Senate report

Senate report McGill University

| Skip to search Skip to navigation Skip to page content

User Tools (skip):

Sign in | Wednesday, April 16, 2014
Sister Sites: McGill website | myMcGill

McGill Reporter
October 9, 2003 - Volume 36 Number 03
| Help
Page Options (skip): Larger

Senate report

The numbers are in, and in keeping with the season, McGill's finances are falling like autumn leaves. Like the trees, McGill's balance sheet ran red last year, according to Vice-Principal (Administration and Finance) Morty Yalovsky's presentation to Senate on October 1, but there are plenty of reasons for the shortfall.

The university projected a balanced budget for the financial year ending May 31, 2003, but in fact came in with a $1.3 million deficit. The accumulated deficit is $13.7 million. This is due to increased spending by faculties and the libraries, as well as higher energy costs.

One factor was the unexpected strength of the Canadian dollar. McGill uses American dollars (from income and investments) for many purchases. This worked in the university's favour when the loonie was lower, but the Yankee dollar lost purchasing power relative to the Canadian buck over the last year, which drove up costs.

Another factor was the poor performance of the Endowment Fund over the last fiscal year. The Endowment dropped in value over the last fiscal year (due to a bear market), which reduced income from that source. In addition, $3.6 million was transferred out of the operating budget into the Endowment in order to cover the losses. Yalovsky reassured Senate that so far this year the fund is performing much better.

Provincial funding still lags behind the rest of Canada, to the tune of $375 million for the entire university system. In addition to its share of this shortfall, McGill is still looking for the promised "McGill adjustment" to make up for the university's underfunding relative to other schools in the province. Currently the provincial government is making up McGill's roughly $16 million shortfall at $1 million a year. The university wants a one-time payout of the full amount.

Deferred maintenance remains an issue. The vice-principal explained that in 1996 the outstanding maintenance stood at $187 million. McGill has been borrowing millions every year for this work, and projects performed in the last seven years have brought the deferred maintenance amount to $165 million.

Yalovsky explained that while the $150 million raised by last year's bond offering is a great help, funds from this can only be used for specific projects, not general operating expenses. In addition, he reported the bond will come due in 40 years time. To meet this expected payout, and not saddle future generations with debt, the university has used some of the funds from the bond issue to purchase other bonds that will mature in 30 years.

In the more immediate future, Yalovsky finished his presentation with a look ahead to the new year. The university is still in negotiation with Quebec about the deregulation of international student fees. Currently McGill receives no extra funding for international students, despite the extra costs entailed in their recruitment; the extra tuition these students pay is collected by the provincial government.

In addition, Yalovsky pointed out that the planning exercise in which McGill is currently engaged will create an expectation of more funding across units. More costs will also likely be associated with the upcoming fourth round of Canada Foundation for Innovation grants, which only pay for infrastructure, not operating costs. New money to fund the indirect costs of research may come from an expected federal program.

view sidebar content | back to top of page

Search