Promoting Excellence: Ontario Implements Performance Based Funding for Postsecondary Institutions

Published on

New approach will help students obtain the education and skills needed for in-demand jobs

November 26, 2020

Colleges and Universities


TORONTO — The Ontario government has signed historic agreements with public colleges and universities that will revolutionize the province's public postsecondary educational institutions. The move will help students get the education, skills and experience they need to find good jobs by ensuring postsecondary institutions offer programs that align with labour market demands.

"Our government believes in making institutions accountable for student success," said Ross Romano, Minister of Colleges and Universities. "That's why we are making sure Ontario's publicly-assisted postsecondary institutions have a clear mandate that is focused on meeting the needs of students and equipping them to succeed in rewarding careers."

Ontario recognizes that students and their families make tremendous sacrifices to attend college or university, and they make these sacrifices in order to find stable, high-quality jobs. Under the previous funding agreement, however, students were graduating with world-class degrees but were finding it difficult to secure stable employment in their field of study. The previous system was not working for students and needed to be driven by results.

The government is now embracing changes to its postsecondary education sector that are modern, forward thinking, and will lead to the high-quality jobs that Ontario's graduates deserve. That is why we are ensuring funding for Ontario's colleges and universities will now be more dependent on student outcomes.

The agreements, which are in effect from 2020-2025 introduce a new 'made-in-Ontario' performance-based funding model that places a higher weighting on student and economic outcomes — making the province a national leader in performance-based funding. By tying a portion of government funding to performance, Ontario is encouraging institutions to focus on their institutional strengths, to ensure that students and graduates have the real-world skills they need for rewarding careers.

"Placing a greater emphasis on outcomes will encourage colleges and universities to be more efficient and specialized, and to focus on what they do best," said Minister Romano. "The new agreements will also encourage transparency and accountability by ensuring that the spending of public dollars results in positive economic outcomes for Ontario."

The government will measure performance against a set of 10 metrics. Institutions will report on indicators such as graduate employment rates in related fields, experiential learning and graduate earnings.

The Ontario government recognizes that COVID-19 has caused challenges throughout our postsecondary sector. Knowing that postsecondary institutions are vital to Ontario's economic recovery, the government has decided to delay the link of institutions funding to the performance metrics for two years (2020-21 and 2021-22). All other aspects of the agreements, including data collection, evaluation and publication, will continue as planned.

"I would like to thank our postsecondary education partners for their time and commitment to ensuring the new performance-based funding agreements were completed and signed despite the challenges of the COVID-19 outbreak," said Minister Romano. "Ontario's colleges and universities are key to Ontario's economic recovery. I am inspired by the tremendous achievements of Ontario's world class postsecondary sector and look forward to the invaluable metrics and outcomes that will help drive future improvements in postsecondary education and lead to even greater student success."

Quick Facts

  • On March 31, 2020, the 2017-20 Strategic Mandate Agreements expired. The new 2020-25 performance-based funding agreements take effect retroactively.
  • Through these new agreements, college and university operating funding will be increasingly tied to performance on 10 measures, rather than based on enrolment. By 2024-25, it is anticipated that 60 per cent of operating funding will be based on performance.
  • The government provides about $5.2 billion in operating funding annually to support Ontario’s 21 publicly-assisted universities and 24 publicly-assisted colleges.
  • Until now, most of the operating funding has been based on enrolment. Only a small proportion of funding is currently tied to performance.
  • In addition to working with institutions on the safe re-opening of the fall term, the province also conducted extensive consultations throughout the summer on the future of higher education in Ontario. Discussions focused on key initiatives such as digital learning, international students, micro-credentials, research and commercialization, and financial sustainability.


"The focus of the Strategic Mandate Agreement3 on institutional strength and community impact is encouragement for Ontario colleges to continue doing what we excel at, which is producing skilled graduates while engaging with community and industry” says Glenn Vollebregt, President and CEO of St. Lawrence College, located in Kingston, Brockville, and Cornwall, Ontario. “The results tracked during the SMA3 will capture and help promote the many ways colleges prepare students for successful careers and support growth in the communities that we serve. There is no better time to be a post-secondary student in Ontario, and with the new agreement in place, colleges and Ontario’s government can continue to work together to support student success and economic growth."


"The University of Waterloo supports Ontario’s efforts to maintain accountability in the postsecondary education system through the Strategic Mandate Agreement. It is important to demonstrate that institutions assisted by government grants are providing the positive economic outcomes students and the people of Ontario need, through teaching, research, commercialization and entrepreneurship."

- Feridun Hamdullahpur 
President and vice-chancellor, University of Waterloo

Additional Resources