Budget Town Hall FAQs
What is the new budget model and how does it impact Arts?
- This is an activity-based model, with most revenues allocated to Faculties based on metrics related to teaching and research activities -- specifically, the number of students we teach and levels of external research funding. Key sources of revenue include:
- Tuition
- Campus Alberta Grant
- Directed Provincial Grants
- Research Support Fund
- Other Income
- The largest portion of funding for the Faculty of Arts ~$94 million budget comes from tuition. Tuition reflects approximately 62% (~$59 million) of the total budget. The second largest portion of funding comes from the Campus Alberta Grant, which accounts for a further 32% (~$30 million) of the budget. The remaining 3 % comes from the other sources.
If a significant portion of our funding comes from tuition, is there a risk this year given the COVID-19 situation?
- The current COVID-19 situation poses risks to the faculty. With course delivery changes and current travel restrictions we could see impacts on course enrolments and therefore tuition.
- For the spring and summer terms, we have experienced increased enrolments. At this time, fall and winter enrolments are not known and therefore the financial impact is uncertain.
- The Faculty continues to offer high quality courses for students. There are a number of supports available to help instructors create and adapt materials for online learning. We’re also working to ensure a robust online student life experience, with clubs and cohorts.
What is the impact of the 2020 provincial budget on the University of Alberta?
- The University of Alberta received an 11% cut to provincial funding in the Government of Alberta’s 2020 budget. This reduction in provincial funding includes an overall 8.9% cut to our Campus Alberta grant and another 2% reduction from the elimination of targeted enrolment expansion as a separately funded item.
- The total 11% reduction to our 2020-21 budget is in addition to a 6.9% cut applied to 2019-20 funding levels. The total reduction of the University of Alberta budget is $110.3 million over the two years.
What is the impact of the new performance-based funding mechanism put in place by the Government of Alberta?
- As signaled in the October 2019 budget, the government has begun to implement a new performance-based funding model
- Fifteen percent of the university’s Campus Alberta Grant in 2020-21($82.3M) is dependent on our performance on four performance metrics. Those performance metrics are: (i) a consolidated total expenditure target, (ii) an administrative expense ratio target, (iii) enrolment targets (domestic, international, and Indigenous students), and (iv) targets related to non-Alberta government external research revenues.
- Failure to reach the performance targets within stipulated tolerances will result in a loss of funding, to be applied in the 2021-22 year. These metrics form part of an Investment Management Agreement (IMA) to be signed between Alberta Advanced Education and each post-secondary institution.
- Future years will see the addition of more metrics, with more funding dependent on the university’s performance on those metrics for 2021-22 and to 40% for 2022-23 and onwards.
What did the Faculty of Arts do to manage the in-year budget cuts during the 2019/20 fiscal year?
- The in-year reduction for the Faculty of Arts was $3.6 million. Arts was committed to maintaining its programming in-year and ensuring there was no in-year impact on course delivery for students. With that in mind, reductions were managed by:
- Minimizing discretionary spending.
- Holding some positions vacant.
- Drawing down accumulated carryforward funds (‘flex’); approximately $3 million in carryforward funds were used to mitigate this reduction.
What is the budget reduction for the Faculty of Arts for the 2020/21 fiscal year?
- In total, the base allocation for Arts was reduced by $3.3 million. This reduction is the result of the combined effects of changes to the budget model, changes to tuition, and the reductions to the Campus Alberta Grant.
What other budget pressures is Arts facing for the 2020/21 fiscal year?
- The reductions are further impacted by increasing costs the faculty faces. Examples of these increasing costs include:
- General inflationary costs on the various supplies and services procured across the faculty.
- Salaries and benefits continue to increase each year; on average increases range from 1.2-1.9% annually where increments are available to staff. Salaries and benefits make up approximately 90% (~$86 million) of our overall spending, so these increases can have a significant impact on the budget.
How will the faculty continue to support the interests of the students, faculty and staff during a time of budget reductions?
- The Faculty is committed to maintaining its core commitments, these commitments include:
- Providing academic programming that meets the needs of undergraduate and graduate students.
- Ensuring accessibility and availability of courses for students.
- Supporting research and creative activity and maintaining a focus on and commitment to being research intensive.
- Supporting graduate students, including teaching and research opportunities.
- Ensuring a safe learning and working environment for all students, staff, and faculty and maintaining priorities that support the health and wellbeing of the Arts community
How are the 2020/21 reductions being managed and what has been cut as a result?
- In response to the budget reductions, the faculty has:
- Deferred a number of ‘flex-funded’ initiatives. Since many of these deferred initiatives represent one-time spending and ‘flex funds’ remain with the Faculty, the initiatives remain as plans for the future.
- Worked with departments to make changes to course offerings. These changes include reducing the overall number of sections offered while adjusting class sizes to maintain enrolment capacity.
- The departments have been encouraged to consider future changes in course design including modes of delivery, pedagogical strategy, material, and space needs, all of which have budgetary impacts.
- Minimizing discretionary spending to the extent possible; this includes reduced spending on travel and hospitality.
- Hiring restraint through delaying the filling of positions where possible.
Will there be layoffs as a result of the budget cuts?
- To date we have not seen layoffs for permanent staff. Some vacant positions have been closed and will not be filled.
- Hiring restraint is intended to generate savings by leaving some positions vacant, where possible, for a period of time prior to recruiting.
- The budget also has built in savings, recognizing that not all positions are 100% filled at all times. As positions become vacant, often the time it takes to recruit suitable candidates generates some savings. In other cases, positions may purposefully be left vacant for a short period of time.
- Of course, the reduction in course sections will reduce opportunities for contract employment in the area of academic teaching.
What do the budget cuts mean for research?
- Changes to the Arts budget do not have a direct impact on research. Expenditure reduction targets do not limit our flexibility with regard to spending external research grants.
- There are, however, indirect impacts as budget reductions limit the capacity of Faculties to actively support research through matching commitments. To date, this has not impacted research in Arts, but future matching contributions and investments in research will need to be considered carefully.
- The provincial government is cutting spending across most ministries and agencies. This in turn results in reduced research funding that would otherwise be provided by these organizations. For example, in the recent provincial budget Alberta Innovates was cut by an additional $11M.
What does the future of the Faculty look like given the budget reductions realized?
- Going forward, the Faculty is committed to sustainability, initiatives to ensure our sustainability include:
- Managing expenditures to allow for ongoing, if limited, faculty renewal.
- Continue to review the structure of programs and the delivery of course offerings.
- Balancing opportunities to reduce course sections while maintaining teaching capacity and meeting student needs.
- Reviewing the way the Faculty is structured and organized to deliver top quality academic programs and Degrees that attract and serve our students.
Additional Information on the University of Alberta budget can be found on the following sites: