By Neale McDevitt
Layoffs of McGill employees, though still a possibility, will only be implemented when all other options to reduce expenditures have been explored, said Provost Anthony C. Masi and Vice-Principal (Administration and Finance) Michael Di Grappa in an email sent to the McGill community on April 4.
“As a last resort, if attrition, wage freezes, and voluntary retirements do not produce the necessary reduction in the University’s wage bill, then we will have to consider terminations due to financial exigency,” the email said. “It must be clear to the community that this will be considered as a last option to meet the necessary cuts.”
McGill must find a way to save $43 million in order to deal with government-imposed cuts and the University’s own budgetary shortfall.
The email was sent in response to questions from members of the McGill community regarding the University’s financial situation and the strategies it will employ to meet increasingly exigent budgetary constraints.
The University has been in discussions with employee groups and has asked them to accept a one-year salary freeze, even if existing contracts call for a pay raise. The McGill Association of University Teachers has agreed to a pay freeze, with the exception of tenure-track assistant professors, who will be eligible for a one-per-cent pay increase in order not to impede their career development.
However, on April 2, the McGill University Non-Academic Staff Association (MUNASA) sent a bulletin to their members saying it was “strongly opposed” to any sort of freeze on salaries or hiring. The statement said, while the MUNASA executive understands the “Senior Administration’s need to respond to the unacceptable funding position taken by the Quebec government,” it felt that “not enough options have been explored to provide for an equitable solution that would have much less an impact on staff morale and the operations of the University.”
Addressing MUNASA’s concerns, Di Grappa said that McGill’s plans to respond to the government cuts were formulated after extensive deliberations and consultation with the McGill community.
“We understand that salary freezes, hiring freezes and possibly layoffs will have some impact on McGill’s operations, as MUNASA points out, and that we are asking staff to make a sacrifice to try to preserve jobs,” said Di Grappa.
“We have explored many alternatives and have chosen a path that we believe will best protect McGill’s core academic mission and our staff,” he continued. “A salary freeze, a hiring freeze, and voluntary retirement program were the suggestions made more frequently during our consultation with members of the community.”
Di Grappa noted that three quarters of McGill’s core operating budget is spent on employee compensation while most of the remaining quarter goes to expenses essential to the day-to-day functioning of our University, such as energy, or to expenses with a very direct link to the University’s academic mission, such as student aid or library acquisitions – which McGill is trying to protect.
“In previous budgets we have already significantly trimmed non-salary expenses, so it is simply impossible to realize the necessary level of cuts without affecting salaries in some way,” he said. “And the options to reduce salary expenses are limited – wage freezes or cuts, hiring freezes, voluntary retirement and layoffs. We are trying to maximize savings from the first three options to avoid or minimize layoffs.”
Thursday’s message to the community also underlined the limited impact the government’s proposed three per cent indexation of tuition or its repayment plan beginning in 2015 will have on the current situation faced by McGill and all Quebec universities.
The three per cent tuition indexation represents an increase of approximately $70 per year per student. In all, McGill will receive approximately $1.4 million in additional tuition revenues starting in FY2014. “This is not sufficient to cover even a small percentage of the revenue losses we are experiencing,” said Thursday’s message.
Apropos compensation for the loss of tuition increases that will be part of the overall provincial reinvestment promised starting FY2015, Di Grappa and Masi said that the fluid nature of the situation makes it impossible to bank on any sort of government reinvestment.
“How that promised amount will be distributed among universities is still a subject of debate in Quebec City. McGill will not be compensated directly for the amount of tuition it has lost, and how much of the future funding it will get is uncertain, given economic conditions in Quebec,” said the message.
The message underlined that the proposed measures aim to address the immediate financial crisis in a fiscally responsible and prudent manner that does not compromise the mission, vision and longer-term success of the University.