Tag: cuts

  • University of Nebraska-Lincoln committee opposes most academic program cuts

    University of Nebraska-Lincoln committee opposes most academic program cuts

    An academic advisory group at the University of Nebraska-Lincoln has opposed most of the program cuts recommended by the institution’s chancellor and is calling for more time before considering major budget reductions. 

    A majority of the Academic Planning Committee members voted against eliminating four of the six programs put on the chopping block by UNL Chancellor Rodney Bennett in September as part of an effort to save $27.5 million annually. 

    The 21-person committee — composed of 10 faculty members as well as deans, administrators, staffers and students — officially issued its recommendation to Bennett in an Oct. 24 memo. 

    Bennett plans to issue his final recommendation in the coming weeks, and the University of Nebraska System regents will consider it in December. 

    In the memo, the committee pointed to concerns raised by faculty about the process Bennett and other UNL leaders used to determine which academic programs to slash. Those issues largely revolved around potential problems with the metrics and the short evaluation period used to make permanent decisions. 

    “We strongly recommend to the Chancellor, the President, and the Board of Regents that the approval of any budget cuts be delayed allowing time for units to identify creative alternative solutions that reduce or prevent the need for these cuts,” the committee said. 

    In a note Friday, Bennett thanked the committee for its work and said, “I am now carefully reviewing the APC’s recommendations and continuing consultations with our shared governance partners before finalizing the budget reduction plan.”

    A ‘top-down’ process for judging programs

    Over the past month, the academic planning committee has been collecting feedback from UNL stakeholders through hearings and nearly 3,000 submitted comments, the memo noted.

    Many questioned the validity and usefulness of the statistical metrics and data used to evaluate programs, while also accusing the administration of not being transparent about those measures. 

    Those metrics led to Bennett’s proposal that UNL permanently eliminate degrees in community and regional planning; Earth and atmospheric sciences; educational administration; landscape architecture; statistics; and textiles, merchandising and fashion design.

    In past budget deliberations, deans were given a target for reductions and could design unit-specific ways to meet goals, a process the committee described as “bottom-up.” 

    “In the current process, metrics were used in a ‘top-down’ approach to identify lower-performing units, and then a holistic review of those units was undertaken by upper administration,” the committee said. 

    Moreover, leaders only shared metrics to make program decisions confidentially with deans and the academic planning committee, which left faculty scrambling to understand those measures. 

    “No one was able to fully validate the metrics, either through confirming the accuracy of the underlying data or via analysis to confirm that the metrics were statistically valid ways to quantify the desired performance indicators,” the committee said. 

    For example, faculty from multiple units said that programs were revenue-positive, meaning cutting them would cost the university more in lost revenue than it saved in expenses. Others pointed to the extension work done by programs that make them important to the state and help UNL fulfill its mission as a public land-grant university. 

    But the comments from faculty and other UNL stakeholders weren’t just critical — they were also creative, suggesting alternative ways that programs and the university could save on costs or generate new revenue, the committee said. In fact, every unit had ideas of ways to generate revenue and save costs.

    “Given that a budget deficit has been looming for years, it is unfortunate that the process was invoked with so little time to engage the creativity and collective intelligence of the full University community,” the committee said. “When the energy of our faculty, staff, students, and stakeholders is unleashed on the problem of the budget deficit, creative and selfless solutions can emerge.”

    Source link

  • NSW inquiry focus on job, course cuts – Campus Review

    NSW inquiry focus on job, course cuts – Campus Review

    Submissions to the NSW government’s inquiry into university governance have flagged issues with a lack of transparency throughout restructures at the state’s institutions.

    Please login below to view content or subscribe now.

    Membership Login

    Source link

  • St. Norbert College to add 5 new programs after March cuts

    St. Norbert College to add 5 new programs after March cuts

    This audio is auto-generated. Please let us know if you have feedback.

    Dive Brief:

    • St. Norbert College, in Wisconsin, unveiled a handful of new academic offerings on Thursday, just months after it cut almost two dozen programs and laid off 21 faculty members amid budget-balancing efforts.
    • The Catholic nonprofit will launch four undergraduate degrees and one bachelor’s-master’s combination program in fall 2026, pending approval from its accreditor, the Higher Learning Commission. 
    • The academic expansion comes after St. Norbert President Laurie Joyner reported at the end of July that the college anticipated a balanced fiscal 2026 budget. In March, she said St. Norbert would need to cut $7 million to achieve that goal.

    Dive Insight:

    Shortly after joining St. Norbert in July 2023, Joyner identified “a significant miscalculation” with the fiscal 2024 budget, resulting in a much bigger deficit than previously anticipated. 

    The shortfall had ripple effects on the college’s finances, and it has since made multiple rounds of reductions to its workforce and suite of academic offerings. Eliminated programs covered fields such as studio art, theology and applied mathematics. At least one cut program, engineering physics, had been introduced less than a year earlier.

    Thanks to the cut, St. Norbert closed fiscal 2025 “with positive operating results” and a stronger financial position, Joyner said in a July community message.

    “With significant cost-saving efforts, program streamlining, and an institution-wide focus on efficiencies, we anticipate breaking even this fiscal year (FY26) as well — despite predicted enrollment declines,” she wrote.

    St. Norbert’s has struggled with enrollment in recent years. In fall 2022, it had 1,882 students, down 17.7% from a decade prior, according to federal data. Like many other small liberal arts institutions, much of the college’s funds comes from tuition. In fiscal 2023, it received 50% of its core revenue from tuition and fees.

    But the college saw a reversal of the trend in fall 2023 — the most recent semester for which federal data is available — when it enrolled 2,165 students. 

    In August, Anindo Choudhury, the college’s interim vice president and chief academic officer, signaled the institution’s interest in reinvesting in its remaining programs.

    “We have had to make some difficult decisions involving both programs and personnel,” he said in an August email. “While some majors no longer exist, we are redirecting existing and new resources to current and recently developed programs.”

    On Thursday, St. Norbert’s leaders touted the newly announced programs as a demonstration of the college’s ability to adapt to changing workforce demands and student needs.

    The forthcoming undergraduate programs include bachelor’s degrees in cybersecurity management, exercise science, digital marketing and sacred music.

    Pending accreditor approval, the college will also launch a 4+1 business administration program that will allow students to earn both bachelor’s and master’s degrees in five years.

    Students in its media studies and communications programs will be able to enroll in new concentrations in sports media, business and professional communication, journalism or public image and promotion.

    The additional academic offerings aren’t the only recent tactics the college has undertaken in the pursuit of financial longevity.

    St. Norbert struck a partnership with nearby Northeast Wisconsin Technical College to allow the public community college’s students to transfer into its data analytics bachelor’s degree program more easily.

    And earlier this month, the college announced a $15 million donation from the religious organization with which it is affiliated, the Norbertine Order.

    Source link

  • “New Collaborations Needed” as U.S. Cuts Global Health Funds

    “New Collaborations Needed” as U.S. Cuts Global Health Funds

    Universities focused on global health will have to collaborate more with each other and with industry and philanthropic organizations in the face of the Trump administration’s multibillion-dollar aid cuts, according to academic leaders from around the world.

    Funding covering projects tackling conditions such as AIDS, tuberculosis and Ebola has been upended since Donald Trump returned to power in January, and speakers at Times Higher Education’s World Academic Summit said that it would be impossible to replace the lost dollars overnight.

    Mosa Moshabela, vice chancellor of the University of Cape Town, said that his institution had been one of the largest recipients of National Institutes of Health funding outside the U.S., supporting projects in areas such as HIV and tuberculosis prevention, and that his institution had been “impacted a lot” by the White House’s decisions.

    “We realize the danger of having placed all our eggs in one basket, pretty much,” said Moshabela, himself a leading public health researcher.

    “We know that, in terms of scale of funding, we’re not necessarily going to have one source that can replace the amount [we received] from the NIH, but by spreading our partnerships we can still achieve similar results—and we are strengthening our partnerships in the Middle East, in Asia, across the globe, and also looking at new donors that are coming through.”

    Moshabela said that Cape Town was also putting pressure on the South African government to increase research spending, highlighting that it currently spent only 0.6 percent of gross domestic product in this area, despite a long-standing target for the outlay to reach a minimum of 1.5 percent.

    “Even between universities, we are adopting the principle of cooperation over competition,” Moshabela continued.

    “For a long time, we were competing for the same sources of funding, but now what we’re trying to do as a strategy is to cooperate more rather than compete over sources of funding.”

    Vivek Goel, vice chancellor of Canada’s University of Waterloo, agreed that it would take time to fill the funding gap left by U.S. cuts.

    “I don’t think it’s realistic to expect that overnight we are going to fill those gaps,” he said. “I think we became very reliant on a certain model … I think in collaboration between governments, philanthropy, industry and our institutions we can come up with new ways of working that can replace that work [on global health, but] not necessarily all of that funding.”

    Goel, another public health researcher, highlighted that it was not just U.S. funding that was being lost, pointing to research that was funded by Canadian sources or philanthropic organizations but that depended on clinics or infrastructure operated by the United States Agency for International Development. Researchers may also lose access to Centers for Disease Control data, he warned.

    Drawing down funding for global health research in the future will require a change of mindset, Moshabela argued, such as focusing on solutions with wider commercial benefit to attract the support of pharmaceutical companies and working to develop broader ecosystems and not just clinical interventions to win funding from philanthropists.

    Deborah McNamara, president of RCSI University of Medicine and Health Sciences, said that Western universities should approach the funding challenges “with humility.”

    “Our partners in the Global South have been doing more with less for a very, very long time,” she noted.

    “I think we’ve all observed over time waste in development funding, and in the surgical arena certainly we often discover [that] at hospitals that we work with they have large amounts of donated equipment that perhaps can’t be maintained, can’t be run, [and] isn’t operational.

    “By listening more we can reduce the waste that happens and direct [funding] more effectively.”

    Source link

  • That Was The Quarter That Was, Summer 2025

    That Was The Quarter That Was, Summer 2025

    Welcome to TWTQTW for June-September. Things were a little slow in July, but with back to school happening in most of the Northern Hemisphere sometime between last August and late September, the stories began pouring in. 

    You might think that “back to school” would deliver up lots of stories about enrolment trends, but you’d mostly be wrong. While few countries are as bad as Canada when it comes to up-to date enrolment data, it’s a rare country that can give you good enrolment information in September. What you tend to get are what I call “mood” pieces looking backwards and forwards on long-term trends: this is particularly true in places like South Korea, where short-term trends are not bad (international students are backfilling domestic losses nicely for the moment) but the long-term looks pretty awful. Taiwan, whose demographic crisis is well known, saw a decline of about 7% in new enrolments, but there were also some shock declines in various parts of the world: Portugal, Denmark, and – most surprisingly – Pakistan. 

    Another perennial back-to-school story has to do with tuition fees. Lots of stories here. Ghana announced a new “No Fees Stress” policy in which first-year students could get their fees refunded. No doubt it’s a policy which students will enjoy, but this policy seems awfully close in inspiration to New Zealand’s First Year Free policy which famously had no effect whatsoever on access. But, elsewhere, tuition policy seems to be moving in the other direction. In China, rising fees at top universities sparked fears of an access gap and, in Iran, the decision of Islamic Azad University (a sort-of private institution that educates about a quarter of all Iranian youth) to continue raising tuition (partly in response to annual inflation rates now over 40%) has led to widespread dissatisfaction. Finally, tuition rose sharply in Bulgaria after the Higher Education Act was amended to link fees to government spending (i.e. more government spending, more fees). After student protests, the government moved to cut tuition by 25% from its new level, but this still left tuition substantially above where it was the year before.

    On the related issue of Student Aid, three countries stood out. The first was Kazakhstan, where the government increased domestic student grants increased by 61% but also announced a cut in the government’s famous study-abroad scheme which sends high-potential youth to highly-ranked foreign universities. 

    Perhaps the most stunning change occurred in Chile, where two existing student aid programs were replaced by a new system called the Fondo para la Educación Superior (FES), which is arguably unique in the world. The idea is to replace the existing system of student loans with a graduate tax: students who obtain funds through the FES will be required to pay a contribution of 10% of marginal income over about US$515/week for a period of twenty years. In substance, it is a lot like the Yale Tuition Postponement Plan, which has never been replicated at a national level because of the heavy burden placed on high income earners. A team from UCL in London analyzed the plan and suggested that it will be largely self-supporting – but only because high-earning graduates in professional fields will pay in far more than they receive, thus creating a question of potential self-selection out of the program.

    In Colombia, Congress passed a law mandating ICETEX (the country’s student loan agency which mostly services students at private universities) to lower interest rates, offer generous loan forgiveness and adopt an income-contingent repayment system. However, almost simultaneously, the Government of Gustavo Petro actually raised student loan interest rates because it could no longer afford to subsidize them. This story has a ways to run, I think.

    On to the world government cutbacks. In the Netherlands, given the fall of the Schoof government and the call for elections this month, universities might reasonably have expected to avoid trouble in a budget delivered by a caretaker government. Unfortunately, that wasn’t the case: instead, the 2026 imposed significant new cuts on the sector. In Argentina, Congress passed a law that would see higher education spending rise to 1% of GDP (roughly double the current rate). President Milei vetoed the law, but Congress overturned President Milei’s veto. In theory, that means a huge increase in university funding. But given the increasing likelihood of a new economic collapse in Argentina, it’s anyone’s guess how fulfilling this law is going to work out.

    One important debate that keeps popping up in growing higher education systems is the trade-off between quality and quantity with respect to institutions: that is, to focus money on a small number of high-quality institutions or a large number of, well, mediocre ones. Back in August, the Nigerian President, under pressure from the National Assembly to open hundreds of new universities to meet growing demand, announced a seven-year moratorium on the formation of new federal universities (I will eat several articles of clothing if there are no new federal universities before 2032). Conversely, in Peru, a rambunctious Congress passed laws to create 22 new universities in the face of Presidential reluctance to spread funds too thinly. 

    The newson Graduate Outcomes is not very good, particularly in Asia. In South Korea, youth employment rates are lower than they have been in a quarter-century, and the unemployment rate among bachelor’s grads is now higher than for middle-school grads. This is leading many to delay graduation. The situation in Singapore is not quite as serious but is still bad enough to make undergraduates fight for spots in elite “business cubs”. In China, the government was sufficiently worried about the employment prospects of the spring 2025 graduating class that it ordered some unprecedented measures to find them jobs, but while youth employment stayed low (that is, about 14%) at the start of the summer, the rate was back up to 19% by August. Some think these high levels of unemployment are changing Chinese society for good. Over in North America, the situation is not quite as dire, but the sudden inability of computer science graduates to find jobs seems deeply unfair to a generation that was told “just learn how to code”. 

    Withrespect to Research Funding and Policy, the most gobsmacking news came from Switzerland where the federal government decided to slash the budget of the Swiss National Science Foundation (SNSF) by 20%. In Australia, the group handling the Government’s Strategic Examination of Research and Development released six more “issue” papers which, amongst other things, suggested forcing institutions to choose particular areas of specialization in areas of government “priority”, a suggestion which was echoed in the UK both by the new head of UK Research and Innovation and the President of Universities UK.     

    But, of course, in terms of the politicization of research, very little can match the United States. In July, President Trump issued an Executive Order which explicitly handed oversight of research grants at the many agencies which fund extramural research to political appointees who would vet projects to ensure that they were in line with Trump administration priorities. Then, on the 1st of October (technically not Q3, but it’s too big a story to omit), the White House floated the idea of a “compact” with universities, under which institutions would agree to a number of conditions including shutting down departments that “punish, belittle” or “spark violence against conservative ideas” in return for various types of funding. Descriptions of the compact from academics ranged from “rotten” to “extortion”. At the time of writing, none of the nine institutions to which this had initially been floated had given the government an answer.

    And that was the quarter that was.

     

    Source link

  • Economic Uncertainty Spurred Campus Cuts in September

    Economic Uncertainty Spurred Campus Cuts in September

    Judging from the widespread job and program cuts announced last month, higher education continues to face economic uncertainty on multiple fronts, from declining enrollment to federal funding issues.

    September saw layoffs, program cuts and other budget moves at a mix of institutions. While some of the institutions listed below are regional universities battered by declining enrollment, others are among the nation’s wealthiest; they pointed to federal research funding cuts, soaring endowment taxes and other factors as the impetus for recent cutbacks.

    Here’s a look at cost-cutting measures announced across the higher ed sector last month.

    Washington University in St. Louis

    One of the nation’s wealthiest universities is laying off hundreds of employees.

    WashU chancellor Andrew Martin announced last month that the private university had cut 316 staff positions and closed another 198 vacant roles as part of an effort to restructure or reduce budgets. He wrote that the cuts, which extend to WashU’s Medical Campus, total “more than $52 million in annual savings.”

    The chancellor cited both external and internal pressures.

    “These include the changing needs of our students, emerging technologies, and innovations in teaching and learning,” Martin wrote. “Others come from internal decisions and structures that have, over time, created ineffective processes and redundancies in the way we operate. In addition, we’re still facing significant uncertainty about potentially drastic reductions in federal research funding.”

    Uncertainty over federal research funding looms even as the university has lobbied heavily on Capitol Hill. Among individual institutions, WashU has been one of the top spenders on higher education lobbying this year, pumping $540,000 into those efforts across the first two quarters. (Third-quarter lobbying numbers are not yet available.)

    Despite a $12 billion endowment, WashU follows well-resourced peers, including Johns Hopkins, Northwestern and Stanford Universities, in enacting steep layoffs.

    Brown University

    Squeezed by a budget deficit and reeling from a battle with the Trump administration over allegations of antisemitism that included a temporary federal research funding freeze and ended with the university making concessions, Brown is laying off 48 employees and axing 55 vacant jobs.

    The cost-cutting measure comes after the Ivy League institution in Rhode Island already eliminated “approximately 90 mostly vacant positions” earlier this year, according to an announcement from senior administrators. Following the cuts, Brown is walking back freezes on hiring, travel and discretionary spending.

    Officials announced they plan to monetize “non-strategic real estate holdings” and pause “spending on plans to move the University to net-zero emissions,” among other efforts, including “prioritizing fundraising for current-use gifts that have an immediate positive budgetary impact.”

    Brown is among the nation’s wealthiest universities, with an endowment valued at $7.2 billion.

    University of Oregon

    Grappling with a budget deficit of more than $25 million, the public flagship announced plans to lay off 60 employees and close another 59 vacant positions, The Oregonian reported.

    The move comes after the university cut dozens of jobs earlier this year.

    “Through careful consultation with deans, department heads and the University Senate, we were able to substantially close our budget deficit without eliminating any degree programs,” UO senior officials wrote last month. “And while we are cutting 20 filled career faculty positions and 14 unfilled tenure track faculty positions, we are not eliminating any filled tenure track faculty positions.”

    Berklee College of Music

    College leaders cited “rising costs, a dynamic enrollment environment, and shifting national policies” in announcing the layoffs of 70 employees at the storied music school last month.

    The layoffs reportedly amount to 3 percent of the Berklee College of Music workforce and include employees on campuses in Massachusetts, New York and Spain, according to Boston.com. Of the 70 employees laid off, all were staff members and no faculty jobs were cut.

    Southern Oregon University

    After declaring financial exigency in July, officials finalized a plan at the public university in Ashland to cut $10 million in operating costs over four years, Jefferson Public Radio reported.

    The cuts will reportedly affect 70 faculty and staff jobs, though not all are currently filled. In addition to layoffs and the elimination of vacant jobs, the university also plans to scale back programs by cutting 10 majors—including chemistry and mathematics—and dropping a dozen minors.

    University of Arizona

    The public university in Tucson is cutting 43 jobs after Congress eliminated funding for the Supplemental Nutrition Assistance Program, The Arizona Daily Star reported.

    The program, known as SNAP-Ed for short, was removed from the federal budget earlier this year. Termination of the program cut off about $6 million in annual funds to the university to provide education-related services, faculty members told the newspaper.

    Arizona’s job cuts come as the university recently managed to zero out a $177 million deficit that administrators discovered in late 2023, which prompted sweeping cost-cutting measures.

    University of Louisiana at Lafayette

    The public university eliminated six jobs and closed the Office of Sustainability and Community Engagement last month as it navigates a $25 million deficit, The Acadiana Advocate reported.

    Other offices were restructured.

    The newspaper reported that officials have already identified $15 million in cuts to help close the deficit. Most divisions across the university will be required to reduce operational expenses by 10 percent.

    Cuyahoga Community College

    Following other public institutions in Ohio, CCC is axing 30 associate degree programs in low-enrollment areas, as mandated by Senate Bill 1, which the State Legislature passed earlier this year, Signal Cleveland reported.

    The cuts, announced last month, include a mix of programs ranging from advanced manufacturing to creative arts. Multiple apprenticeship programs are also being shut down.

    East Carolina University

    Officials at the public university in Greenville announced plans last month to cut $25 million from the budget amid declining enrollment and other factors, The Triangle Business Journal reported.

    Belt-tightening measures will be implemented over three years and will include “permanent reductions, academic program optimization, and organizational adjustments,” ECU officials announced last month. Administrators did not specify the number of potential layoffs ahead.

    Yale University

    Increased taxes and federal funding uncertainty are driving cost-cutting measures at the Ivy League university in Connecticut, where officials last month announced retirement incentives to eligible faculty as the university braces for an 8 percent tax on endowment income.

    Yale is one of the few universities with a multibillion-dollar endowment that will feel the tax at its highest level. The increase is a significant jump from the prior endowment tax of 1.4 percent.

    The university is also delaying major construction projects, among other money-saving moves.

    Source link

  • UTS can’t blame policy for cuts: Minister – Campus Review

    UTS can’t blame policy for cuts: Minister – Campus Review

    The University of Technology Sydney (UTS) has been met with widespread criticism from the federal and NSW governments for its plan to cut 1100 subjects including its entire teacher education program.

    Please login below to view content or subscribe now.

    Membership Login

    Source link

  • The Coming Federal Cuts – Part 3: ISED

    The Coming Federal Cuts – Part 3: ISED

    Monday, we looked at the country’s overall financial situation (dire), and yesterday we looked at how cuts of a magnitude of 15% might affect key programs like the Canada Education Savings Program and the Canada Student Financial Assistance Program. Today, we’re going to look at how a 15% cut might affect the Government of Canada’s research subsidies, which in the main are run through the Ministry of innovation, Science and Economic Development (ISED). 

    (I will be speaking about “the tri-councils” as a single funding line; I am aware that the Canadian Institute for Health Research (CIHR) is funded through Health Canada but for this exercise it is easier just to lump them together).

    Let’s start by acknowledging that ISED is a sprawling mess of a department with small programs with very little political protection littered all over the place. I wouldn’t bet the farm on the $12 million “Futurpreneur Canada” making it out of this budget round alive. I also doubt the Universal Broadband Fund is going to continue at $900 million per year. Computers for Schools (sounded great in the 90s, less so now) and Computers for Schools Interns would also be on my endangered list. I suspect that the various regional development funds might be in for an outsized hit as well. All of which is to say that it is possible that the research enterprise – that is, the tri-Councils, the National Research Council (NRC), the Canada Foundation for Innovation (CFI) and all those organizations that get part or all their money through the Strategic Science Fund – might not get hit with a 15% cut. It’s quite possible all these other areas might take an outsized hit and allow the actual science stuff to get off with a lighter cut.

    That said, remember this key point: the budget exercise is not about cutting 15% of funding from where it should theoretically be in three years’ time (the government has a fiscal framework that extends out four or five years). It is about cutting expenditures from a 2024-25 baseline. That means that to get through any previously planned increase in spending, the cuts to existing programs must be more than 15%. 

    This matters for two reasons. First, it is because the government runs its subsidies to electric vehicles manufacturers through ISED. Those subsidies were worth $39M in 2024-25; they were planned to cost $2.1 billion this year and $4.2 billion in 2027-28 (i.e. it’s about half the department’s direct budget spend come two years from now, and about a third of total sci/tech spend if you include the tri-councils). To accommodate that increase while following the letter of the budget reduction request would basically mean requiring the entire department to shut down. That’s probably not happening (though one presumes that Carney’s announcement last week releasing Canadian auto manufacturers from their 20% EV sales target in 2026 might also lead to a reduction in EV subsidies to manufacturers). 

    Second, remember budget 2024? The one where the Liberals promised $1.8 billion in new spending on research and the whole sector cheered with relief? Yeah, well only $75 million went into the budget framework for 2024-25; 87% of that 1.8 billion is backloaded until after spring 2026. So, basically none of it is protected, and it’s all at risk. I wouldn’t be surprised in the least if they just cancelled the whole thing. And then, on top of that, we must worry about what happens to existing programs, and whether they take a 15% hit.

    CIHR transfers about $1.2 billion to Canadian post-secondary institutes each year, while the National Science and Engineering Research Council (NSERC) transfers about $1 billion, and the Social Sciences and Humanities Research Council (SSHRC) transfers about $440 million (although a fair bit of that last one includes combined tri-council projects which administratively run through SSHRC, including – if I am not mistaken – funding for the Canada First Research Excellence Fund). CFI is another $550 million a year or so. NRC is about $1.7 billion per year. The Strategic Science Fund is another $900 million or so, closer to a billion if you include base funding for Genome Canada. Canada Research Chairs are another $300 million. Call it $6.2 billion in total. Required savings to get to a 15% cut is therefore just under $1 billion.

    Where to start?

    Ask most researchers at universities what they would prefer, and the answer is likely that they would eliminate everything except the tri-council funding. Ditch CFI, significantly cut NRC, definitely obliterate the Strategic Science Fund – anything, anything, anything but touch tri-Council grants. I understand the preference, but as I noted last week, this is a monumentally detrimental position for the sector to take. Yes, basic research and the existing grant system are the basis of the existing tenure and promotion system, and as such is naturally dear to those in the system, but almost no one in Ottawa thinks that’s what these systems are for. If we’re going to keep research funding afloat, it’s probably going to be through more spending on things like the Strategic Science Fund.

    I have very little insight into the state of official Ottawa’s current thinking on the relative value of these various programs, but I could imagine three basic scenarios that get us to $1 billion in savings.

    Option 1 is a straight 15% cut across the board. Take out $400 million or so from the granting councils, $80 million from CFI, $250 million from NRC, cut the Strategic Science Fund and Genome Canada to the tune of $150 million or so, and lose about 350 Canada Research Chairs. 

    Option 2 would be the spare the professors approach. Now, you probably can’t spare them entirely, because they are such a big proportion of the overall expenditure, but if you jacked up the cuts to CFI, NRC and Strategic Science to say 25%, you could hold the losses to CRCs and the tri-councils to under $100M. I think this is unlikely, but it is a possible scenario.

    Option 3 would be the hammer the tri-councils approach. Because, as I said, I don’t think they are particularly well-liked at Finance/PMO. This is close to the inverse of option 2; zero cuts to NRC and Strategic Science, keep the CFI cut at 15% and take the rest of the necessary money out of the tri-councils. That would mean a cut of about $800 million or about 30% to council funding.

    And remember, all of this is on top of walking back the measures announced in the 2024 Budget. Ugly doesn’t even begin to cover it.

    To be clear: I suspect it is unlikely that the research area will get a cut of 15%, in part because officials will feel bad about doing serious damage to existing budgets after, I suspect, already taking away the Budget 2024 measures. If I had to guess, I would say that the department will probably come down hardest on regional development subsidies. Nevertheless, the scenarios above are possible even if not probable. Universities should start thinking about what they might mean and how they might cope. 

    Source link

  • The Coming Federal Cuts – Part 2: ESDC

    The Coming Federal Cuts – Part 2: ESDC

    Yesterday, I explained why the federal government now finds itself in a position where it has to cut program budgets by at least 15% just to keep the budget deficit to $50 billion by 2028. Today, I am going to explain how this will play out at Employment and Social Development Canada (ESDC), which plays a major role in funding for skills and education in Canada, mainly through the Canada Education Savings Program (CESP) and the Canada Student Financial Assistance Program (CSFAP).

    Now, just a note at the start. It is vanishingly unlikely that the feds will actually look for 15% savings in every program. The 15% rule is for the Department as a whole, and ESDC is one big mother of a department. It includes all sorts of programs including EI (which in theory is exempt from cuts), and child care.

    So, let’s start with CESP, which delivers about a billion dollars a year via matching grants to parents saving for their kids’ education via Registered Education Savings Plans (RESPs). This program doesn’t allow for a lot of nuance in cutting. The program gives out about $1.1 billion a year in Canada Education Savings Grants (CESGs), roughly 85% of which goes on a basic 20 cent-to the dollar match rate and about 15% of which goes to “additional” (i.e. higher) matching rates for lower-income Canadians (A-CESGs). It also runs the Canada Learning Bond Program, which is another roughly $150 million per year which is a non-matching grant of up to $2000 to children from low-income backgrounds to start their educational savings.

    There are basically four options here:

    1) The government could cut program spending across the board by 15%. That is, it could lower the base CESG matching rate from 20% to 17%, and A-CESG payment rates for lower income contributors to 26.5% and 34% from the current 30% and 40%. That would save about $150 million/year. It could also reduce the CLB payout to $1700.  

    2) The government could eliminate the A-CESG pieces entirely and go with a flat 20% coverage. That’s a pretty quick way to a 15% reduction.

    3) The government could axe the CLB. Again, a very quick way to get close to 15% reduction.

    4) The government could hold the A-CESG and CLB harmless and reduce the CESG base rate even further, to about 15%.  

    Now, personally, I think CESG probably comes out of this unscathed – that is, a 0% cut – because it’s one of the most popular government programs in existence. But these options give you a sense of what cuts might be, if applied uniformly across the department.

    (Yes, there are also presumably some savings to be made on the personnel side, but it’s a pretty simple and lean program – if you could get savings equal to even 0.5% of total expenditures from that, I’d be shocked).

    Let’s now head over to CSFAP spending and see how that might fare. It’s a bit more complex than CESG so it’s worth looking at its basic cost-structure. Using data from the CSFAP’s 2023 Actuarial report, it’s possible to look at overall direct program costs, as shown below in Figure 1. Technically, this is not a full state of program costs because there’s another billion or so in “alternative payments” to jurisdictions that do not participate in the CSFAP (i.e. Quebec, Nunavut and the NWT). But since this sum is calculated as a fraction of direct programs, we can more or less ignore them here – a 15% cut of the direct costs automatically translates through to a 15% cut in alternative payments as well. And our target number – given that CSFAP direct expenses are about $4.2 billion – would be about $628 million.

    Figure 1: Major areas of CSFAP spending, in millions, 2023-24

    So where do you carve out that much money from CSLP? Well for starters we could and should get rid of the $429 million we spent eliminating interest on loans after graduation. These subsidies do nothing for access; rather, they boost the incomes of middle-class 20–30-year-olds who have already finished school. And it is not a long-standing program. It is, in fact, a quite recent thing, announced by then-finance minister Chrystia Freeland in 2023 when the Liberals were desperately trying to throw a bone to house-poor urban twenty-somethings who at the time were threatening to vote not-Liberal. Now cutting this wouldn’t be a straight $429 million savings – loss of that subsidy would likely lead to increases in bad debt and Repayment Assistance program (RAP) charges somewhat. So, let’s call that a $350M win.  

    Where to find the other $275 million? Not administration: most of the admin money is tied up in payments to provinces for running the front end of the program or to the National Student Loans Service Centre (an outsourced agency which resides over by Square One in Mississauga for running the back end), neither of which can easily be changed in the short term. Maybe you could lose a couple of million in staff costs but not much more. Very little you can do about bad debts either.  RAP and interest subsidies before consolidation could be made less generous. In particular, the income threshold for access to RAP could be brought back down from the current $45K (roughly – it depends on family size) to say $38K, and interest during school could be brought up from zero to the current inflation rate or the government rate of borrowing (i.e. somewhere between 2 and 2.5%). I don’t have access to detailed financial figures on this, but my guess is that the RAP measure might save $50M or so; in-school interest might get you $100M.

    That still doesn’t quite get us to the required $625 million, so the only option left here is to start hacking away at grants. A straight cut in the maximum grant would be the easiest way to cut costs; bringing that down from $4200/year to, say, $3500/year would reduce spending by something along the lines of $400M/year. Another and more likely option would be for the feds to copy what Doug Ford did when he wanted to contain student aid costs – change grant eligibility criteria in such a way as to make grants harder to obtain. The obvious way to do this, I think, would be to change the rules for dependent/independent student status (i.e. the point at which students are considered to no longer get money from their parents) so that it took students five years to reach such independent status instead of four. I am not exactly sure how much that would save, but I’d wager it would be a minimum of a quarter-billion. 

    So, your menu of cut options for cutting CSFAP is, essentially:

    Bring back interest after graduation $350 million
    Admin $3-5 million
    Reduce RAP threshold to $38K $50 million
    Introduce in-school interest of 2.5% $100 million
    Cut maximum grants by $700/year $400/million
    Change definition of independent student $250 million

    (To be clear here, I am guessing a bit on some of these numbers. Intelligently, I hope, but they are guesses. Don’t take the numbers here as gospel. And if any friends at CSLP want to correct me, please do!)

    If it were me, to get to (roughly) the required $625 million I’d bring back interest after graduation – or introduce an equal-to-government-rate-of-borrowing interest rate for the entire life of the loan, which probably ends up with similar savings – and change the definition of independent students. Neither are pleasant but these are the ones that would probably affect access the least.  

    (Again, the Liberals may choose not to cut anything in CSFAP, because hey this is an income security program of a sort, and if we’re obsessing about “affordability” – but that just means cuts elsewhere in the portfolio will be larger).

    Of course, ESDC is much more than these two programs. Take a gander at the full list of programs the programs the Ministry runs (I make it about fifty if you include everything). A lot of those are scattered skills initiatives like Youth Employment and Skills, Indigenous Skills and Employment Training, the Skills and Partnership Fund, Skills for Success Program, the Innovative Work-integrated Learning Initiative. I have no idea what most of these do exactly, nor is it easy to access any budget data about them. But let’s put it this way – few of these programs have a particularly large policy constituency to back them up. My guess is that cuts across these programs will be significantly higher than 15% and some of them may cease to exist altogether.  

    Enough for today.  Tomorrow we’ll do research funding.

    Source link

  • The Coming Federal Cuts – Part 1

    The Coming Federal Cuts – Part 1

    The biggest thing everyone is going to be talking about this year – barring another university doing a surprise Laurentian – is the set of federal cuts coming down the pike. They are big. And they are nasty. So, it’s worth understanding exactly the scale of what is heading in our direction. This is going to be a three-parter. Today, I will talk about the overall size of the cuts to come, and on Tuesday and Wednesday I will talk about how this will affect the two ministries that have the most to do with post-secondary education: Employment and Skills Development Canada (ESDC, tomorrow) and Innovation, Science and Economic Development Canada (ISED, Wednesday).

    So: we don’t know the exact scope of the budget cuts the government is contemplating. What we do know is the following:

    Preliminary budget figures for Fiscal 2024-25 show that the government of Canada posted a budget deficit of $43.2 billion on revenues of $495B, program expenses of $480B, debt charges (that is, interest on existing debt) of $54B and actuarial losses of $4B. We didn’t have a budget this spring, but spending projections for 25-26 from the 2024-25 budget show a projected deficit of $39 billion on revenues of $515B, program expenses of $496B, debt charges of $55B and actuarial losses of $2B.

    The Liberal Manifesto for election 2025 planned deficits of $60 billion or so right through to 2028-29. Its fiscal plan was basically i) existing spending commitments, ii) 30-odd billion in new spending and tax cuts and iii) tiny revenue changes, plus $20 Billion or so in counter-tariffs for 2025-26. (Yes, they also promised “savings from increased productivity” – otherwise known as “frantic handwaving” – of $6B, $9B and $13B in fiscal years ’27, ’28 and ’29. I am excluding them here but will return to them in a sec).

    Figure 1: Government of Canada fiscal picture according to the Liberal manifesto, minus the handwaving, in Billions.

    (The foregoing might all sound strange to those of you who recall Carney making pledges about balanced budgets. But, of course, as I pointed out back here, he never actually promised that. He promised balanced operating budgets, that is budgets with an only vaguely defined “capital spending” netted out. By a complete coincidence, the Liberal platform claimed the government spent roughly $50 billion in capital, so basically the government is already basically in balance.  Neat trick, but not sure bondholders will see it that way. I digress.)

    Since the election, a few things have happened. Counter-tariffs are not collecting anything like the $20 billion forecast, we ditched the Digital Services Tax in a futile attempt to get the Americans to be nicer to us, and, most importantly of all, the prime minister promised to up defense spending by about $18 billion over the next four years in order to reach 2% of GDP by 2028. That means the actual fiscal picture, before any handwaving about savings, looks like this:

    Figure 2: Government of Canada fiscal picture, according to the Liberal Manifesto, minus the handwaving, including proposed spending and tariffs since April 28, in Billions.

    As you can see, we are a lot further away today from “operating balance” (i.e. a $50B deficit) than we were when Carney was elected. And this is where the handwaving/cuts come into play. So, let’s start thinking about how much money it would take to keep us at “operating balance”. In Figure 3, we see that by 2028-29, we are looking at about $32 Billion in cuts. The handwaving “efficiencies” in the Liberal manifesto were meant to cover just $13 billion of that, leaving another $19.2 billion or so to be made up, somewhere, somehow.

    Figure 3: Cuts Required Just to Keep the Government of Canada at Operating Balance (i.e. a $50B deficit), By Source, in Billions.

    I said “somewhere”, but there isn’t much mystery here. As Figure 4 shows, you divide government spending into four categories: debt charges (which the government has to pay regardless), transfers to provinces (which Carney has promised he won’t touch), transfers to individuals (ditto) and then “program spending”. As Figure 4 shows, the first three areas make up 58% of total spending. That means that the last area, program spending, is going to take up the entirety of these cuts. In 2025-26, program spending is estimated at $227 billion; a $32 billion cut to that equals an overall reduction in program spending of 14% by 2028. (Coincidentally, this was more or less exactly the size of the program cuts in the “savage” 1995 budget – $7 billion phased in over three years on a base budget of about $52 billion. Government grew back, as you can see.)  

    Figure 4: Government of Canada Expenditures by Category, 2025-26

    It’s worth being careful here. Overall program spending is $227 billion, but $46 billion of that is currently being spent on defense and housing, two areas that are almost certainly immune to cuts given the government’s overall priorities. Excluding these two fields from cuts means that the field of “cuttable” programs shrinks to $181 billion, and the size of the cuts required to meet the $50 billion target balloons to 17.7%.  

    This brings us to the program review that has been going on in Ottawa since July. Recall that Minsters were asked to bring forward scenarios that involved cuts of 7.5% for next year, 10% the year after that and 15% the year after that. Many thought initially that these numbers were deliberately overdone so that big cuts could be made in some departments so as to shield other departments from having to do the same. Now I am not so sure. That 15% target is awfully close to the 17% overall target the Liberals need to hit just to keep the deficit at $50 billion, and so I am starting to think that in fact the cuts might not be dispersed unequally between departments. They might really need 15% from everybody – and then some.

    There are a couple of alternatives of course that could lessen the blow. For instance, while Carney promised not to cut transfers to provinces, to my knowledge he never ruled out cutting the rate of growth of transfer payments (currently about 5% per year, across CHT, CST and equalization combined). Slash that in half and you’ve got yourself another $8 billion to play with by 2028, thereby reducing by a quarter the required amount of program cuts. Something similar could be achieved by de-indexing pensions for a couple of years. Or, unlikely as it seems, the Government could actually increase taxes (elbows up requires some sacrifices, no?). But, absent those measures, I think we need to seriously brace for impact. These cuts are real, they are huge, and even if they don’t hit this fall (it’s not impossible that the alleged fall budget might actually just be the usual fall economic statement under another name), they are for sure going to hit in early 2026.

    The question, really, is, what needs to be saved? What should the sectors’ priorities be? I’ll discuss that over the next two days.

    Source link