Decreasing government funding and regulated tuition policies have created a financially constrained environment for Canada's universities. The conventional response to such conditions is to cut programme offerings and services in an attempt to lower costs throughout the institution. However, we argue that three Canadian universities have reacted with a different response. Instead of cutting costs, the University of Toronto, Queen's University and the University of Lethbridge have chosen to implement decentralized budgeting and management structures in an attempt to increase efficiency and seek out new revenues. Using interview data and document analysis, this paper discusses the responses of these institutions and what they tell us about the strategies universities employ to cope with financial challenges that are likely to persist.