How Much Is Tuition Subsidized In Canada & Where Does All That Money Go?

Many students complain that they are overpaying for tuition.  While angry student marches and high profile media events are main stay of student life, the reality of the post secondary education funding is quite a different story than you might expect.

In reality, degree granting college and university students only pay about 25% of the cost of their education in Canada.  According to Statistics Canada:

“…The proportion of revenues from tuition fees has grown from 23.5% in 2011/2012 to 26.6% in 2016/2017…” SOURCE

If Students Are Not Paying For Their Eduction, Who Is?

Government funding (i.e. you) is the by far the largest source of revenue for these institutions of higher learning.  The balance comes from:

• corporate sponsorships
• personal and corporate donations
• and what StatsCan calls “other minor revenue sources” like ‘sponsored research’ from the private sector

Here are the numbers.  In school year 2016/17 higher eduction institutions received $8.0 billion in revenue from tuition and other fees.  That is up $422.3 million from school year 2015/16.

If you are trying to make an argument about increasing fees you could compare school year 2011/12 to 2016/17 in which revenue from tuition fees increased a massive 29.1%.  The problem with that argument again is that money is not static and a dollar one year is not the same as a dollar the next year.  One must consider the root source of those funds and appreciate that given the gigantic increases in minimum wage, tuition has been flat for the last two decades.

Did The Price of Tuition Actually Rise?

If you think that jump in fees is substantial, it is matched by the increase in minimum wages that students traditionally live on.  In 2018 we spent considerable effort comparing the cost of tuition to the minimum wage and found that since the year 2000, tuition has actually become slightly cheaper.  We compared the number of minimum wage hours required to cover tuition in this chart from our article: Has The Price of University Tuition Really Gone Up? A Comparison From 1990 to 2018

Is The Money Coming From The Federal or Provincial Governments?

In school year 2016/17 college and universities received $13.9 BILLION from governments.  That was 46% of their revenue.  Of that, $10.8 Billion was paid by the various Provinces a $2.9 billion was paid by the Federal Government.

In simpler terms it means the Provinces are paying about 75% of the government load or 40% of of the total expenditure of post secondary education.

Typically Federal Government payments are for ‘sponsored research’:

“..Almost all of federal government funding (87.6%) is directed toward sponsored research through research granting programs, such as the Social Sciences and Humanities Research Council and the National Science and Engineering Research Council. Provincial funding is primarily earmarked for operating costs and capital spending.”  SOURCE

How Much Do International Students Pay For Canadian Tuition?

Not all students are subsidized.  Foreign students pay whatever the market will bear.  In 2019 the University of British Columbia charged international students in undergraduate programs $38,946.  That is a giant increase from years previous:

“…International undergraduate students paid an average annual tuition of $23,677 in 2016/2017, nearly four times the average for domestic students, who paid $6,375 (unadjusted for inflation).”  SOURCE

Where Do Universities Spend All The Money?

According to Statistics Canada, 60% of the University and College revenue is spent on staff:

“…The largest proportion of university expenditures was for staff compensation (salaries, wages and benefits), accounting for $16.5 billion in 2016/2017, up $246 million from 2015/2016. Total compensation has increased as a proportion of total expenditures, from 57.8% in 2011/2012 to 60.0% in 2016/2017. SOURCE