Economic context of bargainingBargaining at the University of Victoria takes place within a broader provincial and even global economic context.
As we are all aware, the global economy experienced a dramatic downturn in September of 2008. And while Canada fared better than the US, provincial government budgets across the country have been seriously affected ever since.
In February 2012 the BC government released an updated budget that anticipated a $2.5 billion deficit for the 2011-2012 fiscal year and forecast a $968 million deficit for 2012-13.
While BC's economy is beginning to show signs of improvement, the recent BC Budget and Fiscal Plan confirms that it is still vulnerable, largely due to ongoing uncertainty around global economic activity including:
- A return to recession in the US (characterized by weaker consumer spending, slower investment, very slow job market recovery, continued weakness in the housing market and further restraint by all levels of government);
- The debt crisis in Greece, Ireland and Portugal spreading to larger European economies like Italy and Spain, and threatening the stability of global financial markets as well as another global credit crisis;
- Slower than anticipated Asian demand, resulting in weaker demand for BC's exports;
- Exchange rate volatility; and
- Further weakening of the US dollar, resulting in significant disruptions to global financial and commodity markets.
If one or more of these risks materializes in a significant way, the BC Government is signalling that it may create pressures that cannot be accommodated in the current fiscal plan.
In light of this fiscal uncertainty, the provincial government has said it will continue to protect services such as health care, K-12 education, justice and social supports.
However, in order to achieve a balanced budget by 2013-14, the provincial government has also announced an intention to reduce the provincial grant to the public post-secondary sector by 1 per cent in 2013-14 and another 1.5 per cent in 2014-15.
As of April 2012, UVic has not yet received specific grant information for 2013-14 and 2014-15 but early budget planning is beginning using these announced global reductions.