Financial update for campus
‘Doing the right things for success tomorrow’

November 13, 2009

By Colleen MacPherson

Academic and non-academic units participating in the first year of a two-year round of permanent budget reductions are “doing the right things today to position themselves for success tomorrow.”

That was part of the message delivered by Provost and Vice-President Academic Brett Fairbairn to about 150 people who attended a lunch-hour town hall Nov. 5 to hear an update on the university’s budget situation. At the direction of the Board of Governors, the U of S is reducing its operating budget by $10 million, and has begun what Fairbairn termed “a very thorough budget adjustment process” that he is confident will leave the institution in a comparatively stronger position.

“I want to register that this is an organized process,” he said, with budget decisions being made that support key university priorities like enhancing the student experience and raising the profile of U of S research, scholarly and artistic work. The budget changes so far have been “strong, prudent and effective,” he said, and should result in the university achieving $5 million in reductions this year. He added that most college deans are, for the most part, reporting the changes are having a minimal impact on students.

Some the changes taking place include the elimination of about 60 permanent but mostly vacant staff positions, the combination of class sections, a reduction in some class offerings and doing away with some low-priority services. As a complement to the reductions, Fairbairn said some units have embarked on efforts to generate new revenue, and he referred to the amount of construction underway on campus as “concrete evidence of our university’s progress. In tough times, not every institution innovates but many come into their own, and I see that happening here.”

His remarks followed a summary of the financial milestones of the past year presented by Vice-President Finance and Resources Richard Florizone. Starting with the global recession in the fall of 2008, Florizone outlined the steps the university has taken to address the impact of falling markets on its financial operations.

“It’s been an interesting period,” he said. “I supposed that’s not an appropriate adjective to use. It’s been significant. It’s been significant at the University of Saskatchewan too, but less serious … when weighed against what others have experienced.” He noted a $1.3 billion investment loss reported by the University of Toronto and deficits of $59 million at the University of Alberta and $25 million at the University of Calgary.

Florizone dealt in some detail with the solvency deficit in the university’s pension plans, which bore the brunt of the impact of the economic downturn. Although there has been some solvency relief and a partial market recovery, the pension deficit remains significant. There has also been some recovery in the university’s investment income but an issue “that has risen in prominence is commodity prices,” he said. Saskatchewan government revenue is closely tied to those prices “so going forward, our biggest risk is on the (operating) grant” from the province.

Fairbairn noted the university’s annual operations forecast, a summary of its financial needs for the coming year, will be presented to the government later this month and will be made public soon. The continuing theme, however, will be “prepare for uncertainty” until the provincial government’s financial position becomes clear.

In the question and answer period following the presentations, Heather Wagg, vice-chair of the Canadian Union of Public Employees (CUPE) 3287 which represents U of S sessional lecturers, said many sessional positions have been eliminated as part of the budget reductions but it has been difficult to get information on the overall situation.

With colleges autonomously handling budget decisions, “it has been almost impossible to find out what’s happening to our members.” She added it appears the full picture as it relates to sessional lecturers will not be available until February. “We’re at the bottom of the food chain. We’re the disposable workforce … but we need some warning and we need to be able to understand what’s going on.”

“I personally don’t regard sessional lecturers as a disposable workforce,” responded Fairbairn, adding he expects units to provide academic rationale for the changes they make. In terms of communication, he said the university is committed to being thorough, comprehensive and transparent, a commitment that will continue into the second year of budget adjustments.

The next questioner asked how units can find out what other units are doing to meet budget targets. Fairbairn said information has been flowing between administration and units, but not laterally, something he will look into because “there is lots of interesting ideas we should share,” many unrelated to budget reductions.

The provost was then challenged on the claim the budget adjustments are having little impact by a speaker who described the changes to undergraduate education as devastating for students. The provost reiterated that deans are reporting the budget adjustments are generally having a negligible affect on students, and if the university’s three percent budget reduction is resulting in ‘devastating’ change, “there’s something wrong with our systems.”

Valerie Thompson, head of the Department of Psychology, then took the floor, describing the challenge of reducing her budget while trying to maintain a teaching focus. The impact, she said, will be enormous “on our college, and our department.” She suggested the provost speak to department heads in addition to deans to get a clearer picture of the situation.

Peter Grant, a psychology professor and member of Council’s Planning and Priorities Committee, told the meeting that while he is a supporter of integrated planning, its key weakness is that decisions made autonomously by some units appear to deviate from the underlying priorities of the plan. “I don’t think (the College of) Arts and Science is making strategic cuts,” he said. He suggested there be a control mechanism to ensure university priorities are implemented at both the college and department level. Fairbairn said he will address the question of how its plans mesh with university priorities directly with the College of Arts and Science.

More information about the town hall presentations and a comment form can be found at www.usask.ca/budgetupdate