The essay explores how the dynamics of competition and collaboration among Ontario's higher education institutions contribute to the system's differentiation strategy. The essay implements a content analysis approach to the Strategic Mandate Agreement submissions signed between the Ontario Government and the Ontario Colleges and Universities in 2014. The study finds that the dynamics of competition for students, resources, and prestige are influenced by government policies and decisions, which have created a uniform environment where all institutions respond similarly to challenges and opportunities. As a result, system homogeneity prevails. Moreover, Ontario institutions are very internally diversified; yet, their future directions have a limited impact on the entire system differentiation.