Dear members of the McGill community,
We last updated you on June 11 regarding McGill’s financial situation after the closing of the Voluntary Retirement Program (VRP). We promised to report back to the community by mid-July on how the VRP and other cost-reduction measures would affect the University’s financial situation and in particular the operating budget.
Based on careful analyses by the Budget Office, Human Resources and Financial Services, we are confident McGill can achieve the $43.5-million expense-reduction target by the end of this fiscal year (30 April 2014). Further, we believe that we will be able to do so without having to resort to large-scale staff dismissals.
Our approach to tackling the sudden and severe pressures on our operating funds, due to unanticipated reductions in government funding, was to spread the effort broadly while protecting McGill’s core academic and research missions. In addition, we promised to do everything possible to minimize job losses even as we reduced the number of positions at the University.
You will remember that the cost-reduction plan included the following measures:
· a one-year salary freeze taken by most, but not all, of our employee groups;
· 3 per cent salary reductions and a salary freeze for senior administrators;
· 7 to 9 per cent reductions in the operating budgets of all Vice-Principals, as well as the Provost’s and the Principal’s offices;
· 5 to 7 per cent reductions in the operating budgets of all administrative units;
· 3 to 5 per cent reductions in the operating budgets of all Faculties;
· a hiring freeze, effective until further notice;
· numerous non-salary cost-saving measures;
· the Voluntary Retirement Program.
More than 250 of our colleagues took the voluntary retirement package. This number exceeds our forecast and will produce almost $18 million in savings as of fiscal year FY2015. The VRP, combined with the other expense-reduction efforts, bring us to 95 per cent of our cost-reduction target.
In order to close the remaining gap, Vice-Principals and Deans have devised additional plans for permanent savings in their operating budgets. They will implement these plans by the end of this fiscal year. The plans will entail the abolition of some positions, but these reductions can be achieved mainly through attrition, the non-renewal of some term contracts, workforce efficiencies and reorganisations resulting in strategically targeted position abolitions. Decisions about these reductions will be made by individual units, based on their local needs and requirements.
The last few months have been difficult for everyone in the McGill community, and the full implementation of the required measures will test our mettle in the coming months.
In total, including departures as a result of the VRP and those needed to close the required cost-reduction gap, McGill’s administrative and support staff will have been reduced by more than 300 positions by the end of this fiscal year. Human Resources (in particular the Organizational Development group) and the entire senior administration are working closely with Faculties and support units to develop appropriate plans to ensure critical services are maintained and that our core missions, guided by our strategic plans, such as ASAP 2012, are protected.
We take this opportunity to thank you for your hard work, your understanding and, above all, the financial sacrifices you have made to help us avoid an unwelcome scenario. As a result of this collective effort, and barring further shocks to our funding models, we are set to propose a balanced budget for FY2015 that will include a five-year plan to repay the debt we incurred in FY2013 and FY2014, in order to comply with budget rules set by the Quebec government.
We have come a long way and for that the McGill community should take pride, but we must remember that this is not the end of the road. We must be diligent in sustaining our financial position because pressure on McGill’s operating budget, including a growing pension deficit, deferred maintenance costs, and pay equity agreements, will last for the foreseeable future.
Adapting to major change is never easy, but it can and often does provide new opportunities for personal, professional and academic growth. As we move forward, we will continue to support each other to ensure McGill remains a vibrant world-class intellectual community, a great place to work and a force for good in our society.
For more information on McGill’s financial situation and the cost-reduction strategy, please visit the budget cuts site and its FAQs. If you would like information about measures in your unit, you are encouraged to speak with your supervisors.
The response to this financial crisis has demonstrated, once again, that McGill’s people are this University’s greatest strength.
Thank you for your dedication to McGill and your continuing contributions to our great community.
Professor Anthony C. Masi – Provost and Acting Principal
Mr. Michael Di Grappa – Vice-Principal (Administration and Finance)
July 17, 2013