Province announces $1.3 billion in extra funding for colleges and universities

An expert panel report, released in November, concluded that many colleges and universities “have passed the point where they could survive financially with only domestic students”.

Published Feb 26, 2024 • 4 minute read

Jill Dunlop, Ontario’s minister of colleges and universities Photo by Chris Young /The Canadian Press

The province announced $1.3 billion in additional funding for colleges and universities on Monday while maintaining a tuition freeze for domestic in-province students for another three years.

The funding includes $903 million over three years starting next year, with $203 million in top-ups for institutions with greater financial need and $167.4 million over three years for capital repairs and equipment.

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The announcement did not specify how much each institution would be receiving.

College and Universities Minister Jill Dunlop said the funding will “keep costs down for students and their families, and respond to the disruption caused by the federal government’s unilateral interference in our education system” — a reference to last month’s announcement of a cap on the number of international students in Canada for the next two years.

There has been growing concern about the sector’s increasing reliance on international students. An expert panel report released in November concluded that many colleges and universities “have passed the point where they could survive financially with only domestic students” and are financially sustainable only because of international students.

Meanwhile, Monday’s announcement is only about half of the $2.5 billion the blue ribbon panel estimated the province needs to inject into the post-secondary sector in a report released last November.

Dunlop defended the province’s decision to keep the freeze on tuition when an increase could help struggling institutions.

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“We are having an affordability crisis in this province and across Canada. We are not putting this on the backs of students,” she told reporters.

Colleges and universities have projected deficits and announced the measures they will need to take in the face of financial challenges. Among these is a $48 million projected deficit at Queen’s University — whittled down from $62 million after Queen’s initiated a hiring freeze and imposed a reduction on faculty and shared services budgets.

There are at least 10 universities collectively projecting operating deficits of more than $175 million this year, growing to more than $273 million next year, said Council of Ontario Universities president and CEO Steve Orsini in a statement.

“Our universities are at a breaking point.”

Ontario colleges and universities have been squeezed for years by frozen provincial funding and tuition. Direct provincial funding was effectively frozen in 2017. In 2019, the province reduced tuition rates by 10 per cent. The freeze remains in effect.

“I will not apologize for continuing to freeze tuition in this province,” Dunlop said Monday. “Let me take you back to 2019, when Ontario had the highest tuition of all in Canada.”

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There is a large funding gap between Ontario and the rest of Canada, with universities receiving $11,471 per student, 57 per cent of the figure for the rest of Canada, according to the expert panel.

The panel’s report also noted the demographic projections show that there will be a need to admit more students in the coming years. Within the next two or three years, the 18 to 20 age group in the Greater Toronto Area, southwest Ontario and central Ontario will be larger than at any time between 2013 and 2023. By 2047, spaces for an additional 119,000 domestic students and 168,000 international students will be needed in Ontario’s colleges and universities.

The expert panel recommended Ontario provide a one-time 10 per cent boost in government grants followed by inflationary increases in the following year as well as a five per cent increase in tuition and an increase in student financial aid.

The funding announced Monday will provide interim relief as the sector works with the provincial government on longer-term financial sustainability, said Orsini. But keeping the current funding cap in place does not address the growing demand of Ontario high school students applying to an Ontario university. That has increased by more than 11 per cent since 2020 and is forecast to grow in the future.

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“As a result, more and more Ontario high school students will face greater barriers in enrolling in the program of their choice,” he said.

According to projections in Carleton University’s 2023-24 operating budget report, released in April 2023, Carleton may need to present operating budget deficits between 2024-25 and 2026-27 before returning to balance in 2027-28. However, the projections were based on a number of assumptions, including a gradual increase in domestic undergraduate and international graduate student intake and a partial bounce-back in international undergraduate intake after international student visa processing delays in 2022-23.

The University of Ottawa reported a consolidated deficit of $4.9 million for the 2022-2023 fiscal year, marking a second consecutive year of deficit.

“Throughout this period of financial challenge, the University has proactively explored revenue-generating strategies and consistently demonstrated prudent resource management to address these obstacles,” said the University of Ottawa.

According to a submission to the expert panel, uOttawa has argued that its share of the special purpose grant for French language programs is about $50 million short of the programs’ delivery costs.

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The provincial package announced Monday includes $100 to support STEM program costs at colleges and universities with enrolments above the currently funded levels and $65.4 million “to support research and innovation” including updating and maintaining computing systems.

There will also be $15 million for third-party reviews to identify what institutions can “to drive long-term cost savings and positive outcomes for students and communities” and $23 million to enhances mental health supports for students.

Ontario’s universities are calling for a “fair allocation” of international undergraduate study permit applications, and is asking that the province and the federal government work together.

The Council of Ontario Universities said it supports the goal of curbing the rapid expansion of international student enrolment without adequate supports and planning, but it has been disappointed by the federal government’s approach.

“Applying a large blunt cap posts significant risks to all post-secondary institutions — not just those that the federal government is specifically concerned about.”

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