programs.
The $18 million target equates to a 10 per cent reduction in spending by both academic and non-academic units at VIU. Even if the target is reached by March 2026, the university estimates it will take a few more years before the university returns to a balanced budget, per the 2024-25 Annual Financial Report presented to the board of governors on Tuesday.
“We should be allowed to operate effectively and efficiently while we either [have] a balanced budget or are [re]generating some surpluses,” Pruesse said. “If we are nevertheless constrained to diminish our expenditures of a further $3.5 million, well, what is the logic around that?”
Faculty at VIU are currently working without a contract and the union will be going into collective bargaining with the university in the fall.
“Extracting savings from faculty, who are already delivering programs to students very efficiently, is not the solution to the university’s budgetary woes. Evidence-based decision-making is,” Pruesse said, citing write-offs for software and the university’s abandoned child-care centre project. “The union is not interested in having faculty take concessions to pay for expensive management mistakes.”
Drop in international students causing layoffs across the province
The Federation of Post-Secondary Educators of BC (FPSE) said in a press release that layoffs are happening at colleges and universities across the province.
“The Eby government supervises and micromanages every element of our sector but has failed to take any action in the face of this crisis,” said FPSE president Brent Calvert in the press release.
The FPSE says the cut in international study permits and changes to post-graduation work permits has “dramatically reduced the ability of international students to access pathways to permanent residency,” which has “had a devastating impact on BC’s colleges and universities.”
At VIU, the international student headcount was 10.9 per cent in 2024-25 but makes up 36 per cent of tuition paid. In 2022, international student tuition made up 47 per cent of VIU’s tuition revenue.
The university’s audited consolidated financial statements show that tuition revenue from international students decreased by $3.4 million in 2024-25.
In a report by VIU’s budget advisory council in May, it is expected that there will be “at least a 44 per cent decrease in overall international tuition” this year and application fee revenue from international students will decrease by at least 50 per cent, equating to $10.3 million in total losses. Revenue from domestic students is expected to fall by $1.2 million.
A Ministry of Post-Secondary Education and Future Skills statement says the province understands the challenges that colleges and universities are facing due to federal changes to international student study permits and that it appreciates the “difficult financial situation” VIU is in, but the university is responsible for its own financial decisions.
New interim president announced
On Wednesday, the VIU board of governors announced the appointment of Dennis Johnson as interim president of the university for up to two years, starting on June 16.
Johnson was the president of the College of New Caledonia from 2019 to 2023 and previously held senior leadership positions at Saskatchewan Polytechnic.
On behalf of the board, Cassels thanked VIU’s chief financial officer and vice president of administration Emily Huner for her “exemplary leadership and dedication while serving as acting president since early April.”
Pruesse said that while the board of governors followed the process for Johnson’s appointment, she’s concerned about the length of time of his contract.
“It’s quite a long term for an interim president,” she said.” That’s nearly half of the normal term of a president, yet the selection process has not been as robust or far-reaching in terms of its consultation as the normal presidential search would be.”
Pruesse said that faculty, students and the community will be involved in the search for a permanent university president.
Cassels was elected chair of the board of governors and Nate Bello was elected vice-chair at the board meeting on Tuesday.
