0% percent down! 0% percent interest!
APR 05, 2013 | BY EMERSON VANDENBERG
A substantial paycheck and tenure at a storied university does not appear to be enough to retain top-level faculty, a recent Freedom of Information request suggests. The University of Toronto administration has been offering large, interest-free mortgages to staff members.
In accordance with the FOI act, the U of T detailed a list of mortgages valued over $65 000 that it provided to unnamed persons employed by the University. A U of T alum filed the request when researching a similar practice at the University of British Columbia. Interested in how widespread the practice was, he filed a request for the same information from the U of T. The subsequent response displayed 25 interest-free mortgages that the University granted members of various faculties.
When questioned about the issue by the newspaper, VP equity and human resources, Angela Hildyard stated that, “the provision of an interest-free mortgage loan is very occasionally an essential component of a recruitment or retention arrangement.”
Despite not paying any interest on the loan, Hildyard points out that recipients are taxed in accordance with Revenue Canada’s understanding of the loans as a fully taxable benefit. More specifically, the University’s response to the FOI indicates that “interest on the outstanding loan is reported annually.”
When asked about the source of the money, Hildyard said they are assessed and granted on a faculty basis, as they are responsible for compensating staff. Thus, a pertinent further question is why so little information was revealed through the FOI request. No names or payment periods are provided, only the list of loans made at zero per cent interest, some as high as $300 000. To this, Hildyard commented, “The information was provided in accordance with the FOI request and in accordance with FOI law.”
Despite the strange opacity that enshrouds the destination of student funds, the practice is widespread. UBC offers the same kind compensation to its senior staff. A similar FOI request unearthed $11.8m in loans made to employees at the west-coast institution. Included in their slightly more detailed response were the names of the recipients as well as the amounts remaining on their principal.
As reported in Ubyssey, the UBC student publication, the school’s administration similarly defends the practice by saying that it is a crucial tool used to attract and retain top-quality staff. The January article goes on to quote a system of loans provided at Simon Fraser University that are subsidized, but not completely interest-free as the UBC and U of T model offer.
Public servants—university staff included—are already handsomely paid, as the 2013 Sunshine List demonstrates. The yearly report details all public sector workers who earn over $100 000. Listed among them is virtually every professor at U of T. Is such generous compensation not sufficient to retain their employment? Do interest-free mortgages really need to be offered in addition to such vast salaries?
- Subtitle: U of T lures top faculty with interest-free deals