Ford government to give $1.2B to beleaguered colleges and universities, source says

The Ford government will provide some $1.2 billion in funding to Ontario's financially beleaguered post-secondary sector, a source with knowledge of the province's plans told CBC Toronto Friday. 

In news first reported by the Toronto Star, the money will include a roughly $900 million stabilization fund delivered to colleges and universities over three years.

Funding will be allocated based on the needs of individual institutions who apply for it, the source said. It will be conditional on audits and the government will be looking for financial efficiencies, according to the source.

There will also be no tuition fee increases for three years, the source said. 

At an unrelated news conference Friday, Premier Doug Ford said the minister of colleges and universities will announce details of the funding on Monday. 

The money comes as Ontario's post-secondary sector navigates considerable financial strain. An expert panel established by the government reported in November that its fiscal sustainability is "currently at serious risk." 

The panel pointed to the province's long-running freeze on per-student funding to universities and colleges and its 2019 move to scrap a program subsidizing free tuition for low- and middle-income students. That policy came with a 10 per cent cut to tuition fees for domestic students, which the government subsequently froze.

Among the panel's recommendations were an immediate 10 per cent boost in government funding to the sector with future annual increases set at two per cent or the rate of inflation, whichever is higher, and a five per cent tuition hike for this fall. In all, the panel said its recommendations would cost about $2.5 billion over three years. 

In response to the report, Ontario's Minister of Colleges and Universities Jill Dunlop said post-secondary institutions need to find operating efficiencies before the province would consider tuition increases.  

International student cap adding to financial risk

The tuition cut and freeze on domestic students combined with low provincial funding forced many schools to look for different revenue streams, the panel also noted. Colleges in particular vastly increased their reliance on international students, who were not subject to the tuition freeze, as a way to increase revenue.

Federal data shows about 240,000 permits granted to international students for post-secondary education in Ontario in each of the last two years.  

Last month, however, Ottawa announced a two-year cap on international study permits that will see Ontario's allotment of new visas cut in half. The move was partly to deal with private colleges that made false promises of citizenship after graduation, as well as some institutions that the federal government alleged are "diploma mills." 

The federal government also cited the impact the recent surge in international students has had on demand for housing, which is very costly and in short supply, particularly in Ontario.

Dunlop has been critical of the decision, saying it was made unilaterally without any warning to the provinces.

Colleges Ontario, which represents the province's 24 publicly funded colleges, has said the cap is already causing further financial havoc as they have year-round intake of students.

In a statement Friday, the opposition New Democrats said chronic underfunding by the Ford government has pushed the post-secondary sector "to the brink.

"Now Ford's rumoured investment is half what his own panel of experts have recommended," said MPP Peggy Sattler, the NDP's critic for colleges and universities.

"We should never have gotten to this level of crisis in our colleges and university sector. We need serious solutions to get us out," Sattler added.