Staff Report #10 – Re: Provincial Government Announcement – Tuition Fee Reduction and Student Choice Initiative

Staff Report #10

January 30, 2019

To All Commissioners

Re: Provincial Government Announcement – Tuition Fee Reduction and Student Choice Initiative


That the report be NOTED and FILED.


On January 17, 2019, the Provincial Government announced planned changes to the tuition fees for post-secondary students, the Ontario Student Assistance Program (OSAP) and the introduction of the Student Choice Initiative. With respect to the tuition fees, the Province has called on all publicly-assisted universities and colleges to decrease their tuition fees by 10 percent. As part of its overall reform of post-secondary education affordability, it was also announced that the government will be refocusing the OSAP to ensure it remains sustainable and viable for future students while directing a greater proportion of OSAP funding to families with the greatest financial need.

The Minister also announced a Student Choice Initiative through which every individual student in Ontario will be empowered to choose which student fees they want to pay and how that money will be allocated. The annual cost of transit passes for those post-secondary institutions with contracts in place are considered under the category of student fees. Fees for essential campus health and safety initiatives will continue to be mandatory. Ministry staff have confirmed that this change will not require legislation as it is governed by the Ministry of Training, Colleges and Universities (MTCU) guidelines on ancillary fees. MTCU will be determining what the basket of mandatory fees includes in time for the changes to become effective for September 2019.

Over the last number of years, universal pass programs have been implemented in partnerships between student unions representing the students of respective post-secondary institutions and public transit providers. There are currently programs of this nature in place in 18 municipalities, with a number of others currently being negotiated that were planned to take effect in September 2019. The level of participation in programs of this nature demonstrate the benefits they provide to all parties involved, including the community at large. From the student perspective, they are provided with access to public transit at a reduced rate, and often with a pass that is valid for the school term or the entire year which is more convenient than having to purchase a pass monthly. From the transit system’s perspective, the program provides a guaranteed stream of revenue each year which can be utilized to provide a higher level of service, and students utilizing the transit service are much more likely to remain transit users in the future. From a community perspective, the guaranteed revenue stream results in the ability to provide higher levels of service, which the entire community benefits from.

The tuition pass programs are universal in nature, meaning that all students pay the annual fee regardless of whether they plan to utilize transit during their year at school or not. The universality of the program provides the opportunity for a reduced price for all students, given the students who don’t use transit are cross-subsidizing those that do. The introduction of an opt-out clause to these agreements essentially negates this cross-subsidy, making the program unsustainable in its current form.

Currently there are approximately 53,000 students in London that participate in the tuition pass programs each year at Western and Fanshawe. These contracts provide LTC with an annual guaranteed revenue stream of approximately $12.7 million.

The Ontario Public Transit Association has and continues to be in contact with Provincial officials with respect to the potentially significant negative impacts on students, transit systems and communities at large that would result from moving forward with requiring an opt-out provision for these universal transit pass programs.

Administration will remain in contact with representatives from the respective student unions with respect to options for a path forward pending final decisions from government with respect to the status of the current tuition pass contracts.

Recommended by:

Kelly S. Paleczny, General Manager