Last week, the province announced a number of far-reaching changes to the way post-secondary education in Ontario will be funded. The government increased the amount of public money flowing to universities and colleges, ended the tuition freeze that had been in place since 2019, and will massively increase the share of student financial assistance that will need to be repaid as loans instead of grants. Those changes range, in that order, from least to most controversial: everyone observing the province’s post-secondary sector knew the status quo since 2019 was unsustainable, and frankly the Ford government was causing harm by sticking to its guns for as long as it had.
Students who’d planned their near futures on the previous levels of financial support (grants versus loans) are absolutely within their rights to be angry about these changes. As analyst Alex Usher puts it, “richer students, those who don’t need student aid, are looking at tuition increases on the order of $160 next year. Poorer students, the ones who receive grants, are going to see an increase in net tuition about thirty times larger.” The Tories have reinforced the financial structure underpinning the province’s colleges and universities, but they’ve done it in large measure on the backs of low-income students.
Maybe the premier thinks this is a regrettable necessity, but he’s certainly not making his best case. His dismissive remarks this week about students taking “basket-weaving classes” and blowing their student assistance on “fancy watches and cologne” don’t exactly convey a deep and abiding sympathy with the struggles of low-income students. I won’t turn this into yet another housing policy column but just a reminder that the current generation of students are paying unconscionable shelter costs, which is being reflected in distressing rates of student homelessness. If OSAP was creating a generation of wastrels, it’s done a good job hiding it in the available data. The premier, however, has never been shy about governing via anecdote when the data doesn’t support the conclusions at which he’s already arrived.
The government, then, is imposing some lean years on (some) college and university students. It says nothing about the merits of the government’s choices to note that this is in part because Ford is now well into what is in some ways the most difficult time in his political career, at least from the perspective of the province’s fiscal state. That may sound bizarre considering that he was also premier during the COVID-19 pandemic, but the COVID years were a state of exception in so many ways. Huge volumes of federal funding flowed into provincial coffers, either directly or thorough a variety of individual and business supports. (The Financial Accountability Office in 2021 estimated that 85 per cent of all COVID supports came from federal coffers, with only 15 per cent coming from the province’s wallet.) The spending that Ontario did with its own money, meanwhile, was politically painless: nobody seriously contested the need for more spending, and indeed, if anything, Ford faced criticism for not doing enough at times.
The economic recovery from the pandemic, both in Canada and the U.S., then lifted provincial revenues faster than expected, allowing the province to toss out electorally salient goodies like ending road tolls and various gas taxes without doing massive harm to the province’s fiscal state.
It’s 2026 now, and nearly every part of the province’s fiscal state has changed. The firehose of easy money from the feds has disappeared, and the province’s economic growth is projected to be relatively paltry both this year and next, according to the FAO. As a result, the province’s annual revenue growth is projected to be a fraction of what it’s been in the last five years (2.6 per cent instead of 7.6 per cent). Add it all up, and the province is looking at deficits to the horizon — or in this case, to the 2029-30 fiscal year, around the time we can expect another election.
It’s uncontroversial to say that Tories in government would, all else being equal, prefer to balance the budget, and finance minister Peter Bethlenfalvy will be fighting in cabinet to achieve that goal above and before the other political priorities being raised around that august table.
The recent changes to post-secondary funding reflect that, and voters should probably expect more news like it in the next year or two. In particular, the other big area where the government will likely try to extract savings will be in public K-12 education — after health care it’s simply the largest pot of money, but it’s also the place where the Ford government has already kept spending growth down relative to other areas of the budget; finding money there will require big changes that aren’t going to be painless or invisible to voters. Not for nothing has Education Minister Paul Calandra spent months previewing potential major changes in the administration of public, English-language school boards across the province.
The predictable life cycle of governments means that we will eventually see the government pivot back to a good news cycle of more expansive spending (or tax cuts) as we get closer to the next election day, but between now and then, we’re likely in for some leaner years coming out of the provincial treasury.