About Operating Budget Adjustments
We are determined to make our university financially sustainable as we focus our resources to 2016 and beyond. Currently the university is facing an operating deficit that is projected to grow to $44.5 million annually by 2016. The operating budget adjustments process provides a strategic framework to eliminate this financial burden and transform the university into a sustainable and more focused and efficient institution, working toward a common vision—to be among the most distinguished universities in Canada and the world.
Our university vision:
- To become one of the most distinguished universities in Canada and the world.
- Financial sustainability by 2016, by prioritizing more clearly based on our mandate of teaching and research, and strengthening our focus on the areas we have identified together as most important.
- Eliminate a projected $44.5 million gap between our expenditures and our revenues before 2016 to ensure the long term financial sustainability of our university.
Why we need to take action:
- To be sustainable, our expenses cannot keep rising faster than our revenues.
- Our long-term prosperity is based on our financial sustainability, which means we must act to make fundamental changes to the way we do things.
- Great universities are always innovative. The changes we make now must sustain and advance us.
Our current situation:
In March 2012, the Board of Governors approved the university’s third integrated plan, Promise and Potential. The Multi-Year Budget Framework (2012-2016) was approved as part of this plan, and identified our initial financial challenges. The financial challenges were made more pronounced when the level of government funding in the provincial budget was lower than requested. This is a challenge faced by many post-secondary institutions across the country.
Currently, we are projecting that by 2016 the gap between our revenues and expenses will grow to $44.5 million if we do nothing. This is a problem we began addressing immediately - through Operating Budget Adjustments - to ensure this does not happen.
This projected $44.5 million deficit is based on the provincial operating grant remaining steady at a two per cent annual increase over the next three years, similar to what the university received from the province this year. It does not consider variances in any other current projections, including investment income, other revenue, utilities expenses and salary costs. There are many factors that can contribute to changes in our projections over the next four years.
To set the context around this, the recent budget adjustments in 2008-09 and 2009-10 were $10 million or three per cent of our operating budget over two years. In comparison, this represents 8.5 per cent of our 2015-2016 operating budget.
We are looking for long-term, sustainable solutions, and that will take time to unfold – this is not a problem that will be solved by quick fixes. Rather, we must significantly reduce expenses in a comprehensive way over the planning cycle (2012-2016) in order to eliminate this $44.5 million gap and balance our budget, starting with the $15.5 million deficit in 2012-13.
Progress to $44.5 million deficit:
Other Operating Budget Adjustments resources: