An Unprecedented Challenge
McGill is facing the most serious financial challenge in its recent history. I wanted to use this space to provide our community with some background on how the University got here, why we think the situation is so serious, and to solicit your input on what we can do to address it.
One year ago, in February 2012, when we were planning our budget for this fiscal year (May 1, 2012 to April 30, 2013) and projecting it over a five year horizon, the Government of Quebec had promised increases in both government funding and tuition – increases that would be steady and regular over the period.
With the promise of these extra resources, we put initiatives in motion that cannot now be stopped in a matter of months, as the Government has asked us to do.
In September we were informed there would be no tuition increases, reducing by $6 million dollars the revenues we projected in the FY2013 budget. In December, just before the break, we were told that Quebec would cut 5.2% or over $19 million in funding for McGill this year. The government suggested that these cuts would persist into at least FY2015.
Nearly 75 percent of McGill’s core operating budget goes to salaries, and we have contracts, commitments to staff, and other expenses that cannot be reversed so suddenly. Costs other than salaries (such as energy, space, equipment, office and lab supplies) represent about only $160 million per year, and with most of the year over, most of that money is either already spent or committed to third parties.
The coup de grace came last week when the Government announced that if universities fail to make at least 50 percent of their imposed cut in this fiscal year (before April 30), we will also lose the “conditional grant”, or last installment, on this year’s transfers. For McGill that figure is approximately $32 million.
Some of you may remember, or have been told about, the drastic funding cuts of the mid-1990s – not a good time for the Quebec university system and not a pleasant time at McGill. However, at least then we had time to plan in order to reduce the impact of those cuts on our academic mission because the government of the day informed us they were coming and that they would last for five years.
But as you can see, the first cut (the tuition freeze) was announced 4 months into our fiscal year, and the second cut (the reduction in our operating grant) was announced nearly three-quarters of the way through our fiscal year. And the threat of holding back the last installment comes with only 90 days left in our fiscal year! Each week seems to bring new and worse news. VP Di Grappa in his blog lays out the interesting and disturbing chronology of policy reversals.
McGill has achieved and been able to maintain its position as one of the world’s top universities despite scarce financial resources, because we plan for the long-term and we execute on those plans. But these cuts, combined with reductions in provincially funded research and associated indirect cost recoveries, represent an unprecedented assault on McGill, and indeed on higher education in Quebec. We will do everything we can to protect McGill’s core mission of teaching, research and service to the community, but we face an extraordinary challenge.
We would like to take this opportunity to invite you to attend one of the Town Halls being held on February 11 and 12 to discuss the situation. We also welcome your comments online, which can be left below this blog post.