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Universities over-budget; need to freeze travel, hiring, hosting: Alberta government

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Alberta’s advanced education minister says post-secondary schools are going over budget and he’s urging them to immediately freeze hiring and stop spending on travel and hosting.

“We’re not seeing a reduction in expenditures. That’s what we’re most interested in,” Demetrios Nicolaides said in an interview Thursday.

“We’re asking them to redouble their efforts in bringing expenditures down.”

Nicolaides said there’s progress at some institutions, but more needs to be done.

“We commend them on those efforts, but we need to ensure that we’re all moving in the same direction and looking to find savings wherever possible.”

The minister declined to give details on the over-spending. He said the ministry is still crunching the numbers.

READ MORE: Post-secondary students descend upon Alberta legislature to protest UCP cuts

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On Wednesday, Nicolaides sent letters to Alberta’s 21 largest post-secondary schools that said his ministry is starting to receive year-end financial statements that show spending is not meeting expectations.

“Expenditures are forecasted to be much higher than anticipated,” Nicolaides wrote to the board chairs of the schools, including the University of Alberta, University of Calgary, University of Lethbridge and Athabasca University.

“I have been very clear from the beginning that institutions were to exercise fiscal restraint and prudence when making spending decisions.

“This will not be easy, simple, or painless. However, we must take action immediately to improve the financial state of our province before it’s too late.”

READ MORE: Alberta budget 2019 includes cuts to cities, civil servants, universities

University of Calgary president Ed McCauley said the institution is in a position to balance its budget this year.

“Many of the specific actions mentioned in the letter are well underway,” he said in a statement. “In fall 2019, we implemented a hiring restraint policy and communicated to staff that travel and hosting be limited as much as possible.”

A spokesman for the University of Alberta declined to comment and the University of Lethbridge did not reply to a request for reaction.

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Opposition NDP critic Sarah Hoffman said the letters illustrate the government’s misplaced priorities. She noted that the province has cut the corporate income tax and has sent a premier’s aide on multiple business trips to London.

“It’s a little rich of them to continue to point and blame everyone else, when they’re the ones that gave all this (tax) money away, caused all this panic, and continue to spend as though they are entitled to stay in posh London hotels and tell universities not to buy pencils,” said Hoffman.

Along with the freeze on hiring, hosting and travel, Nicolaides has asked the schools to defer all other expenditures where possible until April 1 after the current budget year ends.

His ministry wants to see monthly reports from the schools to ensure they stay on track, and is asking departments to not allow egregious last-minute expenditures of unused funds, known colloquially as “March Madness.”

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The government also wants each school to deliver by April 15 an interim financial statement “that clearly articulates an expenditure reduction and a diligent, thoughtful attempt to bring costs in line.”

READ MORE: Winners and losers in Alberta budget 2019

Premier Jason Kenney’s United Conservative government has reduced operating spending by five per cent for post-secondary education and lifted a freeze on tuitions.

The government says Alberta spends more on post-secondary students than most other provinces and that reforms are needed. It says Alberta remains one of the national leaders in per-student spending even with the funding cuts.

This year’s advanced education operating expense is $5.1 billion and is to be reduced over four years to $4.8 billion, a 12 per cent cut. That’s expected to be achieved through departmental savings and reducing grants to the schools.

The province plans to introduce a new funding model starting later this year that would link funding to accountability, service for students and job creation.

There were five independent academic institutions that did not get the letter as their spending does not impact the government’s bottom line. They are: Ambrose University, The King’s University, St. Mary’s University, Concordia University of Edmonton and Burman University.

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READ MORE: Alta. universities, colleges say UCP funding cuts are ‘significant’, ‘a challenge’

MacEwan University confirmed to Global News that 10 positions are being abolished at the end of January. The affected employees were told on Wednesday.

The cuts impact the office of the provost and vice-president, Academic and Student Affairs, the office of the university registrar, University Relations; Human Resources, Information Technology Services, MacEwan International as well as Teaching and Learning Services.

“This was an extremely difficult decision. I want to recognize the employees’ service to the university and thank all of them for their outstanding commitment to MacEwan and the success of our students,” acting president John McGrath said in a statement.

“The position reductions are a necessary measure that we must take toward balancing this year’s budget and as we prepare to balance our 2020/21 budget.”

McGrath said the university will continue to prioritize students and quality of education. He said the school would work to minimize the impact on students. McGrath also said the university is working closely with affected staff to provide them support and resources to help them transition.

— With files from Emily Mertz, Global News