To attract excellent students to graduate studies, there are lots of graduate scholarships available from government agencies and individual universities. These awards are called "external funding."
Indeed, most Canadian (and many American) graduate programs in psychology offer their students some base level of support through "internal funding" (i.e., funding from the university itself).
(This level of support is the norm in psychology departments and the sciences in general, but it is not the norm in other fields.)
Three main agencies provide funding for graduate students in Ontario:
National Sciences and Engineering Research Council -- known as NSERC (pronounced "en-serk")
Social Sciences and Humanities Research Council -- known as SSHRC (pronounced "shirk").
Ontario Graduate Scholarship -- cleverly known as "O-G-S"
The deadlines are in the early fall of the year before the student plans to attend graduate school, so be sure to check with the UWO psychology department's graduate secretary or our department chair at King's for the internal deadlines so you can submit your applications on time!
Indeed, many schools require that their applicants have applied for all government scholarships for which they are eligible.
These awards are largely based on the applicant's grades; 2nd- and 3rd-year grades are very important, as most applicants are only at the start of their 4th-year.
Not all grad students obtain a government scholarship (or "external funding").
This internal funding may be (in part) covered by:
Teaching assistantships -- also called "TA-ships." The student works as a TA, marking papers, leading tutorials, etc. Working as a TA is a terrific way for students to develop their teaching skills (there's nothing like being thrown right in the trenches!).
Research assistantships -- also called "RA-ships." The student assists a professor with a research project. This can be a good way for students to broaden the scope of their research experience and develop relationships with professors in addition to their primary mentor.
Institutional scholarships (scholarships offered by the university). Most universities offer a wide variety of scholarships for graduate students. Sometimes the student needs to apply for these scholarships; other times, the application is automatic with admission to the school's graduate program. The student's supervisor may also contribute funds through their own research grant moneys.
The level of funding from TA-ships, RA-ships, or scholarships is usually sufficient to live from while in grad school; grad students in psychology typically do not need to hold down a part-time job to afford their studies. (Indeed, when I was at McGill, grad students were not allowed to hold down a part-time job, as being a grad student was our full time "job.") Graduate school the start of your career, so it's important to focus on developing your academic resume (called a CV) and your research program.
Note that professional programs like counselling psychology, OT, speech-language pathology, social work, law school, etc. typically do not offer funding in this manner, but students may be eligible some provincial scholarships for their graduate studies, like the Ontario Graduate Scholarship; you'd have to check with the specific graduate program to ask about this.