The Ontario Government’s long-awaited decision last week to increase post-secondary funding and shift the balance on student aid was the right thing to do for three reasons.
First, it begins to repair the damage caused by the government’s 2018 decision to cut student tuition fees by 10 percent and then freeze them, without compensating the sector for lost revenue.
It was a popular political move by Premier Doug Ford given the public’s growing concerns over affordability. But like many government policies, there was an unintended consequence – universities and colleges turned to increasing international student enrollment because they could charge them significantly higher tuition.
When the numbers grew to unsustainable levels, the federal government cut the number of international student visas, leaving the post-secondary sector with a significant revenue shortfall. For example, universities lost approximately $1 billion of revenue while colleges had to cut some 8,000 jobs and 600 programs.
While the funding shortfall drove some much-needed efficiencies in the sector, the government recognized that it needed to increase both the amount and predictability of its funding as more institutions struggled financially.
So last week, it announced a 30 percent increase in funding levels, increasing transfers to $6.4 billion over four years. The new money will support 70,000 additional student spots as well.
The government also lifted the freeze on domestic tuition, allowing institutions to increase fees by up to two percent a year for the next three years and by the lesser of two percent or the three-year average annual inflation rate after that. While the move attracted criticism from Opposition critics and student stakeholders, it is among the lowest of any province.
Included in that decision was another good move – shifting more of the cost of the Ontario Student Assistance Program to loans to students who qualify, rather than grants. Before the change, a student could receive 75 percent of their tuition in grants, and only 25 percent in loans. That will be reversed this fall, so that 75 percent will be through loans with a quarter being from grants. This means that students have a greater investment in their own future, that the program is more sustainable over the long term, fairer to taxpayers and is in line with other provinces.
It should be noted that the Student Access Guarantee will be enhanced to absorb the increase for low-income students. The province will also work with universities to enhance support for tuition, books and mandatory fees to ensure access for low-income students.
And finally, strengthening the post-secondary sector will prove to be a significant weapon in Ontario’s and Canada’s fight to strengthen and diversify our economy in the face of constant attacks from U.S. President Donald Trump.
One of the significant strengths of our current economy has been the quality of our talent. When potential foreign investors looked to move or expand their operations here, the quality and availability of our talent was one of the top reasons for the decision.
We can’t afford to lose that. Investing in our ability to produce more and better talent, particularly in the science, technology and health space, will be a significant weapon in our arsenal as we fight to save our economy.
It may have taken a long time to get out the door, and it is not without its critics, but the government’s decision was the right one for our post-secondary sector, for our economy and for students themselves.
Janet Ecker is a former Ontario Finance Minister, Minister of Education, Minister of Community and Social Services and Government House Leader in the governments of Premier Mike Harris and Premier Ernie Eves. After her political career, she served as the founding CEO of the Toronto Financial Services Alliance, a public-private partnership dedicated to building Toronto region into an international financial centre. She currently sits on a number of corporate and non-profit boards, agencies and advisory committees.
Ms. Ecker received the Order of Canada for her public service contributions and was recognized as one of the “Most Influential People in the World’s Financial Centres” by Financial Centres International. She also received a “Canada’s Most Powerful Women: Top 100 Award” from the Women’s Executive Network and the Richard Ivey School of Business, among other awards. She is also one of the founders of Equal Voice, a national, multi-partisan organization working to elect more women.
