The rating agency Moody’s warns that the Legault government’s decision to increase tuition fees for students from other provinces and foreign students “negatively affects the credit outlook” of Concordia and McGill universities.
In the fall of 2024, students from other provinces will have to pay annual tuition fees of approximately $17,000 to universities, double the current rate. Foreign students will have to pay a minimum of $20,000. The decision announced in mid-October particularly affects the province’s three English-speaking universities – McGill, Concordia and Bishop’s – which reacted strongly.
Moody’s reaction, which did not downgrade the universities, means that the cost of credit and the borrowing capacities of McGill and Concordia universities could potentially be reduced.
“Like change [de politique] only has an impact for students who are not yet enrolled, it is written in the Moody’s commentary, it will take four years before this is reflected in the finances of each institution. This gives McGill University and Concordia University time to find mitigation measures [de la décision du gouvernement Legault]. In any case, any solution based on registration will not be implemented without difficulty.”
Times are tough for Concordia University, which currently has a deficit of $35 million while only a deficit of $19.4 million was approved by the board of directors. The institution has already announced to its troops a series of upcoming savings.
Responding to Moody’s stance, Vanina Maestracci, media relations at Concordia University, said it was no surprise. This report “by an independent entity expert in financial evaluation, confirms the concerns put forward by Concordia since the announcement of these measures by the Legault government – namely that they will have a negative impact on Concordia and other English-speaking universities “.
Fabrice Labeau, senior associate provost at McGill University, said Moody’s comment was as predictable as it was worrying. The agency “warns investors that there is a risk of a drop in credit rating,” he observes, with the major financial consequences that this would entail.
Quebec calculates that, through its decision, $110 million can be reinvested in the network of French-speaking universities.
In a letter, the rectors of the universities of Montreal, Laval, Sherbrooke, as well as HEC Montréal and Polytechnique Montréal argued a month ago that “any measure that would jeopardize the very existence of a university, or would weaken it to the point of distorting it, must be excluded from the discussion.”