Declining enrolment and mounting deficit trigger provincial takeover of Peel’s Catholic school board 

An investigator appointed by the Ministry of Education last month revealed the Dufferin-Peel Catholic District School Board is at risk of defaulting on payments and financial obligations as the Board grapples with a deficit that could reach approximately $136.3 million if action is not taken.

The worrying financial situation is the main driver of the PC government decision to place the DPCDSB under provincial supervision as part of a move to rein in spending in what the government describes as a wider effort to “restore sound financial management” in Ontario school boards. 

Along with the DPCDSB, the Toronto District School Board (TDSB), the Toronto Catholic District School Board (TCDSB) and the Ottawa-Carleton District School Board (OCDSB) were also placed under supervision. In all four instances, independent investigators recommended the province take control over the school boards. 

“Each of these boards has failed in its responsibilities to parents and students by losing sight of its core mission — ensuring student success,” Paul Calandra, Minister of Education, said in a June 27 press release. “We’re strengthening oversight and accountability so that parents can have the confidence that every dollar is spent responsibly to directly benefit students. I have made it clear that if a school board veers off its mandate, I will take action to restore focus, rebuild trust and put students first.”

When contacted for comment, a DPCDSB spokesperson referred all questions related to the supervision order to the Ministry of Education. 

The independent probe of the DPCDSB, while finding no “serious financial mismanagement”, concluded that the Board’s financial issues were driven by multiple challenges, including soaring long-term disability costs and a consistent decline in student enrolment, which makes up two-thirds of the Core Education Funding the Board receives from the Government of Ontario. Enrolment at the DPCDSB has been consistently declining for the past seven years, dropping from 80,112 students in 2017-2018 to 70,532 in 2024-2025 – a 12 percent drop.

The report concluded that the current cash flow has been badly impacted as expenses have exceeded revenues in each of the past several years. As of June 9, 2025, the Board had a negative cash balance of $61.7 million. While this is within the Board’s allowable credit limit of $80 million, this figure reflects a temporary increase approved by the provincial government for allowable debt, which expired at the end of June. The Board’s credit limit will now return to the original borrowing limit of $60 million. 

The projections are more dire over the coming months. 

The Board is expecting a $97.2 million cash shortfall by August 31, well beyond both the regular and temporary borrowing limits. The Board is currently trying to work out a plan for the necessary payments with the lender; if those negotiations fail, it will create a high risk of financial collapse in the fiscal year 2025-2026 as the accumulated deficit is projected to grow to $136.3 million.

“The cash flow projection includes assumptions regarding the Board’s borrowing limit and cash inflows. If these assumptions do not materialize, the resulting shortfall will increase the gap between the Board’s cash shortfall and borrowing limit,” the report cautions. “There remains a significant risk that the Board may default on its financial obligations. Based upon early planning assumptions for 2025/26, the Board would be in a similar deficit position and require additional borrowing. The risk of default would remain.”

These ongoing financial strains led auditor Paul Cleaver (who conducted the independent review and authored the subsequent report) to recommend the province take over and manage operations directly. His recommendation builds on a previous audit conducted in 2023. The external investigation carried out by Deloitte LLP found that the Board was struggling with a growing deficit that could lead to default. The firm recommended that the control of the Board should be handed over to the Ministry under the Education Act. Deloitte also recommended the Board take several measures in order to improve its financial situation, including the sale of two properties and to study the potential of selling five others. The Board complied with these recommendations.

“But its financial position continues to deteriorate as its accumulated deficit is projected to increase, and its cash shortfall is also projected to worsen,” Cleaver explains in his report. “The Board continues to look for additional savings and cost reduction measures that will minimize the impact to its students.”  

The DPCDSB projected a $32.9 million in-year deficit for 2025-2026 with significant financial strain stemming from long-term disability benefits.

(Dufferin-Peel Catholic School Board)

Just days before the PCs intervened, the DPCDSB’s operating budget for 2025-2026 was proposed at the June 17 regular board meeting, which further detailed the depth of the financial woes. The Board is heavily burdened by the employer-paid long-term disability (LTD) plan, with costs projected at $27.7 million for 2025-2026.

Many of the cost pressures are exacerbated by PC underfunding of the education system, which the DPCDSB has been warning about for several years. 

“The deficit that DPCDSB is facing now, as a result of declining enrolment and significant increases in LTD costs, is a concern given the probability that costs remain high and may continue to increase and the plan is not within the DPCDSB’s ability to change or negotiate,” Marianne Mazzorato, the board’s director of education, told The Pointer in 2022.

Data from the Ministry’s financial investigation show a 12 percent drop in total enrolment at the Peel catholic board between 2017-2018 to 2024-2025, with 9,580 fewer students enrolled.

(Ministry of Education)

Rising costs of statutory benefits like the Canada Pension Plan (CPP) and Employment Insurance have outpaced the provincial funding, leaving a gap of $3.3 million for this year. The special education funding for students with special needs is consistently underfunded, as the total enrolment has been decreasing, and the expenditures are surpassing available funds.

The Student Transportation Funding is also under immense financial strain, as current resources are inadequate to keep up the service. The Board has approximately 1,700 underutilized pupil spaces.

"The proposed 2025-2026 operating budget deficit is $32.9 million. DPCDSB has no accumulated surplus funds to mitigate this position," the proposed 2025-2026 budget reads.

"While resources have been directed toward achieving strategic priorities as outlined in the Multi-Year Strategic Plan (MYSP), it is important to recognize the difficult financial position of DPCDSB and limitations in resources available." 

Ontario school boards are funded almost exclusively by taxpayers through the provincial government, using a model where the Ministry of Education grants dollars based on the number of students enrolled. Other factors, such as how remote a board is and how much is needed to transport students to and from school every day, also determine the per-student funding for each board.

Funding levels have not kept up with Peel's hyper-growth since the 1970s, resulting in lower per-student funding levels compared to other areas of the province, and a gap in capital infrastructure funding for new school construction and maintenance. Now, with more families leaving the public education system or opting for private schooling from the start, Peel is facing unique pressures. The growth of private religious schools, many of which are enjoying skyrocketing enrolment across Peel, is creating significant revenue challenges for the region’s two publicly funded boards.

Revenue challenges have also mounted due to the chronic lack of classroom space across Peel, a factor that rarely seems to be considered as politicians rubber stamp new residential developments. The sight of portables on Peel school grounds is common, and even brand new schools are often opened with portable classrooms as the catchment population exceeds the capacity in the buildings themselves.

Despite declining enrolments, the DPCDSB still has to accommodate students that do arrive in new subdivisions and other developments that continue to pop up across Mississauga, Brampton and Caledon.

Many students across Peel take classes in portable classrooms as there is not enough space to house them within existing school facilities.

(The Pointer files)

Funding gaps are being magnified by the increasingly complex needs of students and educators, many of which emerged following the COVID-19 pandemic. Meeting the needs of diverse student populations; those with special educational requirements, an increasingly stressed and anxious student body; while new education models are experimented with means school boards need more funding, not less. But since being elected in 2018, the PC government has cut $6.36 billion from Ontario’s public education system. 

“Of course school boards have made cuts, they’ve cut to the bone. Sometimes there is nothing left to cut,” Chandra Pasma, the NDP’s Shadow Minister of Education, told The Pointer. 

According to the NDP, 43 percent of Ontario school boards are currently operating in a deficit position—a clear symptom of PC underfunding, the Opposition party warns. 

“You just see from this government no interest in actually taking systemic approaches that will support every child and every family,” Pasma says. 

If the PC government was serious about fixing the issues school boards are currently grappling with, they would pour more money into the system, she says. Without additional dollars, supervision orders will only lead to more cuts. 

“Without adding a single dollar to the system, the only way you’re going to find additional funds is by cutting.”

Unlike elected trustees who are accountable to the residents who elected them, there is no requirement for supervisors now in charge of the four boards to consult with the public before making decisions, meaning parents are now left in the dark over changes that could drastically impact the quality of their children’s education. The PCs have appointed Rick Byers, a chartered accountant, as supervisor for the DPCDSB.

“I think they are driving people to pull their kids out of the public system or to feel the public system isn’t working,” Pasma says. “Ideologically, they don’t support public education.”

Pasma fears valuable properties owned by the four school boards in major Ontario cities could be sold off at the recommendation of the supervisor and end up in the hands of PC connected developers without following proper processes. 

The real solution to this problem is clear, Pasma says: put more money into public education. For years, the PCs have refused. 

“They have made it clear they have a real disdain for the people who deliver our children’s education every day. They have not shown any respect for the work they do or a desire to work with them,” Pasma says, noting the PCs have dumped millions into other initiatives, like the private megaspa at Ontario Place; or the $612 million it will cost the province to expand alcohol sales ahead of a planned contractual agreement with the Beer Store.

Add in the tens of billions that will be needed for proposed highways and tunnels that are not supported by modern transportation planning policy, and it’s no wonder Ontario’s public education system might continue to struggle, she says. 

“It’s a matter of priorities. I want to see those investments go to our kids, not to whatever pet plans the premier drops.”

- With files from Joel Wittnebel 

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