$7.9 million deficit for upcoming budget
Wilfrid Laurier University approved their 2013-14 operating budget and fee report at their board of governors meeting on June 20, which has a projected structural deficit of $7.9 million as well as a seven per cent increase in revenues compared to 2012-13.
According to the proposed budget that the finance and administration department presented to the university’s board of governors, the increase in the structural deficit was “consequence of on-going expenditures outpacing on-going revenues.”
However, Jim Butler, Laurier’s vice-president: finance and administration, noted that the 2013-14 year saw “no big changes” in regards to the budgeting process.
“What we anticipated was the cuts in operating grants from the [provincial] government. They had announced a couple years ago and they followed through with that,” he explained. “[The budget] was, as far as the numbers go, pretty straightforward.”
In terms of balancing the books for the 2013-14 year, Butler added that the university committed reserves and appropriations to deal with the structural budget, but they won’t be as effective in 2014-15.
As a result, the university may see cuts in 2014-15, especially if the provincial government continues to retract its funding for post-secondary education.
“[The provincial government] is going to be hard-put to try and balance the budget, especially with health costs going up. They are going to be continuing to be pressing hard on all other ministries and expenditures as we go forward,” said Butler.
“So things like that we expect it will be troublesome.”
In addition to limited provincial funding for the universities in Ontario, Laurier is also dealing with its pension plan.
“It may sound counter-intuitive, but our deficits continue to rise so we’ve got large pension deficits, but we had budgeted for a five year amortization on those deficits,” added Butler.
“But because of the government relief program it might change to ten year amortization, so the result of that [is] we end up with a lower payment.”
“The size of debt is still there, it has to be paid, but the payments are lower, so they gave us a bit of a break on the budget than we had anticipated,” he said. As of December 31, 2012, actuarial estimates of Laurier’s pension have a shortfall of $86.2 million and a solvency shortfall of $76.5 million.
The Integrated Planning and Resource Management (IPRM) program, which is being implemented next year, is not a result of the impending cuts, but Butler said that it’s going to be “helpful” when those cuts do happen.
“IPRM was not designed to do cuts, but it complements the whole process, because it gives a sense of our priorities,” he added.