Michael Benarroch, president and vice-chancellor, Diane Hiebert-Murphy, provost and vice-president (academic) and Mike Emslie, CFO and comptroller, hosted the university’s third annual budget town hall on Oct. 16.  

The budget town hall is an event where the president and his executives engage the campus community in the university budget for the fiscal year.  

Benarroch stated that “it’s our priority to continue to hold these types of events to engage in our community, to listen to you and take that information back.” 

The budget town hall discussion addressed the university’s budgeting and planning process, 2023-24 financial results, 2024-25 operating budget and plans for upcoming years.

Emslie started the budget discussion by presenting the university’s revenue sources. According to his presentation, the university’s revenue sources are divided into two parts — operating activities  and non-operating activities.

Revenue classified for operating activities is controlled by the university. It includes instructional activities, administrative support, operational costs, ancillary services and income funded activities. These are funded by tuition, provincial grants and income from other revenues. 

However, revenue for non-operating activities is restriction-based and needs to be spent according to the restrictions imposed by the funders. This includes sponsored research projects, donations, special trust accounts and capital funding. It is financed by the provincial government, federal government and other revenue sources. 

The presentation also showed that as of Mar. 31, 55 per cent of the university’s revenue came from provincial grants, while 30 per cent came from tuition and 15 per cent came from other fees.

Seventy-five per cent of the generated revenue was spent on salaries and benefits, while the remaining 25 per cent was spent on other costs, such as utilities, maintenance, supplies and travel.

Emslie emphasized how low the university’s tuition rate is compared to other universities in the country. 

“It’s worth noting that U of M’s tuition is very low relative to our peers,” Emslie said. “In 2000, the province froze tuition for about a decade and has regulated domestic tuition increases since, and this resulted in Manitoba having the lowest tuition rates in the country.” 

Following Emslie’s presentation, Hiebert-Murphy presented the university’s budget planning. She discussed how revenues from provincial grants, tuition and other fees are allocated based on U of M’s budget model.

According to the budget model, funds from provincial grants, tuition and other fees are allocated to faculties and schools. Faculties take from that revenue to support central service units, such as finance, human resources, IT, student affairs, research office and physical plant. The remaining revenue from charges and fees are allocated to the ancillary units.

Hiebert-Murphy also talked about the university’s budget cycle and resource planning. 

According to the presentation, the cycle for the university’s budget begins each spring and ends the following spring with the board’s approval. 

“The timing of the budget process is dictated by our fiscal year which ends Mar. 31, and by funding announcements that come from the government,” Hiebert-Murphy said. “The timeline doesn’t always nicely match up to our decision-making processes. So many of our processes around funding are collegial processes.”

Hiebert-Murphy continued, “the province usually informs us about our grant and tuition increases that are allowable, very close to or sometimes even after the start of the fiscal year. Once we have confirmation of our funding we can actually start moving ahead on some of our plans, but that planning can sometimes take months or even longer and it’s that leg that can lead to surpluses in the budget.”

Emslie continued the presentation with the 2023-24 financial results. 

According to the presented data, the university reported a consolidated surplus of $79.4 million for the 2023-24 budget. This surplus was a result of a late notice grant increase, a late notice in approved program expansion funding, the time to recruit or hire and the delays in renovation projects. 

The data also entailed the cumulative balances for carry-over and provisions by fiscal year. 

As of March 2024, the cumulative balance carry-over and provisions for faculties and university priorities was $160 million and $167 million respectively. 

Furthermore, Hiebert-Murphy presented the 2024-25 operating budgets and plans for the coming year. 

“We are about halfway through the 2024-25 budget. Planning for the budget started in June of 2023, and the budget was approved by the board in May of 2024,” Hiebert-Murphy said. “That time, the board approved an operating budget of $820 million, and that included a two per cent increase on the grant from the provincial government, as well as a 2.7 per cent increase in the domestic tuition.”

Hiebert-Murphy also mentioned salaries and enrolment as the two biggest factors for the 2024-25 budget. She explained further, saying that “as some of you may recall, in January of last year, the federal government announced caps on international students’ study permits. This has increased a lot of uncertainty around international enrolment levels across Canada.”

She continued, “enrolment last year and the previous year was higher than expected, so we adjusted the current year budget to reflect that expectation, but we also offset it by an anticipated five percent decline in overall international student enrolment due to those caps.”

In addition, she said that “to mitigate the gap between the U of M and other institutions on international tuition, we increased international tuition rates by 5.75 per cent.”

The 2024-25 budget had an increased investment in key areas like student services, competitive wages, program expansion, academic programming, one-time strategic investments, utilities and other inflationary costs. 

In terms of the university’s plan for the 2025-26 budget year, Hiebert-Murphy said that “the most significant change we’re making is in how we allocate the provincial grant. We are aligning that allocation to more closely align with how the grant is received by the university.”

The provincial grant will be allocated as a base grant to each academic unit, tuition will be allocated based on enrolments and there will also be an introduction of new carry-over procedures to spend funds more effectively while maintaining an appropriate financial reserve. 

Furthermore, Emslie presented the university’s budget plans for 2025-26 to 2027-28. 

The proposed plan showed that there will be limited provincial grant increases, increases in enrolment with less tuition revenue, increases in wages to remain competitive, increasing demand for student supports, an increasing volume for central support units and upgrades in teaching and learning infrastructures. 

The plan also showed that the university’s expenditure for the 2025-26 to 2027-28 budget is projected to exceed the revenue. 

Lastly, Hiebert-Murphy closed the presentation saying that “we do have some clear and unexpected financial challenges that we’re going to be facing over the next few years, but we are going to continue to use our resources in a fiscally responsible way and do the best that we can to continue to invest in our core mission at the university and make some gains in some of the areas that we have identified as strategic priorities.”

She continued, “we are going to implement revisions to the budget model in support of those goals, and we hope to see some stabilizing of our international student enrolment which will help us plan as well for the future.”