Voice of Business: Investing in Ontario’s Future: Why Sustainable Investment Matters
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Welcome back to this week's Voice of Business. Today, we’ll be discussing the future of post-secondary education and what is needed to ensure its sustainability, particularly as Canada faces increasing demand for skilled workers and the need to enhance productivity.
As you know, Canada’s productivity has been lagging for years—this is not a new issue. There is a direct correlation between productivity, the quality of our post-secondary education system, and workforce development. This week, we’ll examine the impact of post-secondary investment and the advocacy efforts that have been undertaken on this issue.
Last month, the Ontario Chamber of Commerce(OCC), and the Council of Ontario Colleges and Universities, released a letter urging the provincial government to invest in post-secondary education. The provincial government has frozen funding for the sector, leading institutions to rely heavily on international students for revenue. Without critical funding, many post-secondary institutions have been forced to cut programs vital to Ontario’s economy. This has dangerous trickle-down effects on workforce development, especially as we strive for self-sufficiency amid a hostile trade environment. If we want to position ourselves for success, we need targeted investments that contribute to and build our economy. The letter highlights the key link between strategic investment in AI and technology and the need to spur innovation in post-secondary institutions home to Ontario’s research and development. Investing in post-secondary education not only drives innovation but also strengthens our workforce and economy. If the government is investing in key growth sectors, we must ensure we have the talent to support these investments.
How did this problem arise and worsen? A combination of underfunding and a tuition freeze contributed to the crisis. In 2019, Premier Doug Ford mandated a 10 per cent tuition cut for colleges and universities. With domestic tuition frozen at this reduced rate, post-secondary institutions had to find alternative revenue sources to offset the financial shortfall. By 2024, the federal government further strained the sector by capping international student permits by 35 per cent to address housing market pressures, particularly in areas with low rental vacancy rates. As a result, post-secondary institutions began reporting significant revenue shortfalls. Adding to the crisis, another 10 per cent funding cut was introduced this year. Consequently, 24 of Ontario’s colleges are projecting a billion-dollar deficit by the 2026-27 school year, forcing many institutions to implement program suspensions and layoffs. Locally, Fleming College has suspended eight more programs, in addition to the 29 programs cut last year. Another notable college is Seneca Polytechnic which was forced to close its Markham campus due to declining international student enrolment.
Universities may need to downsize to remain financially viable. Although the Ontario government has allocated $1.3 billion to post-secondary education, the Ontario Council of Colleges and Universities reports that this does not account for the $2.5 billion in ongoing base funding recommended by an expert panel commissioned to assess the sector’s financial health. In short, current funding levels are not sustainable.
The OCC and the Council of Ontario Universities and Colleges are advocating for a new approach to post-secondary funding, including:
Increasing base operating revenues
Fully funding enrolment expansion
Enhancing research funding
Strengthening partnerships between government, industry, and academia
