The recession hit the universities hard on Thursday with a cannonade of announcements from Ontario treasurer Floyd Laughren and the minister of colleges and universities, Dr. Richard Allen: * Government grants to the universities in 1993-94 and 1994-95 won't go up at all from the current year's level. There will be some extra money for "restructuring" in 1993-94, but none the year after. * Student tuition fees will rise by 7 per cent next year. * Most grants are being dropped from the Ontario Student Assistance Program, which will now offer only loans to help students get their education. "This is a big blow," said UW provost Dr. Alan George the morning after. And Dr. Peter George, president of the Council of Ontario Universities, used the word "disaster" in a statement issued immediately after Laughren made his announcements in the legislature. George was a little calmer in a more detailed bulletin sent to universities later that day. "This is a significant set back," he wrote. "At the same time, we need to temper our reaction with the recognition that after years of being treated worse than other sectors receiving transfer payments, this time we managed to do marginally better than the others." Laughren's announcement on Thursday also hit schools, hospitals and municipalities, with the details varying. George's assessment that universities did a little better than other agencies is based on the revenue they'll get from the 7 per cent tuition fee hike, and from a promise of a 1 per cent "base budget" increase to the ministry of colleges and universities in 1994-95, a promise that wasn't immediately explained. The treasurer's announcement breaks a promise that was made a year ago, when he told universities -- and the rest of the "MUSH sector", recipients of provincial transfer payments -- what their funding would be from 1992 to 1995. After the 1 per cent increase to grants in 1992, there would be a 2 per cent boost in 1993 and another 2 per cent in 1994, he said then. But last week the boost in 1993 was replaced by a one- time allocation of money for "restructuring", and the 1994 increase was gone completely, the victim of hard times and government deficits. Although opposition parties doubted his figures, Laughren said the province is facing a $9.9 billion deficit in the current year and would see the deficit hit $12.3 billion in 1993-94 if he didn't make some cuts. With universities and colleges getting about $2.8 billion a year from the government, the 2 per cent Laughren is saving means $56 million a year the treasury won't have to spend. Another $110 million in savings comes from OSAP: the government handed out $241 million in grants this year, and will put $130 million of that into the loans program next year, bringing the total available for loans to about $800 million. Community colleges, as well as hospitals and other institutions, also lost the 2 per cent increases they had been promised for 1993-94 and 1994-95. "This is a complete betrayal," said Elizabeth Witmer, member of the Legislature for the Waterloo North riding, which includes UW. She is a member of the Progressive Conservative opposition. She said both students and institutions will suffer because of last week's changes to provincial spending. The effect on UW operations in the next two years isn't absolutely clear, the provost said on Friday. He said quick calculations suggest that in 1993-94, the university's budget will be short about $2 million that he and his colleagues had been counting on. "All our planning has to be revisited," George said. Bob Truman, director of operations analysis, said the 1993-94 budget was being drafted in the belief that the 2 per cent grant increase really would arrive. Budget planners had guessed at a 4 per cent hike in tuition fees, he added. The higher fee level means several hundred thousand dollars in extra revenue for UW, but the lower grants take away close to $3 million. That's bound to mean more cuts to spending, George said, noting that UW has experienced a 1.5 per cent general cut in the current year, and managers are already at work figuring out how to cut 6 per cent from their spending by 1995. "We're having long and very, very good discussions in Executive Council these days," he said, "trying to come up with reasonable strategies for reducing expenses, while at the same time protecting our people and preserving services." COU complained that the treasurer has "reneged" on earlier promises: "While universities have used those promised amounts in their budget planning and contract negotiations, those funds have now been clawed back. "In addition to the loss of these much needed funds, we have also had taken away our ability to plan; once again we are being forced to manage year to year." Among the uncertainties now: * The money set aside for "restructuring" in 1993-94. It's equal to the 2 per cent budget increase Laughren promised and then pulled back -- about $56 million -- but it's available just this once, so that 1994-95 grants will actually be lower than those in 1993-94. How will that $56 million be handed out to the universities? Will each get its percentage automatically, or will there be a competition, like the huge paperwork exercise universities have just gone through to get their shares of $22 million in "transitional" money this year? And what can the money be spent on? Is it related to the provincial task force on restructuring, which is still in the early stages of its work, or is it more like the "transitional" money, largely used for early retirement and reorganization projects in individual universities? * The 1 per cent "base budget" hike promised to the ministry in 1994-95. Since Laughren said grants to the universities would not be increased at all that year, how is the money supposed to be spent? "Some or all of this could benefit the universities," George of COU said, but it could also be directed to the colleges or to special projects.