Friday, June 18, 1993 PRESIDENT'S LETTER: Here is the text of a letter from UW president James Downey that is being distributed on campus this morning. Dear Colleagues: We have all been watching the progress of the Ontario government's proposed "Social Contract" with nervous interest over the past few weeks. The purpose of the Social Contract is to save $2 billion a year for the next three fiscal years through reduced compensation costs in the broader public sector. Three-way negotiations involving representatives of government, employers and employee groups failed to produce a Social Contract agreement by the government's June 4th deadline. Several members of the UW community participated in these negotiations, and throughout this period leaders of the staff, faculty, students, and colleges have been meeting regularly with the Provost and myself to share information and advice. On June 14th, the government introduced legislation that forces the $2 billion reduction and the implementation of many of its Social Contract proposals. We have been given until August 1st to negotiate both a sectoral framework agreement covering all Ontario universities and a local agreement or plan for UW. As incentive, the government has promised lower cuts and access to a Job Security Fund if these negotiations succeed. If they do not succeed, each employer is required to implement a "failsafe program" to achieve the necessary expenditure reductions through a salary freeze, unpaid leaves of absence, and possible other measures. The legislation is complex, and we will be seeking clarification on a number of points over the next few days. At UW we face the necessity of reducing expenditures by up to $9 million for the Social Contract cuts, in addition to about $3.4 million that we have lost through the government's Expenditure Control Plan and tax increases in the provincial budget. The difficulty is increased by the fact that we are already well into our fiscal year and our transfer payments will be reduced starting July 1st. The August 1st deadline makes it impossible to follow our normal procedures for salary negotiations and budget development and approval. While we are distressed at having to reduce expenditures again after the cuts and difficulties already experienced, we take some comfort from the fact that decisions about what to do will be made here at UW, by people who know the University's needs and strengths. We will continue to meet as a group with leaders of the staff, faculty, students and church colleges to obtain their advice and assistance in developing expenditure reduction plans. We are determined that the solution to our financial problems shall be fair to all of our employee groups, and that we must maintain the University's ability to do its work for our students and the people of Ontario through teaching, research and service. We will do our best to avoid job losses which would hurt individuals and damage the quality of work and life for those who remain. With everyone's involvement and cooperation, we should be able to share the pain and give ourselves new cause for pride in Waterloo. It is important that, as we cope with these unfortunate circumstances, we not lose perspective. This University has faced serious challenges before and has come through them with its sense of purpose and community strengthened. There is always opportunity in adversity, and I have no doubt that, if we can mobilize the ingenuity and goodwill that have gained the enviable reputation we have, we can find and seize opportunities for the University of Waterloo. For our part, we in the senior administration are open to any suggestions and initiatives which will help us to deal fairly and creatively with this situation, and we shall actively seek ways of garnering those suggestions and keeping people informed as events unfold. In the meantime, I would be pleased to hear, directly or through the Faculty Association, the Staff Association, or CUPE Local 793, from anyone in the University community who has ideas to share. Yours sincerely, James Downey President SUMMER WEEKEND: The Waterloo Classic road race takes place Sunday morning; Seagram Drive and part of University Avenue will be closed to make room for the runners. Happy birthday tomorrow (Saturday) to Bob Norman, dean of applied health sciences. Chris Redmond Information and Public Affairs credmond@watserv1 ext. 3004