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News Release

March 23, 2007

Provincial Budget Brings Some Relief, Uncertainty Remains

The University of Guelph — along with Ontario’s other universities — is waiting for details from the Ministry of Training, Colleges and Universities (MTCU) about how the 2007 provincial budget announced Thursday will affect its funding.

The provincial budget included a one-time $210-million allocation to universities to deal with immediate cost pressures. But that money cannot be built into base funding, so it will not help U of G alleviate its structural deficit, said president Alastair Summerlee.

That funding was actually committed to universities by the federal government in last year’s budget, but it has been held up until now. “I am pleased that the province has successfully negotiated the release of this promised 2006 funding, as I know it was a challenge,” Summerlee said. “It will certainly be helpful in the short term, but the money will not be available to address our ongoing structural deficit.”

There were few details about other provincial dollars in Thursday’s budget, so how much money individual universities will receive is still unknown, which means U of G’s budget situation remains unclear, Summerlee said.

There was mention of future provincial announcements to support the research and innovation strategy and environmental issues. Details are expected to be released shortly. “We eagerly anticipate information on these further important initiatives in the hope that they, too, will provide base funds to address ongoing crucial issues,” Summerlee said.

The budget did confirm that U of G will receive nearly $6 million for the BioCar Initiative, a multi-university project that involves developing and delivering biomaterials for the automotive industry. Guelph’s role will include creating new industrial crops that can be turned into composite materials used to make interior automobile components.

But the budget did not specify how the province would handle the increases in provincial transfer payments to support higher education announced in the federal budget Monday.

Summerlee said the proximity of the two budgets made confirmation difficult for the province. “But we are looking forward to an increase in per-student spending that brings us up to the national average.” Ontario currently ranks last among the country’s 10 provinces.

“We are also looking for the transfer to become base funding, so it would allow us to address quality issues for our students,” he said.

U of G initial budget assumptions for 2007/2008 (which were made prior to both federal and provincial announcements and before decisions about enrolment and tuition) project a structural budget deficit of $19.7 million. Nearly every other university in Ontario is facing similar budget challenges.

Many universities, including U of G, also continue to seek relief from the Ontario government to address requirements for funding of pension plans. Currently, U of G must pay $47 million a year from the operating budget to its pension fund under provincial valuation requirements.

Because of the uncertainty about government funding, Guelph’s preliminary MTCU budget won't be presented to Board of Governors until June. Tuition proposals will be presented in the context of provisional budget assumptions at the board's April 18 meeting to provide an opportunity for discussion about tuition while most students are still on campus.

The president and provost have begun holding budget discussions with U of G colleges and will address various town hall gatherings, including ones on March 28 and April 17.

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