Financing for equity in higher education
1. Education resources to subnational governments
2. Education resources to institutions
3. Education resources to students
4. Support for students' living costs
Introduction
Key financing indicators (UIS Data)
The gross enrolment ratio for tertiary education for both sexes in Canada in 2023 was 76.26%. In 2022, the initial government funding per tertiary student as a percentage of GDP per capita was 23.3%. The same year, the initial household funding per tertiary student as a percentage of GDP per capita was 4.52%.
Tuition-free status
Public tertiary education is not tuition-free in Canada. However, it is subsidized so that students can pay less for their education. Education subsidies vary between provinces. Tuition fees for publicly funded post-secondary educational institutions are more or less controlled by provincial policy and tuition frameworks. For example, the province of Ontario regulates the tuition for public institutions, while all public post-secondary institutions in Alberta are subject to tuition fee increase caps. Institutions may charge different fees for students from different provinces and international students.
Governance
Canada is a highly decentralised government. Higher education primarily falls under the jurisdiction of the 13 provinces and territories, as established by the 1867 Constitution and its amendments through 2011. There is no national decision-making authority on post-secondary education. There is, however, a Council of Ministers of Education (CMEC) which serves as a national forum for discussion on educational matters. Each province has legislation that sets out the governance of the post-secondary education system. The ten provinces and three territories regulate and organise their own public education system and provide operating funds at all levels.
While the federal government is prohibited from passing laws or regulations in education, they are not prohibited from federal spending.
1. Education resources to subnational governments
The federal government uses several different funding mechanisms to transfer resources from the central government to local governments. The main mechanism which considers equity are the Equalisation Transfers and Territorial Formula Financing, the first of which aims to address fiscal disparities among provinces, while the latter helps to fund the three territorial governments.
The Canada Social Transfer (CST) has portions which are earmarked to support provincially funded post-secondary education. However, once the funds are delivered, provinces may choose to allocate the block grant as they see fit. Over 50% of federal funds for post-secondary institutions are delivered through the CST. The CST is allocated on an equal per capita cash basis and is legislated to grow by 3% annually.
2. Education resources to institutions
Funding for private universities in the absence of public institutions
The federal government does not provide funding for private universities when no public university is available. Private institutions may receive some public funds through government student assistance programmes or through research grants.
Previously, the Post-Secondary Institutions Strategic Investment Fund (SIF), which ran from 2016-2018, provided grants to post-secondary institutions, including not-for-profit private ones, to enhance and modernise research and commercialisation facilities. Institutions applied for the grant, and federal sources helped to cover up to half (50%) of the project cost.
Allocation and equity
Post-secondary education institutions in Canada primarily receive funding from three sources: government (45.8%), student fees (29.4%), and donations, grants, and sales (25%).
Federal Level Allocation
The Government of Canada has three mechanisms for transferring money directly to post-secondary institutions. The primary method is through research granting councils such as the Canada Foundation for Innovation (CFI), the Canadian Institutes for Health Research (CIHR), the Natural Science and Engineering Research Council (NSERC) and the Social Sciences and Humanities Research Council (SSHRC). The second method is through scientific agencies and departments, which transfer money to related post-secondary institutions. The third mechanism is through occasional large investments or grants such as the Post-Secondary Institutions Strategic Investment Fund (SIF).
Provincial Level Allocation
Provincial governments primarily fund post-secondary education by using their general revenue budget to deliver block operating grants, special purpose grants, or enrolment-based funding formulas. Some provinces use special grants to target certain goals of the province. Others may utilise performance grants.
In three provinces- Quebec, Ontario, and Saskatchewan- core funding is primarily distributed by an enrolment-weighted funding formula. In the other seven provinces, funding is largely historically driven. As such, universities largely receive the same amount that it received the previous year with adjustments for new programmes, initiatives, or for inflation. For example, in Alberta, post-secondary educational institutions are funded based on historical funding levels adjusted annually. The Base Operation Grant supports the core operational needs of the institutions, while the Programme Support Grants target funding specifically for students with disabilities, medical faculty support and mental health funding. The Advance Education Grant provides targeted funding related to the province’s strategic goals. This includes student support programmes and French language programmes. Capital funding is allocated separately for the maintenance, upgrading, and renewal of buildings and facilities. New Brunswick and Nova Scotia refer to their funding formulas as enrolment-based. Though these calculations were determined years ago.
Two provinces, Ontario and Alberta, use some form of performance funding.
The federal Department of Aboriginal Affairs and Northern Development Canada provides funding support to post-secondary institutions through the Post-Secondary Partnerships Programme. The programme targets Indigenous Institutes of Higher Learning, which could be publicly funded, private, or independent.
3. Education resources to students
Admission for vulnerable groups
There are no specific admission criteria for vulnerable groups at the federal or provincial levels. Public-funded universities set their own admissions standards.
Scholarships, grants and loans for vulnerable groups
Student aid is available at the federal and provincial levels. Most provincial-level programmes run alongside the federal one. In these instances, the provinces manage both programmes, which allows students to apply only once to receive assistance from both. As of 2023/24, the federal government provided nearly two-thirds of all student aid in Canada.
Federal Level Assistance
Financial assistance for students in Canada is primarily governed by the Canada Student Financial Assistance Act and the Canada Student Financial Assistance Regulations.
Canada Education Savings Grants (CESGs) and Canada Learning Bonds (CLBs) for students are distributed through the Canada Education Savings Act and the Canada Education Savings Regulations.
The Canada Student Financial Assistance Programme (CSFA Programme) provides grants and loans to students who are from low- and middle-income families, have dependents, or have disabilities. The programmes are primarily funded by the Government of Canada; the provinces and territories are responsible for determining which schools and which programmes can be designated for funding. How much a student receives depends on the province or territory of residence, their eligibility factors, as well as the tuition fees and living expenses. While loans are dependent on student need, grants are usually based on income. As of 2024, the loan limit has increased to CAD 300 per week of study for full-time students. Grants have also been increased by 40%.
Quebec, Nunavut, and the Northwest Territories have opted out of the CSFA Programme and receive compensation for this, which they use to fund their own standalone programmes.
The government also provides the same loans and grants to ‘protected persons,’ those who have reason to fear persecution in their country of origin.
Registered Education Savings Plan
The RESP is an account where a ‘subscriber’ (usually parents and guardians) can make contributions which can then be used to pay for the beneficiary’s (usually the child) education as educational assistance payments (EAPs). Government grants such as the Canada Education Savings Grant (CESG), Canada Learning Bond (CLB), or any designated provincial education savings programmes, are paid to the RESP.
Lastly, the federal government and provincial governments may provide tax credits to post-secondary students. These are not means-tested and are available for all.
Provincial Level Assistance
Each province has its own loans, grants, scholarships, and other forms of financial support available for post-secondary students to access.
British Columbia: Access Grant
The B.C Access Grant provides upfront, non-repayable financial assistance to various groups, including low- and middle-income students, Deaf students, and students with disabilities. Eligible students are automatically enrolled in these programmes after they have applied and qualify for StudentAid B.C. financial assistance.
The Yukon Grant is a student funding programme that gives students weekly allowances and travel allowances. This grant is available to all residents of the Yukon territories.
Ontario: OSAP
The Ontario Student Assistance Programme (OSAP) is a financial aid program that offers funding through grants and student loans. The amount that students may receive depends on their education costs, course load, programme hours, and their personal financial situation. Additional funding may be available for indigenous students, students with disabilities, first-generation students, and youth in extended society care. OSAP may help students pay for tuition, books and equipment, school fees, living expenses and childcare.
Alternatively, the Ontario Learn and Stay Grant provides funding for students studying in priority post-secondary programmes in underserved and growing communities. Graduates must work in the region where they studied, helping the underserved and growing communities get the workers they need for in-demand professions. The grant covers the cost of tuition, school fees, books, and school supplies.
Indigenous Students
The federal government funds several individual student financial support programmes for indigenous students. The Post-Secondary Student Support Programme and the University and College Entrance Preparation programme target First Nations students, while Inuit and Métis students are supported by the Inuit Post-Secondary Education Strategy and the Métis Nation Post-Secondary Education Strategy, respectively. Students who qualify for the education strategy programmes may use the funds to cover tuition and other fees, books and supplies, university services, living expenses, transportation support, and childcare.
Finally, institutions themselves are large contributors to student scholarship and bursary funds. Over CAD 2,500 is provided in scholarships to each student on average.
4. Support for students’ living costs
Transportation
The Indigenous Services Canada's (ISC) support programmes may be used to help fund student transportation. For more information, see the section above.
Accommodation
Many provincial-level governments provide grants that may be applied to living expenses, including accommodation. The Indigenous Services Canada's (ISC) support programmes may be used for the same. For more information, see the section above.
Textbooks
The Indigenous Services Canada's (ISC) support programmes may be used for the same. For more information, see the section above.
