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The Soldier's Tower stands over the University of Toronto campus in Toronto on Thursday, November 6, 2014.Darren Calabrese/The Globe and Mail

The Ontario government has agreed to extend funding for graduate studies to international students after years of discussion and lobbying by universities.

No new money is attached to the change. Instead, starting this fall, up to a quarter of new graduate spots will be funded by the province. Provincewide, that means up to 130 spots can be reallocated for international graduate students under the new policy, but discussions will begin on how the program may expand in the future.

At the University of Toronto, for example, the change will mean that the school will be able to accept more students from outside Canada, which will help recruit and retain top faculty.

Professors have been frustrated that they cannot always work with international students in their field because the university is constrained in how many students from abroad it can fund, said Meric Gertler, the university's president.

"We've been worried that frustration would cause them to look elsewhere, so this is for us a faculty retention and attraction strategy as well as a PhD student strategy," Dr. Gertler said.

While tuition for international students in graduate programs can be double or more that of domestic students, many universities cover tuition and living costs. Up to now, Ontario universities have had to absorb those costs. Most other provinces cover funding for graduate students from abroad, either entirely or in part. A third of all international students come to Ontario and the province needs to ensure it does not fall behind, said Reza Moridi, Minister of Training, Colleges and Universities.

Ontario "needs to develop a more comprehensive postsecondary international strategy in the long term, to pull ahead of competing markets and take full advantage of the substantial benefits this opportunity presents," Dr. Moridi said.

Graduate students said they welcome the news as a way to bring international perspectives to their work, but they hope the universities will use some of the funds help international students through new scholarships, for example.

U of T should "commit to adequate support and relief for these excellent students who move across the world to contribute to the intellectual life of the University as teachers and researchers," said Ryan Culpepper, the chair of CUPE 3902, the union representing teaching assistants at the university. This past spring, the TAs were on a month-long strike, largely over the level of funding for all graduate students.

No domestic student applying for a graduate spot will be turned away in favour of an international applicant, under the agreement. Already, science, computer science and engineering have far more students apply from abroad than from Canada. In some areas, as many as two thirds of applications are from foreign students.

"We needed the flexibility and we did not have that flexibility," said Bonnie Patterson, the president of the Council of Ontario Universities. "There will be institutions that use a few of their spaces, but there will be others in certain fields where it's hard to attract PhD students across the country. Now [Ontario universities] can look elsewhere. It's a bit of a sustainability strategy for high-end talent."