The University of Ottawa record-breaking financial surplus and its impact

On September 30, members received a communication from President Frémont announcing a $91.8 million surplus for 2018-2019. This excess in revenue over expenses is a new record for the University of Ottawa, besting the previous record of $69.8 million from 2017-2018 by $22 million – a 31 percent increase. As APUO members are confronted with a growing workload, and fewer resources to support the educational and research mandates of our institution due to the austerity measures of recent years, we are deeply troubled by this massive surplus. 
 
The impact on our workload
 
In his communication about the University’s financial results, Jacques Frémont mentions “delays in hiring” as a contributing factor to this financial surplus. The APUO is baffled that the delay in hiring university personnel is spun as a positive factor contributing to this surplus. In our view, this tone-deaf statement by the Central Administration highlights the need for APUO members to continue to mobilize around the issue of workload. Despite raising the issue of our growing workload on numerous occasions through petitions, letters, and meetings, President Frémont’s message once again overlooks the necessity of adopting a new budgetary approach that could reverse the deterioration of our working conditions – which are largely our students’ learning conditions. 
 
While an increase in the number of APUO minimum complement would certainly help to alleviate some of the workload pressures felt by our members, filling existing vacancies in APUO and support staff positions would go a long way in improving our working conditions and our students’ learning conditions. As mentioned in a September bargaining update bulletin by the Support Staff of the University of Ottawa (SSUO) “we are telling the University that the number of unfilled, abolished and contract positions has increased dramatically in the last 2 years and this undoubtedly adds to the stress of the current employees which negatively impacts the students experience.” Furthermore, during a Special Assembly on October 17, the SSUO highlighted that the University’s $91.8 million excess in revenue is equivalent to the total salary mass of SSUO members. Needless to say, the Central Administration could afford to fill existing vacancies, which it budgets for every year, and create new support staff and APUO positions to redress the concerns surrounding our growing workload and its consequences on the wellbeing and health of University personnel. Indeed, part of the $91.8 million in excess revenue over expenditure could have been spent to improve the students to professor and librarian ratios and to introduce additional support services for students. 
 
The University budget: a problem of priorities
 
The Central Administration has a serious problem of priorities. While there are delays in the filling of vacant positions and a refusal to prioritise investments in additional APUO and SSUO positions, we can’t help but highlight a growing salary mass of senior and middle management positions. Between 2009 and 2016, the senior and middle management to students ratio has more than doubled from 9.8 per 10,000 students to 21.2 per 10,000 students.[1] If the Central Administration can justify budgeting a growing salary mass of senior and middle management positions, it can afford to allocate greater resources to hire key players that directly enhance the student experience: professors, librarians, and support staff.  
 
As is the case every year, the Central Administration ended its communication with a prelude to austerity by announcing that it was anticipating an operating fund deficit of $17.4 million. By adopting a budget on a modified cash basis[2] as opposed to a standard accounting basis,[3] the Central Administration is once again planning to withhold resources from faculties, the library, and student services. With more than half a billion dollars in cumulative surpluses since 2007 ($521.26 million precisely), the APUO is confident in the Central Administration’s ability to afford more tenure-track faculty, librarians, and support staff, a proposal widely supported by students and campus workers alike. However, our priorities are not reflected in the 2019-2020 University budget adopted by the Board of Governors, nor in the narrative promoted by the Central Administration.  
 
University of Ottawa surpluses/deficits

Budget
Financial Statements (SAB)
Modified Cash Basis Standard Accounting Basis (SAB)
2016-2017 financial year

$4.9M operating deficit
$16M surplus $48.6M surplus
2017-2018 financial year

$4.6M operating deficit
$15M surplus $69.8M surplus
2018-2019 financial year

Balanced (operating) 
Not published $91.8M surplus
2019-2020 financial year

$17.4M operating deficit
$22.2M surplus To Be Determined

 
These consecutive financial surpluses coupled with our increasingly challenging working conditions underscore the need for a more collegial governance model at our institution. It is our view that the Board of Governors, which is mostly made up of external appointees, is out of touch with the reality faced by students and campus-workers. Students, professors, librarians, and support staff have for years demanded greater resources with the aim of improving our educational and research outcomes, and to improve the overall student experience. However, through our current governance model, the priorities of key University stakeholders are overlooked. 
 
For your information, here are a few references to past communications sent by the Central Administration announcing austerity measures:

  • In May 2015, the Central Administration “adopted a series of measures to reduce spending by $10.4 million, limit expenditure growth and a number of one-time cost reductions.”[4]
  • In May 2016, the Central Administration implemented more structural and one-time cost-cutting measures which included “a permanent 2% decrease in the base budgets of faculties and services.” [5]
  • In October 2016, the Central Administration detailed some past measures that included the “suspension of renovation projects and contributions from faculties and services of 10% of their accumulated surplus.”[6]
  • In December 2016, the Central Administration implemented new cost-cutting measures including “Construction and renovation projects are suspended, unless required by safety or legal obligations; All discretionary expenses, such as travel, will be restricted; A hiring freeze on all contract or honorarium-based administrative and support staff positions, except in rare cases when approved by the vice-president concerned. A freeze on external job postings and on external hiring to fill temporary or permanent administrative or support staff positions; No retroactive salary adjustments when positions are evaluated or reclassified; No position reclassifications until further notice, except for previously approved unit reorganizations.”[7]
  • In May 2017, the Central Administration implemented new cost-cutting measures in order to reduce expenditures by a total of $22M.[8]
  • In September 2019, the Central Administration stated that their surplus was in part attributable to “delays in hiring.”[9]

 


[1] Data pulled from the sunshine list by REGI Consulting, “Notes about uOttawa’s Draft of and Executive Compensation Program,” February 2018.
[2] A modified cash basis accounting model only considers cash in hand without considering accounts receivables or other incoming revenues when establishing a budget.
[3] A standard accounting basis model considers both cash in hand and incoming revenues and accounts receivables when establishing a budget.
[4] May 26, 2015 email from the Vice-President, Resources
[5] https://www.uottawa.ca/financial-resources/financial-planning/sites/www.uottawa.ca.financial-resources.financial-planning/files/note_de_service_budget_2016-2017_en_003_0.pdf
[6] October 11, 2016 email from the Vice-President, Resources 
[7] https://secure.campaigner.com/csb/Public/show/do2an–b42t0-5l2vffx2
[8] https://secure.campaigner.com/csb/Public/show/ez27t–bt2qz-5l2vaz03
[9] https://secure.campaigner.com/csb/Public/show/ch3x-1dust8–mpdba-5l2vffp9