The Ontario government has announced long-awaited funding changes for post-secondary institutions. These include allocating $6.4 billion in new funding, lifting the existing tuition freeze and shifting the composition of loans and grants within the Ontario Student Assistance Program (OSAP) .
In a news release, the Ontario government says these measures are being brought in as a “response to the unprecedented pressures Ontario’s post-secondary sector is facing, including as a result of changes made by the federal government.”
Meeting labour market needs, strengthening research institutions and promoting access to higher education have been cited as the main reasons for these changes.
The provincial government says the additional $6.4 billion will be allocated to universities, colleges, and Indigenous Institutes that will “fund 70,000 more in-demand seats.”
The freeze on tuition fees increases, in place since the 2019-20 academic year, has now been lifted as well. Ontario will now allow tuition fee increases by “up to 2 per cent per year for three years, then up to 2 per cent or the three-year average rate of inflation, whichever is less” for publicly assisted colleges and universities.
Additional changes have also been made to OSAP. Students in the province will “be eligible to receive a maximum of 25 per cent of their OSAP funding as grants and a minimum of 75 per cent of their funding as loans.” Currently, 85 per cent can be grants and 15 per cent loans. Grants do not have to be repaid.
OSAP funding will also be discontinued for students at private career colleges.
Colleges in Ontario have been facing a funding shortfall since 2024, which has led to program closures and job cuts in institutions across the province.
The federal government’s cap on international student intakes has been a major factor behind the funding crunch.
Several stakeholders, including student and business groups, have consistently called for an overhaul of Ontario’s investment in higher education, which has been one of the lowest in the country.
The provincial government has been criticized for ignoring the recommendations of its Blue Ribbon experts panel in 2023. It called for increased funding for post-secondary education, including lifting the tuition freeze and allowing fees to rise.
The latest announcement on boosting investment has been welcomed by college presidents and business associations, based on an expected increase in institutional capacity and career opportunities for students and youth.