One of the country's most prestigious universities faces punishment for boosting tuition fees for its MBA program by nearly 900 per cent in an effort to keep it competitive.
McGill University began charging $29,500 annually for its two-year MBA program in September, claiming it was chafing under a provincial tuition freeze capped at roughly $3,400 per year.
Quebec's Education Department has been battling the move, saying it undermines the key principle underlying the province's university system: broad access.
The government finally announced Tuesday that the Montreal-based school would also be fined for its actions.
"It's an exceptional measure," Education Minister Line Beauchamp said in Quebec City. "We will have figures on the penalty [amount]soon."
Ms. Beauchamp added that it was unacceptable for a Quebec university to charge such high rates for a regular degree program, arguing that it hurt the integrity of the university system.
Quebec's tuition fees are the lowest in the country and attempts to raise them have met with stiff resistance from student groups in the past.
Universities, however, claim the freeze has left them scrambling behind competitors in the rest of Canada and the U.S.
Officials from McGill refused to comment on the impending fine, but have said previously that the school needs extra funds to bring its MBA program up to par with world-class competition.
It plans to increase the business administration master's program rate by another $3,000 next year. In order to charge the higher rates, McGill has given up the public funding it receives for the MBA program.
The move follows a similar one by Queen's University, which privatized its MBA program in the 1990s, allowing it to set tuition rates higher than provincial limits.
Several other schools offering MBA programs, including the universities of Toronto and Western Ontario, have since followed suit.
McGill's MBA students have generally supported their university's decision, believing it has increased the quality of their education, said Pat Tenneriello, head of the MBA Student Association.
"Everything McGill does, they try to be the best at what they do," he said. "In order to keep that going, they had to move to the self-funded model."
He pointed out that in the 2011 Financial Times global survey of MBA programs, McGill's ranking jumped from 95th last year to 57th this year.
In that time, the school has invested heavily in hiring new professors and support staff.
"Is that a direct correlation of the investment? I would like to think so," Mr. Tenneriello said.
But the self-financing model, which is the norm in the U.S., is not without its critics.
Whereas Canadian universities offer cheaper tuition and fewer student aid packages, their U.S. counterparts charge higher tuition and offer more extensive student aid.
The danger, according to some analysts, is that once a school opts for the U.S.-style self-funding model, its choices become limited.
"It's a spiral," said Watson Scott Swail, president of the Educational Policy Institute, an international education think tank that has studied the Canadian university system.
"You need money, so you raise tuition, which creates more need [for aid] The tuition continues to spiral and there is no economic pressure to stop it from spiralling."
Mr. Tenneriello and his fellow students reported having previously awarded bursaries converted to loans after McGill began billing for its revamped MBA program.
That has created further concerns about the accessibility of the new program.
"Not everyone can pay $60,000 for a two-year MBA program," Mr. Tenneriello acknowledged.
But he remains sympathetic toward the university's position as it tries to boost the profile of its program.
"They see it as, 'We're 20 years behind Rotman, Ivey and Queen's,' " he said, referring to the MBA programs at the University of Toronto and the University of Western Ontario.
"They switched to that model long ago, and those investments have given them a big advantage over McGill."
McGill was, however, ranked as the top university in the country in the most recent survey by Maclean's.