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Cuts to government funding

A message from Heather Munroe-Blum, Principal and Vice-Chancellor, McGill University, December 7, 2012

Dear members of the McGill community,

You will likely be aware that the Government of Québec is planning deep cuts to university operating grants and research in this current fiscal year.  The exact impact on universities for 2013-14 is still unclear, despite information released yesterday by the Government.

A letter I received last night from Pierre Duchesne, the Minister of Higher Education, Research, Science and Technology, confirmed that operating grants to Québec’s universities will be cut by $124 million (5.2%). Incredibly, the government is expecting universities to realize those savings between now and April 30, 2013. In reality, with two-thirds of the year already gone, that represents about a 15% cut – with no margin of manoeuvre to plan or to use economies of scale. The letter also said that universities would receive compensation of $32.4 million for the cancellation of tuition increases, but with no indication of how or when.

Universities need stability and predictability in their funding to perform. Our budget is planned, and approved by our Board of Governors, on the basis of this assumption, for the year in question, at least. It is unprecedented for the government to reverse the financing of universities multiple times within the same year. The announced cut to the operating grant is the third change that the Government of Québec has made in the financing of universities since we set our budget last winter. First, the annual tuition increase, which had been committed to, was reduced; then the increase was cancelled. 

Now, despite unveiling a commitment to a multi-year university financing plan in its November 20 budget, we hear that we are being requested to make massive cuts notwithstanding that salaries have been agreed upon, contractual arrangements are in place, pension commitments undertaken, research and teaching infrastructure has to be maintained, and the commitments to our students who need services and financial aid remain. Effective management and accountable performance are not sustainable under these conditions.

While we are still determining the exact amount by which McGill’s operating grant will be reduced, we estimate it will be in the range of $17 million to $21 million, in addition to cuts to any other Québec funding envelopes on which we depend. Most of our operating fund is spent on staff salaries. 

This, within a context where the University had already budgeted for an estimated $7 million deficit for 2012-13. Were the Board to decide to absorb the cuts requested, into the deficit, McGill’s deficit for 2012-13 could well rise above $30 million.

Out of respect for our students, their parents, our teachers, researchers and our staff, our alumni, donors and other partners in the pursuit of our mission, and, the broader community we serve, we are not in a position, responsibly, to accept these cuts. 

Only a few months ago, we were planning where best to invest necessary new resources from a reasonable increase in tuition against our priorities. Now, we are being asked to manage the financial decline of the educational system, and, the proposed decline of our educational and research contributions, our services to our students and professors, and our upkeep and management of our facilities. At the same time, like others, the University is facing escalation in pension costs, pay equity payments, and other post-employment obligations, notwithstanding sound management. At no time previously, contrary to messages in the press, were Québec's university leaders informed of impending cuts to our operating grants. 

We are examining our options. The Board of Governors will be meeting on December 13 where we will discuss our position. I will report back to the community as to our plans. In the interim, I and colleagues in the senior administration will be seeking your views, reaching out to faculty, student and staff associations.

We understand that Québec faces an unsustainable debt load. We cannot leave the younger generation with a burden that will guarantee their quality of life will be less than that of their parents. Québec already spends nearly three times the amount to service its debt that it spends on the entire university system. However, changes in the way the Government chooses its priorities across ministries and otherwise, are still possible. All financing options should be on the table. The contributions of post-secondary institutions are as high a societal priority as they have ever been. 

Universities, and the talented people and innovative knowledge coming out of them, are the means by which Québec will grow its economy and tax base to escape from its black hole of debt. In 2008, McGill had an annual economic impact of $5.2 billion on the Québec economy, according to a 2010 SECOR Group study, over and above our primary contribution of the talented students we graduate, the world-class research and scholarship we contribute, and the vast services we provide to Québec; the total investment of the Government of Québec in McGill was $389.1 million (operating, research and capital) in 2008-09. This is a powerful return on investment. Through these, McGill's contributions to the community, to culture, to medicine, to industry and to civil society, the University has an enormous, positive influence on the quality of life of Québecers.

The short-sighted cuts requested and announced this week, threaten especially the missions of Québec's research and graduate-student-intensive universities.  They also threaten the very future of Québec.

Heather Munroe-Blum
Principal and Vice-Chancellor
McGill University