Canada is the 11th-largest donor country, spending US$4.0 billion on net official development assistance (ODA) in 2016 (in current prices). This represents 0.26% of its gross national income (GNI). The government of Prime Minister Justin Trudeau has committed to “restoring and renewing” Canada’s international assistance and “re-engaging globally”, though it has not resulted in significant increases in ODA as yet.
- In early March 2017, the government released its ‘Main Estimates’ (ME) for departmental spending for fiscal year (FY) 2017/18. Global Affairs Canada, the department that steers development policy and manages the largest share of Canadian ODA, plans to allocate CAD3.5 billion across three main programs related to development spending. This is an increase over the CAD3.1 billion requested for FY2016/17, and includes CAD237 million more to ’International Security and Democratic Development’ and CAD165 million more to ’International Humanitarian Assistance’.
- Canada’s development policy focuses on helping the “poorest and most vulnerable, and supporting fragile states”. The government has outlined five priorities: 1) health and rights of women and children, 2) clean economic growth and climate change, (3) governance, pluralism, diversity and human rights, 4) peace and security, and 5) responding to humanitarian crises and the needs of displaced peoples.
- Under Prime Minister (PM) Trudeau, Canada has committed a ‘feminist’ lens to international assistance, including enhanced attention to sexual and reproductive health and rights (SRHR) and continued prioritization of maternal, newborn, and child health. In March 2017, PM Trudeau announced CAD650 million over three years for SRHR, and the Minister of International Development and La Francophonie pledged CAD20 million at the ‘She Decides’ conference.
- Food security is another top priority; the government emphasizes the links between agriculture and climate change and is integrating food security policies into a comprehensive approach to clean economic growth.
- Canada conducted a review of its international assistance in 2016. A high-level summary of results from consultations with stakeholders was released in December 2016. A new policy framework shaped by the review is expected spring 2017. It will indicate future strategic directions of Canada’s development policy. There may be opportunities to access some of this funding, especially for evidence-based programs closely-linked to Canada’s priorities.
- The government committed CAD2.65 billion by 2020 to address climate change in developing countries. This presents opportunities to leverage more funding for related areas that help mitigate the impact of climate change (e.g., climate-smart agriculture).
the big six
- How much ODA does Canada provide?
Canada is the 11th-largest donor; ODA levels have risen with potential for further increases
In 2015, Canada was the eleventh-largest donor country among members of the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD) with net overseas development assistance (ODA) at US$4.0 billion (in 2016 prices; US$4.7 billion in 2014 prices). This represents 0.26% of its gross national income (GNI; 15th among DAC countries). ODA decreased by almost 20% from 2012 to 2014 due to efforts undertaken by former Prime Minister (PM) Stephen Harper’s government to reduce public spending. In 2015, ODA increased again by 17%. These increases are due to three factors: (1) timing of contributions to multilaterals, including a double payment to the World Bank’s International Development Association (IDA) caused by a technical change, (2) two loans to Ukraine for CAD200 million each, and (3) increased humanitarian assistance in response to the Syrian conflict. Net ODA decreased by 4% from 2014 to 2015, mostly due to the timing of payments, though it also increased its support for hosting refugees.
The Liberal Party of PM Trudeau, in power since November 2015, announced that it will “restore and renew” Canada’s international assistance, and “re-engage globally”. This included a review of its international assistance policy, which was conducted in 2016 and included consultations with stakeholders. A high-level summary of the consultation results was published in December 2016. A new international assistance policy framework informed by the findings of the overall review is expected after the FY2017/18 budget is presented in March 2017.
The Main Estimates (ME) for the forthcoming FY2017/18 budget, released on March 1, 2017, gives an indication into the planned allocations for development-related programs for the coming year. Global Affairs Canada (GAC), the Canada’s governmental department in charge of international relations including foreign affairs and international development, allocates spending across three programs: 1) International Security and Democratic Development, 2) International Development, and 3) International Humanitarian Assistance (see table). The ME show that GAC plans to allocate CAD3.5 billion to these three areas for FY2017/18, an increase from FY2016/17 (CAD3.1 billion). The increase is due to higher spending on ‘International Security and Democratic Development’ and ‘International Humanitarian Assistance’; these are expected to increase by CAD237 million and CAD165 million, respectively. Core ’International Development’ shows little change.
This is well in-line with the Canadian government’s intention to increase funding for areas related to the Syrian refugee crisis. Between FY2016/17 and FY2018/19, Canada will distribute over CAD1.6 billion for security, stabilization, and humanitarian and development assistance for Iraq, Syria, Jordan, and Lebanon. This includes, among others, CAD840 million for humanitarian aid and CAD270 million in bilateral assistance for provision of basic social services. The current focus is on Jordan, Lebanon, Iraq, and Syria.
In 2015, the government budgeted CAD678 million over six years (2015 to 2021) to support resettling the 25,000 refugees in Canada by the end of February 2016. The FY2016/17 budget included a further CAD245 million over five years for an additional 10,000 refugees. Some of this may be reported as ODA and will likely inflate ODA levels.
For further details on methodology, see our Donor Tracker Codebook.
For further details on methodology, see our Donor Tracker Codebook.
- What are Canada's strategic priorities for development?
MNCH remains a top focus; increasing emphasis on SRHR, climate change, and humanitarian assistance
As part of Prime Minister (PM) Trudeau’s commitment to “restore and renew” Canada’s international assistance, the government is expected to publish a new international assistance policy framework, informed also by comprehensive consultations with the public and civil society organizations (CSOs), in March 2017 after the FY2017/18 budget is released. The government has already provided indications of future priority areas for Canada’s development policy: (1) health and rights of women and children, (2) clean economic growth and climate change, (3) governance, pluralism, diversity and human rights, (4) peace and security, and (5) responding to humanitarian crises and the needs of displaced populations. Further, the government has stressed it will place a special emphasis on women and girls, and apply a ‘feminist lens’ across all development policy and international assistance.
Global health is a key priority of Canada’s development policy. Canada was the fourth-largest DAC donor to global health in 2015 at US$791 million. This corresponds to 16% of Canada’s total ODA, well above the average (9%) spent by members of the OECD’s Development Assistance Committee (DAC). Health is also among the largest sectors of Canada’s bilateral funding, at 14% of bilateral ODA in 2015 (see figure below). Within health, Canada places a strong focus sexual and reproductive rights and health and on maternal, newborn, and child health (MNCH) and has shown strong international leadership in this area. It spearheaded the G8 Muskoka Initiative in 2009, and pledged CAD3.5 billion for MNCH for 2015 to 2020. In addition, Canada hosted the replenishment conference of the Global Fund to fight Aids, Tuberculosis and Malaria (Global Fund) in September 2016, pledging CAD804 million (US$727 million) for 2017 to 2019. This is a 23% increase compared to its pledge for 2014 to 2016 in nominal CAD terms.
The Canadian government has also increased its focus on climate change-related issues, committing CAD2.65 billion (US$2.4 billion) by 2020 for climate change-related programs. Under PM Trudeau, Canada has begun to more strongly emphasize climate change, reframing programming within the greater nexus of agriculture, food security, and climate change. This includes integrating food-security policies into a more holistic approach for clean economic growth.
According to OECD data, Canada channels 70% of its ODA bilaterally. Humanitarian aid was the largest sector of Canada’s bilateral ODA at 22% in 2015, followed by health at 14%, corresponding to Canada’s focus on international peace and security, humanitarian crises, and health and rights of women and children.
Canada’s key development priorities:
- Health and rights of women and children
- Clean economic growth and climate change
- Governance, pluralism, diversity, and human rights
- Peace and security
- Responding to humanitarian crises and the needs of displaced populations
- Who are the main actors in Canadian development cooperation?
PM provides strategic direction; GAC drives development policy
Prime Minister (PM) Trudeau, head of the Liberal Party, sets high-level development policy priorities. Under the PM’s leadership, Global Affairs Canada (GAC), the governmental department in charge of foreign affairs, also steers development policy. GAC, formerly the Department of Foreign Affairs, Trade and Development (DFATD), was renamed in November 2015 under Trudeau. GAC is comprised of three formerly separate departments and thus is under the leadership of three ministers: the Minister of Foreign Affairs, the Minister of International Development and La Francophonie, and the Minister of International Trade.
GAC is headed by the Minister of Foreign Affairs, currently Chrystia Freeland (Liberal Party). With oversight from the Foreign Minister, the Minister of International Development and La Francophonie, Marie-Claude Bibeau (Liberal Party) sets development policy, and makes funding recommendations to the Cabinet. The Deputy Minister of International Development, Peter Boehm, manages GAC’s development policy units and budget allocation. Deputy Minister Boehm is also the PM’s Sherpa for the G7 and Nuclear Security Summits. Relevant units within GAC are: 1) the Global Issues and Development Branch, which manages multilateral policies and contributions, 2) four geographic branches managing country programs, 3) the Strategic Policy Branch, and 4) the Partnerships for Development Innovation Branch, responsible for partnerships with CSOs and the private sector.
Minister of International Trade, Francois-Phillipe Champagne, works with the Ministers of Finance and International Development on development financing issues. The Department of Finance, currently headed by Bill Morneau (Liberal Party), manages core contributions to – and Canada’s relations with – the World Bank, in consultation with GAC.
Parliament in Canada is composed of the House of Commons, the Senate, and the Monarch of the United Kingdom (represented by the Governor General). Within the House of Commons, Standing Committees review government policies in specific areas. The Standing Committee on Foreign Affairs and International Development (FAAE) scrutinizes the operations and management of GAC. During parliamentary debate of the budget, the FAAE holds hearings with the Minister of International Development and La Francophonie. However, amendments to GAC’s budget lines are unlikely under a majority government like the current one (for more details, see Question 5, what are the important decision-making opportunities in Canada’s annual budget process?).
CANADA'S DEVELOPMENT COOPERATION SYSTEM
The House of Common’s Standing Committee on Finance (FINA) is responsible for budgetary policy, including Canada’s development assistance. FINA invites CSOs, the public, and other stakeholders to submit suggestions by August each year on the next year’s budget as part of a pre-budget consultation process.
The Development and Humanitarian Assistance Civil Society Partnership Policy, released in 2016, outlines the guiding principles and objectives underlying the government’s engagement with CSOs in alleviating poverty and delivering humanitarian assistance. It lays out several principles and high-level objectives for Canadian CSOs. This includes giving a voice to the marginalized, promoting community-government engagement, and increasing accountability and aid effectiveness through the enhanced involvement of individuals in decision-making processes. GAC convenes CSO representatives annually to discuss the implementation of this policy.
Beyond these key decision makers, there are important fora in which development discussions and decision-making occur. The International Development Research Centre (IDRC), headed by President Jean Lebel, is a Crown Corporation, and an independent, publically-funded institute. The IDRC is a key vehicle of Canada’s development cooperation, and is mandated to support research, tools, and leadership to address development problems. The government appoints the Board, which along with the Centre Management Committee guides the direction of the center. The Management Committee includes four regional directors and directors from main program focus areas.
Since 1944, Export Development Canada (EDC) has been Canada’s state-owned export credit agency. Headquartered in Ottawa, it comprises 17 regional offices across Canada and permanent representations in 12 foreign markets. EDC is mandated to support trade between Canada and other countries and promote Canada's competitiveness in the international marketplace. Its current President and CEO is Benoit Daignault. Canada’s fledgling Development Finance Initiative will be housed within EDC, making it a new actor in Canada’s development landscape.
- How is Canadian ODA budget structured?
IAE is the primary ODA budget tool
According to Global Affairs Canada (GAC)’s Statistic Report on International Assistance, in FY2014/15 (the latest year for which a detailed breakdown is available), Canada’s ODA amounted to CAD5.7 billion (US$5.2 billion). GAC managed the largest share (63%). Other key actors include the Department of Finance (24%), primarily channeling Canada’s contributions to the World Bank Group and managing debt relief for developing countries, and the International Development Research Centre (IDRC) (3%).
The remaining 10% of ODA is provided by other departments, as well as other spending that may be reported as ODA. The latter category mainly includes costs for hosting refugees, and imputed costs for students from developing countries studying in Canada (together 9%).
The main budget envelope for development assistance, however, is the International Assistance Envelope (IAE). The IAE funds more than 90% of Canada’s ODA; in FY2014/15, 98% of it was eligible for ODA. After remaining static for several years, the IAE is expected to modestly increase by CAD256 million between FY2016/17 and FY2017/18. Throughout a fiscal year, the government may add funding to the IAE through Supplementary Estimates, which need approval by the Parliament (for more details, see Question 5, What are the important decision-making opportunities in Canada’s annual budget process?).
FY 2014/15 ODA budget: International Assistance Envelope (ODA only)
International Assistance Envelope (IAE; ODA only) 5,186 4,693 Global Affairs Canada 3,615 3,271 Department of Finance, of which: 1,344 1,216 International Development Association (assessed contributions) 883 754 Other spending (mainly debt relief) 461 417 International Development Research Centre 194 176 Other government departments 33 30 ODA from sources other than IAE budget 527 477 Costs for hosting refugees 271 245 Imputed student costs 172 156 Other government departments 84 76 Total ODA 5,713 5,170
Full details on the IAE are only available for FY2014/15. However, the Main Estimates (ME) of GAC for the forthcoming FY2017/18 budget, released on March 1, 2017, gives a glimpse into planned allocations for development-related programs. According to the ME, nd GAC's Departmental Plan, formerly the Report on Plans and Priorities, GAC allocates spending across three programs: 1) International Security and Democratic Development, 2) International Development, and 3) International Humanitarian Assistance (see table). The ‘International Development’ program is by far the largest of the three. The ME and the Departmental Plan show that GAC plans to allocate CAD3.5 billion altogether for these three areas, marking an increase over the CAD3.1 billion requested for FY2016/17. This increase is due to higher spending on ‘International Security and Democratic Development’ and ‘International Humanitarian Assistance’, which are expected to grow by CAD237 million and CAD165 million, respectively. Core ’International Development’ shows little change. Overall, however, the ME remains flat relative to actual expenditures in FY2015/16.
GAC: planned development spending
International Security and Democratic Development 237 475 International Development 2,33 2,34 International Humanitarian Assistance 561 726 Total 3,128 3,541
- What are important decision-making opportunities in Canada’s annual budget process?
Fiscal year runs from April to March
Canada’s fiscal year runs from April 1 to March 31. Key stages in Canada’s budget process include:
- Central agencies work with departments to develop budget strategies: In June, the Cabinet convenes to review the current budget and identify priorities for the upcoming fiscal year. From June to September, central agencies (Privy Council Office, Department of Finance, and Treasury Board Secretariat (TBS)) work with the government departments to incorporate the results of the Cabinet review, in order to develop budget proposals for the Finance Minister to consider. By September, all government departments, including GAC, send budget letters to the Finance Minister, which includes requests for budgetary changes.
- Pre-budget consultation process, including public outreach and parliamentary consultations with external stakeholders, begins: From June to August, the Department of Finance invites CSOs and other stakeholders to submit suggestions on the full budget, including for development. These are compiled and may be taken into account by the Finance Minister, during the development of the budget. The pre-budget consultation process provides direct opportunities to advocate for issues around the overall ODA file.
- Minister of Finance consults with Parliament: In October, the Minister of Finance releases Budget Consultation Papers and begins consultation with the House of Commons’ Standing Committees. These consultations run from October to December; participants from within government as well as other experts are invited to give testimony on policy areas and budget lines. Results of the consultation process and recommendations of the Standing Committees and Cabinet policy committees are compiled and taken into account by the Finance Minister in the development of the budget. Continued engagement with key decision-makers is key during this time. Further, during this period, the Department of Finance launches its annual consultation on ODA, a criteria under the Official Development Assistance Accountability Act. While not part of the official budget consultant, this is a critical opportunity to advocate for increases for overall ODA or specific initiatives.
- Fall Fiscal Update and Public Accounts of Canada are released: In fall – typically November – the Department of Finance tables its Fall Fiscal Update and Public Accounts. These provide an update of economic and fiscal projections since the previous budget. Around this time the House of Commons’ Finance and Foreign Affairs Committees hold consultations. These may provide direct opportunities to advocate for development issues, especially during the discussion of the Public Accounts, at which the status of the execution of the previous year's budgets are released.
- Finance Minister develops budget strategy, Cabinet reviews it; Prime Minister and Finance Minister make final decisions: In early December, the Minister of Finance develops a budget strategy, with input from the Memoranda to the Cabinet from all departments. These outline both policy priorities and financial asks. The Cabinet reviews these and budget proposals from December to January. The Prime Minister and the Finance Minister may make final adjustments until February/March. At this time, the PMO and other Cabinet level officials are able to ‘push in’ funding for specific development initiatives.
- Main Estimates are tabled, Finance Minister delivers Budget Speech; budget is approved: The budget is usually presented to the House of Commons in February/ March in a speech by the Finance Minister. The Main Estimates, which are the detailed spending plans for each department for the upcoming financial year, are tabled by the President of TBS no later than March 1. However, there will be areas of surplus not included in the ME, as the government will look to maintain a ‘surprise’ factor around highly political areas, including development spending.
- How is Canada’s ODA spent?
Multilateral organizations are a key channel; World Bank’s IDA is largest multilateral recipient
In 2015, Canada channeled more than half (54%, or US$2.7 billion) of its ODA multilaterally. Core contributions to multilateral organizations accounted for 30% (US$1.5 billion) of total ODA in 2015; this represents an increase from 22% in 2014. This is in part due a double payment to the World Bank’s International Development Association (IDA) caused by a technical change as well as reductions in bilateral ODA to health, making the share of ODA to multilaterals larger. Key recipients were the World Bank’s IDA (30%), followed by UN agencies (18%) and regional development banks (16%), and the Global Fund to fights AIDS, Tuberculosis and Malaria (13%). In December 2016, at the 18th pledging session of the World Bank’s IDA, Canada announced a total payment of CAD1.3 billion to IDA for the three-year encashment period. In addition to core contributions, Canada channeled 34% of its bilateral ODA (US$1.2 billion, or 24% of total ODA) in 2015 through multilateral organizations as earmarked funding for specific countries or issues. This is well above the average of OECD DAC countries (11%). Canada considers this an effective way to reduce administrative burden.
From 1986 to 2010, Canada provided all bilateral ODA as grants. In 2011, the government began to provide loans within the framework of the ‘Fast-Start Finance’ climate initiative. In 2014, loans were first reported as ODA, and loans made up 5% of bilateral ODA in 2015 (DAC average: 10%). In the FY2017/18 budget, PM Trudeau's government announced plans to launch a development finance initiative (DFI) -- initially introduced by the Harper government in the FY2015/16 budget--which will be capitalized at CAD300 million. The DFI will be a wholly-owned subsidiary under Export Development Canada (EDC), a Crown corporation that serves as Canada's esport credit agency. Canada the last G7 country to create such an institution, and it will among other things be leveraged to support companies operating in developing countries and promote investments in the local private sector.
Who are Canada’s ODA recipients?
Canada’s development programs focus increasingly on low-income and fragile countries. From 2013 to 2015, one-third of Canada’s bilateral ODA (34%) was channeled to low-income countries (LICs). When excluding funding not specifically allocated to one country (e.g., regional programs, administrative costs, and funding for CSOs), more than half (55%) of bilateral ODA went to LICs. Canada increased its ‘countries of focus’ from 20 to 25 countries in 2014, and committed to allocating 90% of bilateral aid to them (see inset). A revised list is likely to be included in the forthcoming international assistance policy framework. In addition, Prime Minister Trudeau has pledged to refocus Canada’s aid program on “helping the poorest and most vulnerable, and supporting fragile states”. This may result in a greater share of ODA being allocated to LICs.
The largest share of bilateral ODA goes to sub-Saharan Africa (40% from 2013 to 2015). Canada’s focus countries include 10 from sub-Saharan Africa, and six of the top ten recipients of Canadian bilateral ODA are located in this region (see below). In 2014, 11% of bilateral ODA went to the Middle East and North Africa region; in 2015, the share going to this region was 15%. This is consistent with Canada’s new multi-year commitments to the Syrian region and its emerging interest at the nexus of peace, security, and humanitarian, and development assistance. Ukraine the largest recipient of Canadian aid for the 2014-2015 period. On top of grants of US$63 million and US$73 million in 2014 and 2015, respectively, Canada also provided low interest loans of US$181 million (CAD200 million) to promote economic stability.
25 priority countries for bilateral cooperation:
- Middle East: Afghanistan
- Americas: Colombia, Haiti, Honduras, Peru
- Asia Pacific: Afghanistan, Bangladesh, Indonesia, Mongolia, Myanmar, Philippines, Vietnam
- Eastern Europe: Ukraine
- Middle East and North Africa: Jordan, West Bank and Gaza
- Sub-Saharan Africa: Benin, Burkina Faso, DR Congo, Ethiopia, Ghana, Mali, Mozambique,Senegal, South Sudan, Tanzania
How is bilateral funding programmed?
GAC’s geographic program branches share programming with input from embassies
The basis for programming of Canada’s bilateral programs are multi-year country strategies and mutual accountability frameworks, in which sector priorities, expected results, shared principles, and high-level indicative funding for bilateral assistance are outlined. The most recent country strategies were developed for the former 20 focus countries, for 2009 to 2013. It is expected that Global Affairs Canada (GAC) will develop new country strategies for the revised list of focus countries under its new development policy framework (likely in early 2017). The country strategy review process, led by GAC’s geographic program branches, offers an opportunity to shape country programming, including sector priorities in each country. GAC’s geographic branches also take the lead on designing concrete projects and programs and allocating funding.
Canada’s embassies provide input on project development and assist in monitoring projects. Under Prime Minister Trudeau, ambassadors and high commissioners (consulars) enjoy a certain degree of autonomy. Major projects usually require approval by the Office of the Minister of International Development and La Francophonie, however, who is able to approve programs up to CAD20 million at her own discretion. Programs with a budget beyond CAD20 million require approval from the Cabinet’s Treasury Board.
How will Canadian ODA develop?
- Following sharp decreases between 2012 and 2014, ODA started increasing again in 2015. The budget for FY2016/17 called for moderate increases in the International Assistance Envelope budget, by CAD256 million over two years (FY2016/17 to FY2017/18), though ODA decreased in 2016 by 4%. Based on the Main Estimates (ME) released in March 2017, Global Affairs Canada plans to allocate CAD3.5 billion across three main programs related to development spending. This is an increase from the CAD3.1 billion requested for FY2016/17, due to higher spending in ’International Security and Democratic Development’ and ’International Humanitarian Assistance’.
What will Canada’s ODA focus on?
- Following a comprehensive review of Canada’s international assistance in 2016, a new policy framework is expected to be published in March 2017. Prime Minister (PM) Trudeau has given some indication of strategic priorities, including a stronger focus on “the world’s poorest and fragile countries”, and applying a ‘feminist lens’.
- Health, particularly sexual and reproductive health and rights and maternal, newborn, and child health, are an important focus. This was recently evidenced by Canada’s pledge of CAD20 million at the ‘She Decides’ conference in Brussels in March 2017, and by PM Trudeau’s announcement to allocate CAD640 million over a three-year period for SRHR. Canada has also newly commitment to Family Planning 2020 and the Ouagadougou Partnership.
- Tackling climate change in developing countries is atop focus of Canada’s development policy. The government has committed to spend CAD2.65 billion by 2020 within this sector, and has already increased funding for related programs. It is likely that this trend will continue, and that Canada will increasingly integrate agriculture, food security, and clean economic growth within this new focus.
What are key opportunities for shaping Canada’s development policy?
- For the upcoming budget FY2017/18, which will be the first budget fully under the soon-to-be-identified development policy priorities, the annual pre-budget consultation process open to all stakeholders from June to August 2017 could provide an opportunity for shaping Canada’s development policy. After the release of the Canada’s new international assistance policy framework, anticipated for March 2017, the government will likely cooperate with partners to operationalize and implement the new priorities laid out. This process will open opportunities for further engagement with the government, particularly for organizations working within and on the government’s priority sectors.
- Canada’s pledge to the Conference of the Parties ( COP21) in Paris in November 2015 could be used as an opportunity to advocate for more resources to be allocated to addressing the effects of climate change within other sectors, such as to agriculture and health.
- Canada’s heightened commitment to sexual and reproductive health and rights (SRHR) within is ‘feminist’ approach to international assistance may offer an opportunity to secure resources or engage in policy implementation in this area.