On Tuesday, March 22nd, Minister of Finance Bill Morneau delivered the Government’s first Federal Budget of the 42nd Parliament in which it committed to modestly increase short term funding to the International Assistance Envelope by $256 million over the next two years,...
Canada Must Boost Foreign Aid
By ROBERT GREENHILL & BORIS MARTIN
Note: This article was first published in The Hill Times.
The signing of the historic Paris agreement, where Prime Minister Justin Trudeau underlined the urgency of Canada’s role in assisting developing countries, was just one more example of the new government’s shift toward multilateral leadership and Canada’s return as a positive global player.
But are we Canadians really back? For the last 20 years, Canada’s commitment to official development assistance (ODA) averaged a mere 0.3 per cent of gross national income (GNI)—well below Canada’s leadership position under Pierre Trudeau and Brian Mulroney. It is now even lower, at about 0.28 per cent, which is barely half of the 0.54 per cent average commitment of the G7 and other advanced mid-sized economies.
When we look within our peer group of countries like the United Kingdom—whose GNI per capita and overall standard of living is quite comparable to Canada’s—its contributions to ODA are more than twice as high as ours per capita. Are U.K. citizens twice as committed, twice as generous as Canadians?
The good news, however, is that our prime minister is bucking the trend. Canada’s ODA commitment crept up to 0.28 per cent of GNI in 2015 from 0.24 per cent the year before, which due to major cuts from 2011 to 2014, was one of the lowest rates of the past 50 years.
But making a real comeback remains a challenge, because we are so far behind. Even last year’s 0.28 per cent may be optimistic because it included special one-time items such as a major loan to Ukraine. If Prime Minister Trudeau wanted to ensure that his first term at least exceeds the same low 0.30 per cent level of his immediate predecessors, our estimates show that he would have to commit to increasing ODA spending by 12 per cent annually for the next three years.
Looking further out, if Canada maintained this annual 12 per cent increase for a decade, we would match the average contribution of our peer group (0.54 per cent) 10 years from now and would be positioned to reach our 0.7 per cent commitment by 2030. This is entirely possible—the UK and other OECD countries have already done it—but it will take Canadians and Canadian civil society organizations to push for such a commitment.
Making a strong ODA commitment would not only signal a true comeback for Canada as a global leader, it also would be decisive for setting the course toward success on the UN’s Sustainable Development Goals (SDGs). And this is not about a fraction of a per cent; it is about millions of lives. A 0.1 per cent increase in ODA as a share of GNI could conservatively feed half a million refugee families, save 250,000 children from avoidable death, provide secondary schooling for three million girls, and provide 17 million women with family planning and support.
And while it is often repeated that ODA alone will not achieve the SDGs, civil society should not let that answer become an excuse for under-commitment. When it is untied, transparent, and accountable, ODA contributes to the foundational capacity that developing countries need for social and economic progress.
At the same time, our private sector can and must also ensure that it plays a positive role in fostering social and economic well-being in those markets.
In the coming months, Canada will put into operation its Development Finance Initiative—a private sector investment vehicle that is complementary to ODA and aimed at fostering sustainable economic opportunities in challenging markets. Let’s ensure that it is designed to reach its mandate by privileging high-leverage investments and by rigorously monitoring and measuring its social impact against the SDGs.
On top of that, in the past years Canada has started to clean up its act in the extractive and mining sector, demanding greater consideration for the social impact of such operations through stronger federal corporate social responsibility guidelines. Still, Canada can go much further in leveraging the power of its private sector by ensuring that Canadian companies—whether in extractives, construction, or finance—reach a high level of excellence and integrity.
We now have an unprecedented opportunity to show the rest of the world that Canada is committed to the SDGs and that we really are back as a global leader. But it is not only up to our prime minister. It will not happen without bold and unwavering commitments from all spheres of society.
It will take relentless leadership from government and civil society. It will take bold private sector commitments. And it will take Canadian citizens stepping up and demanding greater leadership—even if we may have forgotten what that looks like. Rising up half-heartedly would be a disappointment, and 20th-century thinking, broken promises, and unmet goals simply will not work.
As a first step, let’s commit to a decent increase in our ODA contributions, and let’s mobilize our private sector to contribute to achieving the SDGs.
Robert Greenhill was former managing director of the World Economic Forum and president of the former Canadian International Development Agency. Boris Martin is CEO of Engineers Without Borders Canada.