UBC’s 2021/22 budget will come to the Board of Governors for approval in April.
I have yet to see a draft of this budget.
The 2021/22 budget is likely to be one of President Ono’s most important budgets. It needs to help UBC emerge from the pandemic with minimal negative impact on the academic mission (certainly possible). It will also constrain UBC’s future for the next decade by locking resources to fund several large-scale strategic initiatives and other projects.
Ideally, this budget would also start to address some of the longstanding problems affecting UBC’s frontline academic departments and the students they teach, but I am not convinced we will see any substantial funding commitments to this end.
Against the backdrop of a pandemic, there is the likelihood of a modest budget deficit, as pre-approved by the BC Provincial Government. I do not think this implies we will have an “austerity” budget, though an overall budget deficit would still affect all units, including academic ones.
For 2020/21, the initial consolidated budget deficit estimate was $225 million in July 2020. This was based heavily on two key factors: (1) a postulated $138 million drop in tuition revenues, and (2) an expected $208 million drop in other revenues (primarily from ancillary operations).
Instead of a drop in enrolment, however, 2020S and 2020W registration levels (pp. 94ff) are at pre-COVID-19 targets for 2020/21 or higher. This will mean a substantially smaller deficit for the 2020/21 fiscal year than predicted.
UBC Student Housing and Community Services (SHCS) laid off temporarily about 350 workers at the end of November 2020 in response to its expected $80 million deficit. As well, more students opted to live in SHCS housing starting in January. As a result, we should see a reduced SHCS deficit.
Thus, one can reasonably say there will be a much smaller deficit for 2020/21 than the $225 million one anticipated in July 2020. The public version of the mid-year financial review given to the Board of Governors Finance Committee in late November 2020 gives no updated estimate on the deficit, but it was verbally reported in this open session (starting around minute 25:45:00) the consolidated budget deficit had shrunk to $100 million. (Unfortunately, this mid-year financial review document does not include any numerical financial data.) I expect the final deficit figure to be even smaller than this.
In spite of a possible budget deficit for 2021/22, it is reasonable to imagine a near-term return to modest budget surpluses, so I expect funding requests for a number of large new or continuing initiatives and capital projects to be included in the proposed 2021/22 budget.
That said, I also expect to see some on-going financial impacts of the pandemic in UBC budgets for the next two or three years.
As a Governor, I have an “insider” set of expectations for what we will see in the 2021/22 budget based on what has been introduced to the Board this past year, mostly in closed sessions (and hence I cannot talk about them publicly yet), but I will be honest with my readers and say the “insider” look-see is less revealing than they might expect.
Based on my experiences on the Board to date, I wonder if Governors will receive sufficient financial information and be given ample time to study and ask questions about major proposals so we may properly assess the associated spending requests in the budget. Questions like ‘Are the costs reasonable?’ ‘How are we funding this?’ ‘What are the financial timelines for this proposal and how will this constrain future expenditures?’ ‘How does this proposal fit into the overall picture?’ sometimes seem to go unanswered, at least from this mathematician’s perspective (I really like numbers).
This is concerning to me.
As is the resistance Governors (particularly elected Governors) meet when raising questions about the financial and operational health of the University’s core academic mission, questions which are best considered by looking at how well the faculties and their academic departments and programs are faring. Too often the message seems to be “all is well” when there is evidence to say otherwise. It is perplexing to me the Administration chooses to ignore questions that go to the heart of the educational experience UBC is able to offer its students (and to whether a tuition increase is justified).
For some time now, I have been studying financial and budget documents from the past 5 years, as well as other data I am able to mine from public sources, in order to build a better understanding of the University’s finances and budget dynamics. Some of the fundamental questions I have, including those related to the flows of money and to the financing of some large-cost items, remain unanswered even after this study. (I will resist going off on a tangent about the situation Laurentian University finds itself in and what it takes for a board to discharge its fiduciary duty with respect to a university’s finances.)
I worry such financial questions Governors will have about an as-yet-unseen budget may not be answered satisfactorily before we are asked to vote on the 2021/22 budget. It takes time to absorb and understand the complexities of a university budget, and it takes time for the exchanges between the Board and the Administration necessary to leave Governors comfortable they are able to fulfill their fiduciary duty with respect to the university budget. I will be weighing this heavily in the calculus of my fiduciary duty to the University when it comes time to vote on the budget.
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Over the next few weeks, I will be posting on some specific budget-related issues. These will include:
- Faculty Salaries and Benefits (and a look at department budgets)
- Consequences of Growth: UBC’s Tuition Allocation Model and the Growing Teaching and Research Deficits
- Funding UBC’s commitments to the Indigenous Strategic Plan, Anti-Black Racism, the Inclusion Action Plan, and EDI.
- Two Campuses, One University?
- Tuition, Affordability, and Accessibility to UBC
- Capital Projects
- The Climate Action Plan