University of Calgary

Balanced budget proposed for 2013-2014

UToday HomeMay 16, 2013

More than 270 students, faculty and staff gathered Wednesday afternoon in the MacEwan Hall Ballroom and 250 more watched online as President Elizabeth Cannon, along with Dru Marshall, provost and vice-president (academic) and Jake Gebert, vice-president (finance and services), shared a budget process update. The May 15 event was a follow-up to the first campus town halls held in March, and was an early review of the proposed 2013-2014 budget that goes to the Board of Governors for final approval on May 23.

The provincial budget announced on March 7, 2013 resulted in a 7.3-per-cent cut (approximately $32 million) to the Campus Alberta Grant for the University of Calgary which, given a two-per-cent promised increase, resulted in $41 million less than expected for the 2013-14 budget. In addition, $6 million was cut from the university’s Infrastructure Maintenance Program.

“The reduction in funding that has occurred in the post-secondary sector will drive major change – it will not be business as usual,” said President Cannon, who thanked the university community for their input into this year’s budget and the future direction of our institution. “While difficult decisions lie ahead, we remain committed to the Eyes High strategic direction and the priorities within the academic and research plans.”

“We are undergoing major changes to our institution but we can’t do everything at once, nor should we,” said Dru Marshall. “We certainly can and will accomplish many things, but first we need to create the conditions to allow our institution to succeed in the transformation.”

Marshall explained that the University of Calgary was in relatively strong financial shape prior to the provincial budget announcement, and has worked hard to propose a balanced budget for 2013-14. However, Marshall highlighted that cuts of this magnitude will have significant impact on the university’s ability to progress at the pace outlined in our Eyes High strategic direction, and the “real pain” will come in the 2014-2015 budget year.

“The impact of cuts across our university will be varied and significant,” said Marshall. “The university remains committed to providing high-quality programs with reasonable class sizes; however, budget cuts will affect people, programs, enrolment, strategic initiatives, operations, and research productivity.”

Marshall explained that while the university is still working through information, a number of impacts have been identified to date as part of the draft 2013-2014 budget:

  • The loss of 50 faculty positions through attrition and retirement. The university continues to recruit the 50 assistant professor positions announced in October 2012, which helps create a measure of academic renewal.
  • Cuts to sessional teaching budgets.
  • Administrative staff reductions through unfilled vacancies, restructuring and elimination of some positions.
  • Elimination of approximately 20 programs that have not enrolled students in recent years. Decisions to eliminate programs will include plans to ensure current students still have good choices and flexible options to finish their degrees.
  • A decrease in annual enrolment in the Faculty of Arts of 200 first-year undergraduate positions to ensure a sustainable funding model.
  • Delaying or cancelling some strategic initiatives.
  • Cuts to equipment and campus infrastructure budgets: less money available to replace aging equipment or to renovate.
  • The first ramp of hiring for 50 postdoctoral scholars has been successful; however, the second ramp of hiring an additional 50 - 60 postdoctoral scholars will be more difficult to accomplish.
  • Unrelated to the provincial budget cuts, a reduction of 30 first-year nursing seats and 15 first-year medical seats. This is a return to previous levels of enrolment before both programs received one-time funding to temporarily ramp up enrolments.

“While these impacts will be difficult, we also see opportunity for the University of Calgary to play a lead role in the responsible restructuring of post-secondary education in Alberta,” says Cannon. “We see the possibility of reimagining the university and look forward to continuing this dialogue with the government, students, faculty, staff and the broader community.”

Changes to accounting standards explained

Jake Gebert explained how changes to the public sector accounting standards regarding pension adjustments and net assets are now recorded in the budget.

In 2011, the University of Calgary and all other Universities Academic Pension Plan (UAPP) members chose to recognize future benefit liability, which affected how unrestricted net assets are reported. This change also coincided with the introduction of new Public Sector Accounting Standards (PSAS). In layman’s terms, the pension liability is now recorded up front whereas previously it was stretched out and recorded over the average lifetime a pension is paid out. As a result, unrestricted net assets now show as $63.8 million instead of $110.3 million as previously recorded, which mean the university has less flexibility to meet its budgetary challenges.

Gebert pointed out that the university is still on track to reach the PSE sector best practice of having unrestricted net assets of five per cent of our annual budget. Holding positive net assets provides the university with a buffer to address uncertainty or leverage potential opportunities.

Next steps

The draft 2013 – 2014 University of Calgary budget will be presented to the Board of Governors on May 23 for final approval before submission to the Government of Alberta on May 31, 2013. Once the budget is approved, detailed impacts will be communicated to the campus community.

During May through June, senior leadership will review the 210 ideas submitted by the campus community on the Ideascale website regarding broader structural change at the university. Analysis of these ideas will play a key role in the 2014-15 budget planning process. Marshall challenged the campus community to think big and reimagine the university and how we might look different academically.

View the slides presented at the May 15 Town Hall.

 

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