Even before the Budget 2025 announcement of $2.7bn in cuts to Canada’s aid budget, there was a recognition Canadian aid needed to change. Partly driven by the destruction of USAID, partly by the election of a very different stripe of government at home, and partly by a longstanding, tacit acknowledgement that Canada’s aid had become woolly, overly bureaucratic, and unfocused. 

Borne of a stifling risk-averse culture at GAC, plus government desire to please every pressure group possible and stretch to every issue under the sun, the overall picture of Canadian development assistance had become incoherent. We can’t ladder up impact or tell a story. The targets initially borne of good intent, came to artificially drive the policy, instead of good policy by default delivering on the targets. 

All this is set against the backdrop of tectonic shifts in the development sector. Whether it’s the alleged end of aid, the rise of African sovereignty, the global health architecture review, or faltering multilateralism, it is a tumultuous time. 

So where next for Canadian development assistance? This excellent Charles Kenny piece proposes a narrow, targeted, back-to-basics version of global aid, and building on it, here’s a suggestion of what targeted, impactful aid might look like for Canada. 

• Return aid to its primary purpose of poverty alleviation, focused where concessional, grant-based aid works best – in low-income countries. I understand the majority of the world’s poor live in middle income countries, but there are other ways to support MIC development outside of aid. Unless there is a specific, timebound, or compelling reason aligned with a need Canada is best placed to fill, we should not use aid in MICs

• Stop trying to use Canadian aid to leverage private sector investment. Evidence shows the billions to trillions agenda hasn’t worked, and that using precious aid dollars has delivered only pennies in private sector return, at a significant opportunity cost. Canada has tried for 15+ years to do innovative financing and it’s time to admit we’re not good at it. The amounts of funding we offer are too small, our processes are too cumbersome, we don’t have the risk tolerance needed, and the concept largely doesn’t work anyway.
  • If we want to reduce poverty by generating economic growth, we’re better following the evidence and funding IFIs/MDBs, targeted programmes like improving women’s access to capital, or increasing FinDev capitalisation.
  • The bigger role Canada can play in LMIC growth is using our voice and shares in the IFIs and multilateral institutions to address structural questions of debt, fair financing, the finance and global health architecture, and trade policies
• A mature, joined-up approach to development. Building on GAC reforms to embed development at country and desk level alongside other aspects of international engagement, Canada should deepen connections between Finance Canada, Global Affairs Canada, Immigration and Citizenship, and even National Defence. We need to see countries as whole, complex entities that don’t fit into our neat aid, security, or trade buckets. Silos within Canadian government mean we sometimes approach developing countries incoherently. A country asks us for a visa office to give their youth mobility opportunities, and we give them money for malaria instead.

• Canada should narrow its limited aid dollars to issues where we have a specific capacity, a unique value-add, or an interest in advancing. In this bucket, I’d put our excellence in global health, our values-based support for sexual and reproductive health and rights, and our longstanding interest in promoting human rights and democracy

• Rather than being the 15^th largest donor putting a tiny $1.2 million into a country, Canada should pool and align its financing a) with domestic country goals and strategies, and b) with other donors. An example of this is country compacts, developed by countries as a whole, with donors funding one plan, one pot, and one set of M&E requirements. Our aid alone won’t move a needle, but it could be a pivotal piece of a larger tranche of work

• Canada should increase its two-way technical assistance where we have a unique value add. For example, Canada pioneered and led global legal fights on tobacco taxation, and tobacco taxation is a very effective way to increase domestic resource mobilisation. We also have expertise in gender-based budgeting, and many of our research institutes are already engaging in non-extractive, equal partnerships on global health R&D. 

• Finally, Canada should retain its feminist approach, not because it’s virtue signalling or Woke, but because it’s the best way to understand the world currently. Nobody understands how raw power gets used and abused by strongmen like feminists

In summary, we need to refocus Canadian aid on tightly delivering impact. Even if it will make some people unhappy. Even if some groups lose out. Even if we are criticized. The current woolly, drifting, stretched-too-thin and delivering too little approach isn’t sustainable. 

A new approach will also go a long way to rebuilding the case for development engagement to Canadians. There is a powerful story to be told in doing less things, but doing them really, really well and making a real difference in someone’s life.