Officials say construction for a new Health Science complex for the University of Saskatchewan will continue. (CBC)

Construction projects at the University of Saskatchewan could be delayed as the school decides how to pay for the work.

A major project already underway is a new Health Sciences complex.

Officials at the U of S say they may have to add to their debt levels to finish that job and doing so could postpone other projects.

According to Bret Fairbairn, a senior administrator, the university was counting on the provincial government to supply $95 million to complete the centre.

However, Fairbairn said the school was told to borrow the money needed instead.

He said construction already underway will continue, but the school is not interested in borrowing more money to fund other projects.

"The university has a number of indicators for what level of debt is acceptable and we've basically reached the limit," Fairbairn explained. "So you know I don't think the board is willing to proceed further if it means increasing debt."

Fairbairn said the fate of planned construction work at the university is now in the hands of the province and will depend on funding levels announced in the next budget.

He added current work remains on schedule, but that could change.

"We're not behind schedule yet," Fairbairn said. "If we're still in the same place we are now six months from now, then at that point I would say we're behind schedule."

In addition to the financial crunch for construction projects, the U of S says its operating budget is out-of-whack and — if nothing is done — will become a $44.5 million annual shortfall in just a few years.

The president, Ilene Busch-Vishniac, announced last week that a cost-cutting exercise had begun, aimed at trimming the operating deficit.

And on Monday the university announced layoffs. Officials also said more job cuts would be announced in the spring.

With files from CBC's Jennifer Quesnel