On this page:
McGill’s Financial Trajectory, post-Dec. 2012 | FY2014 Operating Budget Outlook
The numbers
McGill’s Financial Trajectory, post-December 2012
The table below illustrates McGill’s financial trajectory, with the government imposed cuts and without cost-savings measures.
Click the image above for a larger version.
A few explanatory notes:
- P = Plan, F = Forecast, B = Budget
-
Line 1: This was our planned FY2013 Budget trajectory, based on the information we had as of April 2012.
-
Line 2: Cuts to our operating grant, announced to us in December 2012.
-
Line 3: We had projected a modest 1.25 % indexation on the operating grant from the government for FY2014. We are likely not receive it now.
-
Line 4: Loss of the 2012 tuition increase ($325 per student per year, for 5 years)
-
Line 5: Compensation promised by the government to make up some of the shortfall from line 4
-
Line 6: This line illustrate our total shortfall after the revenues promised in 2012 were rolled-back.
-
Line 7: In the future, we will have to make room in our operating budget for additional growing compulsory expenses, including additional pension liabilities.
-
Line 8: Pay equity will also require additional payments.
-
Line 9: This line represents mandatory commitments and other priority investments we expect to make to meet certain government requirements and invest in the future of our University.
-
Line 10: Before future promised reinvestment, this line represents our projected shortfall if we take no action to address the loss in revenue and increases in expenses.
-
Line 11: With the total revenue loss and new compulsory growing expenses (lines 7 and 8), which we are now able to estimate with growing clarity, this line represents the difference between our FY2013 5 year plan deficits and our revised FY2014 5 year assumptions.
FY2014 Operating Budget Outlook
The table below illustrates McGill’s FY2014 Budget projections, with cost-savings measures. The proposed Budget 2014 will be submitted to the Board of Governors for approval, on April 26, 2013.
Click the image above for a larger version.
A few explanatory notes:
- P = Plan, F = Forecast, B = Budget
-
Line 1: Current expected revenue based on our assumptions, prior to government budget cuts and expected reinvestments from the government
-
Line 2: Cuts to our operating grant, announced to us in December 2012
-
Line 3: Reinvestment from the government calculated based on the current 15.9% share received by McGill. This reinvestment is part of the total $1.7 billion envelope announced at the Summit on Higher Education last February for the entire Quebec university network.
-
Line 4: Since we do not yet know what share of promised reinvestment will go to McGill, we are using a prudent estimate, especially since a revised funding formula might disadvantage McGill.
-
Line 5: Projected total FY 2014 5 year revenue.
-
Line 6: Operating FY2014 5 year budget projected expenses, before cost-saving measures.
-
Line 7: Cost-saving measure: projected annual savings from a one-year salary freeze to administrative and support staff, based on assumptions.
-
Line 8: Cost-saving measure: non-salary related annual savings, including reductions in travel expenses, security, Library 24-hour access, outside legal services, and the Faculty Club.
-
Line 9: Cost-saving measure: includes both savings from voluntary retirement and, if required, additional staff reductions, based on assumptions.
-
Line 10: Costs of payouts related to the cost-saving measures.
-
Line 11: Total projected expenses.
-
Line 12: Money set aside to pay down our accumulated deficit, to meet government debt payment requirements.
-
Line 13: FY 2014 projected annual deficit.
-
Line 14: Total accumulated deficit according to Generally Accepted Accounting Principles (GAAP)”. It includes not only financed deficit from the operating budget, but also liabilities, such as deferred maintenance, accumulated vacation owed to staff, post-retirement benefits and pension liabilities.
-
Line 15: Total accumulated deficit without GAAP adjustments. It represents the portion of our accumulated deficit we have to finance by borrowing.
The following table shows the effects of the cost-saving measures on our accumulated deficit:
- The black line indicates the effect of the government cuts if we didn't take any measures to mitigate them.
- The red line shows the impact on our accumulated deficit following the cost-saving measures.
Click the image above for a larger version.
