The Bare Minimum: how Canada’s “Pandemic Budget” reacted to the Global Crisis

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Monday was Federal Budget Day in Canada, and as always was an important day for Canadians who care about ending extreme poverty around the world.

The big question: is Canada investing our fair share on the global stage? This year, in the middle of the greatest global crisis in our lifetime, this question mattered more than ever.

So how did the Budget respond to these global challenges? In short: the Government did the bare minimum beyond our borders, and is still falling short of our “fair share”.

 

First, the good news

$375 million was allocated to the global Covid response and vaccine access in Monday’s budget, meaning that Canada is in a good position to reach its full fair share of one pillar of the global response: the ACT-Accelerator. This is the global mechanism to provide tests, treatments and vaccines to developing countries, which, shockingly, still faces a large funding shortfall more than a year into this pandemic!

 

Now, the “not-so-good”

This investment in the global Covid response is part of a $1.4 billion increase in international assistance over 5 years in Budget 2021. The bulk of this five-year investment ($1.2 billion) is for this year, with the rest sprinkled over the following years.

This might bring Official Development Assistance (ODA) to 0.34% (as an optimistic estimate) of gross national income in 2021-22, about the same as what we estimate it was in 2020-21. This means that for every $100 of national income, we are, at best, investing 34 cents in international development. This is an increase from pre-Covid when we were at 27 cents, but still much below the 41 cents that is the average of other rich countries.

The increase in this year’s aid budget and the minimal increases announced for future years is also far less than what ONE and partners from the development sector had been asking. Since Covid hit, we have argued that Canada should invest “1% of domestic Covid response and recovery spending in new ODA to help respond to the global crisis and its side effects”, over the next 3 years.

With this budget, we are only about 45% of the way to this target. There are still chances of further commitments throughout the year that could get us closer to that goal. But, the Government’s budget for the year does not include room for that investment.

While this increase might be good news in normal times, these are not normal times. The world is in crisis, and the pandemic is devastating all the progress we made to eliminate poverty and improve global healthcare and education. The scale of the challenges facing the world, not only to end the Covid-19 pandemic everywhere, but to deal with the ravaging aftershocks demands more from Canada (extreme poverty is rising for the first time in decades).

 

Not much on development issues, such as education

Another worrying aspect of Budget 2021 is that the new funds are all already allocated to a few initiatives, such as the Middle East strategy, humanitarian aid, and investments in multilateral banks. There are no additional funds available for longer-term development such as food security, nutrition, or education.

The lack of funds dedicated to education is especially worrying, since the Liberal government promised to renew its commitment to education in crises and for refugee children because what was pledged at the 2018 G7 Summit in Charlevoix is running out this year. This year Canada should also renew its commitment to the Global Partnership for Education, with ONE and partners calling for $500 million to be invested over 5 years. This Budget does not give enough room for investments from Canada on girls’ education. We used to lead the world in this field, but this budget makes it more difficult.

 

A big question mark on climate finance

One way that Canada could increase its impact on the global stage—and get closer to the 1% target—would be with a big increase in its contribution to international climate finance. Again, this budget failed to include any specifics on this.

We cannot celebrate the hoped-for progress without these new investments, so the picture on ODA will not change unless Canada really steps up our investment in the global climate fight ahead of the COP 26 conference.

To reach our fair share of the Paris Agreement, Canada needs to be investing $1.8 billion annually over and above the existing international assistance by 2025-26. This will help developing countries reduce their emissions and adapt to a changing climate. But, we cannot “rob Peter to pay Paul” here. If the Government reduces other ODA priorities – like education, health care, or fighting hunger – we are again failing the global community.

Without news in the Budget, we have no choice but to keep working on this until Canada announces its intentions in the weeks or months to come.

 

A real win for corporate transparency and the fight against corruption

The one real win we can celebrate was a long time coming, and we are happy to finally see this progress. Canada finally committed to create a national, public registry of beneficial ownership. This will fight financial corruption and reduce the ability for “bad actors” to take advantage of developing countries.

Historically, Canada had been lagging behind other countries and was increasingly seen as a safe haven for corrupt individuals to hide their “dirty” money because of the ease of hiding real ownership through shell companies.

With a public registry of the “beneficial” (i.e. real) owners of Canadian corporations, it will become much harder to hide illicit money in Canada. More work remains to be done to make sure that the registry is implemented quickly and follows the international best practices, but this is a real win in the global fight for transparency and against corruption.

Credit goes to Transparency International, Publish What You Pay, and Canadians For Tax Fairness for pushing for this for years through the “End Show-Washing” campaign.

 

Where do we go from here?

Canadians who care about fighting global poverty and preventable disease are still facing a challenge. This Budget did the bare minimum required to “pass”, but if Canada cannot invest our “fair share” in global development during a global health crisis, when will we? It is time for all of us to use our voice. In this pandemic world: none of us are safe until all of us are safe.

Canada must do more to invest our fair share in global education, healthcare, and pandemic recovery. The world is facing a health crisis and a climate crisis. These crises do not end at the Canadian border. We must address both as a global community.

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