Federal funding for Canadian universities has fallen to half its historic peak

Canadian universities and colleges are facing a financial crisis rooted in decades of federal defunding, according to a new analysis from the Canadian Centre for Policy Alternatives.

Federal per-student funding for post-secondary education has collapsed to $5,610 in 2024 — just half the all-time high of $11,170 reached in 1978. The decline accelerated dramatically in the 1990s and has continued since, despite the country's growing economy.

The CCPA, a think tank focused on social and economic justice policy, traced the shift: between the 1950s and 1970s, the federal government was an active and growing partner, splitting post-secondary costs with provincial governments. By 1967, federal funding had risen to $5,470 per student. When the federal government began transferring funds directly to provinces in 1968, support jumped to $8,530 per student. Growth continued through the 1970s until the peak in 1978.

From the mid-1980s onward, the federal government sharply reduced its role. Federal cash transfers to provinces were cut, and research funding stagnated relative to inflation and enrollment growth.

As government funding collapsed, universities and colleges compensated by aggressively maximizing student fee revenue. Average student fee revenue per student grew from $3,140 in 1990 to $12,890 by 2024 — with most growth driven by international students paying significantly higher tuition.

This reliance created a precarious structure. When the federal government abruptly cut the number of international study permits issued in 2024 and made further cuts in 2025, institutions were hit hard. Across Canada, universities and colleges have announced mass layoffs, program closures, and campus shutdowns.

The CCPA argues this crisis was preventable. "It was an inevitable result of government underfunding combined with growing overreliance on revenue from international students," the report states. "It could have been prevented with adequate government funding."

Federal funding has also declined relative to Canada's rising economy. In 1984, federal post-secondary education funding represented 0.67 per cent of gross domestic product. By 2024 it had fallen to 0.34 per cent. As a share of total federal spending, post-secondary education fell from over 3.5 per cent in the early 1970s to just 1.9 per cent in 2024.