Under the Ford government, Ontario’s colleges and (to a lesser extent) its universities grew to rely disproportionately on the revenues from foreign students in the place of a provincially-mandated freeze on domestic tuition. It was a policy that worked until it suddenly didn’t, when the federal government discovered that foreign students amounted to an unanticipated and uncontrolled immigration stream contributing to the housing crisis. Now, the post-secondary sector is announcing class cancellations and layoffs, with the prospect of more to come.
If the sector was looking for a lifeline from the province to help stabilize its financial state, the 2025 Ontario budget, presented by Finance Minister Peter Bethlenfalvy on Thursday, doesn’t contain one. The funding for the next three years is projected to fall from last year’s $14.2 billion to about $13 billion this year and next, to $12.8 billion in 2027.
The budget doesn’t leave the sector entirely bereft. The government has made substantial investment announcements for STEM ($750 million) and a commitment to spend $2 billion on capital grants to modernize facilities. There’s also $207 million for a specific research infrastructure arm of the Ontario Research Fund to help provinces attract global talent. There’s even some flowery language about luring more artificial intelligence research to Ontario. The finance minister, speaking with reporters prior to Thursday’s budget speech, denied that the government was effectively planning for a continued crisis in postsecondary education.
“They’re going through an adjustment period, and that’s why we’re supporting them,” Bethlenfalvy said. “Our colleges, our universities, our skilled trades — that’s a competitive advantage we have.”
Earlier this month, CBC reported that Algoma University in Sault Ste. Marie is looking at a whopping 50 per cent decline in enrollment. While Algoma is avoiding layoffs among permanent employees, the university is hiring fewer sessional lecturers and cancelling some summer courses. Cambrian College in Sudbury is eliminating positions after a $40 million drop in revenues. Earlier this year the Council of Ontario Universities projected a $600 million drop in revenue for 2025-26 and warned that the province is at risk of turning off the pipeline of university graduates that employers of the future will need.
While the province has announced $1.3 billion in time-limited funding for the sector, the COU says that number needs to be doubled and embedded in the permanent base spending for the sector to stabilize, or universities will have to dramatically scale back their offerings to students.
On Thursday evening, the council of universities welcomed some of the measures announced in the budget but struck an urgent tone about the financial state of the post-secondary sector, calling for both expanded funding and revisiting the current freeze on tuitions.
“There isn’t time to wait when our economy is under threat. Strategic investment in Ontario’s universities will fuel the home-grown talent and innovation necessary to support ‘nation-building’ such as the Ring of Fire and nuclear energy generation – projects that will help Ontario stay strong in uncertain times and create jobs, boost unity and spark economic growth,” said Steve Orsini, former secretary of cabinet and current President of the Council of Ontario Universities.
The crisis for the sector comes even as the province is seeing interest from researchers in the United States to come to Canada for their work, given the even greater chaos south of the border.
Three prominent researchers on authoritarianism recently announced their move to the University of Toronto, for both political and personal reasons. But the hard sciences are also being ravaged by funding cuts announced by the Trump White House.
“I live in a community with University of Waterloo, Wilfrid Laurier University, and they’re saying that talent from Harvard, from MIT, from the best universities in the world is looking to come here because of what’s happening to the system in the US,” said Green MPP for Kitchener Centre Aislinn Clancy.
Meanwhile, according to the COU, Ontario lags behind other provinces in research funding, at $563 per student compared to a Canadian average of $1,165, according to the organization’s pre-budget submission to the government.
“Ontario universities are committed to working with industry to commercialize new technology. But to do so will require additional investment in STEM, research, innovation, and commercialization capacity, whether it is research grants, capital investments in economic infrastructure or research chairs to help attract the top researchers to Ontario from the United States,” the council wrote prior to the budget announcement.