Funding

��ֱ�� was founded in 1841 with the modest sum of about £8,000 to its name.

True to its Scottish Presbyterian origins, the main sources of this original amount were various groups in Scotland (£1,250), the Presbytery of Kingston (£800), "persons in or connected with" the Hudson's Bay Company - then replete with Scotsmen - (£562), and the Presbytery of Quebec, home to several of ��ֱ�� clerical founders, which gave the single largest donation of £1,800.

This was a limited amount, but ��ֱ�� leaders would have to get used to scarce resources, as the university continued to lead a precarious hand-to-mouth existence throughout the 19th century. Most of its funding in early decades came from the Presbyterian Church and, after 1845, the provincial government. But these sources were notoriously grudging and unreliable.

By the early 1860s, government support accounted for 40 per cent of ��ֱ�� annual revenue, Church sources provided 28 per cent, investments accounted for 30 per cent, and students' fees provided a negligible two per cent.

This all changed when disaster struck in 1867 and 1868. First, Ontario's commercial bank collapsed, taking about two-thirds of ��ֱ�� investment income with it; and then the government withdrew all of its funding for denominational colleges. More than half of ��ֱ�� annual income was suddenly lost. Only a desperate fundraising campaign led by Principal William Snodgrass, which raised $114,000, saved the university and allowed it to continue.

Fundraising campaigns remained the engine that drove ��ֱ�� for the rest of that century, especially as the Church gradually reduced its share of support. Fortunately, ��ֱ�� was led from 1878 to 1902 by the charismatic Principal George Grant, whose fundraising abilities are a matter of ��ֱ�� legend and whose tireless work ensured that ��ֱ��, instead of merely surviving, evolved into a dynamic national institution.

Late in the century, eager to make ��ֱ�� once again eligible for provincial funding and relieve the burden on fundraisers, Grant proposed separation from the Presbyterian Church. This was finally achieved by his successor, Daniel Gordon, in 1912.

But it was not until after the recommendations of a royal commission on nondenominational universities in the 1920s that the province once again took on a significant portion of ��ֱ�� funding. By 1929, the annual grant was up to $350,000, about half of ��ֱ�� income. But the Depression of the 1930s forced a drastic reduction of about one third, and it was not until 1947 that the grant got back to about $350,000. In the meantime, other sources of income, in particular student fees, took up the slack. During the early 1940s, student fees provided an historical high of about 50 per cent of annual income, government grants supplied 28 per cent, and investments and other sources provided the balance of 22 per cent.

In the prosperity of the postwar years, government funding flowed more generously than ever before and universities across Ontario experienced unprecedented growth in the 1950s and 1960s.

But support has been harder to come by since the early 1970s. Total government operating grants have declined by more than 20 per cent, when adjusted for inflation, since 1972. Student fees have also decreased by about 30 per cent. The university has continued to grow mainly because of large increases in private income and in research grants and contracts, the latter source increasing more than tenfold since the early 1970s.

In the early 1990s, provincial grants accounted for about 50 per cent of ��ֱ�� annual revenue of more than $250 million; grants and contracts provided about 25 per cent; and tuition fees and private donations accounted for equal parts of the remaining 25 per cent.

In the late 1990s, however, the university began to struggle to meet its financial needs in lieu of the provincial government's decline in operating grants to Ontario universities and rapid increases in student enrollment.

In 1998, the Board of Trustees approved the provincial deregulation of tuition fees for the engineering faculty, the busines school, the Faculty of Law, and the School of Medicine.

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