Introduction
Guided by provincial government policies and frameworks, operating grant funding for universities used to be tied to total student numbers. As student numbers grew, so did the value of the grants. When Ontario Tech was founded in 2003, government grant funding accounted for half of Ontario Tech’s budget, with student tuition and ancillary fees making up most of the remaining portion. Since 2012, however, the per-student grant has remained frozen, and total enrolment growth payments have been capped at 2016 enrolment levels. At the same time, multi-year tuition frameworks that allowed for increases of three per cent or more per year were frozen in 2019, following a 10 per cent reduction, and are now frozen until 2027. With per-student grants and domestic tuition frozen, predictability around university revenues from these traditional sources continues to decline.
At present, Ontario’s per-full-time-equivalent (FTE) funding has declined by about 30 per cent in the past decade when adjusted for inflation. The province’s spending patterns fall well below the rest of the country, with Ontario’s per-FTE expenditure pulling the national average down making every other jurisdiction ‘above average’ by comparison. It is no surprise that universities subsequently became reliant on international students to generate additional revenue. However, the federal government’s introduction of caps on international undergraduate study permits in 2024-2025, and graduate permits in 2025-2026, has significantly reduced this revenue source. To mitigate a funding crisis in February 2024, the provincial government announced a one-time operating investment of $900M over three years for the whole university and college sector. Although welcome, this amount is less than half of what the government’s Blue-Ribbon Panel recommended. Ontario Tech’s share of this one-time funding is $3M in 2025-2026 and $4M in 2026-2027.
Looking to the future, the next five years of government operating grants are tied to the 2025-2030 Strategic Mandate Agreement (SMA4), which provides no commitment for enrolment growth funding in its first two years and ties an increasing proportion of existing funding to performance metrics. As a result of the different government policies, 90 per cent of our current revenue sources are subject to restriction. In contrast, our expenses, due largely to inflationary increases, are outpacing our static revenue sources. As detailed in this paper, our fiscal situation becomes increasingly precarious without predictable and substantive revenue streams. Previous deficit forecasts did not materialize, mainly because enrolment growth exceeded our conservative targets and we deferred investing in capital infrastructure projects (e.g. buildings and equipment) that have surpassed their normal life cycle. Although we are presenting a balanced budget for 2025-2026, we cannot maintain this balance in future years unless we find additional revenues.
Overall, the reality is that over time, institutions of higher education in Ontario have moved from essentially being ‘publicly-funded’ to ‘publicly-assisted’ entities. Moreover, public perspectives on the value of a university education have declined, making it essential for universities to demonstrate their relevance and societal contributions. Strengthening industry connections and highlighting the tangible benefits of a university education are key strategies to address this issue. The business model for universities is no longer sustainable. Proactive measures are increasingly urgent to secure both financial stability and academic excellence.
The 2023–2028 Integrated Academic Research Plan (IARP) reaffirms our commitment to four strategic priority areas (i.e. Learning Re-imagined, Creating a Sticky Campus, Tech with a Conscience and Partnerships) supported by differentiated enrolment growth to elevate our reputation, achieve economies of scale and increase revenues. In 2025, President Murphy held information sessions to discuss important actions to further advance the IARP. These actions include creating distinctive programs with hands-on learning opportunities, offering flexible options for traditional and non-traditional learners and prioritizing initiatives that build job readiness while promoting ongoing upskilling and reskilling. We are deliberately committed to strengthening our brand and appeal to students, scholars and partners, to continue to yield high application numbers from both domestic and international sources. The university’s innovative approach to program delivery, adaptability, and strong industry partnerships, aligned with government priorities, will drive continued growth and success.