The 2009 Canadian Budget and development cooperation: no news is not necessarily good news!!!

The Government of Canada released its 2009 budget on January 27. As in previous years, NSI attended the pre-budget “lock-up”, with a view to assessing the Government’s commitments on development cooperation and aid.

Over the last few years, the Government’s budgets have provided only limited information on plans in these areas. This year’s Budget, however set a new, and unfortunate, benchmark: information on Canada’s aid program was not just limited: it was non-existent.

This omission reflects the nature of this year’s Budget. It is not, in fact, a budget at all. Rather, it is the Government’s “Economic Action Plan” for recovery from the global recession. Its main feature is a $40 billion economic stimulus package (with an emphasis on tax relief and infrastructure spending), and the “Extraordinary Financing Framework” that will provide up to $200 billion to support financing and expand credit for Canadians and business.

Anything not part of this recession recovery package does not get a mention in the Budget. So, important areas of Government expenditure that are usually routinely included – such as defense and foreign affairs, as well as development cooperation and large areas of health– are completely absent.

From a development cooperation point of view, this omission suggests that the Government does not acknowledge that impacts of the global recession may be most severe in developing countries. Rather, the Government’s response to the crisis appears to be inward-looking and limited to the national interest. While the budget statement recognizes that emerging markets will experience a more pronounced slowdown than previously thought, this is mentioned as background information only. There are no proposals for Canada’s role in addressing this slowdown.

The only hint of the Government’s agenda on aid levels comes not in the Budget but in the Throne Speech, which states that “Canada’s international assistance will continue to increase”. This broad statement most likely suggests the Government intends to fulfill previous commitments to double overall aid between 2001 and 2010, through 8% increases to the budget over the next two years. As the Canadian Council for International Cooperation has pointed out, however, the 8% increases may not, in fact, be enough to achieve the doubling of aid. Even if they do, this will leave Canadian aid at around 0.33% of GNI, well below many other OECD donors, and well short of the international target of 0.7%.

What happens to Canadian aid levels over the next couple of years is certainly important, but it is the bigger picture that matters most. What is called for is a long term plan for Canada’s aid program that indicates what will happen to aid levels after 2010, and – equally importantly –how aid will be effectively used. The Government has made some steps in the right direction, by unyting Canadian aid, and by supporting a stronger role for civil society in the development process. It is now time to build on these moves, and to articulate a comprehensive policy that will re-establish Canada as a leader in development cooperation, and that will win confidence: both of Canadians, and of those in developing countries that receive our aid.

-Bill Morton