UBC board of governors approves $2.9-billion operating budget with $225-million deficit—thanks to the pandemic

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      B.C.'s largest university is unlikely to generate sufficient revenues to cover operating expenses as a result of COVID-19.

      Earlier this week, UBC's board of governors approved a consolidated $2.9-billion budget for 2020-21. It includes a projected $225-million operating deficit.

      The pre-COVID plan anticipated a $60-million surplus.

      The reversal is due in part to an expected $138-million plunge in tuition revenue. These fees, forecast at $805 million, will still deliver 30 percent of all operating revenue.

      The province's operating grant is expected to cover 35 percent of UBC's operating revenue, with the remainder generated through other sources.

      UBC's budget also projects a $208-million drop in other revenue sources due to the pandemic.

      That includes falls in income from housing, parking, and investments, as well as the cancellation of summer conferences, programs, and events.

      Meanwhile on the expenditure side, salaries and benefits are expected to fall by $36 million. They will still account for about 62 percent of all operating expenses.

      There will be an additional $25 million savings in nonsalaried areas, including travel to conferences, decreases in food purchases, and reductions in discretionary spending.

      The budget also referred to a "hiring chill" in place at UBC.

      "The degree of uncertainty all universities are facing due to the impact of COVID-19 cannot be emphasized enough," UBC president Santa Ono stated in a report to the board.

      "While the full impact of the COVID-19 pandemic on the university's finances are not yet known, it may be substantial," Ono added. "UBC's budget will continue to be directed by the university's strategic priorities in all possible ways."

      In fact, there are three financial scenarios arising from the pandemic:

      * a net impact of $114 million if tuition remains the same;

      * a net impact of $243 million under a moderate scenario, given "uncertainty around tuition";

      * and a worse-case scenario projecting a net impact of $313 million.

      Under the University Act, the president is required to submit a budget for approval.

      The B.C. government appoints a majority of the board's governors.

      New UBC board chair Nancy McKenzie is also vice chair of Coast Capital Savings and a former chief financial officer at Seaspan.
      Paul Joseph/UBC

      UBC has new board chair

      The Ubyssey student newspaper reported that the board approved the budget over the opposition of its three student representatives.

      The board meeting was chaired by Nancy McKenzie, who was recently elected by fellow governors. This followed the resignation of Michael Korenberg after he tweeted "likes" to a series of controversial right-wing tweets.

      McKenzie has previously chaired the board's finance committee and is on the board of UBC Investment Management Trust Inc. She's vice chair of Coast Capital Savings and worked for 19 years at Seaspan, including 12 as the company's chief financial officer.

      The report to the board emphasized that UBC is a "financially robust university with sufficient resources and flexibility to weather the impact of COVID-19".

      |In a normal year, the budget is a reasonable projection of the final financial results," the report states. "This is not a normal year and the actual revenues and expenses may vary significantly, either positively or negatively, from the budget presented here."

      Last December, Black Press journalist Tyler Olsen reported that B.C. universities recorded a combined surplus of $340 million in 2018-2019.