Update on the Budget Situation and Its Implications
Last week, I hosted four Town Halls on the downtown and Macdonald campuses to consult with the McGill community about the severe impact of the government-imposed budget cuts on our University. I want to thank all who were able to attend as well as the many who joined the meeting via live webcast.
While I opened each session with a presentation to share the facts as we understand them, the highpoint of the Town Halls, for me, was the interesting and important give-and- take of questions, comments, and suggestions that followed.
There were two important lessons learned from the Town Halls: First, the McGill community understands how serious this financial crisis really is, and second, the McGill community cares. You care about the University, about ensuring that it remains a world class institution, and about your colleagues’ well-being. We are all working for the same cause: the continued success of McGill University.
At the Town Halls, I outlined a grim situation, one that I did not attempt to sugar-coat. The information coming from the Quebec government has been shifting and even contradictory. One thing that we do know with certainty is that the government has imposed a cut of $19.1 million during the current fiscal year and another $19.1 million for FY2014. These cuts are on top of the foregone revenue we expected from tuition increases when we prepared the budget for FY2013 and the one projected for FY2014.
In essence, this means that over the next 14 months, we will have some $40 to $50 million less in our operating grant. As a consequence, we will face much tighter budgets that require measures going beyond mere belt-tightening to deep cuts that threaten our mission and collective well-being.
The heart of the matter is that as a research-intensive and student-centred university, we spend 75% of our operating budget on salaries, benefits, and pension contributions for professors, administrative and support staff, and other employees. So as we contemplate how to cut $40 to $50 million from our expenses, the impact that these cuts will have on McGill’s people must be top of mind. Of course, we must also ask how to take these cuts in such a way as not to sacrifice the high quality of McGill’s core research and teaching mission. This is a tall order.
It is clear that we will not be able to absorb these cuts without sending significant shockwaves across our University – all units will be affected. As I said in the Town Halls, everything is on the table and we must look at every aspect of our spending.
Suggestions you made at the Town Halls, or submitted to this blog or via email, are varied and wide-ranging in scope, amounts, and timing. Here are some of items you recommended that we explore:
- across-the-board salary cuts
- time off without pay (furloughs)
- capitalising on material assets
- streamlining processes and procedures
- finding a better mix of central vs. decentralized operations
- early retirement incentives
- generating revenues from non-traditional sources
- many, many more.
For a full list of your suggestions please visit our new Government Budget Cuts site.
In the coming days and weeks, and as more information becomes available from the Quebec government, I will continue to keep you up-to-date on what we will have to do to meet these cuts and the ways in which we will have to adapt to protect McGill during this difficult time of financial uncertainty.
I am well aware that the government-imposed cuts are creating a great deal of anxiety and frustration across campus. I share your frustration and concern. Many people at the Town Halls or via blog submissions asked what we as a community can do to oppose these cuts. Principal Heather Munroe-Blum and Vice-Principal (External Affairs) Olivier Marcil are working tirelessly to present our case to the government and to the public, and to build alliances with other Quebec research-intensive universities that face similar challenges. We outlined in a previous blog post actions that individuals or groups might consider in response to the government cuts.
Right now, a key challenge is timing, for McGill and other Quebec universities, as we have to prepare and forward our revised budgets for approval. Working with Vice-Principal Di Grappa and the Principal, I will need to present the budget to our Board of Governors by the end of next month.
We need to act responsibly, and we have to pull together as a community. Everyone may want to protect his or her own area, but we cannot be divided by this challenge. We have to develop workable and sustainable funding solutions that can help protect the University from sudden deep cuts such as those now being imposed.
I want to thank you again for participating in the Town Halls. If you were not able to attend, I encourage you to view the videos and to leave your comments and suggestions on this blog, or send them via email to firstname.lastname@example.org. I encourage you to read this the blog regularly, review the comments left by other colleagues, and contribute your own suggestions. Please also visit regularly the Government Budget Cuts site (mcgill.ca/budgetcuts) where you will find all the facts and information about this challenge.