The research was initiated in response to concerns about the effects of the current envelope funding practice on the institutional autonomy of universities and on faculty association negotiations with the university administrations. In addition to a discussion of these issues, the discussion paper provides a background on the history of envelope funding in Ontario, recent developments, and an assessment of the provincial government’s intentions. It concludes with an outline of policy positions that OCUFA could adopt, the issues each would address and some of their respective implications.