Acadia bailout leaves Cape Breton University officials ‘furious’ and confused

It’s only been a week since figures released by the Nova Scotia government showed millions in bailout money had been provided to Acadia University, leaving officials at Cape Breton University “angered” on learning a total of $24.5 million had been given to Acadia from 2011 to 2017 while their own calls for additional funding have received no response.

Last Thursday the province closed the books on the 2016-17 fiscal year, touting a nearly $150 million surplus. It also showed more than $234 million in additional appropriations, including $10.5 million for the university located in Wolfville, N.S. — specifically the money included $7 million to cover a federal loan and $3.5 million for the school’s operating grant.

CBU board chair Robert Sampson said the news of the bailout for Acadia is “frustrating and somewhat confusing.”

READ MORE: Nova Scotia surplus higher than forecasted, rises to $149 million

“I think the operative word is inequity,” Sampson said in an interview. “It’s one thing to not appreciate or agree with the way I or everyone else in the group is being treated, what’s more frustrating is when inequities creep in and I find out that while you and I are the same, we’re treated differently.”

As a result, Sampson said an immediate meeting with board officials and CBU president Dale Keefe has been requested with Labour and Advanced Education Minister Labi Kousoulis and MLAs Geoff MacLellan and Derek Mombourquette about the Acadia bailout.

Keefe said in a statement released Wednesday that provincial officials had stated Acadia was “financially disadvantaged” due to the change in funding formula for universities made in 2009 and that “no other university had requested financial assistance.”

In the statement, Keefe said this was not true and they had “briefed the government on the challenges at CBU” multiple times and requested assistance.

Sampson said the loss in funding for CBU, as well as other universities, dates back to 2008 when substantial changes were made to the funding formula “principally driven by student enrolment.” CBU saw a loss of almost $6 million as a result — about the same as Acadia. At the time, the university made it “loud and clear” the new formula was unfair to schools in the province.

READ MORE: Nova Scotia foster parents to get $1.6M in extra funding

But the school still made cuts due to the change of funding, and since 2009 has reduced staffing and services for students.

Money for CBU in the budget

Kousoulis, in an interview with Global News, said he recognizes that both schools were negatively impacted by the new funding formula in 2008 but each school’s financial situation is different.

He said funding is based on their own merit and “one has nothing to do with the other” and that Acadia’s financial situation was different from CBU.

“When one school receives something from the province, it’s not to the detriment to another school,” Kousoulis said.

Tweet This Click to share quote on Twitter: "When one school receives something from the province, it's not to the detriment to another school," Kousoulis said.

“No university has taken cost-cutting measures that Acadia has taken by reducing their operating budget by 10 per cent … and they’re finally on good solid ground.”

He said there will be an adjustment to Acadia’s base funding in the upcoming budget to account for the $3.5 million additional money.

The minister said CBU will not be left out, however, with an increase in finding for CBU to come in the budget next month.

Kousoulis added he was aware of CBU having asked multiple times for assistance, but again said each decision is “based on merit.”

WATCH: Nova Scotia has closed the books on last year’s budget, projecting a surprise $150 million surplus. That’s almost $110 million more than what was predicted three months ago. Legislative reporter Marieke Walsh has more.

2:00 Nova Scotia projects surprise $150 million surplus

Reduction in funding threatened Acadia

Questions were also raised by Sampson as to why the decision was made to help Acadia but not CBU.

“When we learn from a press release from the government that ‘we didn’t want to have to see Acadia make the tough decision,’ then it begs the question … why did they stand by and watch us make the tough decision,” he asked.

The same loan that was forgiven for Acadia, Keefe said, was part of a strategic opportunities fund issued to universities by the province that would need to be repaid. That same fund was repaid by all other universities who received it, according to the government.

Last week, Acadia president Peter Ricketts told the Canadian Press that the money, including the loan, was part of helping the school deal with a $7 million loss, a result of changes to its operating grant in 2008.

In a statement provided to Global News through a university spokesperson, board chair John Rogers said they started discussions with the government in 2009 for a $7 million grant, but instead were presented a $7 million loan.

READ MORE: Nova Scotia tuition hikes are double national average this year: CFS-NS

“Acadia was forthright with the then Government and the current Government that it had requested a grant because it did not have the fiscal capacity to repay a $7 million loan,” Rogers said in his statement.

Tweet This Click to share quote on Twitter: "Acadia was forthright with the then Government and the current Government that it had requested a grant because it did not have the fiscal capacity to repay a $7 million loan," Rogers said in his statement.

He said a year later the university informed the government the provincial grant it was receiving was still not enough, and in turn a grant of $3.5 million was provided by the government yearly.

CBU wants ‘equal share’

Sampson said they don’t find the payout to Acadia wasteful and that they “probably needed it,” CBU just wants its equal share.

“We would fully expect the rationale that the government applied to Acadia that they will then put CBU in its lens as well as any other institution,” he said.

READ MORE: Students to pay more as provincial share of university operating costs grow slower

The minister said he is open to speak with CBU officials but would also be meeting with Keefe on Thursday. He added that discussions have recently opened on how to improve the funding formula for universities.

The CBU board of governors’ executive committee also scheduled an emergency meeting for Wednesday afternoon to discuss how the university would deal with the matter.

—With files from the Canadian Press