Budget-cut target set to be reached
By McGill Reporter Staff
McGill is set to reach its cost-cutting target of a $43.5-million reduction in the operating budget without having to resort to large-scale job cuts, Provost and Acting Principal Anthony C. Masi and Vice-Principal (Administration and Finance) Michael Di Grappa said in a message to the community on Tuesday.
Earlier this year it was apparent that there was no easy way to meet the cuts that were provoked by last year’s sudden and sharp reduction in provincial funding for universities without having to send notices of dismissal to a substantial number of employees. However the Voluntary Retirement Program (VRP) and other cost-cutting measures succeeded in making that unnecessary.
More than 250 employees opted to take early retirement under the terms of the VRP, a much higher figure than anticipated based on best-practice forecasts.
“This number exceeds our forecast and will produce almost $18 million in savings as of FY2015,” Masi and Di Grappa wrote in their message to the McGill community. Combined, all the expense-reduction efforts bring the University to 95 per cent of its cost-reduction target.
The University, which decided it was essential to take a prudent approach to managing its finances in the face of a two-year, $38-million reduction in provincial funding as well as a reduction in anticipated tuition revenue, implemented a number of measures to cut costs while protecting McGill’s core academic and research missions. And it did everything it could to avoid significant job losses.
A small gap between the $43.5 million target and existing cost savings remains. In order to close the gap, Vice-Principals and Deans have come up with additional plans for permanent savings in their operating budgets. Some of theses plans will mean a further reduction in the number of positions, but these can be achieved largely by not renewing some term contracts, attrition, and what was described as “workforce efficiencies, and reorganisations resulting in strategically targeted position abolitions.”
Decisions about these reductions will be made at the local level, by individual units, based on their local needs and requirements.
“The last few months have been difficult for everyone in the McGill community, and to be sure the full implementation of the required measures will test our mettle in the coming months,” Masi and Di Grappa wrote. “We take this opportunity to thank you for your hard work, your understanding and, above all, the financial sacrifices you have made to help us avoid an unwelcome scenario.”
Barring further shocks to the University’s funding models, McGill is set to achieve a balanced budget for the 2015 fiscal year, and it will include a five-year plan to repay the debt the University incurred in the 2013 and 2014 fiscal years, in order to comply with budget rules set by the Quebec government.
This doesn’t mean the McGill is totally out of the woods when it comes to its finances, Masi and Di Grappa warned in their message.
“We have come a long way and for that the McGill community should take pride, but we must not forget this is not the end of the road. We must be diligent in sustaining our financial position because pressure on McGill’s operating budget, including a growing pension deficit, deferred maintenance costs, and pay equity agreements, will last for the foreseeable future.”
And there remains the challenge of continuing the work of the University with a work force that will have been reduced by more than 300 people in the end. “Human Resources (in particular the Organizational Development group) and the entire senior administration are working closely with faculties and support units to develop appropriate plans to ensure critical services are maintained and that our core missions, guided by our strategic plans, such as ASAP 2012, are protected,” Masi and Di Grappa’s message said.
McGill had already launched the Strategic Reframing Initiative, designed to manage change in the workforce with the goal of getting different parts of the organization to learn how to work more efficiently and effectively and to determine what old work might not need to be done any more. The reductions in the workforce as the result of the budget cuts will make that work all the more important.
“Adapting to major change is never easy,” Masi and Di Grappa wrote, “but it can and often does provide new opportunities for personal, professional and academic growth. As we move forward, we will continue to support each other to ensure McGill remains a vibrant world-class intellectual community, a great place to work, and a force for good in our society.
“The response to this financial crisis has demonstrated, once again, that McGill’s people are this University’s greatest strength.”
For more information on McGill’s financial situation and cost-reduction strategy visit the Budget Cuts website.