On April 3, Prime Minister Mark Carney stated, “my government will not cut foreign aid.” Just seven months later, his first budget broke that promise.
Here are the top three things you need to know:
- There’s a lack of transparency, but it looks like there is a $2.7B cut to foreign aid
- Investments in global health are being targeted for cuts, despite the fact they are the most effective investments
- The budget talks about trade diversification but does not mention the region with the most potential: Africa.
Let’s talk numbers
The November 4 budget intends to cut $2.7 billion from the International Assistance Envelope (IAE) over the next 4 years. And those cuts are specifically targeted at some of the most effective and lifesaving programs we have.
While the IAE is the main source for Canada’s Official Development Assistance (ODA), the latter contains other funding as well. Unfortunately, Canada’s federal budgets don’t publish figures on ODA. Canadians typically learn what was spent by their government one to two years after the fact through Global Affairs Canada’s Statistical Report and reporting to the OECD.
Adding to the lack of transparency, Budget 2025 did not give the total projected budget for the IAE either. This makes it hard to tell exactly how big the cut is. We do know the $2.7 billion cut is the total over the next 4 years. This works out to around a 10% cut per year.
So how does this cut compare to cuts in other departments?
In the government’s effort to bring down spending, Budget 2025 commits to $60 billion in total ‘savings’ over the next few years. The $2.7 billion in cuts to international assistance represent 4.5% of the total cuts, despite IAE only costing 2% of the total federal budget.
This means the government’s ‘savings’ disproportionately target the International Assistance Envelope. Cutting effective, life-saving medicines in the name of “savings” means more expensive spending later to deal with the fallout. (We all remember what happened in 2020).
So, what’s getting cut?
There are very few details about which programs will be cut, but global health and international financial institutions were specifically named as targets. Their reasoning was that since Canada is already a world leader on health, it means we “were doing more than our fair share” in these areas.
Canada has traditionally been a leader in global health, and that’s a good thing! Canadians are proud of our leadership in health. Singling out health for cuts is not in line with how Canadians want to be seen around the world.
This is a troubling trend: Canada has recently dropped to 8th in the rankings of donors prioritizing health. (https://donortracker.org/donor_profiles/canada/globalhealth)
Canadians are now very familiar with Mr. Carney’s emphasis on investing in things that are efficient and effective, along with our critical need to find new trading partners. In terms of value for money, Canadian investment in global health programs ranks very high on the effectiveness scale. And it pays us back in global productivity, innovation, and protection against the spread of diseases.
For example, The Global Fund partnership to Fight AIDS, TB and Malaria has helped save over 70 million lives since it was created in 2002 by helping to control some of the world’s deadliest epidemics. Canada is supposed to renew its pledge to The Global Fund in just a few weeks.
On Trade: Carney forgets Africa
To no one’s surprise, the word “Trade” was repeated almost 300 times in the budget, with specific sections on engaging more with Europe and Asia. But was Africa mentioned in this context? No. The only mention of the continent in the nearly 500-page budget was a reference to a small program about African Swine Flu.
Africa is home to the world’s fast-growing workforce and the fastest-growing markets. We cannot forget the continent if we are serious about economic growth.
We are pushing the Government on this. The budget announced significant investments in creating trade corridors and federal support for Canadian businesses. These should help us expand to new markets and could eventually lead to more trade between Canada and Africa. But we still need to see a clear indication that the continent is a priority on this government’s trade diversification strategy.
The G20 Summit is taking place in South Africa later this month. We are pushing for Canada to take this opportunity to step up as a strong, reliable partner to African countries. Meanwhile, we are also calling on Mr. Carney to announce Canada’s commitment to the Global Fund at its replenishment conference happening on the sidelines of the G20.
Canada’s budget made the mistake of separating global health from economic growth. But the truth is, the two go hand-in-hand.
Healthy economies start with healthy people. Boosting healthcare capacities in regions like Africa not only helps to unlock their trade potential but also makes the world safer and fairer for everyone.
If Canada wants to rise as a global leader and find new trade partners, we need to start investing in health and stop ignoring Africa.
