Yesterday the Government of Alberta tabled its 2021 Budget. Facing a deficit of $18.2B, Alberta remains in a period of significant economic difficulty. With COVID-19 and other factors contributing to a deep economic slowdown, the province, along with many Alberta organizations, businesses, industries, and public institutions like ours, continues to face serious financial challenges.
Disproportionate Cut
In Budget 2021, the University of Alberta’s provincial grant has been decreased by a further 11 percent, or $60.1M, almost one-half of the total $126M cut to the post-secondary sector in this year’s budget. We had been planning for a cut of 10 percent. This 11 percent reduction, combined with cuts in 2020-21, totals a $170M reduction in our provincial funding over the last two and a half years.
We recognize the province’s challenging financial position, but to require the University of Alberta to shoulder almost half of the required provincial savings is unreasonable. 25 percent of Alberta’s post-secondary students attend the University of Alberta, yet the province has required us to bear nearly 50 percent of the reduction in provincial funding. This disproportionate cut is especially disappointing considering the extraordinary efforts the university has undertaken to reduce our expenditures.
With a bold program of reform larger in scale than anything in the history of Canadian universities, we have responded proactively over the past year, significantly reducing institutional expenditures and seeking meaningful operational efficiencies. We are making major progress by:
- decreasing our administrative costs with total savings of $95M by the end of this year,
- grouping 13 of our faculties into three colleges creating economies of scale to provide high-quality administrative services at a much lower cost,
- changing our procurement processes and rethinking how we use space which will result in an additional $32M in savings.
Growth
The University of Alberta of tomorrow cannot be built solely on cost containment. Our goal is to lay the foundation for growth and reinvestment in our core mission of teaching, research and community engagement, with an even greater impact on the communities we serve here in Alberta and around the world.
Currently, government regulation and red tape broadly restrict the university’s ability to grow its revenue. We continue to press the province to eliminate this red tape and untie the university’s hands to allow greater freedom and flexibility to grow our revenues. With greater flexibility, we could take maximum advantage of key growth opportunities, including increasing enrollment, developing new online programs, expanding continuing education offerings and micro-credentials, and repurposing some of our assets to the benefit of the university and the broader community.
With growth, we can renew faculty ranks, further enrich the student experience and deepen our research impact. Much as the province can strengthen the economy by diversifying beyond oil and gas, the University of Alberta can increase its resiliency by developing new revenue sources and reducing our reliance on provincial funding.
Restarting the Economy
Once COVID has passed, Alberta will need to restart the economy and, together, we must focus on building the future. As it has for over the last century, the University of Alberta will continue to play a central role in advancing innovation, entrepreneurship and knowledge translation to the benefit of all Albertans. Supporting and enriching the experience of our students will remain at the core of our mission, providing our students with the skills, knowledge and intellectual curiosity to innovate and strengthen the province’s economy and advance social well-being.
We ask only for fair and predictable levels of provincial funding along with the freedom to diversify our revenue sources. We will continue to do all we can to make this case to the Government of Alberta.
Bill Flanagan
President and Vice-Chancellor