Over the last several months, administrative units, faculties, and departments across the University of Alberta have been working hard to reduce expenditures and find efficiencies following the provincial budget introduced in October 2019. In media reports late last week, Advanced Education Minister Demetrios Nicolaides continued to urge universities to contain expenditures.
I write to provide an update on where we are in terms of our 2019–20 budget:
We are on pace to meet our budget targets, inclusive of the in-year grant reduction, in every fund, with the exception of the capital. As a result of the elimination of all 2019–20 Infrastructure Maintenance Funding, we are anticipating a shortfall in the capital fund. At the time of the October budget, all contracts that could be cancelled at that point were, but some expenditures had already been incurred. We are temporarily drawing on our non-endowed investment reserve as a source of funding for $15M of those commitments.
We are on target in all other funds because of actions that have occurred across the university. My thanks to all of you for tackling challenges head-on.
- We have implemented hiring constraints and urged all administrative units and faculties to cut all non-essential spending.
- We quickly put in place a voluntary winter leave program which was taken up by nearly 600 employees, resulting in significant savings to their units.
- Our employee complement was reduced by 185 between October and December of 2019 through a combination of attrition, retirements, and position eliminations. We anticipate further reductions in the coming months and will continue to ensure that all occur in accordance with collective agreements.
Prior to these recent actions, over the past several years the community also worked together to eliminate a persistent structural deficit in the operating budget which enabled us to move quickly and deal with our most recent budget challenges effectively.
We continue to make difficult decisions and our goal is to minimize the impact on students and frontline services. As we make the structural changes needed, it is critical that we keep our academic mission in the foreground — to continue to sustain an exceptional learning and research environment that sets students up for future success as leaders, innovators, and problem-solvers. Recent examples include:
- We have identified and closed under-used programs as a first step to making more significant programming changes that are responsive to changing student and labour market demands. Thirty academic program closures and suspensions have been completed.
- We are rolling out our new budget model that ensures that our expenditures are clearly tied to teaching and research activities. This will help us make strategic, evidence-based decisions to the long-term benefit of our students and other key stakeholders.
- We are aggressively pursuing other sources of revenue to support our core activities.
- And, our engagement in an international administrative benchmarking program is providing critical data that we will use to make changes to effectively and efficiently support our academic mission.
Guided by our Integrated Asset Management Strategy, we have also been moving on several fronts to reduce space costs. Integrated Asset Management Strategy, we have also been moving on several fronts to reduce space costs.
- We have cancelled major leases and are moving several units from leased locations into university-owned space.
- We have begun the process of decommissioning and demolishing buildings, such as Alumni House, which are no longer serving the teaching and research mandate of the university and have become too costly to renew, maintain or operate.
We know there is much more work to be done, and budget planning for 2020–21 is well-underway. Thank you for your continued efforts and dedication in helping us meet our challenges today, while also maintaining a strategic focus on our future and ensuring the long-term well-being of our students and university.
David H. Turpin
President and Vice-Chancellor
For more information on the budget, please visit our resource planning site.