Tuesday, December 3, 2013, National Assembly of Québec
Mister President of the Committee on Culture and Education (Lorraine Richard), Madam Vice-President of the Committee (Dominique Vien), ladies and gentlemen, members of the Committee: Good afternoon.
Please allow me to begin by sharing the story of my Quebec experience.
I grew up in Saint-Timothée, near Valleyfield, where my parents ran a small hotel. When I was young, there were three books in the house: the Petit Larousse, the Bible and the Eaton’s catalogue. And there was a globe. It wasn’t much, but it was enough to pique my curiosity.
That was my start. Québec made everything else possible for me. I had the opportunity to study at one of the world’s best universities. I was able to study under the pioneering researchers in my field. I even worked with a future Nobel Prize laureate.
Today, finding myself in this building that’s so steeped in Québec history and symbols, I would like to say “Merci.”
Québec as a society and McGill University as an institution form a partnership. This partnership helps people, whether they come from here or far away, no matter how modest their background. It helps them climb the ladder of knowledge and embark on the career of their choice.
We have succeeded in building a knowledge infrastructure that is a tremendous catalyst for economic and social advancement during this era of the knowledge-based society and globalization. I hope that all the elected members and all Quebecers understand the extremely important role our universities play in the success of Québec, especially in this era of the knowledge-based society and globalization.
I hope that they see that the diversity of this infrastructure is also a great asset. We have top-notch universities of different sizes, universities of different languages, and universities with different missions. This is an asset and a source of wealth. People around the world envy Quebec for this.
And of course I hope that my fellow citizens take pride in McGill University, which for nearly 200 years has been “une université québécoise” that does great honour to Québec.
Let me introduce my colleagues:
- Anthony Masi, the Provost;
- Michael Di Grappa, Vice-Principal, Administration and Finance;
- Olivier Marcil, Vice-Principal, Communications and External Relations;
- Pierre Moreau, Executive Director, Planning and Institutional Analysis, and Senior Advisor on Policy Development.
Kip Cobbett, the Chair of McGill’s Board of Governors, sends his regrets for not being able to be here today. Unfortunately, he was not able to excuse himself from a prior engagement.
Mr. Moreau and Mr. Di Grappa will be assisting me with this presentation.
As you know, my appointment as Principal and Vice-Chancellor of McGill University is very recent. I took up my duties on September 5. I have learned a great deal about McGill since my installation, but I don’t yet have an in-depth knowledge of all the dossiers. I hope you will allow me to call upon the expertise of my colleagues during the question period.
I would like to thank the Committee for welcoming us here today.
My colleagues and I have the greatest respect for the democratic process that brings us here to report on how McGill University is fulfilling its teaching and research mission, and how it is using the citizens’ money.
To set the stage for today’s exchanges:
- I will present a summary of our university;
- I will discuss McGill’s impact on Québec and the relationships between McGill and the Québec community;
- And I will discuss the challenges facing an institution that, let me say this straight out, is increasingly fragile.
Let’s start with a brief overview of McGill.
Our institution is nearly 200 years old. It was founded on the legacy of a great Montrealer named James McGill. A Scottish immigrant who married a French-Canadian woman, he was a merchant and a great lover of knowledge and democracy. He was also elected to the legislative assembly of Lower Canada.
Today, McGill University has:
- Nearly 39,000 students;
- Some 1,700 tenured professors;
- 10,000 employees;
- 11 faculties;
- 11 schools;
- More than 300 programs of study on two campuses;
- And four affiliated university teaching hospitals.
McGill came 21st in the world in the QS 2013 World University Rankings, and 35th in the world on another highly regarded scale, the Times Higher Education World University Rankings. And for the ninth consecutive year, McGill has been named the top university in Canada by Maclean’s magazine.
To give you an idea of how important that international position is, there are some 15,000 universities in the world today. For a small society like Québec to be home to a university that ranks among the world elite is an extraordinary achievement—and, on top of that, another Québec university, the Université de Montréal, is 92nd in the world in the QS rankings. That makes Montréal one of only two large cities in the entire world, the other being Hong Kong, that has two universities working in different languages that rank in the top 100 universities worldwide. That’s an incredible accomplishment.
When it comes to attracting talent, our competition is international, lying beyond our borders. McGill’s excellence depends on the excellence of our professors and researchers and the excellence of our programs. Everything is interconnected.
McGill is second in Canada in its category for intensive research. That indicator, is measured by the amount of research grants obtained per professor. Research at McGill means:
- $484 million in research grants in 2011-2012 (McGill and the affiliated teaching hospitals). These projects are carried out by our professors and our students;
- 160 Canada Research Chairs, covering the full range of disciplines;
- For 2010-2013 alone, 221 research contracts in every imaginable domain, funded by governments and companies;
- And one of the largest patent portfolios in Canada.
Of the 15 largest research universities in Canada, McGill has the highest percentage of Ph.D. students. Through their hard work and the supervision of their professors, they earn their degrees faster than the average for other universities. In fact, McGill has the highest graduation rate of all the Québec universities when it comes to graduate studies – and that’s been the case for the past 10 years.
McGill University also has a very close partnership with Québec society. This is a paying proposition for Québec: In 2008, McGill used a $1-billion budget to generate $5.2 billion worth of economic activities, according to a Secor report released in 2010.
Overall, more than half of our students are Quebecers, and in a faculty such as Medicine that number, for undergraduates, is higher than 90%. McGill creates an exceptional environment for these students, who rub shoulders with students from around the world.
McGill is also the most francophone of the universities at which English is the main language. Any McGill student from any faculty can write papers in French if he or she wishes to do so. The Faculty of Medicine also trains doctors, en français, in Val-d’Or and Gatineau. Over the past 20 years, McGill’s Département de langue et de littérature française has produced many talented members of the up-and-coming generation in francophone Québec literature. Look at the list of writers who have received Governor General’s Literary Awards for writing in French, and you will see the names of many McGill graduates.
McGill also works with the francophone universities every day. The Quartier de l’Innovation project, a joint initiative between McGill and the École de technologie supérieure, is one example: a forward-thinking district in Montréal that brings together culture, science, entrepreneurship and urban life. One of our engineering graduates, Matrox founder Lorne Trottier, set up two research institutes on energy and sustainable development – one at McGill and the other at the Polytechnique – on condition that they work together. And that’s exactly what’s happening.
McGill also means massive numbers of talented people coming from abroad, many of whom stay in Montréal after they complete their studies. A case in point: Aldo Bensadoun, a student who came here from Morocco and stayed to found the Montréal company that bears his name, now the Canadian giant in the footwear industry.
McGill is deeply rooted in the life of Montréal and Québec. But this great Québec university is increasingly fragile. And on that subject, let me start by making two points:
Many people think that McGill is rich because we have many foreign students. The reality, however, is that, except for a few programs that were deregulated in 2008, foreign students do not bring McGill any extra revenue. We send back to the government whatever money a foreign student pays on top of Québec tuition. Every cent. At McGill, this means about $55 million, each year. The government then redistributes that sum among all Québec universities. In other words, all other Québec universities benefit, equally, from the fact that foreign students come to McGill.
On the second point: Many people think that McGill is rich because it receives more donations than the other Québec universities. True, the alma mater tradition is indeed stronger at McGill than it is at other Québec universities. But those donations do not go into McGill’s operating budget; nearly all donations are earmarked for specific projects, such as student scholarships or research activities. That active philanthropy plays a role in the excellence of McGill by helping us to support our students and our research, but it does not relieve the burden of University operations.
McGill’s financial reality is that this is a vulnerable institution. Operating revenues are shrinking. This year, we have had to absorb cuts of more than $40 million.
Our old buildings are beautiful, but expensive to maintain. McGill has 40% of the maintenance deficit for Québec university buildings, with $835 million worth of work to be done on our two campuses.
This is McGill’s reality.
McGill ranks among the top universities in the world today. But competition to attract talented people is extremely fierce.
The issue of the underfunding of Québec universities remains unresolved. McGill University, despite certain perceptions, is affected by this just as much as any other university. In June 2012, for example, Moody’s lowered McGill’s credit rating, which affects our borrowing costs.
To give you an idea of the gap in means, consider this:
According to our analysis, if you picked up McGill University as a whole and transplanted it to Toronto, it would have $70 million more. To Vancouver: $130 million more. To Edmonton: $140 million more. This is all per year.
We are competing with universities in those other cities.
Considering our reduced means, what we’ve been able to achieve is a tour de force. At the very least, we can say that McGill is extremely well-managed. And I’m not embarrassed to put it in those words, because I can’t take any credit – I’ve just arrived.
McGill University demands a great deal of itself.
When the government mandated 14 indicators to measure universities’ performance and management, McGill’s governing body, our Board of Governors, not only agreed—they added eight more indicators.
And now I would like to ask my colleague, Pierre Moreau, to say a few words.
Thank you, Principal Fortier.
Ladies and gentlemen, we’ve given you some facts and figures, which as you can see are complex and cover various domains in comparison with our peers. I won’t comment on each of the tables, but let me simply try to put things in context. However, if you would like to discuss any of these performance indicators, I will be pleased to answer your questions.
We have identified 22 KPIs, as we call them – Key Performance Indicators – that reflect the priorities spelled out in the strategic documents for our institution: Strategic Academic Priorities, the Strategic Research Plan, and the Campus Master Plan. These performance indicators were passed by the McGill Board of Governors last spring. They cover five specific domains:
- our students
- academic excellence
- research and international relations
- administration and finance
- philanthropy and governance.
This was a very serious project, which was undertaken to establish points of comparison that would best reflect our performance and help us to improve.
The process of defining these KPIs began in 2009 through a series of discussions with, among others, our deans, emeritus members of the Board of Governors, the management team, many groups and members of the university community, and other partners, including other universities, CRÉPUQ and the Ministry of Education.
Our indicators show not only our current performance but also a set of ambitious objectives designed to improve or maintain our position in the coming years. Ten of the 22 indicators give us a basis for comparison with the other research-intensive universities in Canada. On that score, our performance is exemplary.
In closing, our faculties and administrative units are currently defining their own performance indicators, which will further enrich the University’s key indicators.
There is no equivalent to this self-evaluation process anywhere else in Québec. It bears witness to McGill’s desire to do better and better and continue to devote its full potential to the success of Québec.
Thank you, Mr. Moreau.
For the financial aspect of our presentation, I will now ask Michael Di Grappa to speak.
(Michael Di Grappa)
Thank you, Principal Fortier.
For the financial year ending April 30, 2013, McGill recorded total revenue of $1.2 billion, including $721.4 million in operating revenue. Thirty-nine percent of our total revenue comes from the Québec government (including research grants and teaching support for the affiliated teaching hospitals).
As the most recent study by CREPUQ (January 2013) shows, under-funding, which stood at $850 million in 2009-2010, continues to widen the funding gap between Québec universities and their Canadian counterparts. Various rankings and studies performed by organizations that are not parties to the debate also put Québec universities in last place in terms of operating funds per student, even before the cuts were applied last year. In the Council of Ontario Universities’ June 2012 report, Québec came in tenth place among the Canadian provinces in terms of revenue from tuition fees and provincial government grants, calculated on a per-student basis. In the ranking of 15 Canadian universities that offer programs in medicine, published by Maclean’s in 2013, the four Québec universities came last for operating funds per student, weighted by discipline and level of study.
The 2013 and 2014 financial years have further aggravated the situation.
In the two years since McGill planned its Spring 2012 budget, anticipated operating revenue has gone down by $56 million; this was due to a reduction in anticipated funds from tuition fees and the cuts announced in December 2012.
McGill has mounted a vigorous reaction to that situation. This year, we set up a difficult but necessary cost reduction program. That program has enabled us to reduce our operating expenditures by $43.5 million by the end of the 2014 financial year. This reduction enables us to:
- balance the budget for the 2015 financial year, and
- start to reabsorb the cumulative deficit during the 2013 and 2014 financial years.
The cost-reduction plan is primarily based on:
- a voluntary retirement program
- reducing administrative budgets
- a one-year salary freeze for staff
- an additional salary cut for top management in the current year, and
- a hiring freeze.
This cost reduction program will bring our cumulative deficit down to $298 million (according to GAAP) at the end of the 2014 financial year, from $341 million. We are currently predicting that our deficit for the 2014 financial year will be around $10.4 million. This would make McGill the Québec university with the second-lowest cumulative deficit in relation to total revenue in 2014.
With this energetic plan, we have so far avoided massive layoffs. But the rubber band has stretched to the breaking point. More than 250 members of our staff have decided to take advantage of the voluntary retirement program. Overall, our staff will be substantially reduced by the end of 2013, which will mean additional challenges in terms of management and organization.
Thank you, Mr. Di Grappa.
Ladies and gentlemen, Québec is fortunate to have McGill.
But the reverse is also true: McGill is fortunate to have Québec.
McGill can attract the best professors and the best researchers because it attracts the best students–and we are able to attract those students because of Quebec. These talented young people, are looking for a specific experience in life. And Québec, the French-speaking society in North America, and Montréal, the North American city that speaks with European accents, are immensely attractive to them.
McGill University is fully québécoise, and that sense of belonging to Québec is an integral part of its reputation and its success. McGill is part of a network of universities that gives Québec an incomparable springboard for economic and social success.
But McGill’s walls are cracking. Literally as well as figuratively.
In the wake of the Summit on Higher Education, the government committed to reinvesting $1.8 billion in the university network starting in 2015. That will be extremely welcome. The government also announced its intention of signing partnership agreements with the universities, based on attaining measurable objectives. We encourage the government to proceed along that path, which involves identifying and recognizing excellence in university management.
But these agreements need to be flexible. It is crucial that McGill and the other Québec universities be given a little breathing room.
Let’s agree on some objectives, and on the destination, but let’s leave it up to the universities to decide the itinerary. Let the universities themselves decide how they will get there.
We will need to find other avenues to let our universities generate new revenue. We will need to imagine other solutions so that McGill and the entire Québec university network can continue to contribute their full potential to the success of Québec.
It is a matter of nothing less than the economic prosperity and social progress of Quebecers in this era of globalization.
Thank you for your attention.
My colleagues and I are ready to answer your questions.