For the first time, a for-profit private institution has been given the go-ahead to grant Canadian bachelor degrees.
The Alberta government passed a recent order to accredit the United States-based Devry Institute, which has been operating a technology institute in the province for nine years.
The 1,400-student Calgary institute, one of 21 campuses across North America, including three in Canada, can now hand out four-year baccalaureates in information systems, electronic engineering technology and business operations.
Critics, such as the Canadian Association of University Teachers, called the move a serious development that could have profound implications for Canada's public universities.
But the Association of Universities and Colleges of Canada said it did not feel that the Devry accreditation represented a threat to its members.
The AUCC did say, however, that opening the door to private operations could continue to erode public university funding, which has seen a 25 per cent drop since 1980.
While governments have assured taxpayers that private operations will receive no operational funding, the student loan interest normally waived by governments during studies will become costlier to support Devry students.
Their Calgary campus charges C$8,000 (£3,600) a year, compared with C$4,000 annual tuition at the nearest university.
AUCC spokesman Bob Best said some universities had been preoccupied with the issue of quality assurance. Not referring to Devry but looking more at the past success of safe-guarding quality, Mr Best said: "It's important that the Canadian brand of education is not undermined."
He expressed concern that private for-profit colleges did not have the same checks and balances, such as bicameral systems of governance, community involvement, academic freedom and university autonomy that Canadian universities hold as important traits.
But Devry's Calgary institution is not purporting to be a university. According to its president, John Ballheim, the non-unionised technical school will be more of a teaching institution "in the age of credentialism". He said that places such as Devry would find their niches in more high-tech areas such as computer science.
Mr Ballheim added that Devry's curriculum was presented to university academics, who agreed it was up to university standards, to gain accreditation from Alberta's Private Colleges and Accreditation Board.