We just received news that the Ontario government is aware of the financial challenges that universities, colleges and post-secondary students are facing. Since Ottawa announced caps on international students two years ago, the provincial government has done very little to prevent the collapse of education institutions that, for too long, have relied on international tuition fees to balance their books. The $1.3 billion announced in February 2023 didn’t make a dent in the problem. And there was nothing more.
Early today, the government announced $6.4 billion in new funding for universities and colleges – over the next four years. In other words, an average of $1.6 billion per year. The government is calling the increased budget “the highest level in the province’s history.” But is it?
Not a historical investment
It is now an old trick of this government to present nominal values as “historical figures,” which is disingenuous and misleading. Money loses value every day due to inflation; as a result, almost any spending in a given year is the highest on record.
A more serious approach to historical comparisons is to track post-secondary education spending as a share of the total economy, measured by Gross Domestic Product (GDP), as in Chart 1.
In 2018-19, Ontario spent the equivalent of 1.41 per cent of the province’s GDP in post-secondary education. The ratio declined under the PC government. In 2025-26, it reached a low point of 1.07 per cent – and that was already amid the international student cap and the financials troubles it brought to post-secondary education.
With the new funding announced today, the ratio will increase to 1.16 per cent in 2026-27, and 1.10 per cent in 2027-28. So, not the “highest level in history.” Calculating the ratio for the two subsequent years would require a longer budget outlook than what is currently available.
Ontario still lags behind
Even with the new funding, Ontario will be far behind other provinces. The Canadian Centre for Policy Alternatives has long documented the fact that Ontario spends considerably less on post-secondary education than other provinces, a persistent trend.
The latest analysis on this gap was published by the Financial Accountability Office of Ontario (FAO). Its 2025 report found that Ontario spends $5,092 less per full-time domestic college student than the Canadian average, and $6,510 less per full-time domestic university student.
The new funding doesn’t even get close to addressing this embarrassing gap.
Assuming the funding is divided equally between colleges and universities, the new amount will increase per-student funding by an estimated $1,620. Ontario will still lag behind, and by a lot: $3,472 per domestic college student, and $4,890 per domestic university student.
What are “in-demand careers”?
The announced plan is based on three principles. The first is, “Preparing students for rewarding, in-demand careers that meet labour market needs.” The terms “in-demand careers” and “in-demand skills” are used repeatedly throughout the document. What do they mean?
We can assume this means funding will be directed to areas and programs the government deems important, which is disconcerting for at least two reasons.
First, predicting labour force demands is not an exact science. Governments can assess existing labour force gaps and quickly inject funding into training, but these are punctual and immediate actions, not something “over the next four years.” Beyond that, guessing what will be “the jobs of the future” is a tricky game. Coding was a must only a few years ago, and now it’s not.
The second problem is that the public should be wary of any funding stream where discretion rests with the Ontario cabinet, like with the Skills Development Fund.
Students will carry more of the burden
Part of the plan to rescue university and college finances is to allow them to increase tuition by two per cent per year for the next three years, and at the rate of inflation thereafter. Tuitions have been frozen since 2019. The government’s announcement contends that, “This rate of increase will be among the lowest of any province in Canada.”
Let’s look at it another way.
Ontario had the third-highest university tuition fees in the country in 2022-23, according to the same FAO report.
Average domestic tuition (and additional compulsory fees) in Ontario would need to drop by 22 per cent to match what BC students pay, and by more than half (52 per cent) to match what undergraduate students pay in Quebec.
In this context, no matter how small the increase purportedly is, it’s a move in the wrong direction. Tuition must go down, not up.
