National office asked to slash $1.3 million from budget

Directors at the General Synod office have been asked to slash $1.3 million from the 2009 budget, a move designed to break a recurring pattern in recent years of huge budget deficits. Incurring yearly deficits is “not a healthy direction for us to keep moving; some would say it’s irresponsible,” Archbishop Fred Hiltz, primate of the Anglican Church of Canada, said in a meeting with staff at the national office in Toronto. “There are dioceses where deficit budgeting is forbidden. It doesn’t look good for us to be doing it.” Last year, the Council of General Synod (CoGS), the church’s governing body between General Synods, approved a 2008 budget that already projected a net operating loss of $1.3 million. An undesignated bequest of $4 million from the Dashwood estate helped bridge the deficit, the seventh in as many years.

“Significant” deficits were once again being projected by the national church’s management team for 2009 and 2010, citing a decline in diocesan giving, increased travel costs, and fallout from the current global financial crisis resulting in an expected decrease in investment income. Archbishop Hiltz said that the financial management and development committee (FMDC), which met Oct. 17 to 18, has told the church’s management team that it cannot ask the Council of General Synod (CoGS) to approve yet another deficit budget for 2009 without a recovery program alongside it. “Deficit can’t be higher than $800,000 for 2009, not higher than $500,000 for 2010, and not higher than $100,000 for 2011,” for the church to eventually recover by 2012, said Archbishop Hiltz. “As difficult as it is, it’s the right thing for us to be doing… This has been coming for a long time,” he said, citing the cutbacks that the national office had to make in 1995 and 2000 because of a number of factors, including the costs of litigation concerning native residential schools. “We all bear some responsibility for the circumstances that we’ve found ourselves in. It’s a wake-up call.” He said: “Nobody has been reckless in their spending, but the reality is that for a long time we’ve been spending more than we have.” Still, he cautioned against looking at the situation negatively, saying, “The ship is not sinking; rather it’s moving in another direction, with some degree of confidence.” The primate did not get into the specifics of how much the projected budget and deficit is for 2009 or where the cuts are going to come from, saying that management team and FMDC are still hammering out the details. But he said that management team agreed that “we need to have a serious look at expense allocation,” including administration, programs, and travel costs. He said that meetings of various church committees constitute one of the biggest expenses and there may be a need to trim them. An audit of national office operations is also being considered, he said, adding that generating new revenue through the newly-formed department of philanthropy was also a priority. “The plan is that directors will work on portions of their budgets between now and the CoGS meeting (scheduled Nov. 14 to 16),” said Archbishop Hiltz. “Management team and FMDC will work together. Ultimately, it would be up to CoGs to approve it.”He added, “In all our discussions, there was huge sensitivity to the impact that it would have on Church House (the national office). After all, it’s not about figures, it’s about the church and its programs; it’s about people.” He urged staff “to deeply care for one another,” saying “there will be pain and loss.” In a related development, Peter Blachford, General Synod treasurer, told a fall meeting of the Council of the North, a grouping of financially-assisted dioceses and areas from Canada’s North, that while both revenues and expenses “were tracking very much as expected” during the first eight months of the year, things changed considerably with “the current volatility of the world markets.” Mr. Blachford the several reasons for the projected deficit for 2008:

• declining estimates of proportional giving revenue to General Synod due to the continuing fiscal situation being faced by the dioceses;
• the elimination of projected budget revenues from unsubstantiated undesignated legacies (the finance department used to include in budgets projected income from wills based on average amounts of previous years);
• the initial establishment of a new development office of the Anglican Church of Canada;
• increased depreciation and real estate taxation expenses relating to the church’s national office at 80 Hayden St. in Toronto; and
• increased costs of undertaking all the missions and programs directed by General Synod and CoGS.

Mr. Blachford assured the Council of the North that, notwithstanding the projected deficits for 2009 and 2010, its annual grant of $2.37 million would remain the same in keeping with General Synod’s decision in 2007 affirming that they “continue at no less than the current level for the next five years.” The Council of the North includes the Arctic, Athabasca, Brandon, Caledonia, Keewatin, Moosonee, Quebec, Saskatchewan, Yukon, the deanery of Labrador and a group of parishes in the central interior of British Columbia. (With additional reporting by Kelly Fowler, editor of The Messenger, the newspaper of the diocese of Edmonton.)