A degree from a good university signifies a smart and dedicated student primarily because the school selects the best students for graduation. That occurs during acceptance and by making the program difficult, causing bad students to leave.
The higher level of competitiveness is hurting the best universities during that acceptance phase. Ontario universities are no longer able to differentiate between the best and average. Waterloo is an exception because it has introduced math competitions across the province as a way to identify "A+++" students, but only Waterloo benefits from that.
I'm noticing that many Ontario schools are now ignoring the acceptance phase and focusing on the weed-out phase. UofT accepts students into a common math/CS program, then only accepts the best students into CS for second year onwards. Queen's University has a common first year for all engineering majors.
Even so, because the acceptance phase no longer differentiates, a lot of good students that would beat the second phase are caught in the first filter.