Ottawa's growing conviction that the new industrial schools in particular 'are costing the Government too much money' led in 1892 to a change in the method of financing that was to last for over half a century. The industrial schools authorized in 1883, in contrast to pre-existing boarding schools, were fully financed by the federal government. The solution was a new formula for financing that would both decrease spending and enhance revenue. A system of per capita grants would put an industrial school 'upon a footing where the careless management of the affairs would at once be felt in the general comfort and usefulness of the institution which should be maintained at a certain standard or level fixed by the Government.' Such a regimen 'would also stimulate the desire to turn out from the workshop articles which would bring some revenue to the schools, and to win from the earth larger supplies of vegetables, accomplishing at the same time the main end & object of their existence as Industrial Schools and the financial advantage of such returns of money and crops. Under these conditions there might be more time spent in the workshop and garden that at the desk.'

    The new per capita system that came into effect in July 1893 not surprisingly provoked resistance from the churches. The Roman Catholics thought the amounts offered for their industrial schools too low. Both Anglicans and Presbyterians expressed concern about their ability to operate their institutions on the southern prairies. Eventually, however, Ottawa bullied all the denominations into line. The federal bureaucrats established maximum enrollment figures for each institution, and their counterparts on the prairies worked to reduce school expenditures, especially salaries.