Budget – May 4 2020

What were the most important factors that were considered when doing the budget for this fiscal year?

Budget development starts with revenue projections. Approximately 80% of our annual operating revenue is enrolment-driven, either directly, through tuition paid by our students, or indirectly, through the support grants we receive from the Quebec Government, which are determined by the number of students enrolled. Budget planning is always driven by a commitment to prioritize the academic mission of the university – enrolment driven revenues directly support the delivery of academic programs and the full McGill experience.

 

What budget measures are being implemented in light of the current situation?

To protect our core programs and commitments given the present situation, the budget for fiscal year 2021 (1 May 2020 to 30 April 2021) includes a number of extraordinary measures aimed at reducing expenses and ensuring elasticity where it is needed:

  • Faculties and administrative units across the University have been asked to identify ways of reducing non-salary expenditures by 2-3%.
  • Salary increases for all non-unionized academic staff and non-unionized administrative and support staff will be partially deferred; cost of living increases will be implemented as planned on 1 June, but performance-based increases will be deferred to December 2020.
  • The University executive will forego all increases this year.
  • New hiring will be suspended until further notice, with some exceptions.
  • Commitments for new allocations for FY2021 made in previous years have been deferred, and a significant envelope has been reserved to allow us to absorb some enrolment loss (and thus revenue loss) should this occur.

Because capital projects are not funded from the operating revenue of the University, critical capital infrastructure projects will continue

Exceptionally, the budget approved by the Board of Governors in April 2020 is a provisional budget. It is our best estimate of revenue and expenses given what information is currently available. We will continue to monitor things closely across the summer months and are prepared to make adjustments if necessary. A final budget for FY2021 will be presented to the Board of Governors in the Fall.
 

What are Fall 2020 enrollment assumptions in the budget vs. actuals for Fall 2019?

The enrollment assumptions included in the provisional FY2021 budget mirror closely the actuals for Fall 2019. In normal circumstances, our enrolments are largely stable year-to-year. We have been planning for some growth at the graduate level but most of our undergraduate programs are at capacity. In a situation of uncertainty, we have been working to ensure that our academic programs can continue in 2020-21, regardless of the mode of delivery or the local situation in Montreal. That said, the provisional FY2021 budget was developed with a range of measures to ensure that we can absorb a temporary decline in enrolments if such a decline occurs.

 

How is McGill going to balance its budget given uncertainty surrounding international student admissions due to border closures and lockdowns?

We would prefer to be able to project a balanced budget, but given the uncertainties associated with COVID-19 that we are facing this year, and the measures we have put in place to prepare for what is not yet fully known, a provisional budget was approved for FY21.

 

How will our budgetary situation affect student financial aid?

The University had committed before the COVID-19 crisis to increase student aid over the coming few years; this commitment remains, and current expense reduction measures do not affect student aid for the 2020-2021 academic year.

 

What are the particular implications for graduate students of our current financial reality – e.g., (tuition, funding packages, graduate mobility support)?

Graduate student funding packages should not be directly affected by the current expense reduction measures. Graduate mobility support is still in place, although the implementation of such mobility may be compromised by prevailing health and travel ban circumstances.

 

How will our budgetary situation affect TA hiring?

Funds allocated to faculties to support the hiring of TAs have not been reduced. Decisions with respect to the hiring of TAs are made at the Faculty level.

 

What are we trying to do to make sure we have good enrolment for the fall?

As of early in the Winter term, we started to move some of our yield activities to virtual as our international travel started to become more restricted. Since then, we have pivoted the entire recruitment campaign to remote. Here are a few of our initiatives:

  • We hosted McGill’s first ever virtual fair for newly admitted students on May 16
  • We created a video to capture the resilience, solidarity, and determination that was shown from our students, faculty and staff (French, and English)
  • We have a webinar scheduled on May 16, following the Virtual Fair, to allow for a two-way dialogue with incoming students and their families regarding the impact of COVID-19 at McGill and our planning for the fall in. To that end,
  • We have developed FAQs to answer the fall planning questions of incoming students and sent them a message to alert them to the announcement about remote learning
  • We are launching an alumni calling campaign for incoming students and their parents, as well as multiple social media campaigns that will roll out over the coming months. .

 

Will tuition be reduced for the summer term and, if fall occurs through remote delivery of courses/programs, for the fall term? This is of particular concern to international students. If not, why not?

No. We are confident that we will offer the same quality of instruction remotely, and the value of the McGill degree remains despite this temporary interruption. Support to students and instructors for remote learning is being increased, and the vast majority of our student services are still available. We are also working to create virtual communities and experiences outside academic learning to ensure a robust student experience even in a virtual environment, including planning for orientation and frosh.

We recognize that the pandemic has affected many people financially, and so we are choosing to increase financial aid to students in need. Please visit Scholarships and Student Aid for more information about our aid services to help students in financial need.

 

Are layoffs planned?

The University will do its very best to avoid laying people off, even in this unprecedented and unpredictable global crisis. Budget measures have been implemented to reduce expenses, especially non-salary expenses. To help avoid layoffs, many duties and work processes will have to be adapted to the reality of COVID-19. Ultimately, we need to work together to protect the essential academic mission of McGill, maintain the financial wellbeing of our University and minimize the impact of the pandemic on employees.

 

Does the freeze to merit-based salary increases apply to everyone?

One of the measures put in place to mitigate against the risk of possible revenue loss this fiscal year is a
salary freeze for all senior administrators and Deans and a deferral of merit-based salary increases for all non-unionized academic staff and all non-unionized administrative support staff.

 

What if things aren’t as bad? Will all the budgetary freezes really impact us?

While the University’s fiscal year begins May 1, the activity that generates most of our revenues — enrolment — does not begin in earnest until September. The budget will be reviewed in the fall when we have a better sense of revenues for the year. The expense reduction measures currently in place may be eased at that point. We must also be prepared for the possibility that further measures will become necessary to address a greater decline in revenues.

 

When will hiring be possible again?

The hiring of tenure-track and tenured faculty, contract academic staff, and administrative and support staff is suspended until further notice. This measure will be reviewed in late Fall 2020. Course lecturers can be hired during this period where necessary to ensure program continuity.

 

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