Budget Development After reviewing this information, we hope you will gain a deeper understanding of where money comes from (revenues), where it is spent (expenses), and why revenues and expenses may change from year to year. Like many post-secondary institutions, Northwestern Polytechnic develops a three-year rolling budget that is revised annually. We are now planning for year-two of our continuous budget. As we consider our goals and the future, NWP’s main focus is to support the delivery of NWP’s Strategic Plan, the Master Academic Plan and seamless operations. Planning Timelines 2025 October Business Advisors give budget templates to Core Leadership Team (CLT) members October - Early December CLT work through budgets and submit plans to Vice-President by early December Mid December Executive Council Review 2026 January - February Executive and CLT refine budget plans. March Budget presented to the Board of Governors for approval April 2026-27 Budget Implemented Funding Facts NWP’s Consolidated Budget includes the full amount of restricted and unrestricted money we receive. Put simply, restricted funds include things like research or capital dollars. These items are reserved for a specific purpose and aren’t as flexible as other inputs. The unrestricted funds, or Operating Budget, is where we tend to spend the most time. This is because many important components need to be carefully considered. Budget Build As a public polytechnic, we rely on government funding for the majority of our revenue. NWP tuition and fees are the next biggest revenue source. Both streams are integral to our operations, funding salaries and benefits, materials and supplies, and other institutional costs. Full Load Equivalent (FLE) Measures NWP’s government funding allocation is also influenced by both the indirect and direct costs per FLE (Full Load Equivalent). The FLE is measured by taking the load of the learner enrolled (instructional hours + practicum hours) and dividing by the full load of that program. This results in a comparable metric that is consistent for every institution and program, and can be measured across the system. Provincial Investment Management Agreements (IMA) When the province implemented IMAs, a portion of the Base Operating Grant became tied to “performance.” These funds are adjusted in subsequent years if the IMA is not met. Each year, the IMAs are negotiated, and the potential impact on the Base Operating Grant is also increased. How do we Estimate Budget Changes Each Year? Each year, the revenues and expenses that make up our budget change. A revenue or expense might change for many different reasons, which we call considerations or pressures. We begin by considering big-picture factors, such as: Provincial and federal finances and funding. Trends in the post-secondary sector. The polytechnic’s long-term financial health. Legislative and other changes (such as carbon tax and collective agreement steps and increases). Ongoing Ways to Manage Costs We will continue to reduce energy costs by using Capital Maintenance and Renewal (CMR) funding to modernize newer educational spaces. Over three years, this will include replacing boilers, installing additional LED lighting, upgrading electrical switching, replacing windows, and installing heat recovery in our facilities, especially our trades facilities. We also look forward to the recommendations that will come forward in the Campus Master Plan as we look to use our existing space more efficiently and modernize existing facilities. Revenues Expenses How do we Plan Our Budget? We can’t know for certain how our budget will change ahead of time. But by looking at pressures on our revenues and expenses, we can make educated predictions about what will likely happen. We call these assumptions. We then put all our assumptions together to create a set of planning parameters - a big-picture look at how much money we will likely have in the years ahead. Our parameters also allow us to set budget targets for future increases or reductions in spending, to get us where we want to be. The Final Step: Approval After all these steps are completed, the President, Vice-Presidents, Deans and Directors prepare a budget for their respective departments. The polytechnic prepares a consolidated budget for our annual report to the Government, subject to Board approval. The final budget is approved by the Board of Governors in March 2026 and forwarded to the province. Glossary of Terms Consolidated Budget. The full amount of money we receive, including restricted and unrestricted sources of funding. Operating Budget. The sum of unrestricted funding we use to operate the polytechnic (e.g. pay salaries and benefits, purchase supplies, etc.). When it comes to planning the polytechnic’s budget, we’re really talking about the operating budget. The operating budget also includes the Foundation’s budget. Amortization. The gradual expensing of a major one-time cost over a number of years. For example: rather than budgeting $50 million for a new building in a single year, the polytechnic may budget $5 million for the building each year for 10 years. Considerations/Pressures. Anything that might cause a revenue or expense to increase or decrease over time, such as changes to government funding or utilities prices. Assumptions. Educated predictions about particular expenses or revenues. Assumptions are based on what we know about the pressures on those expenses and revenues Planning Parameters. A collective set of budget assumptions. Planning parameters bring together our assumptions about the years ahead to give us a big picture look at how much money we will likely have. Budget Targets. Increases or reductions in spending that help us maintain a healthy budget. We develop our targets using the budget projections that flow from our planning parameters Budget Model. A tool that helps us determine how much money each department needs and allows us to distribute money across the institution. The budget model does not affect the overall size of the consolidated or operating budget - it only helps us allocate money to departments within the institution. Get in Touch Vice-President Finance and Administration Office: E213 Campus: Grande Prairie Campus Phone: 780-539-2097 Email: VPSC@nwpolytech.ca