University to run a balanced budget for 2015-16

Last month, the provincial government announced that post-secondary institutions in Alberta will face a 1.4-per-cent funding cut for 2015-16 and a further 2.7-per-cent cut in 2016-17. Since the announcement, the senior leadership team has been reviewing the impact on the university’s budget and on April 20, President Elizabeth Cannon, Provost and Vice-President (Academic) Dru Marshall, and Vice-President (Finance and Services) Linda Dalgetty provided an update to students, faculty and staff at a budget town hall on Monday.

With the cuts this year and next in the Campus Alberta grant, as well as inflationary pressures, the university is facing an estimated shortfall of $37 million to $47 million by 2016-17.

For the 2015-16 budget year, the University of Calgary will be presenting a balanced budget. The Government of Alberta Campus Alberta grant reduction of $6 million will be managed through expense reductions spread across the institution. Additional inflationary impacts of $10 million to $15 million, including salary increases, will be managed by committing accumulated operating surplus from prior years to cover the expenses. 

“The University of Calgary has built a strong financial foundation due to the hard work of many people over the last several years,” said Marshall. “However, the cuts this year, and the cuts anticipated in 2016-17 will mean that our financial flexibility will be greatly diminished. We are in the fortunate position that we can weather the financial storm this year, and take our time to make very strategic decisions in the best interest of our community.”

Slides from the town hall are posted online; watch a video of the presentation.

The university took major funding cuts less than two years ago and will be challenged over the upcoming year to make decisions that will lead to a sustainable model for the university. At the University of Calgary, demand is increasing for the number of students and the space capacity to accommodate them. “The university is grateful for the new enrolment funding that it received, and will grow slightly over the next three years to accommodate some of the demand that is being experienced in Calgary,” Marshall advised. “We will continue to grow in a sustainable manner into the future.” An increase in post-secondary capacity is essential to sustain and diversify economic growth in Calgary and across the province.

The university also announced it is freezing the salaries of its executive and senior leadership team, effective July 1, 2015 through June 30, 2016.

“As the university looks for ways to deal with the budget shortfall, a salary freeze for our executive and senior leadership teams was a fiscally prudent and responsible step to take,” said Marshall.

Salaries and benefits are the largest expense at the University of Calgary, representing 58 per cent of the university’s expenditures.

A decision on the possible granting of merit increases for Management and Professional Staff (MaPs) is currently on hold until the budget review process is finalized. Salary increases for academic staff members and AUPE staff members will be provided based on the collective bargaining that is currently underway.

While there are financial challenges ahead, Marshall reiterated that we will continue to remain aggressive in pursuing our strategic Eyes High goals while ensuring a strong foundation for the university. Marshall concluded by stating that the executive team is looking at ways to involve the university community in the process of finding ways to create a sustainable future for our institution and encouraged all members of the university community to take part in the process that will unfold in the coming year.