The University of Lethbridge recently released their 2020–2021 budget, and, well, it’s not good news.
To start with, the province has significantly reduced operating funding for the university by the following amounts for this new budget year:
- $6,317,734 less in the operating grant
- $365,000 less in student mental health support funding
- Elimination of targeted enrolment, which provided $374,700
- Elimination of graduate technology grant, which provided $68,302
Health workforce funding and support for learners with disabilities have not been reduced, but they also have not been raised to match enrolment or inflation increases.
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In total, this resulted in a loss of $7,125,736 of operating funding over last year’s budget. If you include the $3,412,842 in funding cuts introduced last autumn, the University of Lethbridge lost $10,538,578 since introducing their budget last spring.
And the news doesn’t get better over the next two years, with the U of L expecting a combined loss of another $10 million during that period.
To recap, in 2018, the university received $110.1 million. Last year, that dropped to $106.7 million. This year, it’s down to $99.6 million. And the next two years will it see it reduced to $94.6 million and $89.5 million, respectively.
That’s a loss of $20.6 million in total between provincial elections, a 20.14% cut.
And that doesn’t even factor in increases to enrolment or inflation, which means the functional loss will be greater than $20.5 million.
To try making up for the loss, the U of L increased tuition this year, which will bring in an extra $6.9 million: $5.1 million from tuition, $1.1 million from graduate program fees, and $720,000 in other cost recovery adjustments. But that’ll still be short of the $7.1 million drop in provincial funding.
The problem with increasing revenue, however, is that it doesn’t stop expenses at the university from increasing.
IT maintenance and site license contracts will increase by 7.3% this year, for example. Vendors are increasingly charging based on per instance of software usage, instead of site licenses. And with distance learning during the pandemic becoming even more technology-reliant, this pressure increases. Plus, many of the vendors are US-based, which means fluctuations in the dollar can also drive up prices.
Utilities will also increase. In fact, in this budget year, they’ll rise by nearly 40% to over $1.5 million. This is mostly due to the new Science Commons building, natural gas and electricity prices, and a higher federal carbon levy.
Despite these uncontrollable expenses, the province has mandated that the university must keep its expenses below $209,411,484.
Total operating expenses of the Science Commons were $3 million last year, and that was the first year it opened. Amortization of the building was over $6.3 million. That $9.3 million wasn’t taken into consideration when the province decided to set the expense restrictions based on 2018 expenses.
Yet, anything above that limit will reduce their operating grants even more.
And given that salaries and benefits comprise about 81.5% of the total operating budget, cuts to expenses must affect employees. It’s just not possible any other way.
Academic staff make up 53% of employees at the University of Lethbridge, and AUPE support staff make up 25%. Both groups are unionized, which means that the university has contractual obligations to over 3/4 of their employees. And since they can’t reduce salaries because of contracts, they must eliminate positions.
Between last year’s staff reductions and this year’s, the university has lost 79 employees—17 faculty and 62 non-academic—through resignation, retirement, and layoffs. This amounts to a 6.8% reduction in the total workforce. Even then, the university had to pay out over $2 million in severance pay last year.
Non-unionized positions have had a wage freeze in place since 2016. Both ULFA and AUPE contracts expired last month, so collective bargaining talks will be interesting this summer.
And all this regardless of all the efforts of the U of L to find ways to raise revenue or reduce expenses—in addition to increasing tuition fees—including additional unspecified revenue-generating activities, eliminating the men’s and women’s hockey teams, reducing the sessional instructor budget, reducing library acquisitions, and reducing discretionary spending.
Even then, many revenue generating activities, due to accounting principles, result in a matching increases in expenses.
Take the recent grant the U of L received from the Mastercard Foundation. The foundation will provide $3 million per year for 5 years for the U of L to provide support for Indigenous student education. This grant will increase our expenditures $3 million per year, offsetting the additional grant revenue. That means the university must increase expenditure by another $3 million, which will add additional pressure on their ability to stay within the $209,411,484 limit the province has imposed.
As the budget report states, “The university has been in fiscal restraint mode for several years and therefore any budgetary reductions from this point forward will have noticeable impact on the service levels provided.”
This seems to be an appropriate time to point out that the department I used to work in at the university had its staff cut in half due to budget cuts.
That was 10 years ago.