AMS budget slides into a deficit as businesses suffer

AMS businesses are in trouble.

Almost all of the student union’s food and beverage outlets have reported below target sales in the first half of the fiscal year. As a consequence, the reforecasted 2025-26 budget projected over $450,000 less revenue than expected and will result in a $350,000 deficit, compared to the balanced budget planned for the fiscal year.

AMS VP Finance Gagan Parmar says he believes the downturn is due to a challenging business environment rather than operational inefficiencies in an interview with The Ubyssey.

“There’s a lot of upheaval going on in [the food and beverage industry],” and “[the AMS] is feeling the impact as well.”

In today’s economic environment, young people are feeling the pinch. The unemployment rate among 15-24 year olds remains the highest in the country at 12.8 per cent in January, while recording a high of 14.6 per cent in September, the highest rate for the month since September 2010 (excluding 2020 and 2021).

Students are also feeling pressure on their budget as essential goods such as grocery prices increased five per cent over the past year, while restaurant meals rose 8.5 per cent. Additionally, the price of coffee — a student staple, of course — increased by an average of 31 per cent in December 2025 compared to a year prior, according to Statistics Canada.

All of this in mind, discretionary spending such as eating out becomes one of the first areas curbed in a student’s budget.

Parmar said that these economic headwinds disproportionately affect students, and because students are the Nest’s largest customer base, it only exacerbates the symptoms the businesses are feeling. According to Statistics Canada, households in the lowest income quintile spent more than 27 per cent of their disposable income on food and non-alcoholic beverages in 2024. But the Nest isn’t home to the only outlets on campus facing a crunch.

“We don't even have to look too far out … We're seeing restaurants shuttering [on the strip just outside the Nest] as well, and new ones opening up in their places,” Parmar said.

While sales continue to tick lower than forecasted, and the economic conditions for young people continue to bite, Parmar said that “not much” is exactly within the AMS’s control.

“What we can control on our end is how we react to [external factors].”

Parmar attributed increasing supplier costs as an additional strain on their profit margins, leading the AMS to either shoulder the cost or find new suppliers.

According to the Bank of Canada, the rise in food inflation in 2025 was mostly due to increasing import costs from supply shortages caused by extreme weather and tariffs.

Parmar said Blue Chip experienced this firsthand with matcha supply falling worldwide, increasing the café's costs while forcing them to replace their supplier in a crunch.

To “contend with this new environment,” as Parmar put it, the AMS is focusing on diversifying their menu options and providing variety for students to ensure they can continue to earn revenue that directly goes back to services for students.

Parmar mentioned there are “constant changes” being made with more to be rolled out.

Examples of this include Honour Roll recently adding Korean-inspired menu items and Blue Chip launching protein shakes. Grand Noodle Emporium now boasts one of the cheapest meals on campus, “Combo A” for $11.99.

Notably, the Gallery was the sole food and beverage outlet managed by AMS that reported a better-than-expected first half of the year. Parmar speculated that this is because students are willing to pay for experience.

“Perhaps students are choosing more and more to not eat out, and are choosing more and more to bring their own food,” he said. “But when it comes to those experiences, once in a while, they are willing to spend on them.”

Last year, the AMS launched the AMS Points Card — where students earn five per cent back for every dollar you spend. Parmar said its usage is picking up and the AMS will continue to market and promote the system.

“It did serve before some of the trends [materialized], but it's definitely turned into a bit of a mitigating factor as one of the many things we're trying to turn our businesses around.”

The reforecasted budget revealed the AMS will cut over $100,000 in expenses, but Parmar assured that the cuts will not affect student-facing arms of the AMS and will occur on the administrative side and in the executive portfolio. Previously, funds had been set aside for an advisory board to the AMS, however, in light of the financial situation the AMS finds itself in, the program has been paused, leading to about $7,500 in savings.

While the forecasted $350,000 deficit will likely materialize, according to Parmar, and add to the AMS’ existing internal deficit of about one million dollars, he stated that “it is our every intention that it does not.”

“I think for any organization, a deficit is certainly a position you do not want to be in, and it is the same for us. It is absolutely not sustainable and we've started initial work on our preliminary budget for next year, and so it will be our intention to build out a preliminary budget that is a balanced budget and one that does not forecast a deficit.”

In order to fund the deficit and return to a balanced budget, Parmar emphasized that while addressing the AMS businesses is a priority, they will also encompass a holistic approach and look at other areas in the AMS to cut costs and increase revenue. Parmar stated they have already reviewed and will continue to review administrative inefficiencies across the society.

“Every dollar adds up. Every dollar counts.”

“There's a lot of things that we're undertaking across the entire society to be able to bring us out of this predicament we find ourselves in,” he said.

One of his goals this year as VP finance was to stabilize the AMS finances, and under his leadership, the society has changed its investment mandate towards a higher-risk portfolio with the expectation of earning a greater return.

“We're hopeful in the long term that a riskier portfolio interest that we can take on will give us additional returns that will help stabilize our financial position.”