The landscape of higher education financing in Canada has undergone profound transformation since the pandemic, with universities now navigating complex fiscal realities that could reshape their institutional futures. Analysis of financial data spanning from 2016-2017 through 2022-2023 reveals concerning patterns in university sustainability, reliance on international student revenues, and overall fiscal health across the nation’s post-secondary institutions.
According to comprehensive financial ratio studies, Canadian universities experienced a significant initial shock during the early pandemic period, followed by an uneven recovery that continues to challenge institutional planning. Most concerning is the growing disparity between universities that have successfully rebounded and those facing persistent financial strain.
“We’re seeing a widening gap between financially resilient institutions and those struggling to adapt to post-pandemic realities,” explains Dr. Martin Reynolds, economist specializing in educational finance at the University of Toronto. “This polarization threatens to create a two-tier system of Canadian higher education if left unaddressed.”
The data reveals several critical trends. Government funding as a percentage of university operating budgets has continued its pre-pandemic decline, dropping from an average of 42.8% in 2016-2017 to just 38.3% in 2022-2023. This reduction has accelerated universities’ dependence on tuition revenue, particularly from international students who typically pay three to five times higher fees than domestic counterparts.
International student enrollment, which initially plummeted during border closures, has rebounded dramatically, with these students now comprising over 25% of total enrollment at many major institutions. This dependency creates significant vulnerability as geopolitical tensions, visa policies, and global competition for students intensify.
The report also highlights substantial variations in financial resilience across regions. Universities in Ontario and British Columbia have generally maintained stronger fiscal positions, while institutions in the Atlantic provinces and Prairies show more concerning financial indicators. Debt-to-asset ratios have climbed notably at several mid-sized universities, raising questions about long-term sustainability.
“The pandemic accelerated existing financial pressures rather than creating entirely new ones,” notes Catherine Malloy, Vice President of Finance at the University of British Columbia. “Institutions that entered COVID with strong reserves and diverse revenue streams have generally emerged in better shape than those already facing structural challenges.”
Perhaps most concerning is the data on deferred maintenance—the backlog of necessary repairs and renovations to aging campus infrastructure. This figure has grown by an estimated 18% nationally since 2019, with some institutions now facing deferred maintenance backlogs exceeding 20% of their total asset replacement value.
Faculty associations point to another troubling trend: the growing reliance on contract academic staff rather than tenure-track positions. The percentage of courses taught by non-permanent faculty has increased from 38% to nearly 45% across surveyed institutions since 2016.
“We’re witnessing a fundamental restructuring of academic labor that predates the pandemic but has accelerated dramatically,” explains Dr. Sarah Westbrook of the Canadian Association of University Teachers. “This shift threatens both educational quality and institutional knowledge continuity.”
The pandemic also accelerated digital transformation, with universities investing heavily in online learning infrastructure. While these investments were necessary during lockdowns, many institutions now struggle to balance continued digital innovation with returning to traditional campus experiences that students increasingly demand.
The financial picture isn’t uniformly bleak. Several universities have successfully diversified revenue through research commercialization, corporate partnerships, and philanthropic campaigns. Endowment returns have generally performed well through market volatility, though smaller institutions with less robust investment portfolios have benefited less from this trend.
As Canadian universities chart their post-pandemic course, fundamental questions emerge about sustainability, access, and mission. Will institutions be forced to choose between financial stability and educational accessibility? Can the sector address growing inequities between institutions while maintaining Canada’s reputation for high-quality higher education?
The answers will shape not just individual universities but the future of Canada’s knowledge economy and social mobility pathways for generations to come.
