THE OTHER PRESS Thursday, January 17,1985 ~ Ina Financial Whirl Canadian universities are in a fix, plagued by government cutbacks yet called upon to play a bigger role in Canada’s economic future. The search is on for solutions. by MARIANNE TEFFT from THE FINANCIAL POST As nearly 500,000 full-time univer- sity students crowd tired lecture halls and under-equipped classrooms, cam- pus administrators across Canada are wrestling with issues that could dictate the quality of service they can provide for decades. University officials are struggling to keep rising costs--of everything from lawnmowing to oscilliscopes--in line with revenues increasing at best marginally. At the same time, greater attention is turning to long-term questions of what the university should be, who it should serve, at what price--and from whose pocketbook. In Ontario and Nova Scotia, prov- incial royal commissions are under way with a view to rationalizing the university system. At the recent Saskatoon meeting of the Association of Universities & Colleges of Canada (AUCC), representatives of 72 schools. addressed questions of accessibility. Despite what seems to be too many students and too few public dollars to provide quality education for all, some observers decry any suggestions of a return to elitism. Nt ae ie _ Says Donald Savage, executive sec- retary, Canadian Association of Uni- versity Teachers (CAUT): ‘‘We should be assuring that bright kids from all strata of society are admitted--and we have not been particularly active in that regard.’’ Others, like academics David Bercuson, Robert Bothwell, and J.L. Granatstein, say universal access- ibility must end. Their recent book, The Great Brain Robbery, argues universities have become ‘‘educational supermarkets.’’ They urge univer- sities to cease ‘‘grovelling for govern- ment grants, selling their souls in return for public approval and simul-- taneously selling the value of a higher education for a song.’’ The national cost of higher educa- tion--which has risen to $8.5 billion _ this year from less than $100 million in the 1950s--constrains daily university operations as well as long-term man- agement decisions. As a Currie, Coopers & Lybrand study prepared earlier this year for the Montreal-based Corporate-Higher Ed- ucation Forum notes, ‘Without excep- tion, the universities are in a tight financial squeeze which is beginning to erode the quality of education and research just at the. time when it is essential to be striving for higher standards than have been achieved in the past.’’ Since 1977, Ottawa and the prov- inces share responsibility for univer- sity funding in agreements negotiated under the federal Established Program Financing Act (EPFA), says CAUT’s Savage. Each year, Ottawa transfers about $2 billion to the provinces for post- secondary education. Tax points worth about $2 billion also are transferred. Ottawa antes another $150 million on student aid and more that $400 million on research grants. Federal transfers account for 57 - 60 per cent of university operating bud- gets. Student fees account for 12 - 14 per cent, the private-sector contributes about 10 per cent, and sources such as direct provincial funding and sales of university services make up the bal- ance. That funding system, Savage says, is prone to breakdown. In what CAUT calls an ‘‘outrageous’’ situation, the EPFA does not require the provinces to spend those funds on post-second- ary education, and some provinces choose not to do so. Observers say Prairie universities generally have fared best, while tight provincial pursestrings are causing Ontario and Quebec schools to lose ground. ‘“‘The worst from our perspective is British Columbia,’’ Savage says. ‘The government is in the course of reducing real-dollar expenditures by per cent while accepting increases in post-secondary transfers.’’ Ottawa also has cut its post-second- ary contributions twice since 1982, he notes, stripping the system of nearly $400 million and encouraging the provinces to part further their own contributions. Addressing the.recent AUCC meet- ing, former Saskatchewan Attorney General Roy Romanow called on Ottawa and the provinces to co-operate more closely in determining university policy. He suggested the provinces’ Council of Ministers of Education should invite Ottawa and university representatives to attend its discus- sions. In a trend that could replace some lost revenue, many schools are forging potentially lucrative links with busi- ness. In some cases, campus windows on technology and skilled graduates bring business to the university; in others, schools market their expertise. Such links range from specialized joint ventures to participation in student co-operative-education programs. Across Canada, administrators re- signedly shave expenses. Since sal- aries account for 70 - 80 per cent of operating expenses, most schools have trimmed academic and support staff through attrition, termination of or failure to renew term contracts, and even some layoffs. An .ongoing planning question is whether record-high -enrollment rates will continue. Most administrators sav unemployment is likely to keep higher- than-expected numbers of youths in school. As a result, capital budgets will be further burdened as already- cramped schools seek new space. Financial pressures also pinch re- search programs. Research grants do not cover indirect research costs such as heating, salaries, secretaries, e- quipment, and administration. As a result, notes the Currie, Coopers study, ‘‘the more successful...faculty is in attracting grants, the higher the operating costs that must be funded out of a highly constrained budget.’’ Here’s how some Canadian univer- sities are coping with financial straits: After trimming a net total of 192 jobs last year, the University of British Columbia still faces an uphill battle, says David McMillan, vice-president, development and community rela- tions. On a per-student basis, the province has trimmed UBC's operat- ing grant to $6,000 for 1984-85 from $6,434 in 1981-82. About 800 students admitted to first year failed to enroll this fall, leaving UBC with a $1-million shortfall from tuition revenue in its $212-million operating budget. McMillan says UBC is surveying those students to deter- mine whether some will enroll late, attend community college, or retain full-time jobs. McMillan, a former fundraiser who became UBC’s first development vice- president about two months ago, says his job indicated universities recognize their need for community involvement, particularly with alumni and business. While this year’s basic operating grant to Edmonton’s 24,000-student University of Alberta is expected to be only on a par with last year, the outlook remains better than that for many Ontario and B.C. universities, says Lorne Leitch, vice-president, finance and administration. A major cost-cutting effort is a negotiated academic-staff agreement which includes no salary increase this year, Leitch says. In lieu of a basic-grant increase, the university also hoped for a ‘‘soft’’ contribution from the province, paralleling last year’s $5-million injection to offset additional enrollment costs. University of Regina President Lloyd Barber states simply: ‘“We’re out of whack with our level of service and level of revenue--either we get more revenue or we’ve got to cut service.” At U of Regina and Saskatoon’s University of Saskatchewan, Barber says, enrollment has risen 50 per cent in the past three years. Despite a 5 per cent operating-grant increase, that population leap still creates a $2-mil- lion operating-budget deficit at U of Regina. Meanwhile, capital projects are on hold. An historic, 750-seat theatre sits idle because the university does not have $1% million-$2 million for ren- ovations. “The jobs we’re called upon to do have grown, but our resources have not kept pace,’’ says Arnold Naimark, president of 33,000-student University of Manitoba. As a result, U of Mhas developed a three-part strategy to stretch funds,]} Naimark says: More flexible admin- istration permits decentralized finan- cial decision-making; cost-cutting measures--from energy conservation to postage metering--are a byword; and alternate funding sources are sought wherever possible. Two associate vice-presidents over- ‘see U of M’s aggressive efforts to] ; attract international research grants and sell educational programs abroad. U of M now provides educational support services in the Caribbean]: assists African agricultural develop- ment projects, and is helping tof establish a Thai engineering faculty. ‘Cutbacks in B.C. are getting a lot of attention, but after the B.C. government gets finished, their uni- versities still will get more per student COO! than we do in Ontario,’’ says Doug Wright, president, University of Waterloo. At leading European technical uni- versities, he says, classes average eight-nine students; at Waterloo, 21. Says Wright: ‘‘In Holland, they’ve taken about $1 billion out of their university funding, and they’re still about three times better off than Ontario universities.’ He says Ontario should ‘‘remove the handcuffs to increasing tuition--my view is that would have little effect on accessibility if loans were available.’’ *During the past five years, aca- demic staff at the University of New Brunswick has fallen 5 per cent, while undergraduate and graduate student numbers grew, respectively, 25 per cent and 14 per cent, says Bob Burridge, vice-president, academic. ‘The costs are large in some programs--engineering, computer science, nursing and business admin- istration are the hot spots--and the programs are too large,’’ Burridge says. ‘‘One would worry if it continued too much longer.’’ Facing its largest first-year class ever--3,200 students--and a provincial request for a freeze on academic salaries, Newfoundland’s Memorial University also expects revenue to be about $600,000 less than last year’s approximately $80-million, says lan Rusted, vice-president, health, science and professional schools. ‘‘For the past two or three years, we’ve been trying to trim wherever possible,’” Rusted says. ‘’Since Memorial is the only university in the province, this can’t continue--we would have to seriously limit the admission of students from the prov- ince.’’ Fortunately, he says, a $12-million fund-raising drive, ended about a year ago, has allowed the 13,000-student Memorial to build a new library, replacing the former facility designed to serve 2,000 students.