By Jerry Zhang

Toronto Metropolitan University  (TMU) has approved a budget for 2025-26, despite earlier projections of a $13-million shortfall. Education experts say that TMU’s reliance on temporary funding reveals wider structural weaknesses in Ontario’s university funding model.

The 2025-26 Budget Priorities & Expenditures outline projects revenues will rise by 1.7 per cent or $11.9 million while expenses grow by 3.6 per cent or $24.8 million, roughly twice the rate of revenue. 

TMU is currently relying on the Post-Secondary Education Sustainability Fund (PSESF), a fund aimed at maintaining the tuition freezes. This fund includes a $12.5-million across-the-board provincial funding plus an $8.5 million higher-need top-up for 2025-26, according to the TMU ‘s budget. 

Glen Jones, a professor of higher education at the University of Toronto, warns that these supports are basically band-aids to mask deeper cracks. 

“We have a huge structural issue…they do mask deeper problems,” he said, referencing the 2023 Blue Ribbon Panel, a report of advice and recommendations ensuring the financial sustainability of Ontario’s post-secondary education sector. The report found the funding model in its current form “was not sustainable,” explained Jones. 

According to the Blue Ribbon Panel, Ontario only provides universities with about 57 per cent of the national average for provincial funding per student, which is $9,000 less than the rest of Canada’s average. 

Jones pointed out that since 2019, the domestic tuition has been frozen without any increase in funding and was cut down by 10 per cent, taking out the flexibility of universities to adjust tuition in response to inflation or rising costs. 

He adds that “the only source of new revenues from 2019 onwards were international student fees. In January of 2024 we saw the federal government introduce a cap, which reduced those numbers dramatically.”

A report by the Canadian Centre for Policy Alternatives found that international students in 2021-22 made up nearly 19 per cent of full-time enrolments in Ontario, but accounted for 48.4 per cent of all tuition revenue in the province.

While tuition stays frozen, ancillary costs rose by almost three per cent at TMU, with residence fees increasing by four per cent and meal plans by five per cent in 2025-26. Inflation in Toronto was nearly three per cent in the recent Canadian Price Index.

Jones notes that student affordability isn’t just about tuition, it’s “whether the government funding under [Ontario Student Assistance Program] (OSAP) is increasing enough in line with costs.”

He argues that OSAP has not kept pace. According to the Blue Ribbon Panel report, many students have seen reduced amounts in OSAP grants since 2019.

79 per cent of TMU’s budget is directed to compensation such as salaries and benefits. Jones explains this split is in line with other universities in Ontario, however universities have little flexibility to actually alter their budgets, as collective agreements and contracts have locked in many of those costs over several years. 

Jones explains when universities do decide to cut, they will be looking to “reduce the number of low enrollment courses and to increase class sizes in some areas. There may be program cuts eventually in areas where there’s less student interest and the number of admissions has been modest.” 

An email statement from TMU said, “budget reductions focus mainly on non-salary expenses and vacant positions.” Jones warns that there are easy places to trim, but large cuts usually involve program changes, layoffs or service reductions and if done quickly may lead to “bad choices.”

TMU explained in the emailed statement that it has “taken a careful approach to achieve this balanced budget” focusing on protecting teaching, learning and research and maintaining student experience.

The university also confirms that their base budget reduction across the school is two per cent rather than the 2.5 per cent earlier indicated in the 2025-26 Budget Town Hall. 

According to Jones, the combination of frozen tuition, limited domestic enrollment growth, rising costs and dependence on one-time funds means universities like TMU cannot sustain within the current system. 

“We need more government funding,” he said. “We need to increase domestic tuition. I think it has to be a shared model.”