Universities must freeze travel, hiring and hosting to stem budget woes: province

EDMONTON — Alberta's advanced education minister says post-secondary schools are going over budget and he's urging them to immediately freeze hiring and stop spending on travel and hosting.

“We're not seeing a reduction in expenditures. That's what we're most interested in,” Demetrios Nicolaides said in an interview Thursday.

“We're asking them to redouble their efforts in bringing expenditures down.”

Nicolaides said there's progress at some institutions, but more needs to be done.

“We commend them on those efforts, but we need to ensure that we're all moving in the same direction and looking to find savings wherever possible.”

The minister declined to give details on the over-spending. He said the ministry is still crunching the numbers.

On Wednesday, Nicolaides sent letters to Alberta's 21 largest post-secondary schools that said his ministry is starting to receive year-end financial statements that show spending is not meeting expectations.

“Expenditures are forecasted to be much higher than anticipated,” Nicolaides wrote to the board chairs of the schools, including the University of Alberta, University of Calgary, University of Lethbridge and Athabasca University.

“I have been very clear from the beginning that institutions were to exercise fiscal restraint and prudence when making spending decisions.

“This will not be easy, simple, or painless. However, we must take action immediately to improve the financial state of our province before it's too late.”

University of Calgary president Ed McCauley said the institution is in a position to balance its budget this year.

“Many of the specific actions mentioned in the letter are well underway,” he said in a statement. “In fall 2019, we implemented a hiring restraint policy and communicated to staff that travel and hosting be limited as much as possible.”

The University of Lethbridge said it is reviewing the letter.

“We are currently working toward a balanced budget that will be presented to the board this spring,” the university said in an email.

“To date, the University has implemented many of the measures mentioned in the letter including restrictions on replacing vacant administrative positions.”

A spokesman for the University of Alberta declined to comment.

Opposition NDP critic Sarah Hoffman said the letters illustrate the government's misplaced priorities. She noted that the province has cut the corporate income tax and has sent a premier's aide on multiple business trips to London.

“It's a little rich of them to continue to point and blame everyone else, when they're the ones that gave all this (tax) money away, caused all this panic, and continue to spend as though they are entitled to stay in posh London hotels and tell universities not to buy pencils,” said Hoffman.

Along with the freeze on hiring, hosting and travel, Nicolaides has asked the schools to defer all other expenditures where possible until April 1 after the current budget year ends.

His ministry wants to see monthly reports from the schools to ensure they stay on track, and is asking departments to not allow egregious last-minute expenditures of unused funds, known colloquially as “March Madness.”

The government also wants each school to deliver by April 15 an interim financial statement “that clearly articulates an expenditure reduction and a diligent, thoughtful attempt to bring costs in line.”

Premier Jason Kenney's United Conservative government has reduced operating spending by five per cent for post-secondary education and lifted a freeze on tuitions.

The government says Alberta spends more on post-secondary students than most other provinces and that reforms are needed. It says Alberta remains one of the national leaders in per-student spending even with the funding cuts.

This year's advanced education operating expense is $5.1 billion and is to be reduced over four years to $4.8 billion, a 12 per cent cut. That's expected to be achieved through departmental savings and reducing grants to the schools.

The province plans to introduce a new funding model starting later this year that would link funding to accountability, service for students and job creation.

There were five independent academic institutions that did not get the letter as their spending does not impact the government's bottom line. They are: Ambrose University, The King's University, St. Mary's University, Concordia University of Edmonton and Burman University.

This report by The Canadian Press was first published Jan. 16, 2020