Bob Rae's review of higher education in Ontario is an opportunity to significantly improve the Ontario university system. The review focuses on five issue areas: accessibility, quality, system design, funding and accountability. In some of these issue areas, consensus appears to be forming. On student financial assistance, for example, stakeholders generally agree that the current system improperly measures need and favours students from higher income families (Rae: 4; COU, 2004: 4; OUSA: 52). On the level of public investment, stakeholders generally agree that funding is too low (COU 2004: 11; OUSA: 25). On tuition fees, predictably, there is less cross-stakeholder consensus: the Council of Ontario Universities (2004: 6) advocates "increased flexibility," the Ontario Confederation of University Faculty Associations (2004) advocates more public investment, not "a heavier burden on students" and the Ontario Undergraduate Student Alliance (39) advocates a reduced and fixed student contribution. This paper engages two of the five issue areas, system design and funding. On system design, I argue that the Ontario government's funding formula for operating grants should provide incentives for balanced enrolment at Ontario universities. On funding, I argue that the Ontario government should pursue a third way of regulating tuition, one that achieves both institutional flexibility and stability of tuition fees for students. In combination with improved student financial assistance, these two proposals will improve both the university system and the relationship between the Ontario government and Ontario universities.