Ontario budget leaves universities and colleges twisting in the wind

Posted on May 18, 2025 in Education Debates

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TheStar.com – Opinion
May 17, 2025.   By Ricardo Tranjan, Contributor

In the budget tabled on Thursday, the Ontario government makes some necessary investments to protect the economy from Trump tariffs, but fails to address underfunding in core areas. The neglect of post-secondary education is particularly troubling.

In 2024, the federal government imposed caps on international students, whose high tuition fees had, for years, made it possible for universities and colleges to balance their books. For many of these institutions, the resulting revenue shortfall was significant to severe.

The economic uncertainty facing Canada and Ontario could have served as the final motivation to address this problem head on. Instead, they’re cutting funding.

This crisis has been decades in the making.

One of my colleagues shares tales of her university days in the 1980s when a summer of low-wage, full-time work was enough to save for the full tuition of the next academic year. That’s not the case anymore. Government funding for universities peaked in the 1980s and has since declined. To compensate, tuition fees went up significantly.

Average tuition fees for domestic students in Ontario have tripled between the 1990-91 and 2018-19 academic years, after adjusting for inflation.

Limited in how much they could squeeze from domestic students, universities and colleges began counting on international students as a major revenue source.

In 2019, the Ontario government cut tuition fees by 10 per cent and froze them. The measure cost universities $360 million and colleges $80 million, because the government didn’t make up for the budget shortfall. The government also cancelled free tuition for eligible low-income families.

According to a report by the Ontario Financial Accountability Office, in the first two years of the PC government, per-student funding, adjusted for inflation, dropped by 8.4 per cent per year. International student enrolment grew by 15 per cent in those two years alone.

Colleges did the same. In the 2020-21 academic year, tuition from international students accounted for an average of 31 per cent of colleges’ revenue in Ontario.

The music stopped in 2024.

The cap on international student enrolment was a blow to the finances of universities and colleges. In one of the dramatic developments, Ottawa’s Algonquin College announced the cancellation of 37 academic programs starting next September.

The current economic turmoil could have been the final push this government needed to finally address this problem. This week’s budget does not do that.

It includes funding for targeted training initiatives, such as $750 million over five years for new science, technology, engineering and mathematics courses, $40 million to support communities and businesses impacted by Trump tariffs, $20 million for action centres to assist laid-off workers, and $900 million over three years for the Skills Development Fund.

This crucial funding will provide support for certain workers in some communities, particularly those directly impacted by the tariffs and for whom the retraining can be specifically tailored.

But that’s not enough.

The budget also needed to address the structural underfunding of post-secondary education.

Instead, funding is falling from $14.2 billion last year to $13 billion this year, to $12.8 billion in 2027-28, the last year of the budget outlook.

As a share of GDP, spending on post-secondary education is projected to decrease from 1.41 per cent in 2019 to 0.97 per cent in 2028, according to analysis by the Canadian Centre for Policy Alternatives.

As a result, the same students who transitioned from elementary to secondary school during the COVID-19 pandemic are now facing colleges and universities that are both expensive and underfunded.

Workers impacted by the economic downturn may not have access to retraining opportunities because training funding is limited, colleges are closing programs, and university tuition remains high.

The Ontario government is leaving universities and colleges in limbo at a time when we should be investing heavily in our people.

Ricardo Tranjan is a senior researcher on housing and social policy at the Canadian Centre for Policy Alternatives.

https://www.thestar.com/opinion/contributors/ontario-budget-leaves-universities-and-colleges-twisting-in-the-wind/article_984ef7f9-95be-4c27-a8cd-6439757c9d88.html

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