Update from President Summerlee: The Provincial Budget's Impact on U of G's Budget Planning
The 2009 provincial budget will have some positive impact on universities, but it will not alter the need for the University of Guelph to continue with its plan to reduce costs university-wide between now and 2012.
U of G's initial budget assumptions for its preliminary 2009/2010 Ministry of Training, Colleges and Universities operating budget were already completed, for the most part, when the provincial budget was revealed March 26. This includes a multi-year plan to help address the University's structural deficit.
The provincial budget did contain some new funding for higher education, which was a welcomed surprise because the government had warned universities in the fall to expect a funding freeze. But there were few details provided, so how much money U of G will receive and how it must be used remain unclear.
What is known is that a large portion of the funding in the government's budget for operating support ($150 million for all Ontario colleges and universities) is a one-time allocation. This means it can be used to deal with some immediate cost pressures, but it cannot be built into base funding. As a result, this new provincial funding will not help U of G alleviate its $16-million structural deficit, which is our most pressing financial challenge.
The provincial budget also includes a pool of funds set aside for "quality, growth and sustainability" at colleges and universities, but whether the funding will be one-time or base, how much money U of G will receive, and whether it will come with restrictions are unknowns.
And the government's budget includes increased funding for growth in graduate programs. This was anticipated and was already built into U of G's budget assumptions.
As well, we can expect that the government's funding increases to support research and capital will be earmarked for specific projects, as in the past.
Overall, the government's support for higher education is good news. It's a reversal of previous statements that had us bracing for an all-out funding freeze.
But ultimately, the provincial budget will not help us eliminate our large structural deficit or address the serious challenges that we face with our endowments and the even larger problems with our pension plans.
As a result, U of G will not be altering its budget proposals at this time and will continue with the steps contained in its multi-year plan to address the structural deficit.
Alastair Summerlee