The tertiary education system in Canada performs well in fostering a skilled workforce with generally good labour-market outcomes and is internationally recognised for its research contributions. Tertiary educational attainment is high, but participation rates will need to continue expanding to maintain the supply of highly skilled labour as the population ages and the needs of the knowledge-based economy rapidly evolve. This should be achieved by encouraging access to higher education for disadvantaged socio-economic groups, while enhancing the flexibility of the system to allow students with diverse needs to move between institutions more easily to meet their learning objectives. Immigration is another important source of skills that could be better utilised. The development of skills for innovation can be improved by increasing the integration of technical, business and communications skills training with practical industry experience within tertiary education programmes. In an environment of government spending restraint, the quality of tertiary education could be strengthened by increasing the distinction between institutions that target research and those that emphasise teaching and re-evaluating tuition policies in provinces where public finances are stretched.