The Carney government says it is reducing foreign aid spending to a level consistent with Canada’s pre-pandemic aid allocations – without specifying the size of this year’s aid budget.
Tuesday’s budget includes cuts of $2.7 billion over four years, which will notably affect global health projects. Ottawa is also withdrawing some of its support for a world-renowned aid research center.
“There will be reductions in development funding for global health programs, where Canada’s contribution has increased disproportionately compared to other similar economies,” the budget document states.
It is unclear where the aid cuts will end up. The budget talks about “taking advantage of innovative tools, while focusing support on countries that need it most” and revising existing agreements with specific countries.
The budget also says Canada will reduce funding “to certain international financial institutions” while finding ways to “leverage more of Canada’s contributions.”
Canada spent $6 billion in aid in the last fiscal year ending March 2024, as well as $2.6 billion in international financial aid, such as loans for Ukraine. Total spending on all aid-related matters – including aid to refugees in Canada and development grants – was $12.3 billion in the last reported fiscal year.
Ottawa has increased its development and humanitarian spending during the pandemic, in part to restore stalled progress in the fight against major diseases such as AIDS and tuberculosis, as governments turned their attention to COVID-19.
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Developing countries are still grappling with a debt crisis brought on by high interest rates that soared as wealthier governments spent heavily during the pandemic. They also face an increase in the number and intensity of natural disasters due to climate change.
Under the banner of “trade finance,” the government is reallocating $138 million of current Global Affairs Canada funding – primarily from an allocation Ottawa uses to make funding announcements at global summits – to rebuild Ukraine’s critical infrastructure.
The government says rebuilding Ukraine could boost Canadian industry “in almost every sector, from engineering and energy to agri-food, health care and technology.”
The International Development Research Center will see increasingly steep cuts, starting with $11.4 million in the fiscal year that begins in April, reaching $23.5 million per year after five years.
Parliament allocated $159.4 million to IDRC for the current fiscal year.
The cuts come just days after Randeep Sarai, the secretary of state for international development, suggested the institution would have sufficient funding.
On October 28, before the House of Commons Foreign Affairs Committee, Liberal MP Rob Oliphant, Parliamentary Secretary to Foreign Affairs Minister Anita Anand, asked Sarai about funding for IDRC in this budget.
Oliphant called IDRC “a leading, world-class institution that does research so we can put our aid in the best possible places.”
He said the agency’s research results in projects that prevent costly humanitarian crises. Sarai agreed.
“I call it our secret weapon. I think IDRC is one of the best investments in Canada,” Sarai said. He gave the example of the agency that helped create “climate-resilient potatoes in the Philippines,” which helped the rural poor feed their children and send them to school.
“It will continue to maintain, I think, the necessary support. It is one of the most important institutes in Canada,” Sarai testified.
Prime Minister Mark Carney will travel to the G20 summit in Johannesburg later this month. South Africa’s government is expected to push for aid and loan spending to address what it this week called an “inequality emergency” that is disrupting democracy and destabilizing economies.
© 2025 The Canadian Press
