Board of Governors Approves Budget

The 2013/2014 Ministry of Training, Colleges and Universities (MTCU) operating budget for the University of Guelph has been approved by Board of Governors.

The budget — prepared within the second year of the University’s five-year Integrated Plan (2013-2017) — was presented by Maureen Mancuso, provost and vice-president (academic), and John Miles, associate vice-president (finance and integrated planning).

Consisting of $446.5 million from provincial operating grants, tuition and cost recoveries, the MTCU operating budget is the largest component of the University’s revenue and makes up more than half of total funding.

It funds nearly 90 per cent of all faculty and 80 per cent of full-time staff and all main campus infrastructure costs. Overall compensation costs for University employees make up about two-thirds of the MTCU operating budget.

The operating budget also covers utilities and capital infrastructure, debt repayments, and funding for critical investments, academic programs and administrative support services.

The University’s Integrated Plan includes a multi-year financial plan with overall University fiscal targets through 2016/2017. That financial plan is intended to maintain the University’s current balanced financial position. As real provincial funding continues to decline each year, base expenses are expected to exceed revenues by 2 to 3 per cent each year, leading to a projected $32.4-million funding gap over the next four years.

Closing this gap will require U of G units to increase revenue or reduce costs by 2.5 to 4 per cent per year starting in 2014/2015. During fiscal 2013/2014, the University will assign targets to units, and units will prepare revenue or cost-saving plans.

Tuition revenue for 2013/2014 makes up about 33 per cent of MTCU operating fund revenues. The four-year tuition framework announced by the province allows program fees for domestic students to increase by up to 3 per cent. Within that cap, fees for professional and graduate programs may increase by up to 5 per cent, depending on the year of study.

U of G tuition will increase by 2.92 per cent for entering and continuing undergraduate domestic students. Tuition for continuing undergraduates in professional programs will increase by 4 per cent; students entering professional programs will pay 5 per cent more. Graduate tuition will increase by 2 per cent for both entering and continuing students.

No provincial framework exists for international tuition rates. University fees for entering non-PhD international students will increase by $825 in order to recover a provincially levied grant reduction or “tax” on international students of that amount.

Board of Governors also received an update on the University’s two major  pension plans.

With increased plan costs due to financial market conditions, the University’s contribution levels are projected to double to more than $87 million a year starting in 2014. Much of this projected increase reflects continuing low interest rates and provincial “wind-up” provisions for funding pension plans.

At these projected contribution levels, the University would have to discontinue many programs. The University continues to discuss potential impacts and solutions with provincial authorities.