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UBC challenged to fund wage increases through operational efficiencies

The University of British Columbia is drawing on savings found in the past two years to fund wage increases for union members, but finding the money is a challenge, a university spokesperson said.

Advanced Education minister John Yap announced today that 1,700 members of CUPE 2278 at UBC and 600 members of the BCGEU at UBC's Okanagan campus have ratified agreements that provide wage increases of two percent per year in 2012 and 2013.

Under the co-operative gains mandate, funding for the increases was to come from savings found elsewhere in the employer's budget and be "real, measurable, and incremental to savings identified by employers to meet Provincial Budget and deficit reduction targets for 2012/13 and beyond."

A ministry spokesperson said he could not share details of what was in the savings plan UBC would have submitted to the ministry ahead of substantive negotiations. "Just like in any negotiation these savings plans have to remain confidential to protect the bargaining position of the employer," he said.

"Each savings plan may span several tables within a sector, and connects to Government's overall bargaining strategy. Revealing them may affect Government's overarching strategy for this round of bargaining and jeopardize the success we are starting to see in reaching agreements under this mandate."

As with other recent UBC labour agreements, the funding came from "operational efficiencies realized over the past couple of years," said spokesperson Lucie McNeill in an email.

"I would again underline that finding these efficiencies was the product of very focused effort," she said. "UBC is facing a tough challenge."

The university's main sources of revenue -- tuition fees from domestic students and a grant from the province -- have been more or less static, she said. At the same time costs are rising, "including the need to provide our employees with compensation increases that are close to reflecting the cost of living ... and to remain competitive in the labour market so we can retain and recruit staff," she said.

She provided a link to an article in the Dec. 2, 2012 UBC Reports, a UBC public affairs department newsletter. It quotes Pierre Ouillet, the school's vice-president of finance, on the financial squeeze the school faces and where it has been able to find savings.

"Our expenses are up because like any other sector, we are subject to inflation," he said, mentioning electricity and carbon offsets along with wages as examples of areas where costs are rising.

The 2010 restructuring plan has allowed the school to find $30 million in efficiencies by streamlining management, restructuring building operations, integrating information technology and reorganizing some academic programs, he said. Nor are administrative units allowed any more to hold onto money they don't spend in a given year.

"We are still looking for more, but we are reaching the end of the road on savings," he said.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.

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