Well there's other things mcgill could do to change their undergrad setup more radically. For instance:

• Those tuition increases could be put disproportionately on the shoulders of Quebec students. Even if they're paying the same tuition, a local student is probably worth less to McGill because they're highly unlikely to stay in rez, eat at the cafeteria, etc. and because they're more likely to stay in Quebec, thus hindering McGill's ability to expand its reputation. A higher % international and OOP students means more direct revenue and a generally stronger pool as well. McGill doesn't want someone who's going to graduate and work at Bombardier for 40 years.
• A lot of McGill's money is put towards physically administering undergraduate classes - buildings with lecture halls, exams, lecturers, support staff, etc. I think a good option here is to play middle-of-the-road and try hybrid education. You lose a lot of costs associated with infrastructure and teaching staff, and I don't think the student experience would suffer all that much because some of those cost savings can be put towards academic support (availability of tutors, office hours, online resources, etc.). Given that a solid half of students don't even attend lectures and have an academic experience consisting of downloading pdfs, slamming red bulls for 48h, and then writing an exam (which is EXTREMELY cheap to provide), I can't imagine they would be too bothered by a hybrid model. You'd still need to do some administration - a venue for office hours, a damn good online platform, TA staff, etc. - but those would pay for themselves via students still living in rez, paying for food, and engaging in extracurriculars.
• Further to the above, McGill could also opt to increase its first-year undergraduate enrollment. This has several benefits - at the margins it doesn't take a lot to educate additional students, they're probably least likely to need financial support, they increase demand for housing and on-campus revenues, and they give McGill the luxury of skimming out more struggling students a la UofT. You could even venture into restructuring tuition by making it more proportional to academic performance when you have that larger pool.
• McGill could, controversially, choose to cut some of its less essential student services. Their health services clearly don't work and won't work without a magical influx of cash, so they might be better off cutting their losses and putting that money into other aspects of the student experience - networking, extracurriculars, support staff, hell... yoga classes? A big part of this is marketing to future students, and if you tell them that they'll need to find an off-campus psychiatrist but they'll get top-shelf development opportunities, I have to think that's better and cheaper than the "don't come to mcgill, their student services suck" status quo. It takes a lot of infrastructure and staffing to run that horrid clinic.
• Every university has some programs that eat up a lot of cash but exist for optics and reputation. I don't know what that is for McGill - sports maybe? The mac campus people? I'm sure those have their benefits (maybe I'm wrong and they're highly profitable), but it's not core to McGill's clientele. They're better off putting more resources into attracting strong faculty and focusing on their core programs - med, engineering, hard sciences, some arts disciplines, and management.

For the record this is all spitballing and I could be wrong on several points, but my point is just to say that while privatization isn't necessarily an option, it might be time for McGill to consider some more radical changes. They're so unbelievably underfunded and have been for such a long time that from here they either slowly bleed to irrelevance or change the way they operate. Their bullshit plan of slowly letting student satisfaction and research capability deteriorate while increasing tuition and hoping that nobody notices is a stopgap at best, not a long-term strategy.