Ontario colleges reduce spending by $752 million as sector grapples with drops in international students
Ontario colleges have cut their spending by $752-million so far this fiscal year as the sector grapples with a rapid drop in international enrolment.
The Financial Accountability Office of Ontario (FAO) released its second-quarter expenditure report Tuesday. The data provide insight on the impact federal immigration policy changes are having on college spending through the first half of the fiscal year. Unlike universities, colleges are included on the government’s books.
The FAO report found that unaudited spending in the postsecondary sector overall is down $425-million, or 6.9 per cent, compared with last year. It was the only sector that experienced a decline. Health, education, and children and community services, by contrast, were all up at least 7 per cent compared with last year.
The decline in postsecondary spending primarily reflects lower operating expenditures at the province’s 24 publicly funded colleges, the report said. (While operating costs were lower for colleges, spending may have increased elsewhere in the sector.)
It is part of a major shift in the sector as colleges and universities come to grips with a drop in revenue from international enrolment.
Colleges Ontario said its sector has reached a critical tipping point.
“As a result of the federal and provincial changes, all of Ontario’s public college system is facing unprecedented financial strain,” the provincial lobby group said in a statement.
“Individual colleges are being forced to reduce expenses and consider difficult decisions, including potential campus and program closures. No institution is immune to the impacts of federal policy and provincial underfunding.”
In January, the federal government said it would slash the number of study permits for students from abroad by 35 per cent in 2024, and in September, it announced a further 10-per-cent cut in 2025. The government said at the time the cuts were necessary to address pressure on housing and health care.
Demand from international students has dropped considerably in the months since as leaders in the sector say Canada’s brand as a welcoming destination has been tarnished. Ontario’s universities have said revenue will decrease by about a billion dollars in 2024 and 2025 combined. The impact on colleges is expected to be even larger.
International tuition revenue has become one of the pillars that funds postsecondary systems across the country, along with domestic tuition and government funding.
Earlier this year, the Ontario government rejected a call from a blue-ribbon panel of experts to allow postsecondary institutions to raise domestic tuition rates to address the financial sustainability of the sector. In 2019, Doug Ford’s Progressive Conservative government cut domestic tuition by 10 per cent at colleges and universities and has since kept rates frozen at that level.
Instead, the Ontario government announced in January it would provide an additional $1.3-billion in funding over three years, about half the amount the expert panel said was required.
Ontario colleges, which received 80 per cent of the province’s international study permit allocation and have higher rates of international enrolment, have already begun the process of reducing spending. That has meant job losses, program closings and the delay of infrastructure projects.
Sheridan College in Oakville, Ont., said it’s expecting a $112-million drop in revenue next year and is suspending 40 programs and reviewing 27 others. It said last month that it expects to reduce staff. Mohawk College in Hamilton also said it will cut staff.
Confederation College in Thunder Bay said it will lose millions in revenue after international enrolment dropped 39 per cent this fall. Seneca Polytechnic in Toronto has announced a drop of $35-million in revenue and said it will close one of its campuses in response.
This article was first reported by The Globe and Mail
