Pondering an uncertain future
MacKinnon discusses the impact of the financial downturn

February 6, 2009

By Colleen MacPherson

With no major institutional debt, no deficit “structural or otherwise,” and with balanced books, Peter MacKinnon believes the University of Saskatchewan may be as well positioned as any other post-secondary institution in the country to deal with the current global economic downturn.

That said, the president cautioned that the economic forecast beyond 2009-10 remains very uncertain and ultimately “could call for measures more dramatic than those taken so far.” Sound financial planning in the face of such uncertainty presents, he said, one of the biggest challenges yet of his presidency.

On Jan. 21, MacKinnon sent a memo to the campus community explaining that the Board of Governors has asked the university's administration to prepare various scenarios examining how the U of S financial position might be affected over the next five years. That information will be provided to the board at its March meeting. In the meantime, colleges and units have been advised to be prudent with expenses and financial commitments but no move has been made to curtail what he described as the university's “innovation and academic priorities.”

The negative results of the economic turmoil are expected to be felt largely in three areas of the university's financial operation – the operating budget, endowments and pensions. In an interview with On Campus News, MacKinnon said the scenarios being prepared will serve as background for board members, who he described as being “very qualified for the financial oversight duty it has. The board has asked 'What might we do if …?' It is a question fairly asked of us and the board expects compelling answers from us.”

MacKinnon said all members of the campus community—students, employees and even alumni—are invited to participate in preparing a response to the board. “In times like this, we all want to share our concerns and anxieties about what this economic downturn means to our hopes, plans and dreams. The voices of the economists are awfully important in this discussion, but other voices are important too. It all adds to our understanding in the fullest sense of the word.”

The university will try to “anticipate and contemplate different possibilities but I don't think we're in a position where we should commit ourselves to a course of action that may prove, in hindsight, to have been unwise or even destructive. We don't want to take action based on what happened last time or what might be because we simply do not know what lies beyond 2009-10. We need more facts before we can judge the situation.”

MacKinnon explained that his role as president means he has responsibility for the “financial health of the university” and as a member of the Board of Governors, he will be participating in all discussion and decision-making.

“I am ultimately responsible to the Board of Governors for the development of sensible policy in this and other areas. I believe in the alignment of authority and responsibility so I would expect to be prominent in the discussions and in communicating decisions both to the internal and external communities.”

The president said he is particularly mindful about ensuring, no matter what action has to be taken, that the U of S remains a strong player in the highly competitive post-secondary sector in Canada. Judging by international standards applied to universities, the U of S has been making progress on many fronts, he said, “and I'm concerned about anything that would compromise that progress, so there is no doubt that the economic situation is a major source of anxiety.”

On the other hand, tough economic times do present opportunities. There is a pattern of increasing enrolment at post-secondary institutions during downturns, “and certainly for me there's a question about how we can emerge from whatever it is that lies ahead in a comparatively better position than we had going into it.”

MacKinnon said anyone with questions, comments or ideas to contribute can direct them to any member of the executive team or to Ginger Appel, director of budget strategy and planning in the Institutional Planning and Assessment office, at 966-1825 or ginger.appel@usask.ca.

Brett Fairbairn, provost and vice-president academic, and Richard Florizone, vice-president finance and resources, will lead an information session and question period about the economic situation as it relates to the U of  S on Feb. 24 from noon – 1 p.m. in Convocation Hall. All members of the campus community are invited to attend.