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It may still be fall but UVic administrators are already planning for next year’s university budget. Like universities across the country, UVic will be facing a much different financial environment over the next several years. But unlike many other universities, UVic is not currently facing a deficit or significant budget cuts.
“Our financial picture is currently healthier than at many other universities,” says Vice-President Academic and Provost Jamie Cassels, “but we face some of the same challenges.”
Those challenges include reduced endowment revenues due to investment losses and constrained government revenues and tuition capped at the rate of inflation. At the same time, the university must cope with mounting costs and a rate of inflation substantially higher than the general rate of inflation—due mainly to negotiated agreements with employees and the higher costs of many educational resources.
“Because of this, we will have to continue to be very prudent about allocating resources most effectively,” says Cassels. “We may need to reallocate funds to achieve our goals and diversify our sources of funding. We may also have to reduce budgets in the future.”
With the magnitude of future cost increases difficult to estimate, Cassels says, “We’ve asked administrators to maintain some vacant positions to create flexibility in case we have to reallocate budget funding to deal with inflation or other cost pressures.”
UVic received an unexpected boost in its 2009/10 provincial operating grant. These funds provided funding to deal with pressures in 2009/10 such as shortfalls on endowments and to cover a number of ongoing items including facilities costs, carbon offsets and increases to the university’s annual contributions to staff pension plans to maintain their values in the wake of last year’s financial market turmoil.
Vice-presidents, deans, the university librarian and other administrative heads are assisting in developing next year’s fiscal framework to deal with provincial belt-tightening, a continued economic downturn and the completion of the provincial initiative to expand enrolment capacity that previously provided annual increases in grant funding.
“We are moving from a period of continual growth to a period of developing and building on our strengths,” says Cassels. “We need to capitalize on and develop the major investments that we have made over the past several years instead of relying solely on increased funding to cover continual expansion.
“Our enrolment figures continue to be strong, and while we’ll continue our aggressive recruitment, we’ll increase our emphasis on improving the success of the students who are already here.”
Some of the funds that were held back from faculties pending confirmation of the distribution of increases in student enrolment figures can now be released says UVic’s Vice-President Finance and Operations Gayle Gorrill. “We have been careful with our finances, but continued inflation in the future, the potential impact of the planned introduction of the HST, the need to provide infrastructure support for our increasingly successful research programs, and our commitment to contracted increases in salaries and benefits are all cause for concern.”
Despite an uncertain economic future, Cassels has asked UVic’s senior administrators to continue considering long-term program development and improvement while also developing contingency plans for dealing with constrained staffing and budget allocations in the short term. He hopes this will provide UVic with a realistic and sound financial platform on which to base its future educational, research and operational initiatives.
Administrators were asked to base all budget submissions this fall on the priorities of UVic’s Strategic Plan which emphasize student recruitment and retention, educational and research programs focused on recognized areas of strength, growth in graduate programs and enrolment, high quality undergraduate programs—especially those in first year—and increased opportunities for experiential learning, community engagement, internationalization and the integration of education and research.
“Taking an integrated approach, being realistic about the current fiscal environment while remaining committed to our strategic priorities, will provide us with a strong foundation for the continued development of our programs of education and research,” says Cassels. “Faculties should accordingly continue to be ambitious in their longer-term planning, though our ongoing development will increasingly take the form of changing the way we do things rather than just adding on.”
He doesn’t want the university to respond to economic uncertainty with fear and retrenchment. “University finances go through times of opportunity and times of challenge. But overall, government has recognized universities as a key to the future. UVic has always practiced prudent budget planning and has stewarded its resources carefully. While we need to continue to be prudent and to plan for some challenges, we should continue to be ambitious. That approach has worked well for us in the past and I’m confident it will be effective in the future.”
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