Donor Profile

Canada

Last updated: May 31, 2023

Summary



ODA Spending


How much ODA does Canada contribute?


Canada was the sixth-largest ODA donor country in absolute terms in 2021, as well as in 2022, according to preliminary data.


Canada was the 13th-largest donor in relative terms in 2021, with total ODA representing 0.32% of its GNI. In 2022, there was a slight increase to 0.37% ODA/GNI, but its relative ranking fell to 16th place among donors.



How is Canadian ODA changing?


According to the OECD, the 9% rise in Canada’s ODA between 2020 and 2021 was mainly the result of funding targeting the COVID-19 pandemic and increases in climate finance.


Canada's ODA increased by a further 19% in 2022 to US$7.8 billion, its highest ODA spend to date, largely due to support to Ukraine (some in the form of humanitarian assistance), increased costs for in-donor refugees, as well as higher contributions to international organizations.


According to Budget 2023, Canada’s development spending will decrease by CAD1.3 billion ( US$999 million) in fiscal year FY2023/24 (April 2023-March 2024), to CAD6.8 billion ( US$5.2 billion). This represents a 15% reduction from FY2022/23, when Canada spent a record high CAD8.1 billion ( US$6.2 billion) on international development assistance.


Prime Minister Justin Trudeau’s government has repeatedly promised to increase Canada’s international development assistance every year until 2030 to realize the SDGs, including in the Minister of International Development’s most recent mandate letter. Budget 2023 repeats this commitment, while simultaneously breaking that promise, as it includes a 15% decrease in ODA from 2022.


Given the global context, the war in Ukraine and global health security, including COVID-19 response, will likely continue to dominate Canada’s foreign policy and development spending. Canada will also continue to focus development spending on feminist development, in line with its FIAP. Furthermore, Canada recently announced its inaugural Indo-Pacific Strategy in November 2022, which is part of an effort to diversify diplomatic, trade, and development relations in the region, particularly in the face of heightened tensions between China and the West. As part of the launch of that strategy, the Government of Canada announced roughly CAD960 million ( US$716 million) in development spending in the region.



Where is Canadian ODA allocated?


Canada favors the use of earmarked funding through multilaterals, standing at 40% of total ODA.



Bilateral Spending

Health and population spending accounted for the largest share of Canada’s bilateral ODA in 2021, at 31%. This was due to significant COVID-19 spending to help ensure equitable access to vaccines, therapeutics, and testing. FY2020/21 was also the first year of implementing Canada’s 10-year commitment to global health and rights of women and girls. During this period, CAD1.2 billion ( US$957 million) was disbursed, with the largest amounts going to global health and nutrition as well as to SRHR.


Humanitarian assistance received the second-largest share of bilateral ODA in 2021, in line with Canada’s increasing focus on international peace and security, as well as human dignity in humanitarian crises. Under the FIAP, Canada emphasizes gender-responsive humanitarian action; 99% or US$765 million of Canada’s humanitarian spending in 2021 included gender equality as a principal or significant objective.


READ MORE

Deep-Dive on Canada's ODA for gender equality


Canada’s FIAP emphasizes the poorest and most vulnerable, meaning most of its ODA goes to LICs or LMICs.


The FIAP dictates that by FY2021/22, at least 50% of Canada’s bilateral ODA will be directed to sub-Saharan Africa; however, Canada has yet to reach this goal. According to Canada’s calculations it reached 47% in FY2020/21, an increase from 42% in FY2019/20.


Canada’s funding for Asia and sub-Saharan Africa in 2021 was driven by funding flows to Afghanistan (US$113 million), South Sudan (US$109 million), and Ethiopia (US$99 million), Canada’s top three recipient countries overall. These amounts likely reflect Canada's growing focus on international peace and security and support for humanitarian crises. This includes support to address the needs of refugees and displaced persons due to conflicts and disasters, such as those being experienced in the top three recipient countries.


Canada gave 87% of its bilateral ODA overall as grants, which it considers an effective way to deliver increasing amounts of ODA while reducing the administrative burden often associated with loan financing.


Government documents, such as the Global Affairs Canada Departmental Plan 2023-24 and the Minister of International Development’s mandate letter, suggest that the implementation of Canada’s inaugural Indo-Pacific Strategy will be a key priority in the years ahead.



Multilateral Spending and Commitments

Canada’s multilateral spending concentrates on the World Bank, UN agencies, and the Global Fund.


Contributions to multilateral organizations, including to Gavi’s COVAX AMC and the WHO ACT-A, have made up a significant share of Canada’s international response to the COVID-19 pandemic.


Recent commitments to multilateral organizations are summarized on the second slide below.



Politics & Priorities


What is the current state of Canadian politics?


Canada is a constitutional monarchy, meaning the King of the United Kingdom is technically the head of state; however, in practice, the Cabinet and ministers selected by the Prime Minister hold the executive power. Canada has a federal system of parliamentary government.


There are three levels of government in Canada:

  • Federal: Creates laws, and manages programs and services relevant to the whole country, including shaping funding and policy for international development.
  • Provincial and territorial: Makes legal decisions with direct implications for the respective provinces or territories, manages healthcare and policing; and
  • Municipal: Establishes by-laws and services administered in specific cities, towns or villages. Elections for each level take place separately.

Federal elections are meant to take place on the third Monday of October every four years, but they can be called earlier or later if it is no later than five years after the previous election.


Canada is a representative democracy. The country is divided into 338 ridings (or geographical areas) that each elect one MP based on a ‘first-past-the-post’ system. The party with the most MPs forms the government. Because candidates can win without securing a majority of votes some have criticized this system, saying it does not properly reflect how people vote. Liberal leader Justin Trudeau promised to replace the ‘first-past-the-post’ voting system in the 2015 election, however, after the release of a report by the Special Committee on Electoral Reform in 2016, this promise was never fulfilled.


While Canada is technically a multi-party system, two major parties have historically been dominant in federal elections: the Liberal Party of Canada (Center to Centre-Left) and the Conservative Party of Canada (Center-Right). Other parties, including the NDP (Left), the Green Party, and the Bloc Québécois, have seats in Parliament but have never formed a government at the federal level.


In the last election in September 2021, Canadians re-elected a liberal minority government after calling a somewhat controversial mid-pandemic election. The Liberal Party positions itself as a champion of international development. The Liberal Party’s support of international development is perhaps best exemplified by the inaugural Feminist International Assistance Policy, launched in 2017 and developed in consultations with more than 15,000 people in 65 countries. The policy places gender equality and the empowerment of women and girls at the center of Canada’s approach to international assistance.


Part of the Liberal Party’s 2021 platform included a “Principled Approach to Foreign Policy” as part of the party’s international development plans. Platform pledges included increasing Canada’s international development assistance every year until 2030, to realize the UN SDGs; donating at least 200 million vaccines doses to vulnerable populations around the world through COVAX by the end of 2022; continuing to build on Canada’s support for education; and doubling Canada’s funding to grassroots women’s rights organizations around the world. Canada’s 2021 Speech from the Throne, which was a summary of the government's goals for the new parliamentary session, built on these promises by recommitting to increasing Canada’s foreign assistance in the annual budget year after year and investing in equitable, sustainable, and feminist development that promotes gender equality and supports the world’s most vulnerable.


Given their minority mandate, the Liberal Party must cooperate with other political parties in parliament. In March 2022, the Liberal party negotiated an agreement with the NDP that allows them to govern until 2025 with the NDP’s support in the minority Parliament, contingent on the implementation of a negotiated list of policies and priorities. The NDP is generally a strong supporter of international development, although none of the negotiated policies or priorities pertained directly to development spending.


Who is responsible for allocating Canadian ODA?



What are Canada's development priorities?


In June 2017, GAC published the FIAP that seeks to “eradicate poverty and build a more peaceful, more inclusive, and more prosperous world” by promoting gender equality and empowering women and girls.


The policy applies a human rights-based approach to its core action area — gender equality and the empowerment of women and girls — as well as its five other action areas:


READ MORE

Deep-Dive on Canada’s ODA related to gender equality


  1. Human dignity including health education, humanitarian assistance, nutrition, sexual and reproductive health and rights, and food security;

READ MORE

Deep-Dive on Canada’s ODA for global health


Deep-Dive on Canada’s ODA for education


Deep-Dive on Canada’s ODA for agriculture


  1. Inclusive economic growth;
  2. Environment and climate change;

READ MORE

Deep-Dive on Canada’s ODA related to climate change


  1. Inclusive governance; and
  2. Peace and security.

Canada tracks progress in the FIAP’s action areas using performance indicators released in February 2019. These are used alongside indicators that measure progress on the SDGs, advocacy, and in-house gender equality at GAC.


By issue

Global health is one of Canada’s key priorities. In the FIAP, global health sits under the banner of ‘human dignity’. In recent years, global health security and the COVID-19 response have become a top focus, as evidenced by Budget 2022. Canada has also put women and girls at the center of its international response to the COVID-19 pandemic.


Another one of Canada’s key priorities is SRHR. In FY2020/21 Canada’s funding for SRHR was over CAD489 million ( US$390 million). Based on a 2019 announcement, Canada is on track for its goal to increase its global health funding to CAD1.4 billion ( US$1.1 billion) annually by FY2023/24, including CAD700 million ( US$528 million) annually for SRHR, as outlined in its 10-Year Commitment to Global Health and Rights (2020-2030).


Read more about Canada’s ODA for global health


‘Human dignity’ also includes Canada’s humanitarian assistance. Canada supports “gender-responsive humanitarian action”, meaning it strives to offer assistance that appropriately meets the needs of people, particularly women and girls, impacted by crises. Humanitarian assistance accounts for 50% of the international assistance increases outlined in the FY2021/22 budget. In Budget 2023, ‘international humanitarian assistance’ is projected to receive the 2nd-largest share of bilateral ODA in FY2023-24 at CAD609 million ( US$468 million); however this share only accounts for 8% of the total projected ODA.


Budget 2023 highlights support for Ukraine as a key pillar of “Canada’s Leadership in the World.” Canada’s funding has supported victims of sexual violence and GBV through UNFPA, strengthened grain storage capacity as well as testing to allow for export certification, and humanitarian assistance, among other things. As of the March 2023 2023 Budget release, Canada’s total assistance to Ukraine is more than CAD8 billion ( US$5.8 billion) since the war began in January 2022.


Visit our Ukraine ODA Tracker for more details


The ‘environment and climate change’ action area has been increasingly prioritized in Canada’s ODA. According to the OECD, the 9% ODA growth in Canada’s ODA between 2020 and 2021 was largely driven by higher disbursements of climate finance. At the June 2021 G7 Summit, Canada committed to doubling its climate finance contribution to CAD5.3 billion ( US$4.2 billion) over five years (2021-2026), with a focus on climate change adaptation and biodiversity.


Read more about Canada’s ODA related to climate change


Canada champions the application of a gender lens to climate change; this rhetoric has been sustained through the government’s proposals for “building back better” in the wake of COVID-19. Although the FIAP highlights the government’s intention to adopt feminist approaches to climate finance, it lacks any clear goals or measurable outcomes.



By region

Canada’s FIAP emphasizes the poorest and most vulnerable, with a particularly strong focus on sub-Saharan Africa.


Read more about the regional breakdown of Canada’s ODA


Budget


What are the details of Canada's ODA budget?


The IAE is the main budgetary tool that funds development assistance in Canada: In FY2020-21, the IAE funded 91% of Canada’s overall international assistance, and on average, around 96% of the country's total international assistance is ODA-eligible.


Canada’s latest budget, Budget 2023 includes no new investments for international assistance programs.


This decline in Canada’s IAE comes after several years of growth. For example, Budget 2018 added CAD2 billion ( US$1.5 billion) incrementally over five years. Budget 2019 outlined a much more modest increase of only CAD100 million ( US$75 million) in FY2019/20. Although the government did not release a budget in 2020, Canada’s response to the global COVID-19 crisis resulted in the largest-ever single increase to the IAE. In FY2021/22, Canada’s spending on international assistance reached CAD7.6 billion ( US$6.1 billion), followed by a record high CAD8.1 billion ( US$6.2 billion) in FY2022/23.



How does Canada determine its ODA budget?


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 reviews the budget. From June to September, central agencies, such as the Privy Council Office, Department of Finance, and TBS, work with government departments to incorporate the results of the Cabinet review and develop budget proposals for the finance minister. By September, all departments send budget letters to the finance minister, which include requests for budgetary changes;
  • Pre-budget consultation process begins, including public outreach and parliamentary consultations with external stakeholders: From June to August, the Department of Finance invites CSOs and other stakeholders to submit suggestions on the budget, including on development. The pre-budget consultation process provides direct opportunities to advocate for issues around the overall ODA envelope;
  • Minister of Finance consults with Parliament: Between October and December, the Minister of Finance releases Budget Consultation Papers and begins consultation with the House of Commons’ Standing Committees. During parliamentary debate on the budget, the FAAE holds hearings with the Minister of International Development. Participants from within government and other experts are invited to testify on policy areas and budget lines. Results of the consultation process and recommendations of the committees are considered by the finance minister. The Department of Finance launches its annual consultation on ODA, as required under the Official Development Assistance Accountability Act. While not an official part of the budget consultation, this is a critical opportunity to advocate for increases in overall ODA or specific initiatives;
  • Fall Fiscal Update and Public Accounts of Canada are released: Around November, the Department of Finance tables its Fall Fiscal Update and Public Accounts. These provide an update of 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, when the status of the execution of the previous year’s budgets is 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. It outlines policy priorities and financial asks. The Cabinet reviews these and budget proposals from December to January. The Prime Minister and the Minister of Finance may make final adjustments until February/March; and
  • 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 Minister of Finance. Although, it is not unusual for a budget to be tabled later than this; Canada’s Budget 2021 and Budget 2022 were both delivered in the month of April. The Main Estimates, which are the detailed spending plans for each department for the upcoming financial year, are tabled by the president of TBS in April; however, there are areas of surplus not included in the Main Estimates, as the government aims to maintain a ‘surprise’ factor around highly political areas, including development spending.

The Donor Tracker team, along with many DAC donor countries, no longer uses the term "foreign aid". In the modern world, "foreign aid" is monodirectional and insufficient to describe the complex nature of global development work, which, when done right, involves the establishment of profound economic and cultural ties between partners.


We strongly prefer the term Official Development Assistance (ODA) and utilize specific terms such as grant funding, loans, private sector investment, etc., which provide a clearer picture of what is concretely occurring. “Foreign aid” will be referenced for accuracy when referring to specific policies that use the term. Read more in this Donor Tracker Insight.

Our Canada Experts

Zoe Welch

Zoe Welch

Editorial Working Student