Ontario’s universities and colleges are at a crossroads. By the end of the decade, Ontario’s universities may be forced to educate up to 100,000 students out of their own pockets due to the provincial funding cap on domestic students. Meanwhile, nearly two decades of stagnant provincial funding, a seven-year freeze on domestic tuition, and federal cuts to international student visas have left many of the province’s colleges and universities in dire financial straits. At Ontario’s colleges, 10,000 faculty and staff have been laid off or are sitting on the chopping block; meanwhile, 14 universities are facing budget deficits totaling $400 million. A flurry of restructuring to reduce costs has seen untold departments consolidated and programs slashed.

As Ontario’s college and university students step into a new semester with less programming, fewer educators, and larger class sizes, here are five figures that explain how we got here, and what lies ahead.

Ontario has the lowest post-secondary funding in Canada

The story of Ontario’s crisis in post-secondary education is, first and foremost, a story of provincial neglect. The province is responsible for distributing funds to Ontario’s colleges and universities. The vast majority of these funds are allocated on a per-student basis. For more than a decade, Ontario has had the lowest per-student funding of any Canadian province—providing about half as much as the average Canadian province.

But this is not all. For one, there is a limit to how many domestic students the province will fund; that means Ontario’s universities are taking on the costs to educate at least 28,000 domestic students without provincial funding, according to analysis from the Council of Ontario Universities.

The province’s contributions to the post-secondary sector have also failed to keep up with inflation. This means that even this insufficient funding is worth less now than it was a few years ago. Adjusting for inflation, universities received $670 million less in 2023 than they did in 2018—the year Premier Doug Ford took office. For colleges, inflation has meant a loss of just over $350 million.

Freezing domestic student tuition strained budgets

A few months after taking office, Doug Ford’s Progressive Conservative government cut tuition fees for domestic students by 10 percent and froze it.

On the face of it, this might have seemed prudent. After all, Ontario’s university students were graduating with more than $30,000 of debt. The tuition freeze was aimed, ostensibly, at easing this burden. However, a few months after it was announced, the province introduced more than half a billion dollars in cuts to Ontario’s student financial assistance program OSAP.

Historically, OSAP would have been enough to cover tuition and the majority of living expenses for students pursuing an undergraduate education. But in 2019, students found themselves receiving anywhere from a third to half of the loans and grants they’d previously relied on. Reporting by the CBC and The Varsity at the time found students taking on multiple part-time jobs and lines of credit to make ends meet.

For the province’s universities, the tuition reduction and freeze meant $500 billion in lost revenue as of 2019, the year after the policy was announced. By 2024, with the real value of those domestic tuition dollars declining due to inflation, the ongoing freeze was taking nearly $1 billion out of university budgets.

Of course, this freeze only applied to domestic students. Ontario’s colleges and universities still had other students they could hit up for money. In the ensuing years, their reliance on international students would hit a breaking point, laying bare a crisis more than a decade in the making.

International student tuition has been used to compensate for provincial underfunding

While domestic tuition was frozen, Ontario had no corresponding freeze on the tuition it demanded of its international students. By 2024, the province’s international students paid the highest tuition in Canada. (It’s not close; the average international tuition in Ontario is $10,000 more than the second-most expensive province, British Columbia.)

This is nothing new. Ontario has had a differential fee policy for international students since 1977, charging them three times as much as domestic students. This corresponded with a decline in public funding for higher education by the end of the century. This pattern of underfunding universities and over-charging international students hit a new stride in the past decade.

International student tuition made up seven percent of Ontario universities’ operating revenue in 2010; by 2021 it would make up nearly a third. Under Ford’s tenure, the number of international students in Ontario nearly doubled, and the average international student tuition rose by $15,000. At the University of Toronto alone, international student tuition pulled in more than a billion dollars a year in revenue.

By the early years of the pandemic, however, this system had already proved to be untenable. (By 2022, funeral homes were raising the alarm about the number of international students who had died by suicide.) In 2024, responding to concerns about the impact of all this enrollment on immigration numbers and housing supply, the federal government introduced a 35-percent reduction in international study permits, with more to come. For the province’s colleges and universities, this would be the beginning of the end. International students had become an indispensable part of their budgets. Despite the cuts to domestic tuition and provincial funding, the gold rush of international tuition dollars had meant that many institutions were operating with a historic surplus.

This surplus, however, had been built on the assumption that they could simply enroll ever-more international students for ever-higher fees. Of course, all these new students would need new buildings, amenities, and in some cases entire campuses—all of which Ontario’s universities and colleges were in the midst of constructing when the hammer came down.

Record surpluses spent on capital projects instead of education

For many colleges and universities, the international student frenzy ushered in an era of reckless expansion. For example, while colleges were recording an accumulated surplus of $3.1 billion in 2021, the majority of that had already been committed to capital projects. In Toronto, York University greenlit the development of a new campus for hundreds of millions of dollars, opening last year with a tenth of their projected enrollment.

These projects were built on the backs of international students, but also came at the cost of higher education workers. As colleges and universities greenlit billions in capital projects, they also expanded their administrative ranks (according to the Ontario Public Service Employees Union, Ontario’s colleges now have one full-time administrator for every three full-time faculty) and deepened their reliance on contract faculty and third-party contractors to provide services such as maintenance.

But the budgetary crisis unfolding across the sector has not meant the cancellation of the capital projects (of which many are too far along to cancel without incurring massive costs), but the culling of educators and staff—10,000 in the college sector alone—and the cancellation of hundreds of programs.

What’s at stake: Ontario’s universities and colleges are the backbone of Ontario’s economy

The future of Ontario’s post-secondary sector is intimately connected to the future of the province itself. Economic activity from Ontario’s universities accounts for nearly 12 percent of provincial GDP—roughly $100 billion. Students who go through higher education earn more, spend more, and are more resilient to economic adversity. According to one estimate, every public dollar spent on universities returns $1.36.

The health of Ontario’s colleges is critical to meeting the province’s workforce demands in the next few years—after all, colleges graduate the construction workers and skilled tradespeople needed to build housing, the nurses and medical staff needed to bolster the ailing health care system, and countless workers in a myriad of industries critical to the province’s continued functioning.

While Ontario has made some targeted investment to support key programming (such as the Learn and Stay grant which has brought 8,000 students to crucial health programs in the past couple of years), the province needs to provide the necessary funding to stabilize the institutions that deliver these programs.

Otherwise, an untold number of institutions—and the cities that rely on them—could go the way of Laurentian University.

The first major university to collapse, Laurentian filed for insolvency in 2021. In doing so, it cut 200 staff and faculty members, and slashed dozens of programs (including 29 French-language programs in a move that breached the French Language Services Act). The direct loss of wages ran into the tens of millions, with the combined impact on the city of Sudbury estimated to be $100 million.

Laurentian has since been brought back from the brink of extinction, but as a ghost of its former self. A 65-year-old institution of incalculable value to Northern Ontario, Laurentian served some of the most vulnerable populations in the province. Its loss serves as a stark warning to the rest of Ontario’s post-secondary sector: universities and colleges with mandates to serve the social good are easy to break. What’s not so easy is putting them back together again.