U of A to cut its budget by four per cent in 2018-19

Facing an escalating structural deficit for the second time in four years, the University of Alberta is planning an across-the-board budget cut of four per cent in the next fiscal year, with further 2.5per-cent reductions proposed in each of the two following budgets.

To try to eliminate or at the very least curb its $14-million structural deficit, the university announced Tuesday it is asking faculties and administrative units to find “efficiencies” to reduce costs.

Provost Steve Dew said it was “a little too early” to speculate whether those savings would come from voluntary buyouts, bigger class sizes or through a reduction in course offerings.

“Everything is on the table and we want to look carefully at how we can do this in a manner that allows us to minimize impact on students and allow us to preserve our talent,” he said Wednesday.

Dew acknowledged nothing had changed from 2013 when the university faced a $12-million structural deficit caused by the very same challenges.

“Inflationary pressures” on expenditures such as salaries and benefits, facility maintenance, library subscriptions and contractual obligations for things like cleaning and maintenance were outpacing revenues by “one or two per cent.”

Tandem reviews on tuition and post-secondary funding models being undertaken by the province have added another level of uncertainty to two of the university’s largest revenues streams.

“Yes, it would have been nice if we had solved it four years ago,” he said.

“The best time to plant a tree is 50 years ago and the second best time is today ... We are taking the second best approach.”

Dew said the university had been relying on investment income to counteract the rising deficit, but that was no longer an option, adding the cuts were a “critical step to ensure our health.”

“We are not on life support, but we do need to make sure that we are putting our fiscal management in good shape, because we are worried that the future is going to get tougher and we’d like to do this now so that we are better positioned for that future,” he said.

An institutional strategic plan adopted in 2016 identified the structural deficit in the university’s operating budget as one of several challenges to its continued financial sustainability.