by Dr. M.C.Ircha, P.Eng.
Professor of Civil Engineering
Assistant Vice-President (Academic)
University of New Brunswick, Fredericton, NB, (Canada)

Government Funding Cuts

The Canadian federal system constitutionally divides specific powers and responsibilities between the central government and ten provincial governments (and two northern territories). In Canada s Constitution, education is clearly a matter of provincial jurisdiction. However, the federal government supports the major share of higher education costs through the provision of transfer funds. The federal government has always seen higher education as a matter of national priority as graduates travel to and work in many parts of the country. Despite the provision of federal funding, the actual allocation and level of support provided for specific universities and other forms of higher education remains the responsibility of the provincial governments.

The funding problems facing Canadian universities stem from federal and provincial over-expenditures in all manner of programs leading to high annual budget deficits in the 1980s and early 1990s. The deficit and ongoing debt crisis facing all levels of government in Canada led to severe spending cuts during the past five years. Inevitably these public sector expenditure reductions echoed their way down to cuts in Canadian university support. In recent years, the federal government was forced to reduce its support to the block funding transfer payment comprised of "health, welfare and education". Blending higher education into this combined block funding makes it politically difficult for provincial governments to cut back on health and welfare expenditures to maintain higher levels of support for universities.

Some provinces cut their grants to the universities more severely than others. For example, in the four year period from 1994 to 1998, operating grants to universities were cut by 19.3 percent in Alberta, 19 percent in Ontario, 15.7 percent in Nova Scotia and Quebec, and a mere 4 percent in New Brunswick. However, the higher operating grant cuts in Alberta and Ontario reflect to a degree the generally higher expenditures in universities in these provinces. Facing these significant reductions in their operating grants, universities reacted by increasing student tuition fees. The objective being to ask the recipients of higher education pay a greater proportion of its overall costs. From 1994 to 1998, student tuition fees rose by 31 percent in Alberta, 44 percent in Ontario, 27 percent in Nova Scotia, 2 percent in Quebec (prevented by the provincial government form increasing tuition fees to offset grant cuts) and 27 percent in New Brunswick. It is apparent that universities recaptured a portion of the revenues lost from reduced provincial operating grants from increased student tuition fees (a form of user pay). The net result of increased tuition fees has been an increasingly higher debt load for the average university student upon graduation. Growing student debt loads has recently become a national issue to the extent that the federal government announced a multibillion dollar "Millennium Scholarship" in its 1998-99 budget to provide additional support to students.

Canadian universities were also forced to make "draconian" cuts to their staff and programs to reduce their overall costs to reflect reduced operating grant revenues coupled in some cases with declining student enrolment. In Ontario and Quebec, Carleton and Concordia Universities recently announced major program cuts to offset declining financial resources. At Concordia, six departments are to be cut or merged with others leading to the elimination of over a hundred programs (out of the 250 offered). Cutting their weaker departments and programs will allow Concordia to focus on its stronger areas. Similar steps are being taken at Carleton and have been taken in the recent past at other Canadian universities.

University of New Brunswick (UNB)

Provincial government cuts to the universities operating grants have not been as severe in the New Brunswick context, primarily as a result of the province s belief that a strong post-secondary education sector is essential for the regeneration of this economically depressed region. However, as in other parts of the country, inevitable cuts have been made to the New Brunswick university sector. These cuts, small as they may seem, have significantly impacted the University of New Brunswick (coming at a time when enrolment is declining due to a shrinking population of high-school leavers in the province - UNB s primary source of students).

In 1995, UNB anticipated the need for faculty renewal and adopted an innovative early retirement program to allow older (and more costly) faculty members to retire and use the savings to hire "new blood" to renew academic programs. The initial cut of UNB s provincial operating grant by 2.7 percent in 1996 effectively absorbed the savings that accrued to the University from this early retirement program. Subsequent annual cuts of 2.7 percent (over a three year period) led to tuition fee increases and further attempts to reduce expenditures.

UNB is blessed with excellent labour relations with its faculty union. The financial problems facing UNB in 1997-98 (four percent enrolment decline coupled with a cut in the operating grant led to a projected $ 3 million deficit) led the faculty union executive to undertake informal discussions with the University administration to find a solution. The result was a decision to replace the current contract (prior to its termination) with a new one that involves a one year freeze in faculty salaries and annual merit increments coupled with a second early retirement program. Assuming a reasonable level of up-take of the early retirement program, UNB will be able to weather its current financial problems. The ease by which UNB dealt with its financial difficulties can be contrasted with other universities in Canada that have either had faculty strikes (including an extensive strike at York University in Toronto) or are in serious confrontational situations (Acadia University faculty voted overwhelmingly in favour of strike action, however negotiations continue for the moment).

Similar to many other Canadian universities, UNB has entered into a program of "renewal". An inter-disciplinary Renewal Committee has been established by the President to consider "what business the university is in?" The Committee is actively involving the participation of all elements of the university community to determine UNB s strengths and weaknesses. Knowing more about ourselves enables the University to focus on its specific advantages in this emerging era of increased competitiveness. More and more, Canadian universities are marketing themselves to attract students. UNB faces stiff competition not only from other smaller universities within the province but also from other Canadian and U.S. institutions advertising in the local media. However, despite these significant "sea-changes" in the universities operating environment, there continues to be denial by many faculty and administrators that any shift has occurred. The early retirement program may help to ease the University s transition to the new competitive era.

Within UNB s academic programs, steps have been taken to identify courses with low enrolments and policies established to reduce their number (thus increasing productivity). Some academic units, such as the Department of Civil Engineering, have already taken steps to combat this problem by scheduling low enrolment courses only in alternate years (with the faculty member involved offering other courses in the intervening year). Another step includes the active recruiting of students by academic units, for example, the Chair of Electrical and Computer Engineering has been visiting high school science classes throughout the province to provide a series of unique experiments. This hands-on approach has introduced students to university level studies and serves to promote UNB. Further, various academic units are increasing their outreach to other areas (regionally, nationally and internationally) through the delivery of courses using multimedia and distance education delivery. In addition, UNB is expanding program offerings to become increasingly attractive to students. Recently, the University developed a BA in Multimedia Studies (coupled with a major in Multimedia in Computer Science). It also recently received targeted funding from the federal and provincial governments to expand the Information Technology option within Computer Science. Depending upon the outcome of the Renewal Committee s deliberations, it is expected that creating new programs and options will involve the curtailment of others.

UNB, like other Canadian universities, is actively seeking new revenue sources to offset operating grant reductions. Increasingly, partnerships with private sector firms for specific contract research and targeted instruction are being sought. In many cases, this partnership results in the provision of funding (often matched from federal research agencies) to establish new chairs or professorships in defined areas. This approach provides the University with the opportunity to increase faculty establishment levels and enables academic units to move into new and desirable areas of research and teaching. UNB has established a considerable number of research chairs and professorships over the past decade. These chairs and professorships have led to new programs such as a nuclear engineering option in Chemical and Mechanical Engineering, a pulp and paper engineering option in Chemical Engineering and Chemistry, a hydrography option in Geodesy and Geomatics Engineering, and expanded programs in building and pavement construction in Civil Engineering.


Canadian universities like their counterparts elsewhere have been "hitting the wall" as they face cuts in government support. These traditionally slow to react institutions have adopted a range of innovative approaches to off-set the impact of revenue reduction. Tuition fees have risen. Weaker departments and programs have been eliminated. New innovative programs have been introduced. Extensive marketing has been undertaken to attract students. Private sector partnerships encouraged. All of these steps and others have been taken to enable Canadian universities to continue to operate effectively in today s rapidly changing world.

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