Article 39 Q&A

As identified during a Board Retreat in December 2014 and reinforced by the 2015-16 budget process, CBU must offset significant budget shortfalls as identified in its four-year financial plan ending with the 2018/19 fiscal period. This shortfall is primarily related to declining student numbers at CBU. It was hoped that the shortfall would be bridged by a combination of market adjustments to tuition (Tuition Policy passed by Board of Governors in May 2015), direct non-staff costs savings, and a 5-10 percent cut to employee costs, achieved by voluntary means.

  • What cost-saving efforts have been made by the university to date?

    Controlling and reducing operating costs are important for any publicly funded organization, including universities. Efforts are ongoing to reduce spending on operational activities which cumulatively will generate further cost savings. For example, we made the decision to invest in our existing Student Information System using internal IT staff rather than an external provider. We have also implemented changes in the parameters for certain contracted services and changed internal policies in an effort to reduce costs.

    On the matter of salaries and employee benefits, by June 2016, CBU will have reduced the number of Vice President positions from four to and many of our operational departmenst have been re-organized While sometimes we change someone’s title, e.g. Director of Library to Dean of Library, it has little impact on the budget and is done primarily to reflect a change in the responsibility for an existing position.

    The most significant change in salary and benefit costs relates to the August 2015 Voluntary Retirement Incentive Program (VRIP) through which eligible CBU employees could offer to retire. The VRIP program successful in  most employee groups with 23 employees retiring under the program.  This is expected to generate annual savings appproximating $1.2 million.

    A second VRIP, with the same eligibility criteria as the August 2015 program, is currently (June 2016) being offered to CBUFA members again to help further reduce salary costs. It is our hope that the second phase of this program will also be very successful.  

  • What does all this mean for staffing levels?

    Like all universities, approximately 75% of CBU’s operating expenditures are related to wages and employee benefits. Despite the cumulative cost savings outlined above, it is difficult to imagine any scenario where further reduction in staffing levels will not be necessary. We are committed to working together with internal stakeholders to achieve needed employee reductions through reasonable voluntary means that follow the Guiding Principles of the University’s Sustainability Plan, as endorsed by the Board of Governors. While this represents a significant challenge that will impact academic and academic support units, we are convinced that the university is able to remain a viable comprehensive institution, maintaining a reasonable breadth of academic programs and support services.

    Whatever happens, CBU will remain a strong and independent university that continues to be dedicated to the future society and economy of Cape Breton Island.   Listen to President Wheeler’s thoughts on the challenges and opportunities that await us and the sector in his end of year interview for CBC Information Morning (aired January 5, 2016). In addition, CBU is determined not to be left behind by the technological changes and opportunities affecting the higher education sector.  Read President Wheeler’s recent Academica blog on the topic here.

  • What is the Article 39 clause?

    On January 18, 2016, President Wheeler notified the Cape Breton University Faculty Association (CBUFA) that he would be invoking Article 39 of the CBU/CBUFA collective agreement.  The clause is a mechanism under the agreement that allows for discussion of approaches to reducing faculty staffing costs for bona fide financial and/or academic reasons.

  • Why has the Article 39 Clause in the CBU/CBUFA collective agreement been invoked?

    The Article 39 process provides a framework, including discussion of reasonable mechanisms to ensure CBU maintains its organizational and financial integrity. The Article 39 process may take anywhere from five months to 20 months to complete depending upon the outcome of discussions. It is thus important to ensure discussions occur on a timely basis.

  • What has taken place to date?

    Within 10 days of the invocation of the clause, a committee composed of two CBUFA nominees, two Board of Governors nominees and one mutually agreeable fifth member was established.

    Committee members were:

    Mr. John Malcom, External member, Committee Chair
    Mr. Calvin Howley, CBUFA representative
    Dr. Scott Moir, CBUFA representative
    Dr. Dale Keefe, Board representative
    Mr. Gordon MacInnis, Board representative

    The Committee’s mandate was to examine possible methods of avoiding layoff including, but not restricted to, leaves of absence, early retirements, transfers and re-training. The committee thus examined options for voluntary reductions in staff costs.  Consistent with the direction of the Board of Governors, in all of his recent public statements the President has stressed the vital importance of pursuing voluntary options with maximum goodwill, creativity and flexibility.  

    This committee also undertook work to offer a perspective on whether the clause needed to be invoked – in this case for bona fide financial reasons.  The committee concluded that “bona fide financial reasons” warranting action did indeed exist although a determination was not obtained on the question of whether or not an immediate need existed to begin the process of identifying staff for layoff.

    On March 1, 2016, the Article 39 Committee filed a report in which they recommended, among other things, the continuation of a collaborative process over the next four months through the creation of a Working Group, charged with the responsibility to:

    1. Receive the external review of recruitment and marketing activities of CBU.
    2. Pursue options of voluntary staff reductions of the CBUFA membership.
    3. Receive progress reports on the success of cost saving measures.

    Through an MOU between CBUFA and the CBU administration, work under Article 39 was paused and the Working Group formed to pursue the matters recommended by the Article 39 Committee. Working Group conversations continue  And, consistent with its mandate, the Working Group is anticipated to file its report by June 30, 2016.

    On September 19, 2016, the CBU Board of Governors suspended Article 39 until a Collective Agreement can be ratified.

    CBU remains committed to exploring any and all alternatives to layoffs and it is our hope that this can be achieved through the processes laid out in the CBU/CBUFA collective agreement.

  • Who are the Working Group Members?

    Dr. Dale Keefe
    Mr. Gordon MacInnis
    Dr. Andrew Molloy
    Mr Chester Pyne

  • How many positions will be lost?

    It is premature to talk about positions.   At this stage we only have approximate dollar figures for necessary reductions in staff costs.  Although these can be translated into ‘position equivalents’ or ‘salary equivalents’ they cannot be equated with positions before all voluntary options have been exhausted and associated annual savings and one time costs determined.  Indeed, it would be pre-empting the Working Group outcomes to identify the specific number of positions involved at this time.

  • Is there a list of positions that will potentially be lost?

    No. There is no list of positions that will potentially be lost. It is still too early to talk about the loss of positions and CBU remains committed to focusing on reaching a solution by voluntary means. If following the completion of the Working Group’s mandate it becomes apparent that positions will be lost, another joint CBU/CBUFA committee will be formed and charged with the responsibility to identify those positions.

  • When will voluntary options have been exhausted?

    CBUFA members have until June 24, 2016, to apply for the Voluntary Retirement Incentive Program (VRIP). The success of the program will be fully understood by early July 2016.

  • Will programs be cut?

    There are no specific plans for cuts in programs. Cape Breton University will remain a strong, comprehensive university that will continue to impact positively on the life chances of our students and the economic and social growth of Cape Breton Island.  We continue to work on developing and launching new programs that we believe will be beneficial for our students and the Province.

  • What other opportunities for revenue is the University exploring?

    CBU continues with its commitment to innovation in current and new programming. We have made significant progress the last two years in developing new program concepts such as the MEd in Sustainability, Creativity and Innovation as well as exciting developments of the BACS program and other proposals, e.g., a new interdisciplinary degree in Environmental Studies.

    We continue to diversify our international student market, with new relationships being established in India and other countries. The strengthening of pathways for community college graduates to study at CBU continues to be a high priority and we are seeing growth in our domestic student market as a result.

    We are also exploring new partnerships through the concept of CBU Connected, including open access delivery and new overseas delivery arrangements which help create interest in CBU locally and globally. MIKM 2701 Knowledge Keepers of Mi’kma’ki was our first open access delivery experiment and proved to be a great success.  We are planning more such ventures in the future.

  • What are the next steps that the University will take?

    Once the Working Group completes its mandate, including seeking voluntary means to reduce staffing costs, the President and subsequently the Board of Governors, will determine whether a continuing need exists that warrants the requirement for layoff of faculty members.

  • What happens in the case that the University does decide to move forward with layoffs?

    If there is a need for layoffs, CBU will follow the process as outlined in the CBU/CBUFA Collective Agreement whereby another CBU/CBUFA committee is formed with a mandate to identify the positions to be lost to layoff. Individuals to be impacted will be provided with notice of layoff which ranges between six and nine months. Following the notice period those faculty members impacted will receive a termination pay. The amount to be received (maximum of 12 months) will be dependent upon the number of years of service at the University.

  • What can we do to argue for fairer provincial funding for CBU?

    It is important for everyone to continue to share and celebrate the amazing research, teaching and learning that happens at CBU every day. We offer a world-class educational experience to students from around the globe and we must never lose sight of all the positive things happening at CBU.  According to Macleans, we continue to enrol the smartest entering students and the happiest graduating students in the Province.  We have also been recognized for the many activities we have pursued in support of the goals of the ONE Nova Scotia Commission, for example in promoting immigration and entrepreneurship.

    CBU is also a major contributor to the Cape Breton Island economy; therefore, any decrease in funding to CBU has negative impacts locally. An independent study published in 2014 confirms that for every dollar the Province or the Federal Government puts into CBU, four go into the Cape Breton Island economy.   Cuts of $6 million to our operating budget since 2007 are therefore costing the Cape Breton Island economy more than $20 million per annum every year.    CBU is also responsible for almost 1400 jobs around Cape Breton Island and 2.2% of all household income.  Downsizing by 10 per cent will reduce these impacts proportionately.

    With these statistics in mind, it is understandable that staff and faculty have asked what they can do to exercise their voice in support of the institution and its various contributions to Cape Breton Island and the province of Nova Scotia.   Read Dr. Wheeler’s Chronicle Herald articles on the topic of more effective funding models for Nova Scotia universities here and here.   Whatever happens, CBU will continue to deliver for Cape Breton Island and the Province, by leading initiatives that also positively impact the lives of our students and communities, as outlined in our 2014-15 Accountability Report.   We can only hope that this will be taken into account in any future reform of the provincial funding formula for universities.