U of G to Revise Budget Targets, Increase Fiscal Restraint

November 27, 2008 - Campus Bulletin

The University of Guelph, like other Ontario universities, is looking to find additional cost reductions or revenues due to the global economic downturn and rising expenses.

Specifically, U of G needs to find another $5 million in operating savings or revenues by 2009-2010, and an additional $5 million in 2010-2011. This is the result of an effective freeze on government funding for at least the next two years because of worsening financial climates.

These reductions are in addition to those already proposed as part of U of G's multi-year budget plan approved in June to help address the structural deficit. That plan involved reducing costs university-wide by 2.5 per cent for 2008/2009, five percent for 2009/2010 and 2010/2011 and four per cent for 2011/2012.

"It's a serious situation," says president Alastair Summerlee. "We are certainly not alone. Other universities are also facing similar challenges. But with a fiscal challenge of this order of magnitude, we recognize that we must change the way we do our core business of teaching and research."

U of G's structural deficit is estimated to be about $16 million for 2008/2009, the result of funding for operating costs lagging significantly behind expenses. Under the multi-year plan, the deficit would be eliminated by 2011/2012. However, a key component was the assumption that there would be some increase in provincial funding to help offset a portion of future cost increases through 2012.

"Now, not only will we be receiving less revenue than we predicted from the government, but we will also continue to face rising costs for salaries and benefits, post-employment benefits such as pensions, deferred maintenance and utilities," Summerlee says.

As a result, U of G will be revising its multi-year budget targets and exercising increased fiscal restraint, Summerlee says.

This includes reviewing all hiring requests and only approving those in exceptional circumstances. Major building projects not in progress will also be postponed or suspended. Departments and units are being asked to reduce discretionary expenditures, such as travel and special events, and to consider ways to restructure practices to accommodate the personnel losses due to the voluntary early retirement/resignations.

To begin, the additional $5-million financial challenge will be rolled into the 2009-2010 fiscal year targets. Deans and division heads will be asked to prepare revised plans that identify the additional funds needed.

"The reality is that these are uncertain and challenging times for the economy, and it's vital that the University find a way to persevere," Summerlee says.

Once the revised targets are known, a town hall meeting will be organized to communicate details and to allow people to raise questions or concerns.

"Working together, I'm confident that the students, faculty and staff at the University will continue to find creative solution for problems we face," Summerlee says.

University of Guelph
50 Stone Road East
Guelph, Ontario, N1G 2W1