TORONTO — The Ontario government will inject $6.4 billion in new funding into the province’s postsecondary sector over four years, alongside sweeping changes to tuition rules and student aid, in what it calls a long-term plan to stabilize colleges and universities facing mounting financial pressure.
The investment, announced Thursday by the Ministry of Colleges, Universities, Research Excellence and Security, will raise annual operating funding to $7 billion — a 30 per cent increase and the highest level in Ontario’s history — beginning in the 2026 fall term.
The province says the reforms respond to “unprecedented pressures” on institutions, including reduced international student revenues following federal policy changes, rising domestic demand for higher-cost programs and what it describes as an unsustainable student aid framework.
“In order to protect our province, it is imperative that we continue to train a strong, highly skilled workforce for Ontario for decades to come,” said Nolan Quinn, Minister of Colleges, Universities, Research Excellence and Security. “Through these changes, including $6.4 billion in new funding for the postsecondary sector, our government is not only ensuring the sustainability of our colleges, universities and Indigenous Institutes, but also preparing our graduates with the in-demand skills they need to meaningfully find good-paying, rewarding careers, while continuing to keep education accessible and keep costs down for students and their families.”
New Funding Model and Expanded Seats
At the core of the plan is a new performance- and demand-based funding model aimed at aligning programs more closely with labour market needs. The government says the framework will support 70,000 additional seats in high-demand programs while providing more predictable base funding to institutions.
Base per-student funding will increase by six per cent for full-time students at colleges and universities, and by 30 per cent for part-time college students. The model also includes targeted support for small, rural, northern, French-language and Indigenous Institutes.
Since 2024, the province has invested more than $2 billion in additional funding for the sector, on top of the roughly $5 billion it provides annually.
Finance Minister Peter Bethlenfalvy framed the announcement as part of a broader fiscal strategy.
“It is more important than ever that we manage Ontario’s finances responsibly – to build a more resilient and self-reliant economy to secure long-term prosperity,” he said. “Postsecondary education is one of Ontario’s most important long-term investments – and today’s announcement helps ensure that investment remains strong, responsible and sustainable for years to come.”
Tuition to Rise Within Cap
Ontario will also revise its tuition framework, allowing publicly assisted colleges and universities to raise tuition by up to two per cent annually for three years starting in fall 2026. After that, increases will be capped at the lower of two per cent or the three-year average rate of inflation.
The province says the cap will remain among the lowest in Canada, including compared with British Columbia and Manitoba.
On average, the government estimates the change will add $0.18 per day for college students and $0.47 per day for university students. For low-income students, the added cost will be absorbed through an enhanced Student Access Guarantee (SAG), which institutions will negotiate with the province to ensure tuition, books and mandatory fees are covered if Ontario Student Assistance Program (OSAP) funding falls short.
OSAP Shift Toward Loans
The province is also restructuring OSAP to improve long-term sustainability. Beginning in 2026, students will be eligible to receive a maximum of 25 per cent of their OSAP funding as grants, with at least 75 per cent provided as loans. Grants will no longer be available to students attending private career colleges, aligning with federal policy changes.
The government says the shift will bring Ontario’s student aid model more in line with other provinces while preserving financial assistance for future generations.
Broad Sector Support
Sector leaders and business groups broadly welcomed the funding boost.
“Today’s announcement of $6.4 billion is a game changer for the economic future of Ontario,” said Maureen Adamson, President and CEO, Colleges Ontario. “By strengthening Ontario’s colleges, the province has taken a significant step that will power economic growth through a dynamic, skilled workforce in Ontario.”
Steve Orsini, President and CEO of the Council of Ontario Universities, said the funding comes at a critical juncture.
“Today’s funding announcement comes at a critical time and will help ensure Ontario’s universities continue to protect and grow the province by delivering the talent and innovation needed to remain competitive and position Ontario for the future,” he said.
Business leaders echoed that view. “This announcement reflects a priority the Ontario Chamber has championed: if we want a more competitive, self-reliant Ontario, we have to skill up and scale up. That means preparing more people for in-demand careers, and strengthening the programs that power our key sectors. This is an investment in Ontario’s productivity and long-term prosperity,” said Daniel Tisch, President and CEO, Ontario Chamber of Commerce.
Indigenous and regional institutions also highlighted the impact. “This historic investment will contribute to Indigenous learners having equitable access to Indigenous-led, quality postsecondary education and training that is grounded in Indigenous culture, language, and knowledge,” said Lorrie Deschamps, Chair, Indigenous Institutes Consortium and President, Oshki-Pimache-O-Win: The Wenjack Education Institute.
The province will also streamline more than 400 transfer payment agreements into 45 five-year Strategic Mandate Agreements, a move it says will reduce administrative burden and free up institutional resources.
Collectively, the reforms mark the most significant restructuring of Ontario’s postsecondary funding framework in years, as Queen’s Park seeks to balance fiscal discipline with the demands of a changing labour market and global education landscape.