In the 2022/2023 academic year, Canadian universities experienced a notable financial improvement, with total revenue increasing by $2.2 billion to reach $47.5 billion, according to a recent report by Statistics Canada. This growth in revenue outpaced the rise in expenditures, which increased by $1.4 billion to total $45.1 billion. The figures, adjusted to 2023 constant dollars to account for inflation, highlight the resilience of higher education institutions as they navigated the post-pandemic landscape and resumed full on-campus activities.
The full lifting of COVID-19 restrictions by the beginning of the academic year allowed for the complete resumption of on-campus activities. This was a major factor contributing to increased ancillary revenues from services such as residence halls, food services, and parking. However, the return to campus also brought about higher travel and utility costs, reflecting the broader economic environment characterized by a 4.3% inflation rate in 2022/2023.
Provinces continued to be the largest source of funding for universities, contributing 34.0% of the total revenue, though this was a slight decrease from previous years. Notably, provincial funding saw a modest increase of 0.4% year-over-year, reaching $16.1 billion. Nova Scotia led with a substantial 19.6% increase, driven by investments in capital and special projects. Conversely, funding decreased in seven provinces, with Ontario experiencing a 1.1% decline and Newfoundland and Labrador facing the steepest drop at 7.4%.
Federal funding, which had declined sharply in the previous year, rebounded with a 1.4% increase, amounting to $4.8 billion. This uptick was particularly pronounced in Yukon and Manitoba, attributed to new research grants. However, other provinces saw reductions in federal support.
Tuition revenue, constituting 31.2% of total university income, grew by 0.6% to $14.8 billion. Despite the increase, this growth rate lagged behind the pre-pandemic five-year average of 5.1%. The variability in tuition revenue growth was stark across regions, with Newfoundland and Labrador and Alberta seeing significant rises, while Yukon, Manitoba, and Ontario experienced declines.
Investment revenue saw a remarkable surge, driven largely by Ontario, which contributed $1.1 billion to the $1.2 billion overall increase. Investment returns, although significant, were down from their peak in 2020/2021, comprising 4.4% of total university revenue in 2022/2023.
Ancillary revenue also experienced growth, rising to $3.3 billion and accounting for 6.9% of total revenue. The return to in-person activities played a crucial role in this increase, with the highest percentage gains observed in Nova Scotia and Alberta.
The resumption of campus operations led to substantial increases in associated costs. Travel expenses more than doubled, reaching $689.6 million, while costs for products and services rose by 16.8% to $411.1 million. Utility costs, driven by higher campus activity and increased energy prices, climbed by 11.8% to $784.0 million, with the largest increases reported in Newfoundland and Labrador, Saskatchewan, Alberta, and Yukon.