Ontario boosts college and university funding by more than $1.2B, extends freeze on tuition fees

Ontario will provide a major short-term funding boost to colleges and universities to "stabilize" their finances, but won't allow them to increase tuition fees for in-province students for at least three more years, Minister of Colleges and Universities Jill Dunlop said Monday.

The more than $1.2 billion financial aid package was announced just months after a government-commissioned report found low provincial funding combined with a tuition cut and freeze implemented in 2019 pose a "significant threat" to the financial sustainability of the sector. 

The expert panel had recommended a one-time,10 per cent increase in per-student funding to colleges and universities followed by inflationary increases in subsequent years, as well as a five per cent increase in tuition along with an "equally generous" increase to student aid.

Instead, Dunlop said the freeze on tuition fees will be extended for Ontario student until at least 2026-2027, the year of the next provincial election, although institutions will be allowed to increase tuition by up to five per cent for domestic, out-of-province students.

Dunlop also introduced a new bill that would require colleges and universities to have policies in place to address mental health and wellness, to combat racism and discrimination on campuses, and to increase transparency around fees.

"This is a broad range of measures that will offer much-needed stability to the post-secondary sector, and help keep costs down for students and their families," Dunlop said at a press conference.

"Our goal is to put students and their needs first, while continuing to produce the world-class graduates Ontario is known for."

The funding boost includes roughly $900 million for a three-year, post-secondary education sustainability fund, $200 million of which will be reserved for institutions with the greatest needs, according to a news release. Another $167.4 million will go to capital repairs and equipment, $100 million will go to STEM programs, $65 million for research and innovation, $23 million for mental-health supports, and $15 million for audits to identify "long-term cost savings."

Ontario's post-secondary funding 'abysmal': report

Other measures Dunlop announced include allowing colleges to offer applied masters degrees "in areas of study that will help students graduate with in-demand skills, expertise and credentials" such as in advanced manufacturing, artificial intelligence and animation.

The new legislation would require colleges and universities to give students information about ancillary fees and other costs such as textbooks. 

The funding top-up comes after the government-commissioned report said that funding for publicly assisted colleges for full-time domestic students is at a lower level than every other province, while the Council of Ontario Universities has said at least 10 universities are facing operating deficits.

A report last year by Higher Education Strategy Associates said Ontario's post-secondary funding is "abysmal" and raising spending to the average of the other nine provinces would require $7.1 billion per year in additional funding — much higher than the current level of operating funding at around $5 billion.

The low levels of government funding have caused post-secondary institutions to increasingly turn to international student tuition fees, which are much higher than the rates for Canadian students.

But the federal government announced earlier this year that the number of visas for international undergraduate students will be slashed, with Ontario seeing its allotment cut in half. That has led to post-secondary institutions recently saying their situation has grown even more dire.

Funding not enough, critics say

Organizations that represent Ontario colleges and universities, a prominent higher education expert and the Opposition NDP all said the new funding isn't enough to solve the sector's long-term funding problems. 

"Altogether, between inflation and the loss of international students, the sector was in for a hit of over $2 billion this year," said Higher Education Strategy Associates president, Alex Usher.

"This package maybe covers 20 per cent of that. It is not a serious attempt to put Ontario's colleges and universities on solid footing. It is, rather, the act of a government that prefers the appearance of solving problems to actually solving them."

Colleges Ontario, which represents the province's 24 public colleges, released a statement that welcomed the new funding, but said the future sustainability of their programs could be at risk without additional support.

"While the investment announced today is a welcome first step, we expect further action from the province," said Marketa Evans, president and CEO of Colleges Ontario in a statement.

It is not a serious attempt to put Ontario's colleges and universities on solid footing. It is, rather, the act of a government that prefers the appearance of solving problems to actually solving them.- Alex Usher, Higher Education Strategy Associates

The Council of Ontario Universities also expressed appreciation for the funding, but said while it provides "short-term relief," it falls short of the $1.9 billion the governments blue-ribbon panel said universities needed in base funding over the next three years alone.

"Ontario's universities now face an eight-year long tuition freeze without adequate multi-year base funding, which continues to undermine the financial sustainability of the sector," the statement said.

"Our universities are at a breaking point."

The Opposition NDP also criticized the provincial announcement, saying it's not enough to solve the problem.

"It's clear that this Conservative government does not in any way understand the severity of the crisis," said London-West MPP Peggy Sattler, who is the party's post-secondary critic.

"Decades of chronic underfunding by both Liberal and Conservative governments, plus five years of Ford cuts have pushed our post-secondary institutions to the brink."

Average university fees in 2020-21 were $7,938 for domestic undergraduate students and $40,525 for international undergraduate students, the auditor general said in a 2022 report.

The Smart Prosperity Institute, a University of Ottawa-based think tank, reported last year that Ontario universities nearly doubled international student enrolment between 2014 and 2015, and 2021 and 2022, and colleges more than tripled international enrolment.

Ontario's government-commissioned report on post-secondary finances said international student revenue is now fundamental to the sector's viability, greatly raising institutions' risk exposure.