Power relations between government and higher education in Ontario, Canada, with specific reference to financing and to graduate program development, are addressed. The types of postsecondary institutions and the roles of the Ontario Council on University Affiars (OCUA) and the Council of Ontario Universities (COU) are identified. It is suggested that the government's actions from 1972-73 to 1975-76 resulted in a reduction in the university's power to maintain its revenues even at a minimal level and that the system's power will be further diminished in the next three years. However, institutions have retained the power to make decisions on the allocation of their revenues, to set academic standards on admission and graduation, and to develop new undergraduate programs. In the graduate realm, the universities have also lost a measure of power to develop new programs, and they may stand to lose even more power to maintain some existing programs in the next several years. However, the COU has power to make decisions on the quality of existing graduate programs. The role of the OCUA in serving as a mediator between the government and the universities is concluded to be important in the years ahead. (SW)