Building Canada’s competitive advantage through universities

Canada’s long-term economic strength will depend on whether it can build the talent, research capacity and innovation base needed to compete in a more uncertain global environment. Universities are central to that effort. They prepare Canadians for the jobs of today and tomorrow, attract global talent and generate the research and innovation that support productivity, resilience and sovereignty.

But universities’ ability to deliver at the scale Canada requires is under increasing strain. Years of constrained funding, rising costs and aging infrastructure are putting pressure on capacity. Unlocking that full potential requires alignment across governments. While provinces fund universities, the federal government has a critical leadership role to play, championing education as a core economic and trade lever and aligning policies to maximize its impact for students, communities and the economy.

Budget 2026 is an opportunity for the federal government to act with purpose. While post-secondary education is primarily a provincial responsibility, the federal government has important levers through research, talent, immigration, skills and tax policy. The recommendations that follow outline practical federal actions to strengthen workforce capacity, support strategic research and ensure universities can continue to deliver value to communities, to the economy and to Canada’s broader national interests.

Universities Canada recommendations:

1. Compete for the world’s best talent.
   Expand Canada’s International Education Strategy into a comprehensive International Higher Education Talent, Research and Innovation Strategy to respond to intensifying global competition, aligning federal policies to attract talent, expand research partnerships and support export diversification in priority markets.
2. Equip Canadians with the skills our economy needs.
   Make coordinated strategic investments in Canada’s domestic skills pipeline by ensuring universities are integral partners in the design and delivery of federal workforce initiatives — including work-integrated learning, the Canada Defence Skills Agenda and Workforce Alliances — to strengthen regional talent pipelines and prioritize career pathways for veterans and mid-career workers into strategically important fields.
3. Harness university research to advance national priorities.
   Leverage the full capacity of Canada’s university research ecosystem to strengthen sovereign capability by implementing scalable mechanisms — including standardized entry points and funding that spans the full innovation continuum — to align university research with federal priorities such as defence, artificial intelligence and dual-use research.
4. Strengthen institutional capacity through targeted, fiscally responsible federal tax relief.
   Using existing tax mechanisms to ensure rapid and efficient delivery, increase the GST/HST rebate for universities to 100 percent, aligning the treatment of universities with municipalities and other public interest organizations. This would allow institutions to reinvest an estimated $240 million annually directly into teaching, research and student support.

Universities are essential to our future. They train the workforce, drive innovation and support communities across the country. They turn discovery into real-world impact, from new technologies to improved health and stronger local economies. 

Canadians see this clearly. More than three-quarters support increased federal investment in universities. 

Our recommendations combine strategic investments with practical measures that improve the effectiveness of existing resources and support the long-term sustainability of Canada’s university system. 

Budget 2026 is an opportunity to act.  

Investing in universities is an investment in Canada’s future.