Questions and answers regarding budget decision

Funding/budget details

Q: What are the details of the funding Memorial received from the provincial government for 2015-16?

  • On April 30, 2015, the provincial government released its budget providing the university (excluding the Faculty of Medicine) with an overall decrease in its regular operating grant over the previous year in the amount of $18,664,300; and a decrease of $14,690,300 in the university’s capital grant.
  • Highlights of the provincial government funding (excluding Faculty of Medicine) include:
    • Allocations:
      • $9.1 million base budget allocation for general salary increases in accordance with collective agreements
      • $4.0 million grant-in-lieu of tuition fees allocation (for Canadian undergraduate students only; grant-in-lieu for a continued freeze for international undergraduate and graduate tuition fees was not included in the government grant)
    • Reductions:
      • $4.0 million one-time reduction
      • $6.7 million base budget reduction
      • $20.9 million reduction for the pension plan special payment
      • $8.4 million reduction for deferred maintenance and $1.0 million reduction for the classroom/teaching infrastructure fund.
  • The Faculty of Medicine (funded separately through the Department of Health and Community Services) operating budget for fiscal year 2015-16 has been reduced by $1.3 million.

Q: How will Memorial address the reduction in funding?

  • The university’s governing Board of Regents has approved a total operating and capital budget for 2015-16 of $370,951,740 (excluding Faculty of Medicine).
  • For the Faculty of Medicine, the approved total operating and capital budget is $64,288,900.
  • The approved 2015-16 university budget will include a variety of cost-cutting, reallocation and deferral measures:
    • Exempt from budget cuts are direct academic expenditures and unavoidable operating costs (like utilities and snow clearing)
    • One-time $1.3 million reduction -- from a one per cent reduction in administrative expenditures for all units
    • Base $2.6 million reduction -- from a two per cent reduction in administrative expenditures for all units
    • Base $1 million reduction -- from a 10 per cent reduction to the President’s portfolio. (Many of the units that report to the President (see question below) are expected to generate new revenues to offset the cut.)
    • $7 million funding reallocation for critical deferred maintenance needs and priority infrastructure planning, while deferring planning for other projects.
    • The Board of Regents is requesting a one-year deferral of the $20.9 million special pension payment, a recommendation that was unanimously endorsed by the University Pensions Committee.

Q: Who was consulted in arriving at this budget solution?

  • Consultations on the budget proposal were held with students’ unions, deans and directors, Senate, Senate’s Executive Committee and its Planning and Budget Committee, the University Pensions Committee and the Board of Regents’ Executive Committee and its Finance Committee.

Q: How is the president able to cut 10 per cent of his portfolio’s base budget?

  • The president’s portfolio includes the Office of the President, Office of Public Engagement (including the Botanical Garden, the Newfoundland Quarterly and Conference Services), Harris Centre of Regional Policy and Development, Office of the Board of Regents, Office of General Counsel, Alumni Affairs and Development, and Marketing and Communications. A number of these units have the ability to generate increased revenue to offset the reduction. One example of savings within this portfolio is the reduction by $400,000 of the previously committed $900,000 Public Engagement Framework funding allocation. This reduction is possible given the current investment in the redevelopment of the Battery Facility and its programming as a focal point for the university’s public engagement activity.

Tuition Fees

Q: Will tuition fees go up in 2015-16?

  • No. To give students sufficient time to plan for future fee increases, the university announced previously that tuition and residence fee increases will not be implemented in the 2015-16 academic year.

Q: What tuition fee increases were approved for September 2016?

  • Graduate tuition fee increases were approved as indicated in the table below.

Graduate fee increases

 

Q: What will this increase in graduate tuition fees mean for students in 2016-17?

  • With the increases noted in the above table, the average graduate tuition fee for Canadian students at Memorial will remain at about 50 per cent of the Canadian non-Quebec average.
  • Similarly, the average graduate tuition fee for international students at Memorial will remain at about 25 per cent of the Canadian non-Quebec average.
  • Program continuance fees per semester for Canadian citizens, permanent residents and international students will increase by the already established percentage increase against program fees. The current percentage rates are set as follows: 

program continuance fee table

  • All Special Fees as defined in section 3.3.3 (13) of the University Regulations section of the 2015-16 University Calendar will remain unchanged at this time.

Q: What financial support does Memorial provide to graduate students?

  • Memorial provides approximately $28.4 million annually to graduate students through a combination of grants, scholarships, fellowships, bursaries, assistantships and awards. Over the past 10 years that funding has increased to $28 million from $15.4 million.
  • As an example, eligible PhDs receive a stipend from Memorial of a minimum of $7,000 per year per student. This is in addition to other internal or external scholarships, bursaries, fellowships, etc. they may hold.

Q: What is the tuition fee increase for the doctor of medicine program (MD) in 2016-17?

  • Tuition for Canadian citizens and permanent residents of Canada will increase from $6,250 to $8,250. This increase allows the medical program tuition to remain the lowest in Canada, at 50 per cent of the national non-Quebec Canadian average.

Q: What about the 30 per cent increase to international undergraduate tuition fees that we heard about in the media?

  • No increase to international undergraduate tuition fees was proposed to the Board of Regents by the university administration.

Residence Fees

Q: How much will student residence fees increase at Memorial?

  • There are no residence fee increases for 2015-16.
  • The Board of Regents approved a recommendation that the university adopt the principle that student residence fees be set at a level that will fully fund operational costs.
  • It is estimated that the revenue gap is $1.9M per year. However, the university has commenced a project to develop and implement a sustainable business model for Memorial’s residences.
  • It’s anticipated that the impact will be an increase of approximately $500 per semester starting in September 2016.
  • Even with an increase of $500 per semester, Memorial would remain at between 55 and 84 per cent of many other Atlantic Canadian university residence fees.

For Employees

Q: Is the Memorial pension plan in trouble?

  • Not at all. In fact, Memorial’s pension plan is among the healthiest of the public sector pension plans. By law, however, Memorial is required to be 100 per cent funded to meet its obligations to all employees in the future and in the unlikely event that the university should ever cease operating. Based on actuarial forecasts, special payments are required to bring Memorial’s pension plan to 100 per cent funding. However, excellent returns from pension investments over the last number of years and a consistently high level of employee and employer contributions have resulted in Memorial’s pension fund being 93 per cent funded at present, which is excellent for a public service pension plan.

Q: Will there be a study to make changes to the Memorial pension plan?

  • Such a study was not part of the recommendation to the Board of Regents by the University Pensions Committee. The Board of Regents approved the recommendation that was put forward by the University Pensions Committee to ask for a one-year deferral of the special payment of approximately $20.9M.
  • The pensions committee’s recommendation was:
    • That the pensions committee recommends that the university request of the government that the university be permitted to defer the special payment to the plan required in FY2015/16 to FY 2016/17.
    • That the pensions committee recommends that the ‘study’ is unnecessary.
  • The plan is healthy and well managed under the current structure.

Q: Will the one-time and base budget-reductions result in layoffs?

  • That is not the intent. About two-thirds (66 per cent) of Memorial’s total expenditures are salaries and benefits. Layoffs are the least desirable means by which the university will meet its targets and every effort will be made to avoid that outcome.

Q: Will there be academic program cuts?

  • The budget proposal did not include any academic program cuts and, in fact, exempts direct academic expenditures as well as unavoidable operating costs (like utilities and snow clearing from cuts).

Infrastructure and maintenance

Q: Why continue with the core science facility project given the current budget issues?

  • The core science facility is Memorial's number one infrastructure priority and government also noted its continued commitment to the project in the Speech from the Throne. Several of the 50-year-old facilities supporting our science-related academic and research programs are cost-prohibitive to upgrade or repair and need to be replaced with modern infrastructure. Site preparation work for the core science building has begun, and the Board of Regents approved the remainder of the project at the July meeting.

Q: When will you start to pay the mortgage on the new core science building?

  • Mortgage payments do not begin until the building is finished in 2020, and a fund for the ongoing yearly mortgage payment is already built into Memorial’s budget plan.

Q: What deferred maintenance will you carry out in the 2015-16 fiscal year?

  • Memorial has to address essential health and safety issues across our campuses, and emergency repairs will also be a priority. A total of $7 million has been earmarked for critical deferred maintenance and top priority infrastructure planning.

Contact

Vice-Presidents Council

230 Elizabeth Ave

St. John's, NL A1B 3X9 CANADA

Tel: (709) 864-2530

Fax: (709) 864-2552

becomestudent@mun.ca