Louie Villanueva

Administration preps for budget cuts

By Chris Adams, January 8 2015 —

As the price of oil plummets and government revenue drops, the University of Calgary is preparing to tighten its belt.

Alberta Premier Jim Prentice expects a provincial revenue shortfall of $6.3 billion this year. Prentice addressed the province on Dec. 10, saying that all Albertans “will feel the consequences” of plummeting oil prices.

Prentice formed a special cabinet committee to start planning the coming provincial budget. He said that spending and hiring will be limited, but not frozen.

U of C administration have planned multiple budget scenarios in preparation for potential cuts to post-secondary funding, including preparation for a five per cent funding cut.

Other scenarios forecast a three per cent funding decrease, a stagnant budget and a two per cent increase.

However, provost and vice-president academic Dru Marshall said administration is focusing on where to make cuts rather than the size of the cut. She said there is “tremendous uncertainty in the environment.”

“One of the things we don’t know, for example, is if there is a cut, would the ministry give us more time to manage that cut? An important question would be are we bridging to a greener day when oil and gas recovers or are we bridging to a new reality?,” Marshall said.

At this time last year, oil traded at around $100 per barrel. As of Jan. 6, oil is trading below $47.93 per barrel.

Oil prices plummeted in 2008 when the price per barrel bottomed-out below $40. Marshall said provincial cuts to post-secondary in 2008 were difficult to deal with.

“Certainly in 2008, it was very difficult. The cuts were deep. This is the kind of thing where it’s really important Alberta consider how to develop a more diverse economy,” Marshall said.

Marshall outlined an expected $36 million cut from Campus Alberta — the provincial body that funds post-secondary —  for 2014–15 at a budget town hall in October.

The province cut $147 million from the post-secondary budget in 2013. The U of C received 7.3 per cent less funding than it anticipated before the cuts.

Provincial leaders, including Prentice, have promised “predictable and sustainable” funding to post-secondary since former premier Allison Redford’s government cut the budget two years ago.

Marshall stressed focusing on post-secondary education as a way to diversify Alberta’s economy. She added that she’s not sure if universities have done enough to sell the message of post-secondary as a force for diversification, thereby ensuring consistent funding.

Marshall said tuition is unlikely to rise in 2015–16.

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