Carleton University rolls out program to incentivize retirement amidst financial deficit

As Ontario universities face a myriad of challenges, increasing financial deficit, Carleton University is incentivizing retirement.

A letter form the Office of the Provost dated Nov. 20 said the university is implementing a Voluntary Retirement Incentive Program (VRIP) that will provide a “lump-sum financial incentive” for employees who meet certain criteria, to help them “transition to retirement in 2025”.

The announcement comes after a letter dated Nov. 8 determined that the university’s deficit for the 2024-2025 fiscal year would be greater than the projected $26 million.

“It is for these reasons that Carleton has reached a point where significant measures are necessary to address annual deficits in the short and medium-term as we continue planning towards long-term financial sustainability,” the Nov. 8 letter reads. “Action on all our parts is required.”

According to the Office of the Provost, first-year undergraduate international student enrollment has decreased 55 per cent, and international graduate student enrollment has decreased 35 per cent, this year. The Provost attributes this to the federally-imposed cap on international undergraduate student visas.

The cap on international students has compounded the problem of chronic underfunding from the provincial government.

In 2019, the Ford government reduced tuition by 10 per cent before proceeding to freeze tuition. In 2021, the freeze ended for domestic students from provinces other than Ontario, but the freeze for Ontario students remains in place.

Compared to the rest of Canada, Ontario’s funding per university student is just 57 per cent, according to an expert panel put together by the provincial government to look into the funding shortfall in universities and colleges. The announcement of this freeze in 2017 was a continuation of one that existed prior.

While funding per student remains low, enrollment rates are also on the decline. As of Nov. 1, 2023, enrollment numbers for full-time first-year undergraduate students was down 3.6 per cent at Carleton. Some of the reasons experts cite for this decline in enrollment include lingering impacts of the pandemic, finances, demographic shifts and the employment gap.

With fewer students, post-secondary institutions simply cannot afford to run the same deficit.

Since Carleton Nov. 8 letter publicizing the grand deficit, the Voluntary Retirement Incentive Program (VRIP) is the only initiative that has been proposed to work towards financial stability.

According to the Nov. 20 announcement, the VRIP is a “limited, one-time offer”, and eligible applicants should consider participating while the program is available.

Full-time staff and faculty members who are 55 or older and have a combined age and years of service totaling 75 or more are eligible for this program. Eligible applicants will receive an email from the Department of Human Resources.

Eligible employees will receive a lump-sum payment equivalent to one month of their regular salary for each completed year of service, up to a maximum of 12 months, according to the program’s website. For example, an employee who is 70 years old and has six years of service has a qualifying score of 76. If their annual salary was $70,000, the lump sum payment would equal six months of their salary, or $35,000.

The Carleton University Academic Staff Association (CUASA), a union representing full-time faculty and professional librarians at the university, released a short statement about the the program in its November newsletter. 

“This new retirement program was undertaken without consultation with CUASA,” the statement reads. “We are researching what the program will mean for our members and the larger Carleton community.”

The deadline to apply is Jan. 31, 2025.