Athabasca University unions are demanding its president resign over what they say is the institution’s precarious finances and outrage over illegal donations to the provincial Progressive Conservative party.

"It’s time for the president to retire," labour relations professor Bob Barnetson said.

Frits Pannekoek has been president since 2005. He declined an interview request.

"When the president arrived we had $30 million in the bank and we had annual operating surpluses," said Barnetson, who is on a union bargaining committee. "Now we have no money in the bank and we have annual operating deficits."

Barnetson said the unions have long been concerned about how the university has handled its finances.

But he said the catalyst for a non-confidence vote for the president was a recent CBC News investigation that revealed the university made more than $10,000 in illegal donations to the Tories, with the direct knowledge and approval of senior university executives including Pannekoek.

"Many of us have had concerns for a while about the direction the university was taking but to have this kind of public embarrassment where the administration has clearly acted in a wrongful manner, enough was enough," Barnetson said.

"Many people were outraged. Personally, I am embarrassed that our institution acted in an illegal and clearly unethical manner," he said. "I need the public to know, and I need my students to know, that the university’s employees don’t condone this. They condemn this unethical behaviour."

Non-confidence vote passes overwhelmingly

Internal union documents obtained by CBC News show members of two of the university’s three unions representing faculty and support staff overwhelmingly passed a vote of non-confidence in Pannekoek. The Canadian Union of Public Employees abstained from the vote.

The unions are angry because their members are facing pay cuts, and potentially layoffs because of budget restraints. Barnetson said spending at the university has been cut so deeply that staff can’t get new pens or sticky notes.

The unions blame the university’s current financial woes on what they say was a failed strategy to obtain more operating funding from the province. Barnetson said Pannekoek publicly stated the university intended to spend its $30 million reserve fund because, while it existed, the province would not increase its operating grants.

Between 2007 and 2011, the university spent all but a few hundred thousand dollars of the reserve fund on new programs and infrastructure, Barnetson said.

"That strategy has failed and now the institution is in some financial peril and if we are going to move forward, we need some new leadership, we need a new president," Bartneson said.

"The employees are saying we no longer have faith in the president. We don’t want him to lead us and I think the board needs to take that very seriously."

University finances are solid, says board chair

Board chair Barry Walker, an Edmonton accountant, said the board is fully behind Pannekoek. He denies the university is in any financial distress.

"Nothing could be further from the truth," he said. "We are in a very sound financial position."

Walker acknowledged the university has spent most of its $30-million reserve fund but he said that was planned and had nothing to do with a strategy to obtain more operating grants out of the province.

"Those funds were earmarked for specific projects and those projects have taken place," he said.

Walker also acknowledged the university has had operating deficits in recent years and will have to dip into other reserve accounts to avoid another deficit next year.

He wouldn’t comment on a freeze on hiring that has left more than 60 positions unfilled, salary cuts or potential layoffs.

Walker declined to respond to the union’s demand for Pannekoek’s resignation. But he said the board "fully supports the president."

"He has been very instrumental in raising substantial funds over the past five or six years that he has been president, something in the order of $50 million," Walker said. "And he has significantly raised the university’s profile internationally. I think the university is actually quite proud of the work that Dr. Pannekoek has done."