Provost Steven Dew, Vice-President (Finance and Administration) Gitta Kulczycki, and I want to thank everyone who attended or tuned in to watch the campus forum yesterday on the provincial budget. Our community has significant decisions to make in the coming days and weeks and your participation and input will be vital as we address significant financial challenges.
To help keep you informed, we have shared the information we have to this point on our budget website. You'll find a Q & A and a detailed explanation of the university's surplus there as well. We will update this website as we learn more.
We've also created a channel for you to ask questions about the budget, and to share your suggestions for reducing spending, finding efficiencies, and generating revenue. Given the breadth of talents and skills that exist across the U of A, we want to draw on everyone's creativity in solving problems and finding opportunities. We have already received several suggestions, and we encourage you to share your ideas with us, and to check the budget website over the coming weeks for further updates.
As we discussed yesterday, we still need to learn more before we can assess the full impact of the provincial budget on the University of Alberta. We have not yet received our formal budget letter from the government, which will include details on how the budget will affect us. We also do not yet have a clear picture on future enrolment targets or the budget's impact on Alberta's research funding agencies, for example.
Here is what we do know at this time:
- The average cut to Campus Alberta grants was 5.1%; however, it was applied differentially across Alberta's post-secondary institutions.
- The U of A's Campus Alberta grant will be cut $44M (6.9%) in this 2019-20 fiscal year.
- Our Infrastructure Maintenance Program (IMP) funding, which was $35M last year, has been reduced to zero on a one-time basis this year.
- As a result, the total reduction at the U of A is $79M for the current 2019-20 fiscal year.
How are we dealing with this in-year budget cut? As we shared yesterday, the university will buffer these reductions by cancelling some deferred maintenance contracts planned for this year, using a modest in-year operating surplus, and seeking board approval for drawing on our investment reserve to help in the short-term. We anticipate that these actions will deal with approximately half of the total budget cut before it is allocated to faculties and units. The in-year reductions to faculties and units will be considered one-time only, with the assumption that continuing cuts will roll into our base funding in 2020-21. In the next four years, we expect that we may need to deal with an overall cut to our operating budget in the magnitude of 10-15%.
Meeting the challenge of this budget cut and changes anticipated for the following years will not be easy, and we will need to make tough decisions. In the longer term, we will need to make significant, structural changes. We are considering all options. However, I can assure you that we will not respond reflexively. As a community we will take the time to make thoughtful, informed decisions that best promote the long-term success of the University of Alberta.
We will continue to keep you informed in the weeks ahead.
David Turpin
President and Vice-Chancellor