Last Thursday, Provost Anthony Masi and Vice-Principal (Administration and Finance) Michael Di Grappa released an email to the McGill community providing further details about the extent of the budget cuts imposed by the Quebec government, and the rationale behind the measures McGill has chosen to deal with them.
According to the MRO, from Jan. 1, 2013, to Apr. 30, 2014, McGill will suffer a $56.3 million reduction in its operating budget, of which the provincial government’s cuts account for $38.3 million and the revenue lost due to the cancellation of the former Liberal government’s tuition increase accounts for $18 million.
However, McGill is expecting to receive an additional stipend of $4.4 million from the government in both the 2014 and 2015 fiscal years, as well as revenue from a three per cent tuition increase starting in 2014, according to the MRO. Ultimately the university will be dealing with “a net shortfall of approximately $43 million.”
Given that the Parti Québécois has stated that it will reinvest in the university system come 2015, some have questioned why McGill cannot add the sum of the cuts to its accumulated operating deficit.
“Doing this would double our accumulated deficit in less than five years, which we will in any case have to repay sooner rather than later,” the MRO reads.
However, the email noted that McGill’s Board of Governors has allowed the university to transfer $25.1 million onto its accumulated deficit for the 2013 fiscal year.
As detailed in an email from Principal Heather Monroe-Blum on Mar. 26, McGill will be implementing hiring and wage freezes, and a voluntary retirement program for administrative and support staff in the first phase of cuts. According to Vice-Principal (External Relations) Olivier Marcil, the voluntary retirement program will be available from Apr. 2 to Jun. 3., and is expected to generate savings of $7.7 million on a recurring basis.
Thursday’s email also noted that McGill expects to save up to $7 million through “non-personnel” related cuts. According to Marcil, this may be achieved through cuts in events, catering, legal and consulting expenses, and travel expenditures, excluding research.
Marcil added that the administration will assess the savings reached through the first phase of cuts in June, and will subsequently evaluate the extent of further cost-cutting measures, including layoffs.
“The need for further measures will likely be known by late June to early July,” he said.
The MRO also addressed a query regarding whether McGill could defer capital projects in order to increase savings. Masi and Di Grappa explained that maintenance on campus could not be postponed, and would not be a long-term solution to the cuts.
“McGill has a very serious and unique deferred maintenance problem,” they wrote. “In order to deal with these matters … we have already been borrowing against future fiscal years’ allocations. Therefore, there are no surplus capital funds to transfer to operations.”
“In addition, capital is one-time-only money. It is not recurrent base funding,” Masi and Di Grappa continued. “It may alleviate the problem for a year or two, but then we will still have to find a way to deal with the shortfall in operating grant revenues.”
Marcil emphasized McGill’s efforts to insulate students as much as possible from the effect of the cuts.
“It is our primary objective to limit the impact of these measures on students and to preserve our core teaching and research mission,” he said. “Some services and programs may be at risk, but it is too early to determine which ones.”