So, yesterday I said it was pretty easy to show what’s going on in university budgets just by looking at operating grants, tuition, and salaries – and so I thought, perhaps, I should practice what I preach.  So here goes:

Between 2004-5 and 2012-13, operating grants from provincial governments rose from $8.27 billion to $10.9 billion (all figures inflation-adjusted, expressed in 2012 dollars), an average increase of 3.5% per year.  But this encompasses two very distinct periods.  Up until 2009-10, the rate was about 5%, whereas since then the average has been 1%.

Tuition income has been rising by 5.3%, but here again we see a two-period effect.  Between 2004-05 and 2008-09 the increase averaged about 3% per year, after inflation; since then it’s been about 7%.  And this when actual tuition rises have only marginally outpaced inflation – the growth has mostly come from increases in fee revenue from international students and professional Master’s degrees.

Put all of that together and you get Figure 1, below, which shows that operating grants increased 4.4% per year, after inflation.  And you thought there was some sort of crisis.

Figure 1: Operating Income at Canadian Universities, 2004-5 to 2012-3, in Millions of $2012 (Source: CAUBO Financial Information on Universities and Colleges)

 

 

 

 

 

 

 

So much for income.  What’s going on with compensation?  Well, here’s the simplest way of showing the data.

Figure 2: Operating Budgets and Total Salaries & Benefits at Canadian Universities, 2004-5 to 2012-3, in Millions of $2012 (Source: CAUBO Financial Information on Universities and Colleges)

 

 

 

 

 

 

 

In 2004-5, staff compensation was 72%, and while it bounced around between 69% and 74%, by 2012-3 staff compensation was still exactly 72%.  And although the portion of this which goes to academic salaries fell slightly (40.8% to 39.2%), it was offset by a rise in benefits.

Now, it’s tempting to look at all this and say “what the heck is all the fuss about”?  Institutional income and salaries are rising at the same rate, meaning pay rises are affordable and, by implication, staff costs have not increased faster than non-staff costs.  But this is looking backward to a time when institutional income was rising 4.4% per year.  The question is: how likely is it we’ll keep hitting that mark in the future?

Tune in tomorrow for some scenario planning.