On February 12, 2026, Ontario announced the largest postsecondary investment in the province’s history. The package: $6.4 billion in new funding over four years, the end of a seven-year tuition freeze, and changes to the Ontario Student Assistance Program. The March budget confirmed it all.
I had the chance to be part of this process. Through my advisory work with Colleges Ontario, I supported the financial analysis and strategic work behind the sector’s submission to the province’s funding model review. It is rewarding to see that work contribute to an outcome of this scale.
But this is not a simple win. There are real trade-offs, and there is still hard work ahead.
The Sector Was in Trouble
Ontario’s colleges had been squeezed from every direction.
Operating grants per student had fallen $7,700 below the national average. Domestic tuition was frozen since 2019 — and had been cut 10% before that. International enrolment, which many colleges had come to depend on, collapsed when the federal government cut Ontario’s study permit allocation by 42% in 2026. The Financial Accountability Office had projected deepening deficits across the sector through 2028.
Colleges Ontario’s January 2026 pre-budget submission laid out what was needed: $1.1 billion to close the operating funding gap, $200 million to expand high-priority program seats, and $200 million annually to protect small, rural, northern and French-language institutions. The government didn’t deliver the full ask. But the announcement was responsive to the core of it.
What the Funding Actually Includes
It is worth unpacking the $6.4 billion rather than treating it as a single number.
Base operating funding goes up — including a 6% per-student increase that replaces sustainability grants that were set to expire. Program funding weights are updated to better reflect the actual cost of delivery in high-demand areas like health care, trades, and technology.
Enrolment growth funding supports up to 70,000 new seats province-wide, with colleges getting up to 40,000 of those over three years.
Targeted grants of $284 million go to small, rural, northern and French-language institutions. This was a priority in the financial work I supported. These colleges serve communities that cannot easily replace them. Their cost structures make them particularly exposed to per-student funding shortfalls.
Tuition can now increase by up to 2% annually for three years starting in Fall 2026, then capped at 2% or inflation, whichever is lower.
The OSAP Trade-Off
The funding for institutions comes alongside a significant change to student aid. OSAP grants are being cut from a maximum of 85% of costs to 25%, with loans filling the gap. Students from middle and lower-income families will carry more debt. That matters. Institutional financial health and student financial health are not the same thing — and this announcement does more for the former than the latter.
A Win for the Sector — But Not a Clean Slate
The reaction across the sector has been positive. That reaction is deserved. This is a real course correction after years of underfunding.
But it does not erase the damage. Program cuts, job losses, and deferred maintenance built up over a decade. They will not be reversed by four years of new funding. Some institutions may still face deficits once allocation details are finalized and the math is worked through.
More importantly, the province’s expectations have not softened. The government wants efficiency. It has said so directly — in the budget, in its approach to transfer payment accountability, and in how it has managed its own public service over the past several years. Colleges should expect that this funding comes with continued pressure to demonstrate value, reduce overhead, and make difficult choices.
The funding environment has improved. The management challenge has not gone away.
For college finance and operational leaders, this is the moment to build rigorous multi-year financial plans — not to relax them. Stress-test different allocation scenarios. Make deliberate decisions about where to invest and where to hold the line. The sector has more room to work with now. Using it well still requires discipline.
A Final Thought
I have spent most of my career in and around Ontario’s postsecondary sector. The February 12 announcement is the kind of outcome that takes years of sustained advocacy to achieve. It is significant.
What comes next is the harder part: translating a funding commitment into sustainable operations, institution by institution. If you are working through that financial planning now, I am happy to help.
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