As someone who's seen first-hand a large portion of the lab facilities at Memorial, I can say that this is not uncommon.
This is what happens when government and organized labour get involved. Both have short-sighted horizons. The student union puts pressure on government to freeze the ability of the university to charge a fair price, with the long-run cost of degraded service as the capital wears down. This is irrelevant to the council because they'll be gone in a few years and not have to deal with these issues.
Similarly, governments are all interested in the here and now, and demonstrable benefits now always outweigh nebulous benefits later.
I'm not opposed to government funding of post-secondary education, especially if there's room for choice between schools. Of course, the extent of our public funding has made private schools more or less unable to compete, though deregulation in Ontario and other places should lead to more competition. In Newfoundland, however, MUN is in a classic natural monopoly situation.
Basically, I think the university should be free to charge whatever tuition fees it wants, if we want to ensure quality education. If we want education for all to a degree mill, well, we're doing pretty good.