Having originally forecasted a deficit of $90,000 for the 2013-14 fiscal year, the Students’ Society of McGill University (SSMU) has recently revised its budget with the aim of improving its financial situation. The revised budget now breaks even, after $50,000 saved from cuts was transferred to a fund for long-term expenditures, as per SSMU bylaws.

SSMU was able to significantly reduce its deficit by cutting executives’ personal budgets, as well as General Administration, Building, Club, and Information Technology (IT) budgets. The official report on the budget states that the most significant cuts occurred in the General Administration category – which, according to the report, totalled $85,568.

Further examination reveals that approximately $74,600 of this amount arises from cuts in salaries and benefits of employees. The report explains that the Student Salaries Budget has been reduced by 10 per cent in order to account for the fact that 90 per cent of the budgeted hours for student staff are worked.

“The cuts were decided based on SSMU’s stated values and the overall services that we provide to students. The cuts were made as to minimize their effect on the services that SSMU provides,” VP Finances and Operations Tyler Hofmeister told The Daily when asked about how these cuts were determined by SSMU.

However, Hofmeister said that he could not disclose which categories of employees would be most affected by these cuts, for legal reasons.

This projected $50,000 surplus is to be transferred into a fund known as the Capital Expenditures Reserve Fund (CERF). In 1985, SSMU created the CERF to set aside money for long-term expenditures, renovations, student projects, and the like. Excess revenues are transferred to the CERF and the Student Life Fund annually, as deemed necessary. Sometimes money is transferred out to cover deficits, as happened last year when SSMU’s deficit of $211,320 was covered by money out of the CERF.

Hofmeister stated that the previously projected $90,000 deficit for this fiscal year was very high because it “includes a conservative amount for rent and utilities given the current state of lease negotiations.”

“Currently, SSMU has not been paying its lease during negotiations, but once an agreement is signed, SSMU may have to pay retroactively so it is important that [these potential costs are] included,” said Hofmeister.

One large expense that contributed significantly to the deficit was the $21,000 loss incurred at this year’s Frosh, a fact confirmed by Hofmeister. According to an answer VP Internal Brian Farnan gave at SSMU’s Special General Assembly on November 13, accounting mistakes were to blame for the majority of the five-figure loss.

SSMU used PayPal for Frosh, but miscalculated the percentage of fees that the company asked for. Money was also lost through sponsorship, as SSMU made mistakes calculating taxes. A new system that split up sponsorship revenues between faculties also contributed to the errors. According to Farnan, the approximately $200,000 Frosh budget will be maintained next year by SSMU’s accounting department, instead of SSMU executive members.

In a recent interview with the McGill Tribune, SSMU President Katie Larson suggested that the SSMU base fee might need an increase in order to accommodate future deficits. Hofmeister told The Daily that “a student referendum would be required” to change the base fee.

Another alternative could be “changing the investment portfolio to an endowment fund,” which would require “chang[es to] the relevant bylaws and would require the approval of [Legislative Council],” said Hofmeister.

Although SSMU cut its budget in its General Administration department, it also increased spending for areas such as contract services and interest fees from bank charges. Furthermore, SSMU has also increased its spending on security, as they are considering hiring more security and outsourcing less.

The IT department is also facing large expenses, as much of their hardware is out-of-date and needs to be replaced. Although a portion of this year’s budget is allocated to it, some purchases are being pushed back a few years in order to reduce financial pressures, setting SSMU up for a potential deficit in the future.

In an earlier version of this article, The Daily stated that the revised budget included a $50,000 surplus. In fact, the $50,000 in question was transferred into the Capital Expenditures Reserve Fund, and the operating budget broke even. The title of the article has also been changed to reflect these facts. The Daily regrets the errors.

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This funding prioritizes seven areas of research, according to a press release from the government of Quebec, namely: aerospace, biofood, biotechnology, renewable energy and electric transportation, creative industries, communication and information technology, and personalized medicine.

The policy will also provide funding to the FRQ, a tri-organization funding system that supports research throughout the province. According to the FRQ’s website, this 25 per cent increase in funding is “the first real and sustained increase to the budget of the Fonds in more than ten years.”

Jonathan Mooney, Secretary-General of McGill’s Post-Graduate Students’ Society (PGSS), told The Daily that the cuts to the FRQ earlier this year were “devastating.”

“Students who [had] great projects, great research, great supervisors, and interesting research, [weren’t] getting any funding from the system to actually pursue it,” he said.

Despite the specific targeting of the seven “strategic areas” in the fund, the University denied that the fund would come at the cost of basic research, which, in contrast to applied research, is not done for immediate commercial gain, and lays the foundation for further discoveries.

“This is only one plan. […] Provincial funding only accounts for 20 per cent, roughly, of McGill funding for sponsored research,” Vice-Principal (Research and International Relations) Rose Goldstein told The Daily. “It’s still the majority federal [money], which is mainly [directed to] basic research.”

“There is a lot of money that is dedicated to [basic] research,” Mooney noted. “It’s not as if there is going to be a clawback.”

However, Mooney also said that there could be a lack of growth outside of the seven targeted areas. “Maybe there isn’t going to be growth in those areas […] But there is still going to be an opportunity for scientists or students who want to pursue those topics to pursue them.”

$367 million in bursaries will be available to students in the coming years, according to the specifics of the fund. As per a statement by PGSS External Affairs Officer Navid Khosravi-Hashemi in the press release, this will create 1,500 more grants for students across Quebec.

According to a press release from PGSS, Quebec universities will receive $340 million of funding, targeted toward those seven areas, as well as $478.7 million for indirect costs of research. However, Goldstein said that it was too early to tell how exactly funding would be distributed both between Quebec universities and within McGill, noting that the plan was currently only at a “higher level.”

$367 million in bursaries will be available to students in the coming years, according to the specifics of the fund. As per a statement by PGSS External Affairs Officer Navid Khosravi-Hashemi in the press release, this will create 1,500 more grants for students across Quebec.

Goldstein alluded to the implementation of some form of competition for funding at McGill, noting, “It’s not just going to be handed out.”

Both the University and PGSS remained optimistic on the potential of the funding, saying that there is a significant possibility for growth, especially within the targeted areas.

“It’s going to allow the researchers in those [strategic] areas to grow their groups,” Mooney said. “It’s going to allow McGill to shift its research focus a little bit so what it’s doing with its research policy […] is in line with what the government is doing.”

“We think it’s a very holistic, well-integrated plan,” Goldstein added. “The seven strategic areas [align] very closely with our strengths and priorities. If you look at [the government’s] plan and our strategic research plan we think there’s a very good match.”

Goldstein also welcomed the funding for indirect research costs, giving examples such as electricity costs and libraries. “All research incurs indirect costs. […] The indirect costs are the institutional costs that benefit and support the research.”

Despite the lack of funding increases in certain areas, the reaction to the fund was overwhelmingly positive.

“It means we are going to have $37 million more available for supporting students,” said Mooney.

The policy aims to fulfill the government’s goal of investing 3 per cent of the province’s GDP in research and development.

For more on basic and applied research at McGill, see this year’s feature on Principal Suzanne Fortier, “New Sheriff in Town: Welcoming new principals and principles.”

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