Budget sets tone for universities

University officials across the province were quick to praise Ontario’s 2011 budget rolled out by Finance Minister Dwight Duncan on Tuesday.

Although announced earlier in the week, the 2011 budget’s centerpiece for higher education remained the province’s commitment to fund 60,000 new spaces in post-secondary education over the next five years (to 2015-16).

Of that number, approximately two-thirds are tapped for universities. The Ministry of Training, Colleges and Universities (MTCU) projects numbers for the next three years around 10,572 spaces in 2011-12, 18,404 by 2012-13 and 26,365 by 2013-14.

For 2011-12, MTCU projects 9,300 undergraduate spaces. Beyond that, the division between undergraduate/graduate spaces is unclear.

Janice Deakin, Western’s provost and vice-president (academic), welcomes the news.

“There’s capacity on all campuses to grow,” she says. “Here at Western, we’ve just completed a four-year planning cycle that involves modest enrolment growth over the four years. So we’re actually thrilled to know the government is committed to funding those students fully.”

Sheldon Levy, Council of Ontario Universities (COU) chair and Ryerson University president, echoes Deakin.

“We appreciate the continued commitment to higher education,” Levy says. “Current and future students represent a powerful force in shaping our province’s future and Ontario university presidents are proud to contribute to this force through the provision of high quality university education.”

Beyond the new students, the budget called for the government to reduce funding for all executive offices by 10 per cent over the next two years. Ministry of Government Services staffers indicate universities will be affected by this measure.

COU expectations are that universities will be required to re-direct 10 per cent of current spending on executive offices (including compensation, travel and other expenses) to ‘front-line’ services – that is, not a reduction in transfer payments from the province but an internal reallocation.

But as to specifics, like who qualifies as an ‘executive,’ nobody seems to know just yet.

“We’re going to need to understand more about what that means. As the government provides us more details on that we’ll be watching that carefully,” Deakin says. “I think it’s important to recognize that Western has behaved in a way, the senior executive team has done its part over the last number of years with respect to salary restraint because of the fiscal position the province finds itself in.”

In response to the financial crisis of 2009, and the pressures it imposed on the provincial budget, Deakin points out Western’s senior administration team voluntarily took no salary increases.

“And we will continue to do our share,” she says.

Overall, provincial government expenses are projected to increase 1.7 percent annually between 2010-11 and 2013-14. Post-secondary education – along with health and education – received new investments. Health tops that list at 4.9 per cent increase followed by education at 4.6 percent and postsecondary at 2.4 per cent.

“There are sectors that received no funding and, in fact, find themselves in increased difficulty,” adds Deakin, nodding to the budget’s overall message of containment of program expenditures. “So the fact the government continues to highlight post-secondary education, the importance for citizens of Ontario to access post-secondary education is very encouraging.”

The budget was silent on capital and tuition. As announced last year, the current tuition framework will remain in place until 2011-12.

“In the budget, they talk about pathways, about credit transfers, a commitment to online learning and to internationalization. All of those things are on our multiple agendas,” Deakin says. “Western is interested in all of those files. So I think on the whole this budget speaks to the commitment this government has had to the post-secondary sector – full stop. Perhaps more so when you see the context in which the government is operating.”
Western is neck-deep in budgets this month and is approaching the beginning of a new four-year cycle that sees student body growth running parallel with economic restraint.

At the March 25 Senate meeting, university administrators recapped the financial environment for the membership leading into Western’s budget cycle.

Last week, the federal government released its budget, which quickly became the platform for the Conservative election campaign. This was followed one week later by the provincial budget, which universities watched much closer for indications of investments in education. The trifecta is completed with the released of Western’s budget next month, which looks not only at the year ahead but earmarks the start of a new four-year budget cycle.

With Canadians set to go to the polls May 2, Western President Amit Chakma hopes the new government – in whatever form it takes – will take into consideration the needs of universities. Access to education continues to be a government priority, but “we’d like a commitment for any growth to be fully funded,” says Chakma.

Without showing all of his cards, Chakma indicated the university’s capital budget plans include funding for a new residence. The new building allows the university to continue to fulfill its first-year residence guarantee.

As a prelude to next month’s senate meeting which will include the release of Western’s operating and capital budgets, Deakin gave an indication of what would be Western’s guidepost for its financial planning.

The big ‘R’ word – revenue – continues to be an area of concern for Western as there are limited streams from which to draw income. There is some certainty with university tuition rates, as the framework set out by the province continues to be in place for one more cycle, limiting tuition increases to an average five percent annually.

Western has long made 4,350 the target for first-year undergraduate enrolment. For the 2011-12 academic year, the first-year class is expected to be 4,800 and this expansion brings with it added tuition revenue. Included in the undergraduate expansion are plans to increase the number of first-year international students from 146 (2010-11) to 400 in 2015-16.

There is uncertainty on the horizon beyond 2012, says Deakin.  As a result, the university is choosing to exercise restraint in the first year of the four-year cycle.

“Our investments in the first year of this cycle is for one-time funding until we know where we stand,” she says, noting there have been ‘rumblings’ in the province about a potential tuition freeze.

If this is the case, the university will have to look elsewhere for revenue increases. “Even in the best environment, we are in a constrained environment,” she notes.

“Even though the outlook isn’t as rosy as it as been,” Deakin says, “in the next four year budget cycle our strategy is to be careful and make sure we can respond to anything that comes down the pipe from the provincial government.”