Cape Breton University officials 'furious' over Acadia bailout

Officials at Cape Breton University say they are "furious" after learning Acadia University has received $24.5 million in bailout money from the province — including $10.5 million last year — since 2012-13, while their own pleas for help have gone unanswered.

In a statement released Wednesday, university president Dale Keefe and board chair Robert Sampson said they would be seeking a meeting with Advanced Education Minister Labi Kousoulis as soon as possible to discuss the matter.

In the statement, Keefe said the suggestion from government and Acadia officials that the Wolfville-based university was somehow in a unique financial situation following a 2009 change in the funding formula is "simply not the case."

"We have on multiple occasions briefed the government on the challenges at CBU and have, in fact, requested support," Keefe said in the statement.

Sampson said in an interview that CBU's losses following the funding formula changes were about the same as Acadia's — roughly $6 million. That's resulted in cuts to staff and services through the years, as well as depleting the school's reserve fund.

"We both fell into the same bucket," said Sampson. "And as the last seven or eight years have rolled out, the hit that they took was reimbursed to them."

Sampson wouldn't speculate on why Acadia's requests for help were answered, while those in Cape Breton were not.

Help is on the way

Kousoulis said Wednesday that each university is different and their respective situations are examined separately. Acadia and CBU were the two schools that suffered under the funding formula change and the minister said both have bounced back. 

The problem is there was no mechanism to help them adapt to swings in enrolment, which is why the government stepped in with Acadia.

The minister said help is also coming for CBU in next month's budget.

"Up until recently, we felt that CBU and Acadia still had room within their budgets to manage and meet those challenges," he said in an interview. "And when it got to the point that we felt that they were operating as efficiently as possible, then we looked at what the gap was remaining and then we funded that."

Kousoulis said Acadia has "made great strides in improving their finances" and the $3.5 million in additional money the school has been receiving since 2012-13 will now be embedded in future base funding.

Acadia made clear it couldn't pay

The Acadia bailout became public last week with the release of the province's public accounts, which officially closed the books on fiscal year 2016-17. It showed Acadia received $3.5 million in emergency operating funding. The province also forgave a $7-million loan it guaranteed for the purpose of operating funding, dating back to 2011.

Keefe said the government made clear to all universities receiving the loan via a strategic opportunities fund that it expected the money would be repaid. The province confirmed last week Acadia is the only school not to have repaid the loan.

In a statement released Wednesday, Acadia board chairman John Rogers said the school made clear to the government at the time it received the loan that it would not be able to repay. In fact, he said, the request was for a grant.

"Acadia was forthright with the then-government and the current government that it had requested a grant because it did not have the fiscal capacity to repay a $7-million loan."

Rogers said Acadia's problems date back to 2008 when it experienced "a precipitous enrolment drop and high debt-servicing costs."

"Unfortunately, that same year, the formula that allocated funding to each Nova Scotia university was changed significantly. The new formula calculated Acadia's operating grant based on years of reduced enrolment."

Rogers, who declined through a university spokesperson to do an interview, said in his statement that the tides have turned for the university — its enrolment has grown by 25 per cent since 2009 and professors have attracted twice as much research funding in the last five years than in the previous five.

Not enough progress

But even with all that progress, the university still faced potentially dire financial circumstances and more help was required.

Acadia president Peter Ricketts said in an interview last week that the most recent $10.5 million from the province prevented the school from having to make further difficult decisions, which in recent years have included not filling vacancies, staff taking unpaid time off and wage rollbacks, and eliminating 90 administrative positions.

To date, government officials have refused to discuss the need for the additional help for Acadia, referring all questions to the school. The only other school to receive help during the same time period was NSCAD University, which recieved $10.2 million from 2009-10 to 2015-16.

'Lacks any shred of fairness'

The bailout isn't just news to officials at CBU. The executive director of the Council of Nova Scotia University Presidents said last week that none of the presidents he spoke to were aware of the extra help.

Sampson, the CBU chair, said the news last week confirmed rumours he was hearing in recent months. He said his problem isn't with Acadia, rather with how the government told universities "this is the way it's going to be and you have to step up and play by the same set of rules" — something that's now been shown not to be the case.

He was even more blunt in his assessment in the statement.

"This is baffling and lacks any shred of fairness to our institution and to our community."

The board of governors' executive committee at CBU is scheduled to have an emergency meeting Wednesday to discuss its next steps.