Canada’s universities are in crisis as money gets tighter

Jonathan Malloy is the Bell chair in Canadian parliamentary democracy at Carleton University. He is co-editor of The Politics of Ontario.

A quick test: What university did your acquaintances and co-workers attend (if they went to university)? Unless they’re recent graduates or lifelong friends, there’s a good chance you don’t know. And the most likely guess is a local public university.

One of the unappreciated strengths of the Canadian postsecondary system is its high levels of both accessibility and equality. In most cases a person’s alma mater has no long-term significance, because it is not taken as a permanent indicator of their value and brilliance. In contrast, in the United States, if a person is a Harvard graduate, you’ll hear about it sooner or later.

Canadians largely take for granted that anyone in a medium-sized city can count on attending a solid and reputable local public university. There is no stigma to attending a “state school”; all major Canadian universities are public. Most Canadian students are commuters living at home, able to retain part-time jobs, and family and cultural networks. Tuition varies by program and province, but in most cases remains under $10,000 annually, balanced by significant scholarships and other funding. While not free, a Canadian university degree is a good bargain.

What is the value of higher education in Canada?

And yet it is not a system of equal mediocrity. Canadian universities successfully balance excellence with equality through economies of scale. Size and prestige generally correlate in Canada, unlike the United States. Harvard’s first-year entering class this fall was 1,675 students. Meanwhile, the University of Toronto last year admitted 17,758 first-year students.

But this balancing act is under severe pressure, in part because it’s been taken for granted.

Canadian universities work so well that they are increasingly being treated as utilities or commodities, with a focus on price without considering quality. This is most severe in Ontario, where the government has frozen tuition since 2019, with only modest funding increases. But across Canada, funding for universities is in “long-term stagnation,” in the words of leading education consultant Alex Usher. Provinces are spending money on other priorities such as health and K-12 education, but not postsecondary education.

While holding down tuition might seem to make education even more affordable for students and their families, the revenue squeeze is undermining what they are buying, with larger class sizes, less course selection, and deteriorating facilities and services. At the beginning of 2025, 14 of Ontario’s 23 universities were projecting deficits for the coming fiscal year, even after hiring freezes, retirement buyouts and layoffs. Concordia University in Montreal recently announced it has no money to retain its part-time instructors. All this chips away at the accessible, equal-quality model we have long taken for granted.

Immigration cuts leave an Ontario college, and its city, feeling the strain

In recent years, universities tried to make up for stalled domestic revenue by admitting more international students. But that approach came crashing down with drastic reductions in the number of student visas issued by the federal government. This abrupt change means serious problems for institutions that expanded facilities and staff to serve that now-diminished population.

Ottawa has been more forthcoming in other areas of education – for example, with funds in the latest budget to recruit star researchers from abroad. But this is new money for new things; it doesn’t help existing classroom costs. Instead it will likely increase the prestige gap, with most funding going to the largest and richest institutions – such as U of T, which already has its own recruitment initiatives under way – while smaller ones struggle further to give students value for money.

The economies of scale that long made our system so accessible are breaking down as money gets tighter, even as needs grow larger. Universities are constantly encouraged to focus on aligning with labour markets, creating “job-ready” graduates. But as a recent Royal Bank of Canada study notes, “academic programs that connect best with high-productivity industries are the most expensive to run” – requiring more equipment, more hands-on instruction, and larger co-op and industry liaison offices.

Artificial intelligence (AI) is a particular challenge for our mass-scale system. Instructors are now flooded with ChatGPT essays, and yet classes are too large to give students the individual attention needed to develop their AI skills critically and thoughtfully.

Admittedly, no university has ever claimed to have sufficient money. But it is worth recognizing the strengths of the current system, which most take for granted. Universities are not a commodity in which quality holds steady regardless of price. Rather, starving the system of overall steady funding means a few winners and a race to the bottom for the others. Over time, where someone earned their degree will mean more and more, and signify whether they were a winner or a loser in the higher-education status game.