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Athabasca University campus with the town of Athabasca and Athabasca River in the background.Blaise MacMullin

The Alberta government has backed off on its threat to cut funding to Athabasca University unless the school agrees to relocate hundreds of employees to the small town that shares its name, with the minister in charge of post-secondary education signalling he is willing to negotiate the proposed residency target.

Alberta wants AU, an online university with roughly 40,000 students, to prop up Athabasca’s economy by moving employees to the rural region. In a July 29 letter, the province demanded 65 per cent of the institution’s staff be based in Athabasca by the 2024-2025 academic year, according to AU president Peter Scott. This would force AU to relocate 500 jobs to the community, on top of the 295 employees already in the region, he said.

Mr. Scott resisted Alberta’s earlier demand that AU produce a plan to bolster the local economy by luring employees to Athabasca, which has about 2,805 residents. The July letter escalated the fight; Mr. Scott said the government’s new proposal links $41-million in annual funding to the residency target.

But Demetrios Nicolaides, Alberta’s Advanced Education Minister, said to The Globe and Mail that the 65 per cent residency goal is flexible.

“It is a suggestion,” Mr. Nicolaides said Tuesday. If AU believes some of the targets in Alberta’s proposed funding deal, known as an investment management agreement, are “unattainable,” the government would be willing to “chat about that [and] revise them.”

Asked what counter-offer would suffice, Mr. Nicolaides said: “I would indeed like to see, at a bare minimum, senior executives and administrative staff be based in the town, as they have been for the past several decades.”

AU’s website lists nine executives. Mr. Scott, in an Aug. 2 video statement, said the government’s July letter directs seven members of AU’s executive team to work in Athabasca full time by March 31, 2025. It is unclear how many administrative staff such a compromise would affect.

The institution welcomed Mr. Nicolaides’s softer stance. “AU would be thrilled to return to the consultative relationship it has had with government for years,” Kristine Williamson, a spokeswoman for AU, said in a statement.

Asked about Mr. Nicolaides’s “bare minimum“ requirement, she said: “We are grateful for the opportunity to pick up discussions with the minister.” She added that AU looked forward to working with the minister “to find a mutually agreeable path forward.”

Mr. Nicolaides noted the school initially had until June 30 to provide the province with a plan to attract and retain more employees to the rural region, which is about 145 kilometres north of Edmonton.

The minister’s explanation for subsequent residency quota figures was that the school’s response came up short of the government’s expectations, so Alberta had to “fill in the blanks to the best of our ability.” Mr. Scott said Alberta gave AU until Sept. 30 to sign on to the proposed funding deal or risk losing $3.4-million in monthly funding.

The government’s 65 per cent residency proposal would be a dramatic shift – for both the school and the region. AU said 295 of its employees live in the region now, making up about 24 per cent of its 1,200-strong work force. The proportion of AU employees based in the region peaked at 44 per cent in 2001, when 368 of AU’s 844 employees lived in the community, according to lobby group Keep Athabasca In Athabasca. The group’s statistics, provided by the town’s mayor, only reach back to 2001. The group’s tally shows AU’s local headcount topped out at 520 in 2010, accounting for 36 per cent of the university’s total work force.

AU, which has always focused on distance learning, moved to Athabasca from Edmonton in the mid-1980s. It accelerated its “near-virtual” strategy during the COVID-19 pandemic, which also fuelled the local lobbying effort to increase AU’s employee headcount in the community. Ms. Williamson, the school’s spokeswoman, said AU employees in the Athabasca region who work online were recently given the option to work remotely, with a hybrid opportunity on campus, or work in person full time. Roughly 92 per cent of these employees opted to remain remote, she said.

AU is now redesigning its physical space in Athabasca to accommodate hybrid and collaborative work, Ms. Williamson said. The space is expected to be usable come October.

“All employees in the area and those that wish to travel to Athabasca for team meetings … will have access to our buildings,” she said.

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