Operational Overview

Lakeland College provides truly immersive learning experiences that shape futures and prepare students for the real world. The college's campuses – one in Vermilion and one in Lloydminster – are designed to guide students beyond the classroom, creating tangible environments where they can learn, lead and manage. Lakeland's focus on hands-on learning ensures students graduate with the skills, knowledge and competencies to join the workforce or continue their education.

Lakeland is a hub for innovation, supportive student services and academic excellence. With high-quality, industry-relevant, affordable and accessible post-secondary education opportunities, Lakeland is focused on how best to serve its students, the region and the province. Lakeland plays a crucial role in strengthening Alberta's economic foundation by providing career preparation, jobs, programs and applied research that drive the province forward. Programming areas at Lakeland include agricultural sciences, business, energy, environmental sciences, fire and emergency services, foundational learning, health and wellness, human services, interior design technology, trades and technology, and university transfer. In 2021-22, Lakeland welcomed the first cohort of students into its new bachelor of agriculture technology program, Canada's first such degree program. Due to the response to COVID-19, Lakeland's full load equivalents (FLEs) dropped to 1,901 in 2020-21. Enrolment started to rebound in 2021-22, as FLEs increased to 1,970. This growth was on the strength of domestic enrolment, as international enrolment continued to decline due to travel restrictions. There was a slight increase in the number of self-identified Indigenous students attending Lakeland. The number increased from 287 in 2020-21 to 311 in 2022. Student tuition and fees increased slightly in 2021-22, from $14,147,000 in 2020-21 to $14,972,000 in 2021-22. Revenue from sales of services and products declined to $7,372,000 in 2020-21, but this was offset by a modest recovery to $8,898,000 in 2021-22. The decline in sales of services and products revenue was due to restrictions on the number of students in residence and the loss of contract revenue from in-person training at the Emergency Training Centre. In 2020-21 and 2021-22 most of the losses in revenues were offset by reductions in expenses.

Economic overview

The full impact of the worldwide response to COVID-19 has yet to be felt. Government debt, the short and long-term effects on the supply of labour and on the supply of goods and services, and the effects of inflation have been and will continue to be significant. Significant increases to interest rates may result in an economic recession. These increases also increase the risk that governments will continue reducing support for postsecondary education to fund large interest payments on accumulated debts. Since the fall of 2019, Lakeland has managed 9.3 per cent cuts to its operating grant and an additional budget reduction of $11.8 million. These reductions support expenditure targets outlined in the January 2020 Government of Alberta post-secondary funding framework. These changes have been managed through strategies to reduce expenditures to discretionary expenses such as travel, professional development and hosting, along with changes in programming and staffing levels. The economic effect of the response to COVID-19 on Lakeland for 2019-20, 2020-21 and 2021-22 fiscal years was significant. However, for 2020-21 and 2021-22, the college was able to mitigate revenue losses with expenditure reductions, and the net effect on the bottom line was not significant. Lakeland remains very prudent with its budgets. Although the government has relaxed restraints on increases to tuition and other student fees, enrolments may be negatively impacted by COVID-19 for several years. Because of its fiscal situation, the provincial government has mandated a zero per cent increase in wages and benefits for post-secondary institutions. Nevertheless, if settlements cannot be negotiated, arbitrators make the final decision, and increases are possible regardless of the government mandate. Given significant increases to inflation, increases to salaries are anticipated. Every 1 per cent increase in salaries would increase the college's expenses by $400,000. Lakeland will soon face significant operating deficits if typical annual salary increases return.

Capital investment

Lakeland needs to invest heavily in revitalizing its infrastructure – the required investment is estimated to be $150 million. Lakeland continues to build a Strategic Investment Fund to address this critical need. Lakeland allocated $9 million to its Strategic Investment Fund for the year ended June 30, 2018, another $5 million for the 2019 fiscal year, $8 million in 2021 and a further $3 million in 2022. Internally restricted assets at June 30, 2022, now stand at $26.4 million, although $16.4 million of this is restricted to ongoing projects. More funding is needed to invest in capital projects as aging infrastructure poses a significant risk to effective operations. Therefore, Lakeland will need to generate future surpluses and also receive funding support from the provincial and/or federal governments. The Government of Alberta continues to recognize this needed investment. The government provided a $17.3 million grant in July 2020 for a significant renovation to the WHT Mead Building at the Vermilion Campus (completed in 2022) and $2.1 million to fund the Lloydminster campus heating plant replacement and renovation.

Risk management

Lakeland's largest risk is its dependence on funding from the Government of Alberta (56 per cent of revenue) and ongoing regulation of tuition fees (22 per cent of revenue). Currently the Government of Alberta has restricted its growth in grants but has allowed modest increases to tuition to help offset cost increases and pressures for post-secondary institutions. The Government of Alberta has also now tied the operating grant to certain performance metrics (enrolments, work-integrated learning, graduate outcomes and administration expenses) and if certain benchmarks are not achieved as written, an operating grant can be reduced quite significantly to the affected post-secondary institution. Aging infrastructure is another major risk, as discussed previously. Other risks, in addition to funding and aging infrastructure, include an emerging risk related to the short and long-term effects of the response to COVID-19 on the mental health of staff and students. An ongoing and ever-changing risk is related to cyber security. The costs to protect Lakeland from cyber risks continue to increase, and processes necessary to prevent breaches add significant administrative burden. Much attention is focused on financial and cyber security controls in the public sector. The college has completed the documentation of its risk and control matrix. Recommendations from the review of the controls will require increased investment in control functions, including cyber security and internal audit. Increased government attention and red tape will also require more time and resources to address information and reporting requests. The chief financial officer has completed documentation and testing of Lakeland's internal control framework. This was developed with support from chief internal auditors in the sector. Lakeland also continued to provide chief financial officer consulting services to Portage College through a shared services arrangement. Other shared services and shared systems opportunities are being explored.