By McGill Reporter Staff
While McGill remains on track to meeting its $43.5 million cost-reduction target by April 30, 2014, Provost Anthony C. Masi reported to Senate that the cost-saving reduction to McGill’s workforce means the University will need to innovate and do things differently. In an update on McGill’s financial situation at this fall’s first Senate meeting on September 18, Masi also indicated that efforts to stay on track must continue because McGill’s financial situation remains precarious.
The University needed to reduce its payroll in order to deal with the government cuts to McGill’s operating funding. Functioning with some 340 fewer positions in total, however, represents a significant challenge. “We are working hard to facilitate the process of internal reorganization to streamline our operations and develop ways of doing things differently to reduce costs and, where possible, find innovative ways of generating new revenues while making sure that we continue to protect our academic and research mission,” Masi said. When asked how the University plans to address the uneven impact of the Voluntary Retirement Program (VRP) – some 255 employees took the retirement package, with certain departments yielding higher numbers of new retirees than others – Masi said that workload reorganization is now a primary undertaking for departments and administrative units across the University. In addition a special Workforce Planning (WFP) initiative under the guidance of VP (AF) Michael Di Grappa and AVP (HR) Lynne Gervais is identifying the gaps in critical areas. However, he reiterated that, given total reduction in positions, “we must ask ourselves how we can do things differently,” with every employee having a role to play in meeting this challenge.
Masi said that achieving a balanced budget remains a top priority for the long-term well-being of the University. “Let me be clear what a balanced budget means: We could not make any operating cuts in fiscal year 2013, meaning that based on government requirements we must pay back the total operating cut over the next five years,” Masi indicated. This means that McGill has to repay the government more than eight million dollars each year for the next five years. In addition to settling that account, the University must pay a large sum in one-time settlements stemming from Voluntary Retirement Program’s high uptake – although Masi was careful to clarify that, one-time settlements notwithstanding, the VRP will overall lead to greater operating savings in the future. “Given the reduction in the total wage bill that will take effect once the voluntary retirement program is paid out, and assuming no significant recruitment to vacant positions, the University will be able to meet salary and benefits agreements with all employee groups.” All told, the University must anticipate a higher deficit for this fiscal year than was contained in the budget book due to the higher uptake in acceptances for the VRP. Masi committed to providing a report on updated figures back to Senate later in the fall.
In closing, the Provost acknowledged that the total cost-reduction package is placing challenging demands on McGill’s employees. Reduced operating revenue means that pressure on McGill’s operating budget is not bound to ease up any time soon. Masi pointed out that departments must remain diligent with their budgets. They must reorganize their workforce and processes to accommodate the University’s new funding reality, and they must follow through on the additional cost-reduction plans proposed by VPs and Deans in July. Those additional plans were important precisely because it meant the University did not have to resort to collective dismissals in order to meet the objectives imposed by the funding cuts. Today, the outlook is positive. “I can report that almost every department has met most of their expense reductions,” Masi said, noting that he is seeing a lot of resolve and determination from community members across both campuses.
“This is a truly remarkable feat,” Masi said, “and we must work hard to maintain these budget reductions this year so that we can move on with the business of addressing our accumulated deficit with a plan for a balanced budget next fiscal year.”
For more information on the University-wide cost-reduction measures please visit the Budget Cuts website