CBU Staff to Face Layoffs due to Financial Crisis



On Monday, CBU President David Wheeler invoked the layoff clause in the collective agreement between CBU and the faculty association.

Wheeler cited a shortfall in projected revenues, and aims to trim $5 million from the $50-million budget, and reducing unionized staff is an option on the table.

The Financial Exigency clause in the collective agreement will create a committee to decide whether Wheelers claims of financial exigency are true, and if so, could lay off as many as 20 faculty association members to address the crisis.

This marks the first time a Canadian University has invoked its exigency clause for layoffs.

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President of CBU invokes financial exigency clause citing revenue shortfall.
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Joe Ward Follow Me
When a business or organization doesn't have sufficient revenue (or funding) to sustain their operations (including salaries), they have to streamline those operations, sell stuff off, lay off staff, or figure out a way to raise more funding or achieve more revenue. If CBU is seeing a decline in enrollment, they are not going to increase revenue from tuition, housing, etc. So I see very little difference between the professors - both those who will be impacted and those who are currently worried they will be the ones impacted - compared with our Western oil workers who are being heavily impacted right now by plummeting oil prices. The academic community holds no special privilege that warrants keeping them in an organization proving itself to be non-sustainable under present operating conditions. Though unions represent their members, simply being a part of a union doesn't mean that your job should be secure forever. They should be figuring out how to get Saudi students back, and ensure Asian students aren't put out in the cold by their university coordinated housing arrangement (a very bad brand message). Those should be the revenue drivers. There are just under 100 professors earning in excess of $100k, some significantly so. Compared with regional salary adjustments in other sectors, I'm not sure they've been entirely fiscally responsible with those employment contracts. http://www.cbu.ca/wp-content/uploads/2015/07/2015-Final-Audited-PSCDA-Statement-of-Disclosure.pdf
Bill Goldston Follow Me
$50m seems like a pretty meagre budget. A little less than 1/3 of the CBRM $160m. In HRM Dalhousie sits with a $400m budget which is almost 1/2 the HRM $850m budget and there are 3 other big Unis there. Of course none of those comparisons really mean anything, so you just lost a minute of your life reading my comment. Basically, work with what you got.
Heather Sparling Follow Me
As a CBU prof, I feel compelled to respond to Joe's comments. Most importantly, there's no reason to invoke the exigency clause at this time: enrolments are holding and CBU is not in a deficit position, unlike other universities in this province. Moreover, education is not a business. It's education. It's true that we're struggling to address declining government subsidies (see http://almanac.caut.ca/#/en/finance). Now, we could accept declining subsidies on the argument that universities should be self-sustaining. But if go that route, we will wind up with a private education system similar to the one in the States (with tuition prices to match). I also want to address your comments about professorial jobs. I'm not sure if you realize that if a professor loses his or her job at CBU, the chances of getting another similar job anywhere in the world are slim to none. Universities generally don't hire a prof who's had tenure elsewhere. I don't know why, that's just the way it is. Moreover, the job market in academia is horrible, especially in some disciplines, which are almost certainly going to be the disciplines that Wheeler and the CBU administration are going to want to cut. So the loss of a job isn't just the loss of a job -- it's almost certainly the loss of a career. You're right that we're well-paid, particularly compared to many on the island. However, we still have some of the lowest university salaries in the country. You can see a chart comparing minimum and maximum salaries at various career stages for universities across Canada here: http://almanac.caut.ca/#/en/academic-staff (scroll down to table 2.13). It's important to maintain comparable salaries with other institutions in order to attract strong faculty. Otherwise, we risk returning to our status as the "University of Crayons and Colouring Books" or the "high school on the highway." Poor faculty will not attract students from anywhere. Cape Breton deserves better.
Joe Ward Follow Me
Hi Heather, thank you for replying. I think there's a great opportunity here for an exchange of perspectives. I'll respond this evening with full consideration to everything you've presented in your message.
Roz Sorrie Follow Me
In reality, the reason why some (but not all) tenured CBU professors may find it difficult to find employment in other universities is that they are uncompetitive in terms of research engagement and outputs, grant income and external focus.
Heather Sparling Follow Me
It is true that some professors are more productive in terms of research than others. And it also true that the more productive a faculty member is with research, the more likely s/he will find a job elsewhere. However, if you look at academic job ads, they are almost always for *assistant* level professors -- that's an entry position. Once a professor has been promoted to *associate* professor and/or has tenure, other universities will rarely hire them. And if you look at the job listings for faculty in Canada, you'll see that they're very meagre and mostly in areas in which we don't have faculty. I would also say that just because some faculty are not as productive with external research grants and publications as others does not make them expendable. Many of these faculty are leaders in the classroom, in community engagement, and/or in administrative positions, all of which are essential to the success of CBU. Finally, I heard recently that CBU attracted an *additional* $1M in research funding last year. That, quite frankly, is very impressive for the size of CBU. So we're not exactly unproductive when it comes to generating research and attracting grant money!
Roz Sorrie Follow Me
I should also add that I feel more concerned for CBU employees on term contracts. These individuals are more easy to 'pick off', irrespective of the contributions they make to CBU, as they do not have a collective agreement to protect them.
Heather Sparling Follow Me
I absolutely agree: the adjunctification of universities (the shift from full-time tenured faculty to part-time contract faculty) is nothing short of a crisis that is negatively affecting the quality of education across North America. For anyone unfamiliar with this horrendous situation, here is a tragic story of an adjunct professor who had worked in universities for 25 years who died all but penniless and homeless (http://www.post-gazette.com/Op-Ed/2013/09/18/Death-of-an-adjunct/stories/201309180224). Sadly, her story is not the exception today. When I say that the adjunctification of universities is negatively affecting the quality of education, I do not mean to suggest that contract faculty are not excellent and committed teachers. However, they are not paid to do research nor service (all the admin work that full-time faculty do) -- nor would they likely have time to do it even if they wanted to. And when they have to take on large numbers of contracts just to make ends meet, it's understandable why they may not be as available to students for extra help. We are lucky at CBU that we don't have too many part-time and contract faculty (although we do have a few, and their futures at CBU are certainly threatened by the evocation of the exigency article). However, I'm sure that we *would* have a lot of them if they lived in Cape Breton -- and an increase in part-time faculty would certainly decrease faculty salaries. The reality is that a small community like Sydney with only one (small) university is not the kind of place that attracts unemployed PhDs. Thus CBU doesn't exactly have a pool of part-time faculty from which to draw. And part-time instructor pay is not enough to attract anyone from out of town. Fortunately for our students and community, the CBU faculty contingent remains largely full-time with permanent positions.
Joe Ward Follow Me
Ok, I had a little time to think over your message. Keep in mind, I'm not a part of the academic community. If I present anything inaccurately, I would love to have you provide me with better and more accurate information. My position should be seen as an impression coming from a typical thoughtful person, developed based on some reading of media coverage, press releases, and searchable performance data. You said enrollments are holding. Media reports indicate this is not correct. They are declining. This includes lower enrollment for Cape Breton sourced students, and the changes to the Saudi Arabian scholarship program: http://www.capebretonpost.com/News/Local/2015-10-15/article-4310981/Overall-enrolment-down-at-CBU/1 You said CBU is not in a deficit position. Wheeler said back in April 2015 (and since then) that the university was running at a shortfall. He announced hikes to tuition to try to make up for it. So media reports seem to refute your indication that they are not in a deficit position. http://www.capebretonpost.com/News/Local/2015-04-24/article-4124237/Cape-Breton-University-budget-includes-tuition-hikes-as-part-of-four-year-plan/1 I would say that education is very much a business, of a very distinct type. However, if we avoid calling it a business, we might say instead that it is an institution that requires maintaining cash flow positive status and/or increasing funding sources to keep it sustainable. You shouldn't accept declining subsidies. You should fight for your funding. In fact, it's possible that your President may be floating the exigency clause in the media in order to create political pressure (a somewhat guerrilla public relations and negotiation strategy). (cont'd)
Joe Ward Follow Me
Part II: There are programs in the United States that are arguably superior to the Canadian system. I graduated ranked 3rd academically (honours) in a local high school with a graduating class of over 300. UCCB (now CBU) offered me an insulting $1,000 scholarship. While St. F.X. didn't offer much better, I chose them for 2 years before heading onto Dalhousie to complete my degree. Check out the Florida Bright Futures Scholarship: https://en.wikipedia.org/wiki/Bright_Futures_Scholarship_Program BTW - I am currently a CBU student in the BBA program through UIT Startups. In regards to grim career prospects for tenured professors getting laid off, I can certainly empathize with how that must feel. However, we are in a new economy where it is repeatedly written that the job market has changed. People are warned not to expect lifelong careers with a single business or organization, as was often possible with our parents and grandparents. We have to anticipate multiple different employers and possibly variants of our position within the job market over our lifetime. I do not see a strong argument in favor of avoiding layoffs merely due to the likelihood that professors may find difficulty getting into the job market again. It's a very unfortunate situation, but is still a question of sustainability. Everyone is struggling. Oil workers are laid off without concern as to how they will support their families. Factory workers in North America were left abandoned. Miners and steelworkers were faced with the same kind of dismal prospects here in Cape Breton. For those affected, we'll have to be hopeful that they've invested their income wisely, will be aggressive in pursing new career opportunities, and are open to being adaptive to changing careers if that is required. This is the same situation that all other professions and trades must face when an industry declines. (Cont'd)
Joe Ward Follow Me
Part III: Regarding salary, I'm not sure I'm seeing a great disparity shown within the charts you linked. I believe that cost of living needs to be a significant factor, and is not accounted for. Perhaps university ranking and outcomes is relevant as well. However, what we are hearing now is that at existing revenues (tuition) and funding, the university cannot sustain itself. This requires cut backs in operational expenditures, salary reductions and/or layoffs. Alternatively, one might suggest increasing tuition. However, this will only make the university even more competitively *disadvantaged*, compared with other institutions of higher status. http://www.macleans.ca/education/best-of-the-best-introducing-the-2016-macleans-university-rankings/ I would agree with all the other important roles that you have indicated for professors. However, in fairness, to the extent that combined efforts have not resulted in success for CBU (benchmarked by enrollment), it just further indicates that despite the attempts made, it just simply hasn't resulted in the desired outcomes. In my industry, there are many startups of intelligent, well meaning, hardworking people with creative and valuable concepts who fail to build a sustainable business. And perhaps there are parallels with this institution of higher learning at present time. Our startup sector struggles due to regional challenges as well. We can't match the types of investment possible in other markets. Therefore, as people leave the region, it's going to impact CBU too. We all collectively share in the effects of a weak and struggling economy. Given that perhaps 75% of enrollment is comprised of Cape Breton students and international students, I'm not sure how much the quality of faculty weights in recruitment. I think the university needs to find a new way to differentiate. And I must admit that recent announcements about online learning caused me to immediately think of the University of Phoenix.
Heather Sparling Follow Me
Part II: I'd like to highlight once again that the most important point from my perspective is that the financial exigency article did NOT and does not need to be invoked. Faculty and staff do not need to be fired and lose their careers. There is no financial crisis. Now that the article has been invoked, morale has declined further and there is less incentive and energy available to develop the new programs and innovative solutions that are needed to ensure that CBU continues to be a sustainable university. If faculty are fired and programs are cut, even more students will stay away -- either because the programs they want are not available or because of a fear that CBU is unstable. That will certainly result in declining enrolments which will then require further faculty cuts - and thus the death spiral starts. I also don't believe (although I could be wrong on this one) that any Canadian university has ever successfully invoked their financial exigency clause, despite some sometimes significant financial challenges. See https://www.cautbulletin.ca/en_article.asp?ArticleID=2625. Generally speaking, financial exigency articles are to be invoked only as a very last resort. Surely CBU, which is in a far better financial position than several other universities in NS (none of which have invoked similar financial exigency articles), is not in a position to warrant doing so at this time. On a more positive note, I'm happy to report that CBU has worked hard to improve its scholarship funds: http://www.cbu.ca/come-to-cbu/tuition-finances/scholarships-bursaries/.
Heather Sparling Follow Me
Thanks for your perspective, Joe. I realize that you may well have a typical understanding of the situation, which is why I wanted to respond to your post. I appreciate your willingness to engage me on the topic. It's true that our overall enrolments are down. Slightly. As the article you cited states, enrolment was down 3.6% and the decline at CBU is mirrored at other institutions. In other words, this is a regional situation, not a problem with CBU specifically. In fact, it's not just a regional situation, it's a national situation (http://www.thestar.com/yourtoronto/education/2014/09/22/ontario_university_enrolment_down_for_first_time_in_15_years.html), and that's making for some extremely competitive recruitment efforts among Canada's universities. That's certainly not helping: we have to spend more on recruitment with less chance of success. We need to develop new, innovative programs to attract students - and that requires faculty. What's interesting is looking at the historical enrolments at CBU. The Maritime Provinces Higher Education Commission (MPHEC) has those records (http://www.mphec.ca/media/118018/Enr_Table1_2014_2015E.pdf). The article you cited states that CBU has an enrolment of just over 3000. The MPHEC report shows that enrolment was similar 2014-15 with 3050 students. But CBU only had 3079 students in 2010-2011. If just over 3000 students is a problem, why didn't the financial exigency article get invoked last year? or in 2010? As for a deficit, Wheeler is predicting we'll be in a deficit position *in the future* as a result of predicted declining enrolments. The university's financial position as of March 31, 2015 (less a month before the article you cited was published), the university had lost $135,368 (which is close to nothing when dealing with revenues and expenses of over $63M each). And the previous year, CBU posted almost $2M in "profit." http://www.cbu.ca/wp-content/uploads/2015/07/2015-cbu-financial-statements.pdf
Joe Ward Follow Me
Wheeler isn't predicting the decline in enrollment to be slight: "It's worthwhile noting that in the early 1990s, the number of students studying at this university from Cape Breton Island was just shy of 3,000 — within a few years, it will be just over a thousand. From 2,900 to 1,250 over a 40-year span — that's a massive change. But anyone here who works in the school or has kids in school knows what the school boards are up against. We see it in terms of the reduction of kids graduating from high school so we're always recruiting from a smaller and smaller pot." He's actually predicting enrollment will fall to "just over a thousand". With over 50% of enrollment coming from students in the CBRM, we have to realize the school teachers just took a round of layoffs and we're seeing school closures because the system is seeing ~450-500 less students per year. http://www.cbc.ca/news/canada/nova-scotia/nova-scotia-school-boards-face-continued-declining-enrolment-1.3145187 Prince Abdullah also ended his scholarship program. Dalhousie was the closest to qualifying (i.e. must be ranked in the top 200 in the world), but also failed to make the cut. http://www.cbc.ca/news/canada/nova-scotia/saudia-arabia-stops-scholarships-1.3377832 With CBU near the bottom of the MacLean's ranking, it's fully inconsistent with the new aims of that particular program (high education standards). So we should see significant fall off from the ~300 Saudi students as they graduate or depart early. So the question becomes whether or not Wheeler's projections are accurate. And he seems to have strong reasoning, even though he optimistically thinks CBU could grow to 3,500 enrolled. If his projections are correct, there will be no other options but exigency, or in plain speak "layoffs". The deficit you noted is equivalent to the revenues from 10-15 International students. Imagine if 300 Saudis and another 100+ CBRM students are lost in the next few years. (cont'd)
Joe Ward Follow Me
Part II: You said: "We need to develop new, innovative programs to attract students - and that requires faculty." In fairness, exigency hasn't been enacted yet. That faculty has been in place. And, so from the perspective of devil's advocate, one might ask why that faculty hasn't been developing new, innovative programs to attract students already. If they have, then the question shifts to why they have not been successful. And finally, we must ask if it is that their best efforts cannot overcome our regional decline? CBU professors certainly aren't responsible for the out-migration in Cape Breton, or the province. It remains to be seen if that can be slowed or (more importantly) reversed. When Wheeler talks about the $5 Million shortfall, what comprises that shortfall? Is he being inaccurate? You said: "Now that the article has been invoked, morale has declined further and there is less incentive and energy available to develop the new programs and innovative solutions that are needed to ensure that CBU continues to be a sustainable university." This is disappointing. If the layoffs happen, those who remain have to fight to make the university sustainable. They are going to have to be at their very best. Just as our Western workers have to reluctantly jump onto WestJet to fly out to a cold camp away from home and their families, we're going to have to ask each of you to continue to get the job done. Wheeler needs to be on a plane to China and Saudi Arabia and offering tuition *reductions* to bring more international students back to CBU. Actually develop a cost based competitive advantage. If the prospective students are merely researching quality, they'll see the MacLean's rankings and either end up in Halifax or another Canadian university out of province. Another option is to scale up programs like UIT Startups immediately to 100 students.
Heather Sparling Follow Me
The exigency clause HAS been invoked. However, there is a process to follow before layoffs can happen. We're going through that process now. The process is designed to ensure that there is, indeed, financial exigency and that the only solution is to fire faculty. I'm hoping the process will determine that that is not necessary, but that's not at all a certainty at this point. You are right that future enrolment prospects are looking very concerning. And the financial exigency clause may well need to be invoked at some point. But I don't think it needed to be invoked now. As I would like to point out once again: CBU is in a GOOD financial situation at present, and it's in a far better situation than many other universities in the province which have not invoked a similar article. There was no need to invoke this article, and there is no need to fire faculty. We can reduce costs through attrition. I would also agree that we could have done a better job of developing new, attractive programs. However, any shortfall here was not caused by faculty alone. And whether or not we should have developed more new programs sooner, there is no question that we need them now. But if we fire faculty, who will be doing that work? The remaining faculty will be so overwhelmed with the extra work that they won't have time (we really don't have time now -- which is part of the problem). And let me tell you from personal experience: developing new programs is a huge undertaking and, unfortunately, cannot be done quickly. I would also like to point out that we have been successful with some new and innovative programs. The UIT program is a great example. We also have a new traditional music program -- the only undergraduate traditional music program in all of Canada. We have new program proposals going through the (very long) approval process, including a new BA-BSc joint degree in the Environment, and a new Sports and Leadership program.
Joe Ward Follow Me
Thank you for correcting me on that. I was inaccurately referring to exigency as the final determination of layoffs, versus the actual initiation of that process of determination. I'm still somewhat unclear about the $5 Million amount Wheeler is trying to trim. Is he projecting significant shortfalls for the 2016 or 2017? If CBU was even $1 in the red in 2015 (over $100k as of March 2015 you suggested), then with a downturn in enrolment by 50-100 will lead to significant cash flow issues - especially if the student decline includes a significant segment of international students. Based on our discussion, I don't think that I could characterize CBU as being in a good financial situation. If they were a publicly traded company and announced that they were running into the red, predicting unmitigated decline in revenues, with their customer base dropping by up to 50% or more, their stock market value would fall off sharply on that news. So in business or organizational financial management at this scope, there would be an anticipation of a 3-5 year outlook. It's wouldn't be prudent to not plan ahead. And it appears that Wheeler has been prognosticating about this decline for several years now. The issue with attrition through retirement is that it doesn't alleviate the problems you noted about reducing staff and programs. Meanwhile, trimming staff through early retirement is targeting the most experienced professors. A layoff versus a retirement that doesn't result in someone filling the vacated position has the same absolute value. Reduction of professors. (cont'd)
Joe Ward Follow Me
Part II: Just as a note on the UIT Startup program: Part of the reason the program has moved so quickly is because it's actually being developed entirely by 3rd parties from the technology and startup space, and is operating with a great deal of autonomy from the academic system. It benefits from the umbrella of CBU, but also with the fleet footedness and agility of a lean startup. It might serve as a great model for other programs that CBU could look at developing, sort of as a proof of concept on doing high value stuff on a rapid timeline. The concept of a rapidly iterated and improved Minimum Viable Product can certainly apply in an academic environment, and certainly will be as education will be targeted for disruption (the good kind).
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