Budget 2017-18 FAQ

On May 11, 2017, the Board of Regents approved the 2017-18 university budget. This page aims to answer some of the questions raised during the consultative budget development process. 

1. What are the details of Memorial University's 2017-18 university budget approved by the Board of Regents on May 11?

2. Is the Faculty of Medicine included in the university budget approved by the Board of Regents on May 11?

3. What cuts have been made to administration at Memorial to date?

4. What is Memorial doing to reduce its salary expenditures by $6 million to meet the attrition target assigned by government in the 2016-17 provincial budget?

5. Up to now the university has said that minimizing the impact of budget reductions on students and academic programming has been a guiding principle, but can that continue with this budgetary shortfall?

6. What are some examples of the impact of cuts to academic budgets?

7. When would any fee or tuition increase be effective?

8. How will you determine who qualifies as a Newfoundland and Labrador student?

9. How have tuition fees increased across Canada over the past couple of decades compared to Newfoundland and Labrador's tuition fees?

10. Aren't you concerned that higher tuition will mean decreased access to post-secondary eduation?

11. Why is Memorial implementing a new campus improvement fee?

12. Why is Memorial implementing a new student services fee?

13. Are you going to charge higher tuition fees for various professional master's programs where the demand warrants?

14. There's been a lot of discussion about the average annual per student cost of a degree at Memorial compared to other Canadian universities. Is this a valid indicator to compare a university's efficiency to other institutions?

15. Why do the government’s 2017-18 budget documents show a $3.6 million reduction in the annual operating grant from government, while the April 7 update from President Kachanoski said the reduction was $11.9 million ($5.4 million announced last year and a $6.5-million reduction in this year’s budget)?

16. What is the impact of being the province's only university?

17. Are the construction costs for the new science building driving the need to raise revenues from students?

18. What is the impact of the Battery Facility on the university's financial situation?

19. Why do you use executive search firms to assist in the hiring of some senior roles at Memorial?

20. Are there rules at Memorial governing expenses related to hosting guests?

21. Government cut its senior management positions by about 20 per cent. Will the university do the same?

22. Is Memorial’s president one of the highest paid university presidents in Canada?

 


 

1. What are the details of Memorial University's 2017-18 university budget approved by the Board of Regents on May 11?

The university budget approved by the Board of Regents at its meeting on May 11, 2017, includes a three-year plan to reduce expenditures and increase revenue. Expenditure reductions totaling $13.5 million will be applied across all university operations. This is the sixth consecutive year that the university’s budget has included base budget reductions.

The budget includes a continuation of the tuition freeze for Newfoundland and Labrador (NL) students, a commitment to no tuition fee increase for all non-NL current students until fall 2021, a planned tuition increase for new non-NL students starting in 2018, and for all students the implementation of two dedicated fees for student services and campus renewal effective September 2017.

Specifically, the university budget includes:

Multi-year expenditure reductions starting April 1, 2017:

  • Total annual expenditure reduction of $6 million in 2017-18, cumulating to total annual expenditure reductions of $13.5 million by 2019-20.

Tuition:

  • Continued tuition freeze for Newfoundland and Labrador students.
  • Current non-NL students will be maintained at current tuition rates until fall 2021 to allow for completion of their programs.
  • Tuition increase effective fall 2018 for new non-NL Canadian students and for new international students (excludes Faculty of Medicine):
LevelNL and all current Canadian students New non-NL Canadian
September 2018
New International 
September 2018
Undergraduate$2,550$3,315$11,440 (was $8,800)
Masters (Plan B)$1,896$2,465$3,206 (was $2,466)
PhD$2,664$3,463$4,497 (was $3,459)


Student services fee (applies to all students):

  • $50 per semester per student (includes Faculty of Medicine).
  • Effective: September 2017.
  • Purpose: maintain services to promote student success and well-being.

Campus renewal fee (applies to all students):

  • $50 per credit course for undergraduate, diploma and certificate programs (includes Faculty of Medicine).
  • $167 per semester for graduate programs (includes Faculty of Medicine).
  • Effective: September 2017.
  • Purpose: support revitalization of physical and technological infrastructure.

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2. Is the Faculty of Medicine included in the university budget approved by the Board of Regents on May 11?
No. Memorial's Faculty of Medicine receives an operating grant from the provincial Department of Health and Community Services, rather than the Department of Advanced Education, Skills and Labour, so its budget is separate from that of the rest of the university. Medicine is currently developing its 2017-18 budget and more information will be available at a later date. 

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3. What cuts have been made to administration at Memorial to date?
The university budget for this year includes a three-year plan for $13.5 million in additional expenditure reductions across all university operations. This is the sixth consecutive year that the university’s budget has included base budget reductions.

Previous government grant reductions were managed exclusively by reducing expenditures in administrative units and the administrative functions within academic units. The guiding principle for those cuts was to save the academic budgets and programs harmless.

To date this has resulted in $12.5 million in cuts in administrative expenditures not including an additional $3 million cut from the salary allocation (attrition) in 2016-17. However, it has reached the point where major savings can no longer be achieved from only administrative areas. Academic expenditures account for about 75 per cent of the university’s operating budget.



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4. What is Memorial doing to reduce its salary expenditures by $6 million to meet the attrition target assigned by government in the 2016-17 provincial budget?
Memorial has fully met the $3 million attrition target for 2016-17. A further $3 million reduction in salary expenditures will be achieved by the end of 2018-19. To date, 44 full-time equivalent positions have been deleted and that work is continuing. A breakdown of reductions by area is available here.

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5. Up to now the university has said that minimizing the impact of budget reductions on students and academic programming has been a guiding principle, but can that continue with this budgetary shortfall?
Academic units have been made aware that, while every effort should be made to follow this guiding principle, the magnitude of the cut to the university this year will mean that it can no longer save harmless academic programs. In fact, many of the administrative cuts over the past several years, like the closure of the Math Learning Centre in the Faculty of Science, have had impacts on academic operations.

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6. What are some examples of the impact of cuts to academic budgets?

  • Academic programming effects:
    • Larger class sizes
    • More courses taught by short-term contractual faculty
    • Reduced capacity to grow graduate studies enrolment
    • Longer time-to-completion rates
    • May place program accreditation at risk
  • Research effects
    • Reduced research output
    • Reduced grant funding
    • Reduced research revitalization
    • Fewer staff supports for program delivery
  • Reduced staff complement will result in reduced capacity to:
    • provide critical services to students
    • fulfil operations management mandates
    • ensure compliance management (including research grant requirements)
    • maximize development opportunities
    • manage and maintain infrastructure
    • respond to service requests

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7. When would any fee or tuition increase be effective? 
There is no tuition increase for Newfoundland and Labrador students and current non-NL students will be maintained at current tuition rates until fall 2021 to allow for completion of their programs. However, effective fall 2018, tuition will increase for all new international and non-NL Canadian students. See the chart below for more information:


LevelNL and all current Canadian students New non-NL Canadian
September 2018
New International 
September 2018
Undergraduate$2,550$3,315$11,440 (was $8,800)
Masters (Plan B)$1,896$2,465$3,206 (was $2,466)
PhD$2,664$3,463$4,497 (was $3,459)


The campus improvement fee and the student services fee come into effect for all students in September 2017.

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8. How will you determine who qualifies as a Newfoundland and Labrador student?
That mechanism will be established over the coming months. There are a number of criteria that can be used and those will be clearly communicated to students well before the academic year starting in fall 2018.

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9. How have tuition fees increased across Canada over the past couple of decades compared to Newfoundland and Labrador's tuition fees?
A comparison of Memorial's tuition vs. teh Canadian average is demonstrated in the following charts:

Chart outlining domestic undergraduate tuition 1999-2018

 

Chart describing international undergraduate tuition 1999-2018

Chart outlining graduate tuition 1999-2018

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10. Aren't you concerned that higher tuition will mean decreased access to post-secondary education?
Both Memorial’s graduate school applications and enrolment increased following the 30 per cent tuition increase applied last year. This aligns with national trends reported by Statistics Canada.

A recent article analyzed Statistics Canada data and indicates that, while tuition fees have increased nationally, so have participation rates. Here’s the link: http://higheredstrategy.com/access-a-canadian-success-story/.

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11. Why is Memorial implementing a new campus improvement fee?
Many universities across the country, particularly in Atlantic Canada, charge students a special fee to support the revitalization of the physical and technological infrastructure.

Specifically, revenue from this fee would provide Memorial with necessary resources to renew classrooms, laboratories and buildings, as well as to improve the technology environment that supports student learning.

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12. Why is Memorial implementing a new student services fee?
This type of fee is common among Canadian universities and is intended to fund services for all Memorial University students to promote academic and professional success and physical and social well-being.

These services are considered vital to promote positive student experiences and improve student persistence and graduate outcomes. Memorial has long been considered one of the best universities in Canada in providing supports for both undergraduate and graduate students. This fee will ensure that existing services are sustainable and accessible for all students at Memorial.

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13. Are you going to charge higher tuition fees for various professional master's programs where the demand warrants?
This idea was presented to the university community for discussion and was not a part of the 2017-18 budget proposal approved by the Board of Regents on May 11. It is common practice for universities to apply differential tuition rates at the graduate level for different programs. In fact, differential tuition by graduate program already exists at Memorial, as special fees can be proposed for new programs to offset incremental costs. The option being considered is whether or not to allow faculties and schools to develop differential tuition proposals for existing programs. Whether or not this will be implemented in future is still to be determined.

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14. There's been a lot of discussion about the average annual per student cost of a degree at Memorial compared to other Canadian universities. Is this a valid indicator to compare a university's efficiency to other institutions?
According to the Canadian Association of University Business Operators (CAUBO), the organization that collects this data that Statistics Canada uses to publish its reports, there are limitations to the comparability of the data. It would not be appropriate to use this data as a comparator of per student costs among universities. See CAUBO’s letter: http://www.mun.ca/regents/CAUBO_corr.pdf.

"Certain data in these reports are subject to interpretation or clarification because of inherent differences among institutions in size, academic programs, organizations, physical environment, management philosophy, and budgetary and accounting procedures. Interregional comparisons must also recognize differences such as various sources of funding, fiscal year-end dates varying from March 31st to June 30th, and different reporting procedures requested by provincial authorities. Comparison of similar reports from previous years should be done with caution due to changes in the Guidelines, which govern the compilation of these data." - from CAUBO's General Caveat, FIUC Report 

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15. Why do the government’s 2017-18 budget documents show a $3.6 million reduction in the annual operating grant from government, while the April 7 update from President Kachanoski said the reduction was $11.9 million ($5.4 million announced last year and a $6.5-million reduction in this year’s budget)?
For 2017-18 Memorial expected a grant increase to cover obligations under collective agreements, the grant in lieu of increased tuition fees and the reversal of past years' one-time cuts. The university had also been advised of the $5.4 million general cut to the base budget (announced last year and for which planning was ongoing). With that information, Memorial anticipated the 2017-18 government grant would be approximately $321 million and instead the government grant was approximately $315 million.

The additional reduction of $6.5 million to the base budget was new information presented in the April 6, 2017, budget. The net impact year over year on the grant was a $3.6 million reduction instead of the $2.9 million increase Memorial expected and around which the university’s 2017-18 budget was being planned.

Provincial budget reconciliationBack

16. What is the impact of being the province's only university?
As the province’s only university, Memorial's vision is to fulfill its special obligation to the people of Newfoundland and Labrador. Therefore, it must remain an accessible, comprehensive university. Because there aren’t other options within the province, like in most other provinces, Memorial must maintain a broad range of academic programs so that Newfoundlanders and Labradorians can gain a high quality education within the province. Memorial also undertakes special initiatives and services that only a university in this province could undertake – such as the collection, preservation, research and dissemination of Newfoundland and Labrador’s unique cultural and historical materials in the university’s library system. Another example is the unique nature of the Marine Institute as a polytechnical campus of the university, which offers specialized degree, diploma and certificate programs as well as industrial training.

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17. Are the construction costs for the new science building driving the need to raise revenues from students?
No. Federal funding for the new Core Science Facility is approximately $100 million and provincial funding is approximately $25 million. The rest will be paid for through a mortgage starting in 2020, the payments for which have already been earmarked to come from internal efficiency savings.

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18. What is the impact of the Battery Facility on the university’s financial situation?
The Battery project has no impact on the university’s operating budget. Most of the money for the initial purchase of the Battery Facility came from Memorial’s endowment funds. These funds are managed to return yields to the university through investment. In this case, Memorial elected to invest $8.5 million of these funds in this piece of real estate, which has value of its own. The acquisition also helps address a number of operational needs of the university, including office and conference space (some of which is currently leased off campus), public engagement areas and graduate student housing. For more information about the Battery Facility visit http://www.mun.ca/battery.

The provincial cabinet and Board of Regents approved the university’s expenditure on both the purchase price of $9.5 million and $16.2 million for renovations. The $1 million remainder of the purchase price and the renovation funds were secured through an internal loan from the university’s cash flows. The projected investment yield and renovation costs will be returned to the university through lease avoidance and rental income over time. Once the funds are repaid, the facility will continue to generate revenue that will return to the university.

The Battery Facility has also successfully competed for $8.6 million in incremental funding through targeted federal/provincial programs to support increased convening space and the province-wide connectivity of the facility. In addition, a philanthropic donation of $1 million has also been contributed to Memorial for the Battery Facility.

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19. Why do you use executive search firms to assist in the hiring of some senior roles at Memorial?
Search firms provide collective expertise in all areas of recruitment, including finding or sourcing candidates. They do this by leveraging their extensive networks and national and international candidate databases to identify high-potential candidates for niche and specialized senior academic and administrative roles. These candidates are often recruited nationally and internationally and search firms help to ensure that Memorial has access to the best candidates who might not otherwise have been aware of the opportunities available at Memorial. Most organizations, including universities, do not have this capability in-house and therefore rely as needed on the experience of a specialized firm when an open position requires a more extensive candidate search than internal resources can provide. The alternative to a search firm would be to add additional administrative resources within Memorial at additional cost.

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20. Are there rules at Memorial governing expenses related to hosting guests?
Memorial has a clear policy as it pertains to hosting at the university’s expense. For more information, visit https://www.mun.ca/policy/site/policy.php?id=251.

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21. Government cut its senior management positions by about 20 per cent. Will the university do the same?
Given that 75 per cent of Memorial’s operating budget goes to salaries, there will inevitably be fewer employees at the end of the current budget cycle.

The university also has a $6 million attrition target (of which $3 million was achieved in 2016-17) to reduce expenditures on positions over the next several years, and a number of those roles will be senior management. Units have not been directed to meet a targeted reduction in senior leadership and management positions. The university is looking its operating budget and staffing needs holistically, and reductions will be made where they make sense.

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22. Is Memorial’s president one of the highest paid university presidents in Canada?
No. University presidents’ salaries in Canada range upwards to more than $1 million per year. Additionally, benefits provided to many presidents also include provision of a residence or a housing allowance, car allowance, social memberships, etc. Dr. Kachanoski’s salary details are available here: http://www.mun.ca/president. His current salary does not include any additional allowances or social memberships.

 

Contact

Office of the Provost and Vice-President (Academic)

230 Elizabeth Ave

St. John's, NL A1B 3X9 CANADA

Tel: (709) 864-2530

Fax: (709) 864-2552

becomestudent@mun.ca