Incremental (or historical) funding is the dominant funding mechanism in Prince Edward Island. Provincial government grants have traditionally been the largest single source of revenue for post secondary institutions. Almost half of university and college revenues in fiscal 2004/05 were in the form of provincial operating and capital grants. The most notable feature of this is the dramatic decline in the proportional contribution of provincial governments to total post secondary education revenues since 1990/91. In almost all provinces, this has coincided with significant increases in the share of revenues provided by tuition fees.
Tuition for Prince Edward Island's post secondary intuitions are set by the individual institutions, in consultation with the provincial government.