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Most provinces provide at least some funding to graduate students from abroad.Glenn Lowson/The Globe and Mail

Ontario is considering funding spots for graduate students from abroad, bowing to pressure from universities that say their global competitiveness is harmed because they have to turn away qualified foreign applicants due to lack of money.

Universities and the ministry responsible for higher eduction have had conversations, and the issue is on the table in talks between the two groups this month. The government says it recognizes the importance of international students for the province and it will implement policies that protect Ontario's "global reputation." The issue is difficult politically for the Liberals, because one of their last attempts to deal with it led to accusations from the opposition that then-premier Dalton McGuinty was "out of touch" with voters.

"We are not able to bring in the best and the brightest from around the world and we will start to see Ontario universities falling in the rankings. We've started to see that a little bit," said Allison Sekuler, the dean of graduate studies at McMaster University in Hamilton.

The higher-education ministry said it understands those concerns.

"As a ministry, it is our responsibility to evaluate all proposals brought forward by our partners in the postsecondary sector and to look closely at best practices in other jurisdictions to ensure we're attracting the best talent," said Reza Moridi, the Minister of Training, Colleges and Universities.

Ontario is one of the few provinces that does not finance graduate students from abroad, although some provincial scholarships are available. To attract top early-stage researchers many schools provide full funding packages that cover tuition and living costs. A 2012 survey from the Council of Ontario Universities (COU) found that Alberta, Saskatchewan, New Brunswick and Nova Scotia give universities the same amount of money for international students as for domestic ones, and Quebec and B.C. provide partial funding.

As a result of the current situation, Ontario universities are careful about how many international applicants they accept. Only about 15 per cent of the University of Toronto's graduate students are from abroad, compared to more than a third at the University of Alberta.

Some fields, such as science, engineering or business, have three to 10 times the number of qualified applications from international students as from Canadians. This fall, 94 per cent of foreign applicants for PhD programs at U of T were turned away. Meanwhile, Canadian students in those fields are in such high demand in the labour market that they do not feel the need to go on to higher education, Dr. Sekuler said.

Because about a third of all international students in Canada come to Ontario, the lack of provincial funding affects the country's overall success in increasing its share of students from abroad.

For students, the constraints on how much money their universities have for them translates to tight budgets. Sally Esmail is in the third year of a PhD in dentistry at U of T she believes will take at least five years. Her fees and living costs are covered for four years, but as an international student, she is limited to 20 hours of work a week and cannot apply for national science scholarships.

"If there are any extras or anything unusual, I don't have enough money to cover anything," said Ms. Esmail, who works part-time as a tutor.

The government wants to avoid the firestorm it faced four years ago, when Mr. McGuinty announced a plan to award 75 students $40,000 each to do doctoral work in Canada. The opposition said government money should be for Canadians only.

Dr. Sekuler said universities have to do a better job of explaining the benefits of international students, from research partnerships to future trade links.

"Bringing in international students to our universities brings in economic dollars and the students tend to stay here," she said.

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