Quebec has penalized McGill University for raising its MBA tuition fees. (cbc) Quebec is cutting its annual subsidy to McGill University by more than $2 million in a dispute over tuition fees for the prestigious Montreal school's Master of Business Administration program.

McGill announced last year it was going to raise tuition to $29,500 from approximately $2,000 for the 2010-2011 academic session — more than nine times the provincial limit.

School officials said the hike was justifiable because McGill can't afford to subsidize the program any longer.

Administrators also argued the university can't compete with elite business schools such as Harvard, where annual tuition is more than $50,000.

Education minister, Line Beauchamp, said the tuition hike makes the program less accessible and that the sanctions will remain in place until McGill lowers its MBA tuition costs to within provincial guidelines.

"However, I will not accept that this subsidy reduction affect the quality of the services offered to students," added Beauchamp.