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Indira Samarasekera, president of the University of Alberta, chats with a participant in a convocation ceremony in Edmonton on November 21, 2012. Alberta slashed university operating grants 6.8 per cent just one year after promising more money, which amounted to a $40-million blow to the University of Alberta.Jason Franson/The Globe and Mail

As Canada emerged from recession, many vote-conscious governments at first tried to shelter education funding from the worst of spending cuts as they manoeuvred to cut deficits. But several provinces are now signalling universities are fair game too, and anxiety is spreading around campuses.

On Thursday, Alberta slashed university operating grants 6.8 per cent just one year after promising more money. It was a $40-million blow to the University of Alberta, an outcome far worse than even university president Indira Samarasekera had foreseen. Dr. Samarasekera had first warned the $12-million deficit her school faces next year would grow without new government funds. Then she had conceded it would be "a victory" if the province only froze the school's operating grant, and didn't cut it.

"We can't go on just shaving a little bit here and a little bit there," Dr. Samarasekera said as she surveyed the new funding landscape. "We have to tackle this head-on by looking at bigger structural changes."

The reality of the U of A's plight is particularly harsh, but its challenges are increasingly common. As the new reality of restraint sets in, schools are shedding jobs, closing courses and programs, growing class sizes and leaving empty professors' posts unfilled.

At the University of Saskatchewan, the troubles began abruptly last year. Administrators were counting on a 5.8-per-cent funding increase – in line with the historic trend. "Here we are and things are going great," said USask president Ilene Busch-Vishniac.

Then, mere weeks before last year's budget, the "generous" provincial government abruptly changed course, offering a lesser, 2-per-cent funding boost that threw years of budget assumptions off kilter. Predicting a $44.5-million shortfall by 2016, the university cut 40 jobs early this year and has left 10 more vacant positions unfilled – and "there will be more such," Dr. Busch-Vishniac said.

"Although it's been presented as this horrible doom and gloom, if you ask us, we're simply being responsible," she said.

Having read the tea leaves in Ontario, Western University president Amit Chakma fears "a thousand little cuts" to come. Universities were protected from the worst of the province's spending cuts last year, "but how long that can continue is a big question mark," he said. Rather than asking the governing Liberals for new money in the April budget, however, he suggests redirecting funds that are earmarked to enroll 50,000 more postsecondary students to "consolidate our gains."

"Why don't we use that money and minimize the negative impact?" he said.

Meanwhile, demographics dictate that growing enrolments to bring in revenue isn't an option for many Maritime schools. While Nova Scotia and Prince Edward Island have endured 3-per-cent annual budget cuts, New Brunswick has avoided acute pain, but is now "waiting for the penny to drop," said Robert Campbell, president of Mount Allison University. Costs at the undegraduate-focused school are rising 4 per cent each year, and calls for modest, predictable funding hikes have fallen on deaf ears.

"We don't expect anything from the government with a plus in front of it," Dr. Campbell said, adding that a freeze or cut to government funding could swell class sizes and affect student services.

Even as British Columbia's higher education leaders argued the province will face a skill shortage if it fails to invest in higher education, the government responded with three years of cuts totalling $46-million in its recent budget.

"Certain programs may not be able to be sustained," said University of British Columbia president Stephen Toope. "The slow bleed that happens in these kinds of circumstances has to be dealt with."

And that is where many university leaders agree: If they are to weather the storm, they must face up to their weaknesses and stop spending money on them.

"For me, the critical thing is to use this year to transition," said Dr. Samarasekera of the University of Alberta, "to use the crisis as a way of actually reinvesting our resources in what we do best. And if that means closing down certain programs where we don't have excellence, we will undertake to do that."