Last Monday, Provost Anthony Masi held an open forum where he discussed the effects of the Quebec government’s recently announced budget cuts for the university sector on McGill’s financial situation.
McGill’s budget for the 2015 fiscal year (FY2015) was approved by the Board of Governors last April and accounted for a $7 million deficit. An additional $9 million in funding for special projects was labelled as contingent upon receiving the expected amount from the government. In October, the provincial government announced a $15 million cut to McGill’s expected grant of $360 million for FY2015. The provincial government will also announce subsequent cuts—ranging from $4 million to $12 million—later this year or early next year.
During the open forum, Masi explained that despite the precautionary measures taken by the administration while creating the FY2015 budget, in a worst-case scenario McGill’s operating budget deficit could reach $34 million as a result of the additional cuts imposed by the government.
According to Masi, the uncertain timeline for future cuts will make it difficult for McGill to achieve a balanced budget for FY2015.
“Those formal budget rules were only promulgated by the ministry to the university system in September,” he said. “Trying to manage variances—both positive and negative—that are due to cuts in the grant, make it much more difficult when they come so late in the fiscal year.”
The Quebecois government’s grant comes with additional stipulations. McGill will have to reduce the administrative salary mass that is not based on instructional expenditures by two per cent and the administrative operating expenses by three per cent. Masi explained that McGill will impose a hiring freeze for all new external searches for administrative staff.
“Right now there’s no immediate plan to claw back monies that have been allocated to units […] but there have to be restraints in ways the money is spent,” Masi said. “Salary mass is not necessarily the number of people [we hire, but] if we end the year not spending two percent less than when we started the year, the government will penalize us.”
Further announcements by the McGill administration regarding spending restrictions will be made in January to allow for expenditure planning for the 2016 fiscal year (FY2016).
“We have begun undertaking very detailed analyses of anticipated expenditure and [… we’re] looking at expenditure pattern on the local level,” Masi said. “Other expenditures that were approved may be postponed for [FY2016].”
According to Masi, all non-essential equipment and furnishing purchases will be postponed. Travel and hospitality funding will also be reduced and the process through which applications for job reclassifications are considered will be reviewed.
Masi spoke to McGill’s budgetary priorities for FY2016, which are in line with McGill’s mission statement.
“The primary budget planning objective will be to minimize the effects on academic programs, which are the source of our [reputation,] our reach, and of course our revenues,” he said. “If students fail to come, if professors fail to generate research grants, then revenues go down.”
According to Masi, McGill’s budgets have been more austere than those of other Quebec universities. He cited McGill’s immediate implementation of the budget cuts imposed by the previous provincial government as a reason for McGill’s relatively stable financial standing.
“It’s clear that these cuts […] will have significant financial implications for administrative units, faculties, schools and departments,” Masi said. “It isn’t yet a crisis because we have a strong base. We took the serious medicine […] and we took the cuts.”