The Canadian Government is to skirt the provinces' educational power by giving money directly to tens of thousands of post-secondary students, cutting the cost of attending university.
Belinda Stronach, the Human Resources Minister, said earlier this month that the Government aimed to deliver direct grants to Aboriginal and low-income students and possibly also to part-time and adult learners.
Under a deal reached last spring to keep his minority Liberal Party in power, Prime Minister Paul Martin bowed to New Democratic Party demands to scrap a corporate tax cut and instead provide an additional C$1.5 billion (£725 million) over the next two years "to reduce the costs of post-secondary education for students".
In exchange, the left-wing NDP supported the Liberals' budget. But crucial details on the agreement, such as how students would benefit from the funding, have begun to emerge only this month.
Because Canada's Constitution gives provincial governments authority over education, it was initially thought that Ottawa would have to negotiate with the ten provinces over how to dole out the cash. But it now seems that the Liberals have decided to bypass the provinces and the universities and give the money directly to students.
"The original deal was intended to send money to the provinces to lower tuition fees," said George Soule, national chairperson of the Canadian Federation of Students. "But now the Liberals are intimating that the money will go primarily to a grants programme."
If the new money were distributed evenly to all of the country's university and college students, it would give them about C$680 each, or 18 per cent of average tuition fees.
Ms Stronach told The Globe and Mail newspaper that any new initiatives would not trample on provincial jurisdiction.
Robert Best, vice-president of the Association of Universities and Colleges of Canada, said: "There has been much discussion over when the Government will make that announcement."
News reports have said that the Finance Minister, Ralph Goodale, is expected to outline the spending in an economic update by the end of the month.
Mr Best urged the Government to consider that improving accessibility to post-secondary education required not only underwriting tuition for students who could not afford it, but also increasing schools' capacity to admit students.
"We were projecting that there would be enrolment growth from 2001 to 2011 of as many as 200,000 full-time students, but all indications are that it will be more than that, if institutions have the capacity," he said.
Mr Soule said students would benefit more if the C$1.5 billion went to the provinces to reduce fees, which nationwide have tripled on average since 1990 - an increase of four times the rate of inflation. Without an initiative to control tuition-fee increases, the effectiveness of a low-income grant was minimal, he said. "The grants programme won't be able to cover rising tuition fees, and students from middle-income families are completely left out."