U of A faculties facing one-time cuts due to Budget 2019

Faculties will have a one-time 4.7 per cent cut and support units will face an eight per cent cut because of Budget 2019

Faculties and support units at the University of Alberta will face significant one-time cuts because of the 2019 provincial budget.

At the board finance and property committee on November 26, it was revealed that despite efforts to minimize and absorb cuts at the institutional level, University of Alberta faculties will face a one-time cut of 4.7 per cent.

On October 24, the United Conservative Party (UCP) revealed their first budget which increased student costs to post-secondary and decreased the amount of financial support institutions could expect from the provincial government.

To help absorb the loss of revenue by the budget, the University of Alberta board finance and property committee, which oversees all financial matters at the university, recommended the Board of Governors approve a $15 million transfer of investment dollars to its operating budget. As the highest decision-making body at the U of A, the Board of Governors will give final approval to the motion at its next meeting in December.

Gitta Kulczycki, vice-president (finance and administration) said the reallocation of $15 million from the U of A’s investment reserve of non-endowment funds is the best way to alleviate funding challenges for the institution. The fund currently, without the transfer of money, has $55.1 million.

“We are asking, considering the challenging circumstances we face, that we be allowed to transfer $15 million to assist us in absorbing the in year budget reductions,” she said.

The investment reserve at year-end, if the proposed transfer is approved, will still sit at $40 million. The $15 million being transferred out would be replaced within the strategic reserve investment fund at the most opportune time.

Kulczycki said $15 million represents two per cent of U of A expenditures for 2019-20. By taking this money from the reserve, it saves faculties and support units further two per cent cuts.

“That is a very significant amount of funds to find in a very short period of time,” she said.

Cancelling the infrastructure maintenance program (IMP) funding left the U of A in the hole for $35 million. The university was able to cancel several projects to a grand total of $14.9 million. The remaining $20.1 million spent on capital projects was not able to be cancelled, leaving the university on the hook to pay for it.

Additionally, “favourable” international student and higher than expected domestic student enrolment has created an extra $2 million in revenue the institution did not expect to receive.

Despite the cancellation of some IMP projects, better than expected enrolment, and the proposed investment transfer, the budget cuts set out by the provincial government will leave the university with a $45.1 million funding shortfall three-quarters through its fiscal year. Faculties will face a one-time cut of 4.7 per cent, with support units seeing a one-time eight per cent cut for 2019-20.

The UCP government has assured the university that the IMP funding being reduced from $35 million to zero under Budget 2019 is only a one-time cut. According to them, the $35 million will be re-instated in a future provincial budget.

Steven Dew, provost and vice-president (academic), said in correspondence from the Ministry of Advanced Education the board has received, IMP funding is “expected to resume next fiscal year.”

Adam Lachacz

Adam Lachacz was the Editor-in-Chief of The Gateway for 2020-21. Previously, he was the 2019-20 News Editor, 2018-19 Staff Reporter, and a senior volunteer contributor from 2016-18. He is a fifth-year student studying history and political science. Adam is addicted to the news, an aspiring sneakerhead, and loves a good cup of black coffee.

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