From the President’s Desk: Update on 2019–20 Budget

As you know, on October 24, 2019, the Government of Alberta tabled its budget for the current fiscal year (ending March 21, 2020). I…

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As you know, on October 24, 2019, the Government of Alberta tabled its budget for the current fiscal year (ending March 21, 2020). I outlined the key impacts of the provincial budget on the University of Alberta in our campus forum shortly after. We received a $44 million cut to our Campus Alberta grant and a $35 million cut to our Infrastructure Maintenance Program (IMP) funding. The total $79 million cut applies to the current 2019–2020 budget year.

The cut signals a shift in post-secondary funding in Alberta, which has historically supported a strong network of post-secondary institutions. The University of Alberta stands among Canada’s best universities, and among the top 100 universities worldwide — no small accomplishment in a province of four million people. We play a fundamental role in the development of our city, province, country, and indeed the world. We have a mandate with the provincial government to educate a given number of students each year, and we meet these enrolment targets consistently. Our students maintain high completion rates and graduate well prepared for successful futures — this year the U of A ranked second in Canada for the employability of our graduates. We have delivered on our commitment to provide Albertans with a world-class institution in their home province, and as we face these budget challenges, our continued commitment to Albertans guides our decisions.

Over the past month, I have been working with deans, vice-presidents, and other senior leaders to determine how we will manage the in-year cut of $79 million. We are absorbing as much of the cut at the institutional level as possible, and applying the residual amount differentially between the faculties and units. At the institutional level, we have cancelled all possible maintenance and infrastructure projects, drawn upon limited financial reserves for investments (pending the approval of the Board) and applied our small contingency fund. These actions total $34 million. The remaining $45 million shortfall will be handled through a one-time, in-year cut of 4.7% to the faculties and an average in-year cut of 8.0% to the central support units (applied differentially). While these cuts will be applied on a one-time basis for this year, the ongoing reductions to our funding will be rolled into the planning process for the 2020–21 budget.

These cuts are significant and will require some hard choices. Our priority in making these reductions is to maintain an outstanding learning experience for our students and to support the amazing research that has made us one of the world’s best universities. One measure we have already taken to help with the short term is to put in place strict hiring constraints for the coming year.

As we continue to plan for the years ahead, several key pieces of information remain unknown. Enrolment targets have not yet been set by the province. Very significantly, the provincial government is also introducing a new performance-based funding model for Alberta’s post-secondary sector, the elements of which are not yet known.

In this period of uncertainty, we will follow our usual budget planning practices to set budget targets for the next three years. We have been working with deans to assess anticipated changes to both our revenues and expenses, and we are now in the process of finalizing budget assumptions and planning parameters for 2020–21 and the following two years.

I will be in touch to share these parameters and keep our community updated in the coming weeks.

David H. Turpin
President and Vice-chancellor