Ratings agency Moody’s warns that the Legault government’s decision to increase tuition fees for out-of-province and foreign students will have a “negative impact on the credit prospects” of Concordia and McGill universities.
Published at 6:14 p.m. Updated at 7:33 p.m.
In fall 2024, students from other provinces will have to pay annual tuition fees of about $17,000 to universities, twice the current rate. Foreign students must 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 response, which did not downgrade the universities, means that McGill and Concordia universities’ borrowing costs and borrowing capacity could potentially be reduced.
“Like change [de politique] Since this only affects students who are not yet enrolled, the Moody’s comment states, it will take four years before this is reflected in the finances of the individual institutions. This gives McGill University and Concordia University time to find remedies [de la décision du gouvernement Legault]. In any case, a solution based on registration will not be implemented without difficulty.”
Times are tough for Concordia University, which currently has a $35 million deficit while the board has only approved a $19.4 million deficit. The institution has already announced a number of upcoming cuts to its troops.
Vanina Maestracci, a media relations officer at Concordia University, reacted to Moody’s stance, saying it was no surprise. This report “by an independent financial valuation expert confirms the concerns raised by Concordia since the Legault government announced these measures – 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 concerning. The agency “warns investors that there is a risk of deterioration in creditworthiness,” he notes, with the associated significant financial consequences.
Quebec expects its decision to reinvest $110 million in the network of French-speaking universities.
In a letter a month ago, the rectors of the Universities of Montreal, Laval, Sherbrooke, HEC Montréal and Polytechnique Montréal argued that “any measure that would endanger the very existence of a university or weaken it to such an extent.” Distortions must be excluded from the discussion .”