Algoma University’s $16M deficit forces tough decisions, including layoffs

Algoma University faces a $16.45 million deficit, cutting 50 to 75 jobs as enrolment drops 50 per cent. Angela Gemmill reports.

Algoma University says it expects to run a $16.45 million deficit in the coming year, driven by plunging international student enrolment, something that is behind revenue shortfalls for institutions across the province.

On Monday, the Sault Ste. Marie-based university’s board of governors approved the school’s 2026-2027 budget, which forecasted $75.4 million in revenue, offset by $91.9 million in expenses, resulting in a $14 million shortfall.

Added to that is $2.45 million in one-time restructuring costs, bringing the total deficit to $16.45 million.

Algoma interim president Sheila Embleton said difficult choices are ahead for the university to avoid the sort of problems that led to Sudbury’s Laurentian University to declare insolvency in 2021.

“The long-term health of the university and the community is important,” Embleton said.

“So, it’s making those tough decisions early enough, which will avoid this kind of problem.”

The deficit is largely due to a 50 per cent decline in enrolment, she said, driven by the federal government’s January 2024 cap on international students.

Embleton said she feels that decision damaged Canada’s brand overseas.

“There are students who are reluctant to apply to Canada, wondering how welcome they are, will they be able to finish their degrees,” she said.

“There are all kinds of uncertainties that is bringing.”

The deficit isn’t expected to affect student experience since no programs are being cut. However, Embleton said some certificate programs have been eliminated because they didn’t have any students enrolled.

Between 50 and 75 staff will be laid off, she added, depending on which option the impacted workers choose.

“One is an exit plan, so a voluntary exit of the kind that you see at other universities,” she said.

“The other is a voluntary reduction in the work week. So instead of working five days a week to only work three days a week. This enables people to maintain their status with respect to things like benefits, but, of course, there’s a commensurate reduction in salary.”

The deadline for decisions is May 8.

Other work is underway to help balance the budget in future years, including the board approving an increase in international tuition fees to help bring in another $1.5 million.

The drop in enrolment has meant there is plenty of empty space on Algoma’s Brampton campus. Embleton said the space is leased, so the school is trying to sublease it to help reduce the financial liability there.

“If we are able to sublease some of that, that will quite significantly change the budget picture,” she said.

Embleton said she realizes Algoma’s financial challenges could be compared to the financial crisis that happened at Laurentian University. But she said that won’t happen at Algoma.

“We don’t want to be the next Laurentian. I don’t know how many times I heard that, especially when I was at Laurentian,” said Embleton, who served as interim president at LU from January 2023 to April 2024.

“Because we (Algoma) are taking these measures and getting down to the right size compared to our enrolments. Everything is really driven by enrolment. It’s the fees the students pay, but on the domestic side, it’s also, of course, funding from government.”

The news of Algoma’s operating deficit comes just days after Laurentian approved its 2026-2027 budget, which includes a $4.6 million surplus.