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University of Alberta president outlines historic budget cuts

EDMONTON – On Friday afternoon, the head of the University of Alberta outlined the cost-cutting measures the institution will have to take to try to balance its budget by April 2015.

“These are very difficult decisions,” said U of A President Indira Samarasekera.

“In order to be balanced by April 1, 2015, we have to reduce our core academic expenses by seven per cent in 2014-2015, our core support for the academy… by eight per cent in ‘14-’15, and we will then take two more years to ensure that we have balance beyond that, given wage settlements, given inflation, we will have to plan for two more years of cuts of two per cent,” she revealed.

Samarasekera couldn’t recall a time when the University of Alberta has had to make such large cuts in such a short amount of time.

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“There has never been a one-year cut of this magnitude perhaps ever in the history of the University of Alberta,” she said.

“I understand … in the Great Depression… the one thing they did not cut was the University of Alberta.”

Samarasekera explained the U of A was already dealing with an operational deficit of about $19 million of its own, when it learned it would be receiving roughly $56 million less from the province than it expected.

Watch the full video of what she said here:

“It should be known this is the first cut after… ten years of continuous budgetary increases to the tune of 47 per cent,” explained Advanced Education Minister Thomas Lukaszuk. “So was this difficult? The answer is definitely yes. Are we doing well overall relevant to other institutions in Canada? We are. We have strong institutions and we’ll simply have to get through this.”

“This – from a post-secondary institution perspective – was a very difficult budget,” said Lukaszuk. “It wasn’t a budget of choice; it was a budget of necessity – where all schools across the board have taken a seven per cent decrease.”

“It is not possible to take the kind of money that Alison Redford has taken away from our post-secondary education system without it having a seriously damaging impact on Alberta students, their families and ultimately all Albertans,” said NDP Advanced Education critic Rachel Notley.

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“I think it’s very clear now to students that, despite what we were told, these budget cuts will fall on the backs of students,” added Students’ Union President Petros Kusmu. “This decision to fast track these deficit reduction plans is going to be unbelievably dangerous, not only to the academy but to Albertans as a whole.”

This month, the U of A announced some of the consequences of the budget, including:reducing staffsuspending admissions to 20 Arts programsscaling back course options for science students and reducing enrollment numbers.

Friday was the first time Samarasekera has commented on the controversial measures.

“The minister’s letter, several letters in fact, communicated to us very clearly that we had to make this adjustment and be balanced by April 1, 2015, which meant the ’14-’15 budget requires $56 million of reductions in expenditures.”

She described her relationship with Advanced Education Minister Thomas Lukaszuk as “cordial.”

“It’s disappointing that there doesn’t seem to be the collective will to convert that very important one-time resource into prosperity for the future,” she explained.

“Here is an opportunity for us to convert the one-time resource of oil and gas into the resource that keeps on returning investment: the human resource.”

Hear more from Samarasekera in her live interview with Vassy Kapelos here:

“This is not about pointing fingers and not about culpability,” said Lukaszuk. “Because, at the end of the day, we’re here to deliver the best education to our students and we’re here to make sure that all of our 26 schools are in the financially strong position.”

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Earlier this week, the U of A’s Board of Governor’s Chair Doug Goss revealed Minister Lukaszuk would be appointing consultants to review the school’s finances and see if “any potential gaps in fiscal planning” could be identified.

The specifics of the cuts for the University will be determined as faculties look at their individual expenses and budgets, and will likely be revealed by December of this year. However, U of A’s president says variety of programs and choices, as well as class sizes will be impacted. In early October, the first draft of the 2014-2015 budget will be prepared.

“The thing that students need to know is that the University of Alberta is the best university when it comes to teaching in Canada. We have won more teaching awards, our professors are still here… and so the students who get access to those professors, and who are in those classes will still get a phenomenal experience. The problem will be for students who want the variety they had hoped for, that may not be quite there… larger classes, and again, it might mean lengthening degrees for some students.”

But, the President of the Association of Academic Staff at the U of A says some of those staff members may not be around.

“I can say that we do have faculty who have already left, other faculty that are thinking of leaving. So, this next year really is going to have some negative impact on our academic staff,” said Kevin Kane after Friday’s announcement.

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He said, while the details of the budget plan provided some clarity – as well as a timeline – for staff, the continued need for cuts has many of them worried.

“The president of the University has indicated we have – going into the future – two per cent cuts going forward. We’re concerned that could end up being death by a thousand cuts.”

Kane also said it will negatively impact the University’s ability to recruit top professors and staff.

“A lot of our scholars, including myself, we go to international meetings in our disciplines, and one of the first things we hear from our colleagues is ‘what’s going on at the University of Alberta? Why are there such problems?’ And we hate to have to attempt to explain the reasoning for this, because we don’t understand it ourselves,” he added.

“That’s a message to the government that this is being noticed globally … it could significantly hurt the reputation of the University as well as the province.”

In a blog post this week, Samarasekera wrote about meeting with the U of A’s senior leadership, including vice-presidents and deans “to continue the work of developing budget strategies and action plans.”

“I think it is important for you to know that these meetings are the culmination of many other planning sessions that have been ongoing throughout the spring and summer among the leadership team as well as in my office and all administrative units, faculties, and departments,” she added. “Finding the right solutions to our challenges continues to take time and I recognize that uncertainty threatens morale and unity. This week’s meetings are thus critical.”

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The University hopes to have its books balanced by April 1, 2015 – that’s after fast-tracking its original three-year plan – which would have seen its budget reduced by $28 million a year – to a two-year plan. The University said it was told – informally – by the government to “move more rapidly” to balance its budget, hence doubling the amount that would be cut next year to $56 million.

Ahead of her scheduled public appearance Friday, Samarasekera said the following in an email:

“We recognize the urgency of the situation and agree that it is in the best interest of our university and the morale of our community to accelerate our original plan. Given the direction the Board has now received from the ministry, we must take decisive action in the immediate term, so that we can turn our attention to long-term academic and administrative transformation. The next few months will not be easy, especially because several units and faculties already have experienced lay-offs, program suspensions, position closures, and other impacts from the cuts contained in the 2013-2014 budget.

(You can read Samarasekera’s email in its entirety below.)

She said she will continue to post weekly updates on the Colloquy website going forward.

You can read more of what she said this afternoon in our livetweets:

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FYI: Budget Update from President Samarasekera

Dear Faculty, Staff, and Students,

Following many months of analysis and discussion, the deans, other members of the senior leadership team, and I met Thursday to undertake a critical task—to review and discuss strategies that have been under development and to come to agreement on what our community must do to reach a balanced, sustainable position by April 1, 2015.

We recognize the urgency of the situation and agree that it is in the best interest of our university and the morale of our community to accelerate our original plan. Given the direction the Board has now received from the ministry, we must take decisive action in the immediate term, so that we can turn our attention to long-term academic and administrative transformation. The next few months will not be easy, especially because several units and faculties already have experienced lay-offs, program suspensions, position closures, and other impacts from the cuts contained in the 2013-2014 budget.

During yesterday’s meeting, we reached many important decisions, with the university’s core mission of providing excellence in teaching, research, and service for the public good in the forefront of our discussions. Primary among the decisions made is that to balance the operating budget for 2014-2015, we must make a further overall 7% reduction in expenses relating to the core academic enterprise and an 8% reduction in the cost of services supporting those core functions. To sustain this balanced position over the long-term, we also agreed to plan for additional overall reductions of 2% in both 2015-2016 and 2016-2017.

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I want to be clear: these are major cuts and every member of our community will feel the impact. We will continue to streamline administrative functions, reduce redundancies, and seek new or untapped sources of revenue. We will maintain our commitment to excellence and do all that we can to minimize the impact on student access and experience.

However, we will not achieve the goal of a balanced, sustainable position by April 1, 2015 without further suspension and closure of programs, courses, and course sections, some in degree programs that are unique in Campus Alberta. Although Alberta’s young population continues to grow, and with it, student demand for university education, we will be unable to admit the full number of applicants who are well-qualified and well-prepared for success here. We will lose valued employees through voluntary and involuntary severance. We will permanently close many vacant positions and will all feel the resulting reductions in service.

The outcome of the Voluntary Severance Program may influence the approach individual faculties and units take to achieving their share of the necessary reduction. After the September 16 VSP deadline, we will assess the result on units and faculties and determine the precise percentage of the cut allocated to each faculty and unit. Until then, the deans and VPs will be finalizing plans so that they can be ready to move quickly once we know exactly where we stand.

Let me tell you the timeline we prepared:

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• Aug. 30: Provost’s Office will send a letter to the deans, confirming the percentage cut above and affirming other details of the action plan.
• Sept. 6: Martin Ferguson-Pell and Phyllis Clark will hold a Campus Forum (12-1 pm, ECHA L1-490) to provide details on the 2013-2014 budget to date and to provide a basic budget primer for the 2014-2015 budget.
• Sept. 16: Deadline for application to the Voluntary Severance Program.
• Sept. 16: Annual budget presentation to General Faculties Council.
• Sept. 19: I will deliver the State of the University Address (11:30 am – 12:30 pm, Convocation Hall) at which I will present a new 3-year action plan for academic and administrative transformation. To register, please go to: http://www.president.ualberta.ca/2013stateoftheu
• Early October: First draft of 2014-2015 budget prepared.

Throughout this process and beyond, we are committed to providing as much transparency and clarity as possible. Going forward, we will share the deans’ letters, action plans, and budget primers with our internal community. I will post a regular update on our progress every Friday.

Let me close with a simple observation. The University of Alberta has a proud, 105-year history of educating the leaders, highly-skilled professionals, and highly-engaged volunteers who are active in every sector of this province. UAlberta research has fueled the province’s economic growth and prosperity for more than a century and research done today will continue to be the source of innovation and discovery. We are facing grave challenges right now, but this university can withstand them. With a shared commitment to excellence and leadership in teaching and research, we will—as a community with a proud history—find the right way to preserve and advance the UAlberta far into the future.

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Indira

Follow @Emily_Mertz

With files from Patricia Kozicka