Neither crisis mode nor complacency

On Nov. 12, Quebec’s universities and CEGEPs were hit with that new round of cuts, amounting to $31.6 million. McGill’s share is close to $5 million. Provost Anthony C. Masi talked to the McGill Reporter about this development, and the University’s ongoing underfunding situation.

Arts-Cupolla_NMThe Provost talks about the way forward from last week’s almost $5M funding cut

By McGill Reporter Staff

In September, the Quebec government announced that McGill’s operating grant would be almost $15 million less than what it had proposed in the spring — and warned that a second wave of cuts were to come. On Nov. 12, Quebec’s universities and CEGEPs were hit with that new round of cuts, amounting to $31.6 million. McGill’s share is close to $5 million. Provost Anthony C. Masi talked to the McGill Reporter about this development, and the University’s ongoing underfunding situation.

In the Open Forums you hosted on October 27 you refused to characterize McGill’s financial situation as a “crisis” in light of the new cuts imposed by the Quebec government this year. Why isn’t it a crisis? Has the additional cut announced Nov. 12 changed anything?

We should be cautious about crying wolf. I was not pleased to learn four months into the fiscal year that the budget rules from Quebec indicated that McGill’s grant would be $15 million less than we had anticipated, and that another cut was to be expected. Remember, the budget was based on an orientation document that we received from the Ministry. Fortunately, Budget Book FY2015 is a cautious document that proposed spending only if revenues materialized. We can postpone some necessary items for now and incorporate them into our planning for FY2016.

The second cut for FY2015, announced Nov. 12, will mean a further reduction in funding for McGill of almost $5 million. This is of course not ideal, but we are handling the cuts.

Some Quebec universities now have to meet both cuts announced this Fall on top of cuts from previous years. McGill already took measures to reduce spending; we also increased alternative revenue streams. We got positive results without resorting to collective dismissals. Saying McGill is not in a “crisis” should not lead to complacency, thus the short-term measures announced for operating funds during the town halls: hiring freeze, reduction in travel and hospitality, no purchases of furnishings, review of reclassifications, and controls on all contingency funds.

We will continue to address cuts in a responsible manner that does not compromise McGill’s long-term sustainability. Whatever else we do, McGill must protect academic and research priorities.

Some in the community are feeling that McGill’s administration is being complacent because it is not doing enough to oppose these new cuts and is not protecting the interest of students and employees. What is your reaction?

From the moment it became clear that government allocations would be cut to allow the Province to stabilize its own fiscal crisis, we understood that McGill would have to make a contribution to this effort. We were, however, very disappointed that instead of giving us time to plan, the Ministry: (a) imposed cuts very late in the budget year, and (b) informed us to expect even more cuts for FY2016. Our position has been to ask for greater flexibility, similar to what has been available in other provinces, so that we can help ourselves.

McGill has always pushed back hard on funding cuts, especially those that unjustifiably penalize our University relative to others. But, in difficult times, choices have to be made. In presenting budgets to the Board of Governors, I always emphasize McGill’s mission and priorities and how we plan to meet them with available resources. Our budgets provide for contingencies, and I make sure we have incentives for doing the right things.

McGill has argued against cuts and chronic underfunding for years. Each new government gets “the talk.” Cuts in a context of relatively low funding to Quebec’s universities cannot be sustained. Low funding threatens both quality and access. We make these points regularly to government officials. I do not feel compelled to repeat them incessantly in public. We are already on the record – McGill needs more funding!

Decreased funding affects all public institutions and services: hospitals need more funding, and so do infrastructure, transportation networks, and social services. Most of us try to bring water to our own mill by advancing our cause and benefiting our organization. But, as citizens we cannot ignore reality. We do not want politicians to spend more than they have, unless it is demonstrably an investment in the future and we can be fairly certain that there will be revenues to cover future liabilities.

We disagree with cuts to our grants, but it is not in our best interest to stubbornly ignore Quebec’s fiscal crisis. We continue to protest serious underfunding. We must also look for sustainable and long-term solutions. The only real and lasting solution in this context is to become less dependent on government funding by seeking flexibility in how we generate operating revenue.

Some have said increased revenue would have to come from students. Is that how you want to generate more operating revenue?

Quebec subsidies per university student are above average in Canada, but other jurisdictions have allowed their institutions greater flexibility in raising revenues. This could mean higher and differentiated tuition. So, you can see that preparing and presenting a budget for McGill places the Provost between a rock (student lobbying against fee increases) and a hard place (cuts to operating subsidies on the part of the Provincial government). Consequently, we must be willing to explore alternatives.

For example, international students in science, engineering, management, and law are now “de-regulated,” meaning that universities get no subsidies for them, but all the tuition they pay stays with the home institution. So, why not de-regulate all international students? Much of the red tape at McGill is due to compliance and reporting requirements of a complex funding formula. Wouldn’t the Ministry and universities save positions and money if the processes were simplified? A third option is to generate revenue by offering programs that are not subsidized by the Ministry like professional master’s degrees and continuing professional training. Couldn’t McGill build on strengths and enhance our reputation and reach, and therefore revenues, by designing and delivering such offerings? As a final illustration, look at how well we have done in increasing revenues with creative off-shore programming by Continuing Studies, the Desautels Faculty of Management, and the Faculty of Medicine. Can we think of other such developments that would be in line with our mission and values?

Do you expect the quality of teaching and research will be affected by the measures you announced during the Oct. 27 Open Forums?

The measures are meant to control some administrative spending while preserving the savings we achieved last year. Clearly, there is only so much we can cut in our administrative expenses before there is a measurable impact on our operations and services to students. We are walking that tightrope every day.

We cannot cut our way to fiscal health; austerity is at best a short-term fix, not a long-term panacea. It is impossible to keep cutting and asking people to do more with less. That is not the road to a successful future.

McGill needs more revenues, globally and per capita. So, based on our strengths and aspirations, we must seek to increase revenues. We must also examine how we work, ask ourselves tough questions about what we need to do more of, what we need to change, and what we need to stop doing.

Principal Fortier outlined this “culture change” as one of her five priorities. While it is important to stress that budgetary constraints are not the impetus for this change, they are certainly one more reason why it is in McGill’s best interest to become more agile in such uncertain and quickly changing times.