Does cutting foreign aid threaten Canada's reputation in the world?

Budgets may be all about looking ahead, but for those concerned about Canada's place in the world last week's federal budget seems to take several steps back.

After promising, just two years ago, to freeze foreign aid at $5 billion for five years, in part to give more predictability to Canada's foreign assistance efforts, Ottawa is now embarking on three years of cuts.

For a country that has developed a reputation for kindness and caring — remember Stephen Harper's much-touted G8 initiative in 2010 to improve maternal and child health in poor countries — the cutbacks to Foreign Affairs and the Canadian International Development Agency are seen as casting a particularly troubling shadow.

"We've seen the aid budget frozen for the last two years. But these deeper cuts to spending … will really jeopardize a lot of the gains we've made in important areas of health and education," says Jennifer Slawich, a member of the steering committee of the coalition group Make Poverty History.

"It's very concerning that these cuts have happened because what the government should be doing is protecting its investments," particularly those, she says, "with a proven track record of success."

A step backward

As part of its effort to cut the federal deficit by $5.2-billion in 2015, roughly 7.5 per cent, or $377.6 million, will be eliminated from the government's $5.16-billion international assistance envelope by that year.

A further $170 million will be taken out of the Foreign Affairs department budget. And the cumulative three-year cuts to aid will amount to just over $800 million.

The government says the cuts are all fiscally prudent and that Canada's international assistance will remain focused, accountable and effective, but practitioners disagree.

"Even freezing foreign aid is to step backward from international commitments," says Jeremy Kinsman, a retired Canadian diplomat who was Canada's chief ambassador to Russia, Rome, London and the EU.

"If Canada is hurting economically, it is axiomatic that Canada's carefully selected aid recipients are hurting more. So, we lose standing and influence in international North-South economic forums and discussions."

Apart from aid, Kinsman believes Canada's ability to act and the country's role on the world stage will be even more compromised by cuts to the foreign service.

And he's not talking about something as obvious as the plans to sell off what are being called "grandiose" official residences in foreign locales.

"This government has no feeling for 'soft power,' " Kinsman says, "because it still has little feeling for the world landscape except from the standpoint of Canadian business interests."

"Its mental centre of gravity is more or less that of a chamber of commerce.

"Internationally, it believes only in trade promotion and military expeditions like Afghanistan, no support internationally for culture, or for staking out a Canadian role in international institution and capacity building," he says, referring to the support diplomats can often offer local legal and pro-democracy groups.

Never hit our targets

Still, while Canada has enjoyed a reputation over the years as a caring and kind nation, its actual dollar commitment to foreign aid has never put it at the front of the pack.

When foreign aid was frozen at $5.16 billion in 2010, that translated into 0.34 per cent of the country's gross national income (GNI).

That rate falls well short of the 0.7 per cent global target set in 1969 by a United Nations expert commission headed by Lester Pearson, who had just stepped down as Canadian prime minister and whose actions had helped propel Canada onto the world stage.

See chart

Canada has never come near the 0.7 target, but it did hit 0.5 per cent in 1986-87 under Brian Mulroney, according to a 2009 report by the Library of Parliament.

Aid funding was cut significantly in the 1990s under the Jean Chrétien Liberals, and Canada's aid-to-GNI rate fell to 0.25 per cent by 2000, meaning the country's rank among 22 OECD donor countries fell to 17th, down 11 spots from five years earlier.

In 2010, Canada ranked 14th, well behind countries such as Norway (first with aid at 1.1 per cent of GNI) and the U.K. (seventh with 0.56 per cent of GNI), but ahead of the U.S. (19th with 0.21 per cent of GNI) and Italy (22nd with 0.15 per cent of GNI).

See chart

Canada is not alone in considering reductions to foreign aid funding — Spain, for example is cutting its assistance by 20 per cent — but there are also nations planning to move in the opposite direction.

British Prime Minister David Cameron is proposing a 37 per cent increase by 2015. In Australia, annual foreign aid spending of $4.8 billion is estimated to rise to between $8 billion and $9 billion, or 0.5 per cent of GNI, in 2015-16.

"These allies realize that aid is a crucial investment in a more stable world," says Mark Fried, policy co-ordinator at Oxfam Canada.

As he puts it, "investing now in the resilience and prosperity of poor communities will not only save lives, but cost us less in the medium term by helping reduce the risk of conflict, disease and despair."

New focus still to come

At CIDA, it will be weeks before decisions on how the funding cuts will be implemented are laid out.

"The government's commitment to CIDA's leadership role in helping people who live in poverty remains strong," says media relations manager Scott Cantin, adding that "CIDA will continue to focus its international assistance on its three thematic sectors — sustainable economic growth, food security, children and youth and humanitarian assistance."

But with the prospect of Canada scaling back its fiscal commitment to foreign aid comes the chance it could also retreat from the leadership role it has played in many international projects.

"It's disappointing to see this significant level of a cut to the international assistance envelope because there will be a likelihood that Canada could step back in terms of its leadership on the international stage," says Caroline Riseboro, vice-president of public affairs with World Vision Canada.

"We've weathered the economic storm the best compared to other nations like the U.K., Italy, France, for instance," she argues.

"So I think really this is a critical time where Canada can say 'OK, we will continue to provide international leadership, we will continue to advocate on behalf of the poorest of the poor.' "

All that said, there is still the question of how to sort out Canada's undeniably sticky fiscal situation.

For observers such as Riseboro and Slawich, the answer does not lie in cutting the kind of aid funding that could help a child go to school or stay healthy halfway around the world.

As Slawich puts its, "it's our view that the poorest should not be ones paying the price or shouldering the burden for getting our deficit back on track."

External Links

Canadian International Development Agency
LIBRARY OF PARLIAMENT: Official Development Assistance Spending
GOVERNMENT OF CANADA: Budget 2012

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