September 12, 1996
by Eric Smith
Making ends meet will be a continuing challenge for McGill faculties, departments and programs this year. The University's operating budget for 1996-97, approved by the Board of Governors over the summer, reflects cuts in provincial funding that went deeper than had been anticipated.
This year's hit adds up to $14.2 million, or 6.3% of the total operating budget. Added to the cuts in base allocation undergone each year since 1991-92, McGill estimates a total loss of operating funds over the five-year period of $86.2 million. And current projections anticipate additional grant cuts totalling $24 million over the next two years.
The lion's share of McGill's budget goes to salary, and the University's strategy continues to focus to a large extent on staff reduction. The hiring freeze remains in place and more people on the placement transition list are taking over vacancies created by last year's special early retirement package. Among administrative and support staff, 98 people availed themselves of the early retirement option as did 62 faculty members.
Vice-Principal (Administration and Finance) Phyllis Heaphy says she is pleased with the results of the early retirement program. "In my opinion, we were very successful," she says. "I had originally estimated a total cost of about $16 million. It came to $13 million." Although this amount is added on to the University's current deficit, it represents eventual annual salary and benefit savings of $9.2 million. Factoring in the cost of replacements and interest costs, McGill will have an extra $4.3 million in this year's operating budget as a result of the package.
This budget continues to chip away at the University's deficit. The deficit currently stands at $71.5 million, down from its high of 1991 at $79.5 million and up from last year's low of $66 million because of the early retirement program.
In spite of difficult decisions that will have to be made this year by the University's deans and directors, there is some good news for McGill faculty and staff. In its ongoing effort to attract and keep the best academics, the administration has set aside $1 million to bring academic salaries more closely in line with those of Canada's top 10 research-intensive universities. An additional $1 million has been earmarked for merit increases and $500,000 will go to a pay equity program once a formula for implementation has been agreed to with McGill's unions and staff associations.
And although they will have to contend with reduced staff and other across-the-board cuts, some areas of the University's operations will get a boost this year. "There are new initiatives to encourage programs that foster cooperation between faculties," says Heaphy. One of these is the new School for Environmental Studies, a cooperative venture between the Faculties of Arts, Science and Agricultural and Environmental Sciences, which will be provided an allocation this year of $105,000.
McGill libraries will see an extra $600,000 this year for acquisitions, but Heaphy acknowledges that the special provision won't make up for the hardship of the overall cuts. "Perhaps they will have more books. However, there will be fewer staff," she says.
The size of the government cuts for this year's operating budget was not known until quite late. The University has more advance warning about the cuts it can anticipate in the next two years. But according to Heaphy, this knowledge provides the University with little solace.
"The information is so paralyzing that we may as well not know," she says. "We now know there will be a further cut of $16 million next year. We don't know whether there will be any relief, whether there will be a tuition fee increase. If the cut stays at $16 million with no relief, short of just lopping off programs, we're at a bit of an impasse."
Since this article was written, the provincial government has announced plans for even deeper cuts in the health and education sectors. It is not yet clear how large these extra cuts are or what their impact will be for McGill.