Provincial funding support: The reality

In early April we sent out an announcement explaining details of the funding increase in the 2014 provincial operating grant for the university, indicating that a base increase of 2% is consistent with our plans. Although this makes it necessary for the university to continue its operating budget adjustment efforts, there is appreciation that the university can continue on track with its current plans rather than having to make more significant adjustments.

Several questions were posed to the president in the annual report to the General Academic Assembly last week relating to provincial support for the university and the projected deficit. The president and the senior leadership team represent the university in the most energetic efforts to advance the university’s interests, to deepen public support and understanding, and to ensure government knows that the university is aligned with public priorities. These continuous efforts, led by our president, are an important reason why our financial support from government is strong. However, we must not fall into the thinking that even more strenuous efforts with government would resolve our financial situation. A glance at the post-secondary landscape across the continent shows why this is the case. In terms of the projected deficit, we have made it very clear that this is a forecast, that we have not been in a deficit position, and our planning efforts are designed to avoid such circumstances. Our financial pressures were made plain, and our forecast deficit was predicted and announced in spring 2012, well before President Busch-Vishniac arrived.

To respond more fully to the question of how well the university is supported by government, one needs to compare how we are doing relative to other provincial sectors in terms of total funding and comparatively with our western Canadian peers. In the March 2014 provincial budget, the allocation for Advanced Education increased by 3.7%. The resulting increase to the University of Saskatchewan was approximately 4.4%, with a 2% increase on the base operating budget. The university received additional targeted funding of approximately 2.4% for the following: additional health science seats in Nursing and Medicine; incremental operating costs for the new E-wing in the health sciences building; additional support for sustaining capital; annual capital costs projected for the A & B wing renovations in Health Sciences; and support for the Canadian Excellence Research Chair in Water.

When we compare across provincial sectors, post-secondary education received the largest increase in 2014, including health care. The K-12 sector received a larger increase to their base, which approached 2.7%. However, they are confronted with major enrollment growth over the past few years. When we compare total funding increases across sectors, post-secondary education was a top priority for funding and the U of S is receiving a greater share of the average increase within the post-secondary envelope.

Relative to the four western Canadian provinces, an increase of 2% of the base provincial grant in 2014 was among the highest. Manitoba increased its base grants for universities by 2.5%, Alberta maintained grants at 2013 levels after reducing grant levels by approximately 5.65% in 2013 from 2012 grant levels, and the provincial grant for British Columbia universities was reduced by 1.1% for 2014. When we compare the U of S to other provincial universities, we are in more favourable funding circumstances and receive more public support, both as a funding priority and in terms of public acknowledgement and recognition of the value of the U of S. As a response to this public support, the U of S takes its responsibilities seriously as a partner in serving provincial and national priorities in its teaching and research activities.

Another theme of questions to be posed within this funding context involves the cost structures of universities and why they remain financially unsustainable with annual cost growth of over 4%, while revenue growth increases at less than half this rate. Why do university base expenses increase at a greater rate and often more than double the rate of inflation? And why should the public support an increase larger than inflation for the same outcomes? It is within this context that the U of S and other universities must address the challenges of unsustainable base cost growth. It is important to note that as we confront these challenges, that the U of S is recognized as being among the best supported universities in western Canada in a province where the U of S is made a top priority in being among a very short list of the best supported institutions.

Greg and Brett

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