McGill graduate student Ashley Burgoyne has one word to sum up the outlook this spring for freshly minted PhDs with dreams of getting on the tenure track. Scary.

McGill graduate student Ashley Burgoyne, an expert in music technology, worries that he won't find full-time work at a university.

The economic crisis that has gripped the globe is hitting campuses across the country. Universities are cutting budgets, and for many schools that means putting hiring plans into deep freeze. Add to that federal cuts to research funding, a new reluctance by senior faculty to retire, and dwindling endowment funds to support scholars, and the picture grows grim.

"People are very worried. People are scared," said Mr. Burgoyne, president of McGill's postgraduate student society. "Jobs, they are just disappearing."

It wasn't supposed to be that way. Less that two years ago, university leaders were warning of a talent shortage as professors hired in the 1970s retired and universities around the world expanded.

A study released in the fall of 2007 by the national group that represents Canadian universities predicted that between 3,600 and 13,600 new positions would be created in the next decade, and another 21,000 existing jobs would need to be filled as faculty retired or left. Canadian universities, the study forecast, would be "under pressure to renew faculty positions at a level previously unheard of in this country."

How things have changed.

Hardly a week goes by without news of more university budget cuts, and restrictions on new postings or a hiring freeze are usually in the mix of belt-tightening measures. At the University of Waterloo, all hiring is on hold except for what president David Johnston describes as "mission-critical areas." At the University of Calgary, hiring is restricted to "the most compelling of cases," and other schools are not filling vacancies.

They are in good company. Prestigious U.S. schools, including Harvard, Stanford and Johns Hopkins, have closed their doors to new hires.

At the same time, increased government funding in recent years means that just as Canadian jobs are drying up, the nation is producing record numbers of advanced degree holders. Figures released last week by Statistics Canada show that the country turned out 20 per cent more PhDs in 2006 than in 2001, and 37 per cent more masters graduates.

Graduate students are coping by spending extra time in school or looking for postdoctoral fellowships and contract teaching positions, hoping conditions will improve in a year or two. The increasing use of contract faculty by some universities, even before the current economic crisis, has others wondering if that day will ever come.

Yannick Tremblay, a graduate student in microbiology at Dalhousie University, said he hoped to finish his thesis this summer and was scouting for post-doc positions. He said he was optimistic that, in his discipline at least, there would be enough opportunities to allow him to do research until the job market improves. "I'm not stressing about it yet," Mr. Tremblay said. Still, it's a far cry from the future painted for him when he entered graduate school.

Linda Miller, the vice-provost of graduate and postgraduate studies at the University of Western Ontario, said that while Canada may need more advanced degree holders, it's wrong to think that all will find a place on university campuses. Their knowledge, she says, can be put to use by industry and the public sector, and Western in recent years has helped its graduate students to make that transition.

As someone who graduated in the academic bear market of the 1990s, Prof. Miller has this advice: "I tell them it can't go on forever. There is a cycle to these things."

Not all schools have left the job market. Some, such as the University of Alberta and the University of Toronto, see an opportunity to nab promising graduates and mid-career stars while other universities aren't recruiting. "We are urging deans to be cautious and prudent but to watch for opportunities," said University of Alberta provost Carl Amrhein. In the past year, U of A added between 30 and 40 tenure or tenure-track positions, but he said he does not expect to keep that pace this year.

What hasn't changed is the demand that prompted those rosy forecasts for academic jobs, said higher education consultant Ken Snowdon. Enrolment is still growing on many campuses, and industry and the public sector also will require the expertise of this year's graduates when the economy kicks back into gear. The key, he said, is to find ways to put these graduates to use in Canada until that day comes, suggesting that government money would be well spent on a short-term increase in post-doc positions.

At McGill, Mr. Burgoyne, an expert in music technology, said he likely could find work in the gaming industry when he completes his studies next year. But his heart, he said, is still set on teaching and research.

"We all choose where we want to make a difference," he said. "Mine is a university."