Canada Balancing Budget on Backs of World’s Poorest

This piece originally appeared as a guest post on the McLeod Group’s blog: http://www.mcleodgroup.ca/2015/04/21/canada-balancing-budget-on-backs-of-worlds-poorest/

The latest foreign aid numbers were released on April 8. Globally, aid remains at near record high levels (US$135 billion). This is good news for the global fight against poverty. The numbers tell a rather depressing story, however, if you are Canadian. In the past two years, Canada’s aid to the world’s poorer countries has declined by over US$1 billion, a more than 20% decrease since 2012. This sharp decline is among the largest of all the wealthy donor countries and comes in a year when Canada’s government had already committed in its 2014 budget to hold its aid commitments steady.

Broken budget promises are not new, but in further cutting Canadian foreign aid, the Harper government is literally looking to balance the budget on the backs of the world’s poorest. Lapsed spending in previous years, combined with two years cuts of more than 10%, means that Canada’s real dollar aid spending is at its lowest levels since 2005. These declines are explained by the OECD as being: “due to the timing of certain contributions to international organizations and planned cuts in aid as budget saving measures.”

It is these “budget saving measures” that are enabling the Harper government to shirk Canada’s international responsibilities to fight poverty in order to balance the newly released 2015 budget and fund Conservative party election promises, such as the controversial income-splitting tax policy. With an estimated cost of $2.2 billion, the income-splitting program is expected to benefit only 15% of Canadian households and disproportionately aid middle- and high-income earners. In this respect, nearly half the cost of Harper’s income-splitting policy can be seen to be funded by cuts to Canada’s foreign aid.

Some will respond to this assessment by saying that it does not matter how much aid we spend as long as we spend it well. Indeed, Bill Gates’ whirlwind visit to Ottawa in February saw Canada lauded for its leadership of recent global efforts to promote maternal and child health through its aid program. Canada and the Prime Minister personally have garnered recent acclaim for these efforts, but at the same time Canada should be called out for its flagging overall commitment to international development.

Canada has never seriously pursued the UN’s aid target of 0.7% of gross national income. The fact that 2014 tally indicates Canada spent only 0.24% of GNI on aid is testament to this failing. Further, Canada continues to fall short of the secondary target of providing 0.15% of GNI to the world’s poorest countries (Least-Developed Countries). Many would argue that committing to arbitrary global targets such as these, especially in lean economic times, makes little sense. Yet, the United Kingdom has done exactly that. In an era of British austerity, the Cameron government committed to sharp increases in UK aid spending and indeed recently passed legislation making it mandatory for future governments to spend to at least 0.7% of GNI on aid. This is what political will to support global development looks like. In Canada, we instead see paper thin political will intended to score easy points by championing one global development challenge at the same time as drastically cutting our already miserly aid commitments.

The new Federal budget, released on April 21, paid little attention to aid levels. Instead, much is being made by the Harper government of its shrewd economic management to arrive at a balanced budget and to deliver on election promises like income splitting.

Canadians should have no illusions about how we will have arrived at that point: The budget has been balanced, at least in part, on the backs of the world’s poorest. Balanced budgets and boutique tax-cuts like income splitting might help win votes for the Conservative party and put money in the pockets of some of Canada’s wealthier households, but at a steep price when it comes to Canada’s foreign aid commitments and reputation. We should all ask if this is a price we are willing to keep paying: Is a balanced budget at the expense of Canada doing its part in addressing key global challenges in our longer-term self-interest? Surely not. Canadians deserve generous and visionary commitment to global development that safeguards these interests. Instead, we get penny-pinching and shortsighted political opportunism at the expense of continued global poverty and inequality.

Canadian Aid: New and Improved?

As the Canadian International Development Agency symbolically faded into history today with the folding of its Internet presence and Twitter feed, Canada’s newly re-titled Minister for International Development continued this week in publicly defending the recent CIDA-DFAIT merger with zeal.  One of Minister Fantino’s favourite talking points for explaining the upside of what is destined to be a rather messy and complex merger is that the newly formed DFATD is “enshrining in law for the first time the mandate for development assistance.”

While this might seem an attractive selling point to many, it is not an entirely accurate statement.  Indeed, just such a mandate was already laid out in the 2008 Official Development Assistance Accountability Act, legislation proposed as a Private Member’s Bill and passed with cross-partisan support under the Conservative minority government.

The Minister cannot be blamed for originating such an inaccuracy; he is simply repeating the verbatim wording of the 2013 Economic Action Plan document which reads:

In addition to maintaining a separate ministerial position, this Government will, for the first time, enshrine in law the important roles and responsibilities of the Minister for development and humanitarian assistance (p.239).

Taking it for granted that Canada’s Minister for International Development and others in the Canadian Government are aware of the ODAA Act, why do they insist on repeating this inaccuracy?  What is gained from trying to portray this merger not only as something pursued for reasons of effectiveness or policy coherence? Why is the first “enshrining in law” a selling point for a new and improved organization for Canadian aid?  Why the willful blind spot to the ODAA Act?

In 2008, the rather toothless ODA Accountability Act set out a clear mandate for Canadian development assistance.  The act’s purpose is:

to ensure that all Canadian official development assistance abroad is provided with a central focus on poverty reduction and in a manner that is consistent with Canadian values, Canadian foreign policy, the principles of the Paris Declaration on Aid Effectiveness of March 2, 2005, sustainable development and democracy promotion and that promotes international human rights standards.

Further, it defines its use of Canadian values as: “amongst others, values of global citizenship, equity and environmental sustainability.”  Continuing, it specifies that Canadian ODA “may be provided only if the competent minister is of the opinion that it (a) contributes to poverty reduction; (b) takes into account the perspectives of the poor; and (c) is consistent with international human rights standards.”

There is little objectionable about this mandate.  It clearly defines Canadian aid as reducing poverty in a way that accounts for the wishes of the poor and embraces human rights, keeping in mind Canadian values, aid effectiveness norms, environmental sustainability, and democracy.

In comparison, Bill C-60, specifies how CIDA will be folded into the new Department of Foreign Affairs, Trade, and Development, and establishes a mandate for the newly titled Minister for International Development to:

foster sustainable international development and poverty reduction in developing countries and provide humanitarian assistance during crises by:

 (a) undertaking activities related to international development and humanitarian assistance;

 (b) ensuring the effectiveness of Canada’s international development and humanitarian assistance activities;

 (c) fostering relations with other countries and organizations engaged in international development or humanitarian assistance activities; and

 (d) ensuring Canada’s contributions to international development and humanitarian assistance are in line with Canadian values and priorities.”

Apart from specifying a role for the Minister in humanitarian assistance, opening the door to greater politicization of aid by referring not only to Canadian values but also Canadian priorities, and being less insistent that ODA can only be approved if it contributes to poverty reduction, there is little new here as far as mandate goes.  Aid effectiveness, Canadian values (not defined in Bill C-60), and poverty reduction all make an appearance. Everything else is sufficiently vague that the Minister for International Development can approve most anything and call it aid.  If anything, the newly “enshrined in law” mandate for Canadian development assistance is less narrow and less focused than the first mandate outlined in the ODAA Act.   Considering that the ODA Accountability Act was not repealed and is not even mentioned in the text of the omnibus bill, the newly crafted mandate is largely redundant and equally toothless.

Redundancy does not sell.  Legislation with little or no consequence does not sell.  Neither appeals to a Conservative base who has viewed Canadian foreign aid as a problem in need of a fix for years.  It is not desirable as a sitting government to announce “we’re undertaking a massive and expensive organizational reshuffling of the deck chairs to achieve the same sort of mandate as the one which was passed just five years ago.”  Instead, the Harper Government is banking on most of the Canadian public and its Conservative constituency being unaware of the ODA Accountability Act and portraying the new legislation as the “first” time a foreign aid mandate has been enshrined in Canadian Law.  This new mandate does little to impact the content of Canadian aid. It has little means of ensuring that Canadian aid is delivered more effectively. To be sure, it will not, for instance, mean that Canadian aid is audited more rigorously.

Overall, the only benefit of labelling these changes the “first” legislated mandate for development assistance in Canada is to try and make people think that there is something new under the sun when it comes to Canada’s aid mandate.  There is not.  With the creation of DFATD and the elimination of CIDA, something new is happening administratively, but it is more to do with the organizational packaging and politicization of aid than anything else.

Calling the CIDA-DFAIT merger the first legislated mandate for Canadian development assistance is akin to the Diamond Shreddies advertising campaign – selling the same old square Shreddies by tipping them on their side and insisting they are something new.  This government wants Canadians to think it is reigning in the reckless and problematic CIDA with a novel “first” attempt to shape Canadian aid, but in the end, we are left with a redundant and nearly identical mandate in some “new and improved” packaging.  Canada’s first legislated mandate is still in place in the form of 2008’s ODAA Act and, as others have suggested, Minister Fantino and DFATD should still report against this original legislated mandate as CIDA had since 2009.

This post originally appeared on the Ottawa Citizen Aid & Development Blog on 2013/06/27.