Due to a freeze on operations funding from the province, the University of Calgary will have to tighten its belt to avoid three consecutive years of deficits.
The deficit is set to increase from $17 million in 2010 to $47 million in 2012. However, the university is not allowed to run a deficit because provincial accountability regulations bar public institutions from doing so. As such, the university needs to trim its spending or find other sources of revenue.
In a recent interview with the Calgary Herald, U of C provost Alan Harrison warned the university has been in a gloomy financial position since the cutbacks Ralph Klein made in the mid-'90s.
Last month, though, the future looked bright when the provincial budget included a six per cent increase in post-secondary education operating grants. However, there are no increases after 2010 and at least $8 million from the university's current budget is going towards erasing the 2008/09 deficit spurred by endowment fund losses suffered earlier this year.
To deal with the cutbacks, the university has placed restrictions on hiring, mandating that senior administrators approve all new hires. At least eight support-staff jobs have been cut, including four advisors in the faculty of Fine Arts, explained U of C communications director Colleen Turner, noting the changes are necessary to deal with the years ahead.
"There's no question the next few years will be challenging from a budget perspective," said Turner. "However, the projections made at the recent Board of Governors' meeting speak to the need for the university to decrease expenses and increase revenues in order to ensure we have a balanced budget that benefits students."
Advanced Education Minister Doug Horner echoed Turner's comments about the need for balanced budgets, expressing his confidence in the BoG's ability to manage the university's spending and investments in a responsible way. He explained the province would not provide any further increases to post-secondary schools' operating grants due to the current economic recession.
"We are not immune, however, and we need to ensure maximum value for the funding taxpayers and students contribute," said Horner.
Horner argued the province is still helping PSE institutions in several ways, including an increased capacity to create more student spaces.
"Operating grants are only one component of overall revenue sources for institutions," said Horner. "Budgets are not static documents and the government will continue to monitor the economic situation and make adjustments accordingly."
Turner agreed with Horner's points, saying there is no need for alarm, as the U of C is still focused on ensuring students get a high-quality education. She noted the university is in a strong position when measured against other institutions, pointing to the University of Guelph, which had to close down several programs including Womens Studies last spring because of financial difficulties.
"Compared to other universities, we have been well-funded over the past several years," said Turner. "We are in the midst of our largest-ever capital campaign. We have many opportunities to increase revenue, including new developments in the West Campus."
The talk of cutbacks has Social Sciences dean Kevin McQuillan concerned. He noted the faculty is having a difficult time finding replacements for retiring instructors and support staff, due to the restrictions on hiring.
"We expect four new faculty members to join the faculty of Social Sciences for the 2009-10 year," said McQuillan. "We have avoided cutting courses in our programs and have added capacity in high demand areas. But this will become increasingly difficult in the years ahead."
McQuillan finished on a dismal note, warning it would be difficult to maintain the quality of education if even more cutbacks are made to faculty and support staff.