On Thursday morning (January 20), Dalhousie’s Budget Advisory Committee – or “BAC” – released its draft operating budget for the upcoming fiscal year (2022-23).
The operating budget, which accounts for 70% of all Dal’s financial activities, consists primarily of income from government funds and tuition. It pays for the day-to-day expenses of running the university — from salaries and benefits for faculty and staff to student aid, facility maintenance, and other key priorities.
Each year, the BAC, led by the Provost with members from across the university, develops a draft operating budget that reflects the Dalhousie community’s spending priorities (as determined through consultation and surveys) and determines how resources are best allocated to meet advance the university mission. And each year, the Dal community is invited to provide feedback on this plan before it is finalized and approved by the Board of Governors.
The time for feedback is now: BAC will be engaging with groups like the Senate on the budget and is currently soliciting feedback on the draft plan via email and a student survey. The plan and tuition/fee recommendations are currently scheduled for Board approval in March.
You can view the draft budget plan and tuition/fee recommendations at dal.ca/budget. To provide some background, here are five key takeaways from the plan.
1. Dal’s expenses are growing faster than revenue – which is why tuition increases and cost savings are needed to balance the budget.
Of the estimated $515 million that will make up next year’s operating budget, 90% of that will come from just two sources.
The first comes from tuition fees (45.8%). The other is an operating grant provided by the provincial government (estimated at 44.2% of next year’s revenue) which will be increased by 1% each year under the terms of the current agreement between the universities of Nova Scotia and the government.
The challenge Dal faces is that costs are increasing by more than that — often in the 3-4% range per year. This is mainly driven by the remuneration (salaries, benefits and pension payments) to faculty and staff, which increases every year in line with collective agreements. In addition, there is inflationary cost pressure and urgently needed investments in areas such as systems and technology.
Under the current budget model, the core math of balancing each year’s budget is finding a combination of revenue increases (usually through tuition) and budget cuts to fill that gap – how to balance increased costs with the more limited revenue increase.
2. General tuition typically increases by 3% every year – and that’s also recommended for 2022-23.
The budget challenge described above has been the case in recent years. As such, Dalhousie has typically increased general tuition by 3% each year as part of its strategy to deal with rising costs. (3% is the maximum allowable increase for Nova Scotian students under the current provincial agreement.)
For 2022-23, this is recommended again: the proposed budget includes a 3% increase in tuition fees that would apply to all programs. For example, for a bachelor’s degree in science, a 3% increase would increase tuition by approximately $285 for the year.
International tuition will increase slightly more, as has been the case in recent years: In 2019, the Board of Governors passed a multi-year fee increase for international tuition, recognizing that Dal’s international tuition is significantly lower than most of his fellow institutions nationwide. International tuition for students who began their studies in 2019 or later will increase by an additional $1,473 over the next year, beyond the 3% increase. This is the last year of these special increases.
For a breakdown of Dal’s tuition compared to other institutions across Canada, see Appendix C of the Draft Operating Budget.
3. Faculty and unit budgets increase every year—but not enough to cover the rising costs.
The vast majority of the operating budget (74.6%) is distributed to Dal’s faculty and operating units to cover their expenses. The most significant of these expenses are the remuneration (salaries, benefits and pension payments) for faculty and staff. Across the university, 84.5% of all faculty and unit spending goes towards compensation.
Each year, compensation is increased in accordance with collective bargaining agreements, and the university increases faculty and unit budgets to cope with these rising costs, along with other inflationary increases as appropriate. In aggregate dollars, faculty and unit budgets generally increase each year.
The problem is that, as noted above, Dal’s earnings do not cover all of the university’s increasing costs, even with proposed tuition increases. For this reason, faculty and units are typically asked to find cost savings to bridge the gap between costs and revenues. The 2022-23 draft budget calls for faculties and units to cut costs by 1.5% after their budget increases are applied.
4. The operating budget makes key investments in critical areas – from student support to facility maintenance.
While the budget must be balanced, its primary purpose is to ensure funds are allocated to advance Dalhousie’s priorities. Some of the key investments identified in the draft budget 2022-23 include:
- $9 million for Dal’s new strategic plan initiatives, promise of the third century, and other key priorities
- $4 million in addition to the facility renewal budget to improve campus spaces
- $500,000 for classroom technology improvements and an inflationary increase
- An inflation adjustment of 2% in the Budget for library acquisitions.
- While the proposed budget reduces temporary pandemic financial aid from last year’s budget, it also recognizes the ongoing need to support students and commits to a $1 million increase in ongoing scholarship and fellowship support.
- Additional support for students will continue to be made possible in this coming year by strong returns on investment, leading to higher endowment revenues (which make up a significant portion of the roughly 10% of the budget that is not funded by tuition or government). This will provide $2.6 million in additional student support.
5. Two things that will change the budget for 2023-24 and beyond: a new budget model and an international tuition task force
The budget report highlights two ongoing issues that will shape Dal’s operating budget well into the coming year.
The first is the development of a new budget model for Dalhousie —a priority identified in the promise of the third century strategic plan. A budget model steering group will be set up and work will start in the coming months. The goal is a budget model that ensures effective resource management and sustainable financial stability, and allocates Dal’s revenues strategically and predictably to encourage initiative, growth and entrepreneurship.
The second is the results of a International Task Force on Education commissioned in Fall 2021 to review and renew Dalhousie’s tuition fee model for international students. As mentioned above, Dal’s international tuition fees are currently significantly lower than many comparable universities at the national level. The task force aims to provide international instruction recommendations that align with Dal’s enrollment goals (including growth and diversification), increase revenue to further support Dal’s academic mission, and support an exceptional student experience (through quality programs and support systems, including financial assistance). and awards). The task force’s recommendations are expected to be presented to the board in the coming months and will apply to new international students beginning their studies in autumn 2023.
Would you like to provide feedback on the draft operating budget? Visit dal.ca/budget to review the plan in full. Any member of the Dal community can email feedback to [email protected]. Students should also check their dal.ca email to participate in BAC’s student survey. Feedback is due by February 16th.