General operating budget

The university uses an incremental budgeting process. This process enhances stability and predictability within the context of a three-year budget plan, promotes transparency and flexibility, and provides incentives for income sharing opportunities.

The previous year's budget provides the basis for the new year budget, with revenue and expenditure changes added to the prior year budget balance.

Once the general operating budget is implemented, faculties and departments have authority to spend within the limit of their allotted budget for the year, which includes unspent operating budgets carried over from the prior year.

Unspent funds that have grown by more than 25% over the prior year are allocated to the university’s Strategic Priority Fund, which is used to support the implementation of priorities for the university’s institutional plans.

The priority use for funds allocated from carry forward to the Strategic Priorities Fund are determined by the Integrated Planning Committee each year, typically with a June 30 deadline.

In their planning, departments are also expected to plan for future equipment and capital requirements, such as computer ever greening and renovations. As a result, departments will typically plan a surplus each year for allocation to their equipment reserve for future use.

General operating revenue

UVic's operating revenue is made up of three main sources:

1. The government operating grant is the largest source of operating revenue, which typically represents 50% of UVic's total revenue.
2. Tuition and student fees generally make up about 38% of total revenue. The government policy on tuition fee limits restrict domestic tuition and mandatory fee increases to the rate of inflation.
3. Remaining revenue is made up of a variety of other miscellaneous sources, such as grants and contracts, investment and other income, and departmental income. 

UVic's ever-changing environment requires us to assess revenue drivers when the budget is developed and throughout the year, to ensure revenue targets are being met. The main drivers for revenue are government policy, student fees and enrolment. 

While enrolment goals are driven by our Strategic Enrolment Management (SEM) Plan, external factors such as population demographics and world events, like the COVID-19 pandemic, can impact our enrolment goals and targets.

General operating expenditures

UVic's general operating expenditure budget is made up of two main costs:

1. Employee compensation (salaries and benefits) make up about 80% of the total budget.
2. The remaining budget covers non-salary expenditures such as supplies, utilities, scholarships and bursaries, and equipment.

Reflecting the mission of the university, 80% of the total operating budget is allocated to research and academics (e.g.,  faculties, research, library, student awards and services), with the remaining 20% allocated to maintain and operate facilities and for support functions.

Like revenue, the main expenditure drives are largely controlled by government policy as well as collective bargaining with unions.

Primary objectives in developing the expenditure budget is to ensure:

• it is balanced with revenues;
• projected expenses can be covered by projected revenues; and,
• there is sufficient revenue to allocate to strategic objectives.

As with revenue, expense drivers are assessed when the operating budget is developed and expenses are monitored throughout the year to ensure that costs remain within budget.