In order to cover the significant costs incurred by their work, universities must find different funding sources. Originally mainly financed through private means (tuitions fees, philanthropy, religious communities, and other revenues generates by the universities themselves ), they gradually received support from the public support, first as loans, then as subsidies . At present, the funding of Quebec universities comes from four main sources: students (user-pays principle), the government of Quebec, the government of Canada (direct and indirect, via transfers made to the Government of Quebec), and the private sector (corporations, individuals, foundations, etc.).
As of 1971, and during the three decades following, public financing of universities took place according to the “historical method”, which is to say that it was essentially based on criteria established during the reference year of 1969-1970. Strongly criticised for its inability to take into account the realities and diversity of Quebec university establishments, this method had various adverse effects. For instance, as funding was allocated according to the number of students and regardless of the program and cycle that they were in, universities sought to reduce enrolment in programs that were more costly to run .
During the 80s and 90s, the government introduced various cost containment measures that ended up increasing the gap between the expenses of universities and the funding that they received (CADEUL). In 2000, after a series of changes were made to the historical method, the Quebec government reviewed the calculations for university funding and adopted the new Quebec Policy on Universities and the Quebec Policy on University Funding. The latter, which is still in effect, brought forwards the notion of real costs and that of “performance contracts” .
The proposed new arrangement sought, among other things, to create a “compromise between, on the one hand, the political will to fund current and long-term expenditures of universities and, on the other hand, the desire to establish a common ground for these expenditures with the goal of arriving at a calculation that would be seen as equitable and fair according to the needs of each [university]” (CADEUL). As for the Quebec Policy on Universities, it testified to the desire to provide universities with the financial capacity to adapt to the “knowledge economy” and to “realign their activities towards the precise demands expressed by ‘society’ from a scientific and economic perspective” .
In 2014, as a conclusion to the February 2013 Summit on Higher Education, the final monitoring report on university funding was published by the government of Quebec, presided by Ms. Hélène P. Tremblay and directed at Mr. Pierre Roy. Its goals were to “propose a new funding policy that is better adapted to the realities of universities […], propose a fair contribution from non-Quebec-resident students to the financing of the university (tariffing and exemptions); proposing, if necessary, a revision of particular envelopes [and] reviewing the classification and grouping of fields of teaching and research” . Though responses were generally favourable, concrete measures are still forthcoming.
Quebec government subsidies are divided into functioning subsidies (funding for regular activities) and investment subsidies (medium- and long-term (real estate) development). The former represent the large majority of funding that is allocated to universities and seeks to help them cover the recurring costs associated to teaching and research, as well as to other specific functions. Functioning funds are further divided into general and specific subsidies, which more closely reflect government priorities at a given point in time.
In addition to provincial funding, the federal government also has an important role in the funding of Quebec universities. Though this was not always the case, federal funds are now indirectly transmitted to universities. They are now transferred to the Quebec government biannually, either via the Canada Health Transfer (CHT) or the Canada Social Transfer (CST). As far as research is concerned, however, direct government intervention exists much more, in part via funding committees such as the SSHRC, the NSERC, and the CIHR. Quebec has its own organisations that are similarly devoted to funding research on its territory, including the Fonds québécois de recherche sur la société et la culture (FQRSC), the Fonds québécois de recherche sur la nature et les technologies (FQRNT) and the Fonds de recherche en santé du Québec (FRSQ).
Public or private funding?
The question of university funding is a fundamental one, as the funding is in large part responsible for the quality of services that are offered to students and to society in general. As a society, it is important to take into account the impact of possibly increasingly private funding. By being funded by all Quebecers, universities are accountable to them, and it is Quebec residents, via their elected representatives, who choose who these funds are invested. However, if universities are funded by “donations” from the private sector, that is who they will be accountable to. Contrary to the government, which is (generally) trying to serve the public good, the private sector functions based on profit. Consequently, the more the private sector finances universities, the more we can expect that universities will serve short-term financial interests, favouring sectors that are considered profitable and orienting their research activities according to the needs of industry, to the detriment of the rest. Does that imply that we should ensure that there is no funding from the private sector? Not necessarily, but rather that universities must absolutely not be dependent on such funding to pursue their mission.Furthermore, if students have to take on a larger part of university funding due to an increase in tuition fees, access to education could be severely affected (see the Access to Education section).
In general, European universities are mainly financed by the public sector, while the private sector plays a larger role in funding North American and Asian universities . Since the 1950s, Quebec has preferred to opt for a formula that places an emphasis on public funding. In 2007-2008, 70.1% of universities’ general operating revenues were public, as compared to 29.9% that were private (ACPAU, 2009, p. 16-17). Over the last few years, however, the announced reinvestments in university education have left greater room for the private sector, notably through increases in tuition fees.
State control vs. University autonomy
Another issue to bear in mind when considering funding is the control exercised by the State on university activities. Indeed, according to the funding formula in use, the State can majorly orient university activities. Admittedly, the government must have some control that allows it to ensure a healthy governance of universities, but these institutions must still remain autonomous enough to be somewhat protected from the uncertainties of politics. This is a difficult balance to strike. Over the last few years, there seems to be an increase in specific funding in Quebec, to the detriment of general funding . This situation gives the government more latitude in resource allocation, as specific subsidies “meet the specific goals and needs outlined by the MELS”  and therefore vary considerably from one university to another and from one time period to another.
Out of the main adverse effects of the current formula, one of the regularly mentioned effects is the decreasing funding to areas of study that are considered to be “more compressible”, favouring things like medicine to the detriment of social sciences. Furthermore, the high level of competition for student that leads universities to constantly compete, sometimes in a way that is harmful for public interest, is also regularly criticised (76.28% of operating subsidies are allocated in proportion to the number of students, CADEUL).
The current cuts
After a period of increasing funding, including a 71% increase of the operating budget of universities between 1997-1998 and 2004-2005 (going from $2.4 billion to $4.1 billion (FQPPU)), and the reinvestment of approximately $240 million between 2006 and 2009 , the Quebec government has changed their direction in a significant way. This is how at the end of 2014, as part of its “budgetary rationalisation” (or “austerity”), the provincial government decided to cut more than $200 million from Quebec universities.
This decision has major repercussions on the universities in question, which must now cut down on their activities. Though it is always difficult to measure the real impacts on students, it is clear that many of them will be affected by these measures. Over the last few years, the number of professors has diminished while the number of teaching assistants (whose salary is much lower) has increased, which certainly has an impact on the quality of teaching.
The SSMU’s position
To this day, the SSMU has not taken an official stance concerning university funding policies. However, when it was part of the TaCEQ, the SSMU clearly expressed its desire to reconsider student-based funding and its impacts on the competition between universities and on the emergence of many decentralised campuses.
 CADEUL (2009). "Le financement sur le grill", 214 pages.
 La Loi concernant le financement des investissements universitaires, adoptée par le gouvernement du Québec en 1961, constitue à cet effet une étape charnière.
 Conseil des universités, 1975-76, p. 164-165, dans Confédération des associations d’étudiants et d’étudiantes de l’Université Laval, 2009, p. 24.
 UNBRIACO et al. (2007). "Le financement des universités québécoises et la question de leur gouvernance", L'autre Forum, p. 21 à 24.
 CADEUL (2009). "Le financement sur le grill", 214 pages.
 TREMBLAY, Hélèbe et Pierre ROY (2013). "Rapport d'étape du chantier sur la politique de financement des universités", Gouvernement du Québec, 61 pages.
 CADEUL (2009). "Le financement sur le grill", p. 166
 Opt. cit., 2009, p. 193
 Gouvernement du Québec (2008). "Règles budgétaires et calcul des subventions de fonctionnement aux universités du Québec pour l’année universitaire 2008-2009", p. 2.
 ROBITAILLE, Antoine (9 août 2006). "Québec annonce le réinvestissement de 320 millions en éducation postsecondaire - Mieux que rien, disent les universités", Le Devoir.