NEWS THAT MATTERS

Financial crisis in the university sector? What crisis?

From Macleans.ca March 31st, 2009

To look at the presidents’ paychecks, you’d never know universities were desperately short of cash. Ontario’s public universities cry poor to anyone who will listen and can produce elaborate pie charts and balance sheets to support their claims. Interestingly, none of their advocacy materials mention the
increasingly rich financial compensation awarded to the senior administrators of those same institutions.

Today, as required under Ontario’s “sunshine act”, the province’s universities were forced to disclosure the taxable compensation given to senior administrators.

If you were judging only by how much senior administrators are taking to the bank, you’d think universities were richer than ever.Two university employees made more than a half-million dollars last year. John Lyon, Managing Director of Investment Strategy at the University of Toronto, was paid a salary of $494,598.04 with $62,876.32 in taxable benefits for a total of $557,474.36. Peter George, president of McMaster University,continues to be Ontario’s top paid executive head with a salary of $524,435.14 and taxable benefits of $9,478.34. The next highest paid president, David Johnston of the University of Waterloo,
made $45,000 less than George with a total compensation figure of $488,242.66. Following close behind at $484,357.92 is Mamdouh Shoukri, president of York University. Overall, 13 Ontario university employees were compensated over $400,000 in 2008 with another 59 clearing the $300,000 hurdle.

Province wide, 10,461 university employees made the $100,000 plus list. In fairness, over half of the people on the list made less than $125,000. The grand compensation total of everyone on the list is $1.4 billion. More than half of that went to those earning more than $125,000. Judging by the record pay cheques for senior and mid-level university executives, one could reasonably conclude that universities are flush with cash and that “business” is booming. Sadly, that is not the case. University endowments are down by double-digit percentages and pension plans are facing major deficits. To address growing shortfalls, universities are going so far as to exploit loopholes in tuition regulations to increase fees on students, in order to pay for the excesses of the sector. The University of Toronto, for example, is the latest university to exploit a loophole in provincial regulations limiting the maximum tuition the university charges. The rules set the maximum tuition for students taking a 100 per cent course load. Traditionally, student fees are based on the number of courses taken: A student taking four courses paid for four, a student taking five paid for five.

The University of Toronto plans to make students taking three or four courses pay the same fees as those taking five. Ten Ontario universities are already exploiting this loophole to generate additional funds. Other universities are increasing “administrative fees” for services students must use in the course of their university career.

But if the situation is so dire in the Ivory Tower, why are the people at the top taking home growing, record pay cheques? Administrators are asking low-level staff to take pay freezes and benefit rollbacks. They are increasingly cutting full-time tenure track positions in favour of contract positions. (And then, as budgets squeeze, reducing contract positions). Student services are being cut so that, for example, students can’t get the counselling and other supports they need to succeed in university.

It seems that Ontario universities are only poor when it comes time to deliver the undergraduate education that taxpayers believe their money is going to support.

It’s time for Ontario’s university administrators to follow the lead of University of Winnipeg president Lloyd Axworthy. Axworthy, realizing that he’s asking others to bare the burden of his institution’s financial situation, cut his salary by 10 per cent. If university administrators are unable to control their excesses, then it is time for the Dalton McGuinty government to step in and force universities to spend taxpayer money on undergraduate education instead of administration.

Administrators taking a pay cut may not amount to much in the big picture, but 10 per cent of McMaster president Peter George’s compensation could, for example, save the job of an entry-level professor facing lay-off as his institutions continues to cut Liberal Arts undergraduate programs.

What do you say university presidents? Do you have 10 per cent to give back to your institutions? Or is it just everyone else who is expected to bail you out?

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