Challenges and opportunities

Deep cuts to provincial funding amount to $110M in 2020/21, with additional cuts anticipated over the next two years, requiring staff reductions of at least 1000 — and COVID-19 is compounding these pressures. Without a strategic approach to these financial challenges, the risks to the university are significant, including:

  • Declining student experience,
  • Reduced ability to attract talent and external research funding, and
  • Diminished role in the province and beyond.

We must rethink and restructure how professional and administrative services support and enable the academic mission, while continuing to provide high-quality services with fewer staff members.


Challenges

Funding reductions: Taking into account additional income from tuition revenue, the U of A faces a net reduction of at least $127M by 2022/23.

Funding reductions 2020-2022

Funding reductions 2020-2022

  • Fiscal year 2020/21
    • $110 million funding cut
    • $30 million tuition revenue increase
  • Fiscal year 2021/22
    • $53 million funding cut
    • $29 million tuition revenue increase
  • Fiscal year 2022/23
    • $53 million funding cut
    • $30 million tuition revenue increase
  • Net change in funding after three years
    • $127 million reductions

Pace of program: the U of A must implement the first stage of funding reductions by March 31, 2021, in order to reach the imposed financial targets.

Job losses: we expect the total job loss will be in the range of 1050-1100 jobs


Key opportunities for savings

  1. Operational spending: Our operational costs were over $410M in 2019. This is approximately 29% above the comparable costs for a university of similar size and research intensity based on UniForum data.
  2. Procurement spending: A thorough procurement review can typically find efficiencies between 4% and 9% (for a university like ours) which could save up to $29M over two years.
  3. Size of footprint: With five campuses (and 150 buildings covering 50 city blocks on North Campus alone), we need to consider the size and complexity of our footprint and how to effectively use our spaces.
  4. Distribution and cost of administrative staff: More than 60% of all U of A expenditure is on salaries and benefits, representing $1.1B annually. Also, 64% of the university’s employees are administrative staff (high for a research-intensive institution) and distributed across all 18 faculties.
  5. Process efficiency: 56% of the U of A’s operational costs are associated with transactional processes (high-volume activities, such as payroll or expenses, that should be standardized across the university). 43% of staff do ‘generalist’ work (comparatively higher than other universities), spending more than 20% of their time splitting their focus rather than specializing in a single function or activity.
  6. Use of research resources: More efficient use of U of A’s substantial research funding could place the university much higher in global rankings. Researchers spend time and money on administrative tasks that could be spent on delivering increased research outcomes.