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During the internal consultation phase, the working group engaged with campus leaders including Deans’ Council, Integrated Planning, Presidents’ Leadership Council, chairs and directors, and leaders in each of the university’s executive portfolios. The working group also engaged with governance bodies including the Senate Committee on the University Budget and the Board of Governors Finance Committee.

Since all areas would be impacted by a change in budget model, this broad range of internal consultations was critical in considering the needs and perspectives of different units and ensuring transparency.

Consultations included an education component to share information about UVic’s existing model as well as the range of models in use across post-secondary institutions. A series of questions was posed on what works well and what is seen to need improvement. With the recognition that people make decisions rather than budget models, the consultations included discussions on values and principles.

Members of the working group interviewed key budget decision stakeholders at several Canadian universities, particularly in British Columbia and Ontario. We also collected and reviewed publicly available information from various university websites, including universities in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. As well, we heard from and consulted post-secondary colleagues at the annual Council of Western Canadian Financial, Logistical and Operational Personnel and annual Canadian Association of University Business Officers (CAUBO) conferences in 2023.

We collected information from a range of universities, particularly those that are similarly sized and that we consider peers. Recognizing that provincial funding differs, we looked at universities from different provinces to help ensure we build a model that is resilient to change. Both CAUBO and the Education Advisory Board provided helpful materials related to available and alternative budget models, as well as information about adopting and transitioning to a new model.

UVic currently operates with an incremental/historical budget model. While we have made modest refinements in recent years to allow for professional program revenue sharing and position control flexibility, we have not made any major changes to our model in decades.

Though this incremental/historical model has provided stability and predictability, it has not kept current with the evolving needs of students, the university and the post-secondary landscape. Over time, UVic has grown and become more complex, requiring a budget model that can better adapt to and support operations, aspirations and sector changes. Many Canadian universities have moved or are moving away from an incremental model.

Based on consultations, there is considerable interest in adjusting UVic’s budget model, including to empower leaders, better manage costs, and make more strategic investments to enhance our profile as a leading Canadian research university. A new principles-based model will better support the university’s strategic objectives and align investments with needs and opportunities.

UVic currently operates a historical/incremental budget model where the previous year’s budget serves as a baseline, and incremental changes are made annually based on factors like enrolment changes, service level changes, inflation, and through strategic planning requests. It is generally just additive. Although this model is simple to manage—particularly when there is growth—and stabilizes funding for units, it is not sufficiently sensitive to different opportunities and costs, reduces accountability for managing expenditures and creates disincentives to grow revenue.

It also does not allow for flexibility during periods of fiscal constraint or stagnation, nor has it kept current with the evolving needs of the university and the post-secondary landscape.

Over time, UVic has grown and become more complex, requiring a budget model that can better adapt to and support operations, aspirations and sector changes. The proposed hybrid model will strengthen long-term connections between budget and enrolment, which is reflective of our operating revenue sources, budget model principles and our mandate to educate students. Approximately 90% of the university’s operating budget is funded by a combination of student tuition and a provincial grant to educate students, both of which are directly related to enrolment.

The proposed principles-based budget model can support UVic’s strategic plan and priorities in several ways, most notably through a new Strategic Initiatives Fund that will support strategic priorities that have a broad impact on the university.

The new model would also better connect budget to our mandate as a publicly funded research university, which is to provide a quality, research-enriched education to students. Approximately 90% of the university’s operating budget is funded by a combination of student tuition and a provincial grant to educate students, both of which are directly related to enrolment.

During both internal and external consultations, we heard consistently that any changes to our model should be selected, developed and implemented based on our values and principles. The proposed model was designed with this feedback in mind, so UVic’s budget model principles and values (elsewhere on this page) will underpin decision making.

Though not a comprehensive list, some examples of how the model will align with UVic’s values include:

• Budgets will be connected to enrolments and research intensity to support our values as a publicly funded comprehensive Canadian research university.
• Revenue retained by units will be subject to a “relative to opportunity” weight or margin, reflecting differential abilities and our equity values.
• A retreat for budget leaders with clear reporting mechanisms will be held annually to demonstrate our commitment to transparency and collaboration.
• Benchmarks and performance metrics will support service excellence and discourage duplication.
• Allocations will be made at the faculty-level, allowing Deans to identify, and determine how to support, each faculty’s diverse priorities and strengths.
• A strategic fund will be created for institutional initiatives that support our Strategic Plan and enhance our profile as a leading Canadian research university.

This is a multi-year process, and in many respects, we are still in the conceptual phase. The proposed budget model changes will incentivize certain behaviours and support decision making, aligned with our budget model principles, but will not make budgetary decisions for us. University leaders—including Executive Council, Deans, AVPs, Chairs and Directors, etc.—will still be responsible for budgetary decisions.

A shadow budget phase will provide an opportunity for building acumen and training, testing and analytics, and refining and adjusting the model as needed. All members of the university community will have this opportunity to become familiar with the new budget model without changing divisional budgets to align with the model.

For some units, change will take time and staging. We are proposing using a multi-year average with respect to better aligning unit budgets and enrolments, with a period of smoothing that values stability and provides for contingency.

Through the proposed model, UVic will strengthen the long-term connections between budget and enrolment, reflecting our principles, mandate to educate students and operating revenue sources. Recognizing that enrolment may fluctuate year-over-year, and that unanticipated events can impact enrolment, budgets will be developed based on multi-year averages.

Ultimately, budget models don’t make decisions, people do. This means if units are unable to meet their targets over the long-term, then Chairs/Directors will work with Deans to determine a path forward.

We expect a more complex budget model will impact the VPAC Office, Budget Office, and potentially also Deans’ offices. Based on our research, UVic’s central budget supports are very lean compared to similar sized institutions. To support those teams and build acumen across the university, the Budget Design Committee has proposed new resources and tools, an annual retreat, and associated policies and guidelines. For example, new dashboards will support data-informed decision making, and new staffing positions may be required to support Deans and other major budget holders.

We recognize that it will take time and effort to build budget acumen across the university, including through the shadow budget process. We do not, however, believe a new model will materially change workload for Chairs or Directors, as many of their decisions are already budget decisions, although those decisions may not be recognized as such. For example, while section sizes and teaching assignments are primarily pedagogical and operational decisions, they are also budgetary decisions. The new budget model will more directly connect those academic decisions already being made to budget decisions.

Budget models don't make decisions, people do. The proposed model is designed to encourage and incentivize innovation, revenue diversification and growth, quality and service excellence. For the university and all its units, enrolment health means financial health.

Faculties with programs will see a direct flow of revenues based on their enrolments and teaching in their areas. The allocation of revenue will be sensitive to relative opportunities and the costs associated with pedagogy and delivery.

Support and service units will continue initially with the incremental approach, but we are laying the foundation for performance and accountability-based budgets.

Space is an important part of UVic’s operational landscape as well as a cost driver.

UVic is a vibrant in-person institution, and individuals and units are encouraged to use the university space(s) they have been assigned. At the same time, unused space is a sunk cost and contributes negatively to our sustainability goals. For example, we pay to heat and power spaces and must assume they are being used as allocated.

Rather than assigning cost to space, the Budget Design Committee proposes a new policy or guidelines to support leaders with the allocation and use of space. This process would be separate from, but aligned with, the budget model work.