B.C. is home to 25 public post-secondary institutions that provide access to higher education in urban, suburban and rural areas of the province. This includes six research universities, five teaching universities, 11 colleges and three institutes. B.C.’s public post-secondary sector plays a vital role in supporting workforce development, driving innovation and contributing to the province’s economic growth. 

Public post-secondary institutions in B.C. rely on four main revenue sources: provincial operating grants, international tuition, domestic tuition and other revenues, such as research grants and ancillary services. The provincial operating grant has grown by $1.2 billion since 2016-17 to fund negotiated wage increases and targeted seats in high-demand areas. Domestic tuition revenue has remained largely unchanged due to stagnant or declining enrolment. Other revenue sources, including ancillary services and research grants, are generally restricted for a particular use and cannot be leveraged for regular operations. 

Until 2023-24, international student tuition accounted for approximately 18% of total revenues for the sector and as much as 40% of revenues at some individual institutions. In 2024, the federal government announced a series of policy changes that significantly reduced the number of international student visas that would be issued to individuals planning to study in B.C. The 2025 federal budget indicated that the number would be further reduced.  

This abrupt and unilateral change has deeply affected the financial health of B.C.’s public post-secondary institutions. The decline in international student tuition will have an estimated negative annual revenue impact of $300 million.  

Prior to the immigration changes, institutions were facing other financial pressures, including global inflation, declining domestic enrolment, increases in the cost of borrowing for capital projects and lingering impacts from the pandemic. Many operational expenses of public post-secondary institutions are fixed, such as facility maintenance, staffing and program delivery, making it difficult to quickly adjust spending in response to financial pressures. In addition, the sector’s governance and policy environment requires extensive consultation and can delay decision-making processes for significant operational changes. These factors contribute to the sector’s difficulty in aligning expenses with revenues.  

Between 2018-19 and 2024-25, the sector was facing financial difficulties, with 16 of B.C.’s 25 public post-secondary institutions incurring at least one annual deficit. However, since the federal government began making immigration policy changes starting in 2024, the financial situation for institutions has deteriorated rapidly. Historically, the overall revenues of the sector have always exceeded expenses. But this is now changing. Within the next three years, 19 of B.C.’s public post-secondary institutions are forecasting at least one annual deficit and nine are in an accumulated operating deficit position.  

For the first time, public post-secondary institutions are also forecasting a consolidated deficit position at a sector level, which is expected to increase in future years and will impact government’s fiscal plan.  

Cash that is available to fund deficits, called unrestricted cash, is depleting quickly. Some institutions are operating with very little unrestricted cash, and over time, it is forecasted that institutions will have depleted their cash reserves to a point where some could have insufficient funds to cover costs. It is expected that reserves will have fallen by $1 billion or more than 50% by 2028-29, with about 40% of remaining cash balances at that time anticipated to be held by the three largest institutions. Not all cash is available for regular operational use. Much of it is restricted for specific purposes, such as employee future benefits, approved research or required upgrades to aging facilities.  

Post-secondary institutions have undertaken a number of different actions to address the situation, including: 

• hiring freezes, early retirement incentives and layoffs 
• administrative budget reductions and reorganizations 
• program restructuring, including suspending and canceling programs 
• expanding class sizes (where permitted under collective agreements) 
• facility consolidation and closure of underutilized spaces 

Most institutions are working to respond, but the system is not built to respond quickly. 

The Province has limited authorities under the existing legislative framework to intervene directly in academic or operational matters at an institutional level. However, government has been supporting post-secondary institutions through a number of measures, including: 

• increasing operating grants to post-secondary institutions by $1.2 billion since 2016-17 
• implementing new, more detailed financial reporting requirements to improve government’s financial analysis 
• requiring public post-secondary institutions with deficits to develop formal deficit mitigation plans and to provide government with regular updates about progress
• encouraging and supporting cross-institution collaboration and shared services initiatives

However, given what government is seeing financially and operationally within the sector, it is clear that the situation has changed substantially since the federal government started introducing changes to the immigration system in 2024. The current state is no longer sustainable. Decisive action is needed to help stabilize the sector in the short-term and work toward a sustainable path over the long-term that continues to align with B.C.’s economic and workforce development goals.  

The independent review led by Don Avison, KC, will deliver a report that will guide government’s work to keep the system accessible, affordable, sustainable and aligned with provincial economic priorities. Avison will be paid a maximum of $75,000 for this work, which is expected to be wrapped up by mid-March 2026.