Guess what? The Canadian Federal Budget has just dropped. So, let’s talk about the scoop on Official Development Assistance (ODA) – since it’s not half bad!
Here’s the lowdown: International Assistance gets a bump of around 5% compared to last year’s budget. The standout addition? An extra $350 million over 2 years for humanitarian aid – talk about a much-needed boost, especially with all the crises happening in Gaza, Haiti, Sudan, and Ukraine. Now, here’s the kicker: this 5% boost comes after a 15% cut last year. But in the context of the current financial situation and the fact that other countries are scaling back ODA, this increase is definitely something to welcome!
Now, let’s dive into the juicy bits. The budget dedicates a whole section to the importance of modernizing international financial institutions (IFIs) – music to our ears at the ONE Campaign and other advocacy groups. Even better? Canada isn’t just talking the talk, they’re walking the walk by planning to introduce legislative changes that’ll make it easier to mobilize private sector funds for development through regional development banks. Before, they could only do this through the World Bank and the IMF. Fingers crossed that this recognition of the importance of IFIs leads to a big pledge to the World Bank’s International Development Association (IDA) later this year – it’s the real deal, cost-effective and driven by countries themselves.
Oh, and did I mention that ONE, along with other big names in the international development sector, is cautiously optimistic about this budget?
For those who love getting into the nitty-gritty, let’s dig in a little more.
The around 5% increase in International Assistance is “around” because, unfortunately, there’s no clear breakdown or figure for the size of the International Assistance Envelope (IAE) for FY 2024-25. Boo, right? Transparency matters, folks! We’re left doing some back-of-the-envelope math, adding up new commitments with last year’s figures, without a clear idea of where the money’s coming from. But fear not, the main chunk goes to new humanitarian aid, with some extra investments for Haiti. So, we’re looking at international assistance somewhere between $7.1-$7.3 billion in 2024-25, roughly 5% more than last year’s $6.9 billion.
If things stay the same, ODA could be around 0.27% of GNI this year, back to where we were in 2016. But hey, these budget numbers are just a starting point. Most of the support for Covid and Ukraine in past years has been extra, above and beyond the baseline aid. Case in point: in FY 2023-24, even though the international assistance budget was down 15% from the previous year, a surprise $2 billion loan to Ukraine in the final days of the fiscal year bumped the statistic up. Some of that loan will count as ODA, so we might end up with a higher percentage of GNI than we thought.
All in all, within this context, the federal budget brings some good news for development. But hey, for next year, let’s push for that total International Assistance Envelope graph to make a comeback – transparency rocks, right?
