Donor Profile: Canada

Last updated: December 16, 2022

Summary



ODA Spending


ODA in Context



According to the OECD, the 8% 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 total ODA in 2021 represented 0.32% of its GNI, up from 0.31% in 2020. This increase in ODA as a percentage of GNI saw Canada hold its spot as the 13th-largest DAC donor in relative terms.


According to Budget 2022 in fiscal year (FY) 2020/21 (April 2020-March 2021), Canada spent a record high CA$7.6 billion (US$5.7 billion) on international assistance. In that fiscal year, the Canadian government added CA$1.6 billion (US$1.2 billion) to the IAE (the main budgetary tool that funds Canadian development assistance) to fund its international response to COVID-19. This represented the largest addition made to the IAE in a single fiscal year in Canadian history.


Although no exact figures are provided, a chart in the budget document forecasts that development spending in FY2021/22 was slightly lower than in the FY2020/2021, and that development spending will increase to just over CA$8 billion (US$6 billion) in FY2022/23. It does not provide projections for total international assistance levels beyond this point.



ODA Breakdown


Canada favors the use of earmarked funding channeled through multilaterals.



Bilateral Spending

The costs of hosting refugees in Canada, which accounted the largest share of Canada’s bilateral ODA in 2020, increased 33% compared to 2019 as a result of disbursements from IRCC to provinces and municipalities to fund the Interim Housing Assistance Program. This program, which provides temporary housing to asylum claimants, was established in March 2019, and extended until 2021 because of the COVID-19 crisis.


Humanitarian assistance received the second largest share of bilateral ODA in 2020, 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; 96% or US$557 million of Canada’s humanitarian spending in 2020 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 low-income countries.


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.


Canada’s funding for the MENA region in 2020 was driven by funding flows to Afghanistan (US$86 million), Syria (US$75 million), and Lebanon (US$75 million), Canada’s top three recipient countries overall. This is consistent with Canada’s new multi-year commitments to the region and its emerging interest in the nexus of peace, security, humanitarian, and development assistance.


Canada gave 91% 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 2021-22 and the Minister of International Development’s mandate letter, suggest that the Indo-Pacific will become an increasing 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.




Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.

For more granular and up-to-date development finance data on Canada, including information on where and in which sectors it is spending both ODA and non- ODA funds, please consult the IATI d-portal. IATI is a reporting standard and platform on which organizations and governments voluntarily publish data on their development cooperation.



Politics & Priorities


Political Context


Political System

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 is a parliamentary democracy and 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.

Elections

Federal elections are meant to take place on the third Monday of October in the fourth calendar year following the previous general election, 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 MPs 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.


Political Parties

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 (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 thousand 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” including a section on the party’s international development plans. Platform pledges included increasing Canada’s international development assistance every year, from now to 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’ (a summary of the government's goals for the new parliamentary session) built on these promises by recommitting to increasing Canada’s foreign assistance budget each year and investing in equitable, sustainable, and feminist development that promotes gender equality and support 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 will allow 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.


Main Actors



Key Bodies

  • Parliament is composed of the House of Commons, the Senate, and the Governor General (representing the Monarch of the United Kingdom). Within the House of Commons, Standing Committees, FAAE, review government policies in specific areas.
  • FAAE supervises the operations and management of GAC.
  • FINA is responsible for budgetary policy, including Canada’s development assistance.
  • GAC is the government department in charge of foreign affairs andsteers development policy.

Canada has a “whole of government approach” to delivering international assistance meaning other government departments and entities are also involved in ODA allocation:

  • IRCC and provincial governments jointly manage ODA associated with supporting refugees during their first year in Canada.
  • Department of Finance mainly manages Canada’s relationship with the World Bank Group, the IMF, and the EBRD. It is also responsible for delivering official debt relief.
  • IDRC 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.
  • EDC, Canada’s state-owned export credit agency is mandated to support trade between Canada and other countries, and to promote Canada’s international competitiveness.
  • FinDev Canada, a development finance institution capitalized with CA$300 million (US$226 million) was created in 2018. Budget 2021 announced an additional CA$300 million (US$224 million) of capitalization starting in 2023-2024. FinDev Canada is a wholly owned subsidiary of EDC and aims to be financially sustainable, generating returns on loans and investments while producing favorable economic and social impacts in the communities where its clients operate.

Development Priorities


In June 2017, GAC published a 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 healthDeep-Dive on Canada’s ODA for educationDeep-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.


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.


‘Budget 2022’ highlights support for Ukraine as a key pillar of “Canada’s Leadership in the World” Canada’s funding has supported victims of sexual and gender-based violence (through UNFPA), grain storage capacity and testing to allow for export certification, and humanitarian assistance, among other things.

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 7% ODA growth in Canada’s ODA between 2019 and 2020 was largely driven by higher disbursements of climate finance. At the June 2021 G7 Summit, Canada committed to doubling its climate finance contribution, with a focus on adaptation to climate change.


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


Political Outlook

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, 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 CA$960 million (US$716 million) in development spending in the region.


‘Budget 2022’ states that “the government is committed to increasing international assistance funding towards 2030;” however, it does not reiterate earlier commitments to increase international assistance spending every year.


Budget


Budget breakdown


The IAEis the main budgetary tool that funds development assistance in Canada: Generally, the IAE accounts for around 86% of Canada's overall international assistance, and on average, around 96% of the country's total international assistance is ODA-eligible.


The IAE has grown in recent years. For example, ‘Budget 2018’ added CA$2.0 billion (US$1.5 billion) incrementally over five years. ‘Budget 2019’ outlined a much more modest increase of only CA$100 million (US$75 million) in FY2023/24. 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 FY2020/21, Canada’s spending on international assistance reached a record high CA$7.6 billion (US$5.7 billion), according to the latest budget documents.


No exact figure is provided for total funding to Canada’s IAE in ‘Budget 2022,’ but Chart 5.2 suggests funding for international assistance will exceed CA$8 billion (US$6 billion) in FY2022/23. The 2022 budget commits CA$1 billion (US$775 million) in new funding for international assistance over five years (see table). This includes a new commitment to the ACT-Ain FY2022/23, and funding for GACfor priorities including infectious disease prevention and response.




Budget Process


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 — 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, 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 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 for 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 Finance Minister 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 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 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.

Issue Deep-Dives

Learn more about Canada's ODA for...


Zoe Johnson

zjohnson@seekdevelopment.org

>See all publications from this expert

Explore other profiles