What does the 2016 Ontario Budget do for university funding?

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The new up-front grant program for Ontario students is grabbing headlines, but what else does the 2016 Ontario Budget do for universities? When it comes to operating funding, the picture continues to darken.

Just as it has for the past four years, the level of operating grants to universities will barely change. And in the final year of the current three-year horizon, operating grants will actually drop. After inflation in (as project in Budget 2016) is taken into account, operating grants will have fallen for five consecutive years. They will be nearly eight per cent lower than they were in 2013-14.
Considered on a per student basis (and this is per “eligible” student, as defined by government), inflation-adjusted operating allocations from the Ministry of Training, Colleges and Universities (MTCU) has been falling since 2008-09. This year alone it is on the cusp of being 11 per cent lower than eight years ago. If enrolment projections from universities’ strategic mandate agreements and current patterns hold, per student funding in 2018-19 could be 19 per cent lower. That’s a significant loss in revenue.

The provincial government might be counting on lower enrolment to mitigate against this decline. Fewer students will mean the drop in operating funding will be less acute. In the past, government has also allowed universities to make up some of the lost public funding with increases in tuition. While the financial aid changes announced in the 2016 Budget lessen the psychological and up-front financial impact of high educational costs, these benefits can be swiftly undercut if tuition fees continue to rise.

The province’s tuition fee policy is up for review next year. To ensure the financial aid changes remain effective, tuition fees will need to be controlled. Without recourse to higher fees – which are undesirable anyway – universities will need new public investment to protect educational quality.

MTCU is also consulting around a new strategy for attracting international students to Ontario. It will be very important to ensure that universities do not use international enrolment as a way of subsidizing their programs in the face of declining public funding.

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