Canada ranks seventh in foreign aid spending, but a fifth goes to refugees in the country

OTTAWA – Although Canada is one of the largest contributors to foreign aid among some of the world’s richest countries, a fifth of its spending never leaves Canada’s borders.

About 19 percent of Canadian aid reported to the Organization for Economic Co-operation and Development last year benefited refugees and Ukrainians in Canada.

“Most Canadians wouldn’t think that matters because when we think about foreign aid, we think about something that’s happening in other countries, not the costs we have here,” said Elise Legault, Canada director of the One Campaign, an advocacy organization against poverty. .

Canada ranks seventh in dollars spent on foreign aid, according to the OECD, a group of mostly wealthy countries.

Last month, the organization published its analysis of aid spending in 2023.

It shows that Canada spent just over $8 billion on aid last year, with $1.5 billion of that going to support refugees, asylum seekers and Ukrainians fleeing the Russian invasion during their first year in Canada.

The table includes provincial and federal spending in this area, including Ukrainians who came to Canada on emergency visas to wait out the war, but who are not technically refugees.

The expenditure accounts for 19 percent of Canada’s foreign aid, compared to an average of 13.8 percent among other OECD countries.

The United States spends 9.7 percent of its aid budget within its own borders, while Britain spends 28 percent domestically.

Unlike some other countries, Legault says refugee spending does not eat into Canada’s core foreign aid budget.

“So far they haven’t robbed Peter to pay Paul,” she said.

“Other countries like Britain and Sweden have plundered their foreign aid budgets to cover the costs of refugees arriving in the country, and fortunately Canada has avoided that path.”

Many have been advocating for these costs to be reported separately for years, she said, despite the long-standing practice of combining them.

Professor Christina Clark-Kazak of the University of Ottawa argued that combining them makes sense to some extent. She specializes in migration and development policy.

“Whether we’re helping a refugee in a refugee camp or helping them in Canada, it’s still money being spent on non-Canadians,” she said.

“That’s why it’s recorded that way.”

The spending reflects a turbulent era when historic numbers of people around the world have been forced to flee their homes due to armed conflict and natural disasters linked to climate change, she said.

The bulk of the money spent on refugees comes in part from specialized resettlement programs, such as Ottawa’s pledge to bring 40,000 Afghans to Canada, as well as health care and temporary shelter for people seeking asylum in Canada.

In terms of the portion spent abroad, a significant portion of the financing went to the response to the conflict in Sudan and hunger in Haiti, and 21.4 percent went to Ukraine, mainly in the form of loans.

The aid sector loudly protested the 15 per cent cut to foreign aid spent outside Canada in the 2023 budget, despite the Liberals’ promise to increase aid funding every year.

The administration argued that they had simply returned to the kind of spending that preceded a historic surge in aid dollars during the COVID-19 pandemic and Russia’s invasion of Ukraine.

Although Canada is the seventh largest donor among OECD countries in terms of gross dollars spent last year, the country ranks well below 10th when money is compared to the relative size of the Canadian economy.

Still, this was the most Canada has spent on foreign aid relative to its gross domestic product since 1995, Legault said.

It is to the government’s credit that Canada has responded to the many crises that have erupted in recent years, she said.

As governments become better prepared to respond to emergencies, they appear less willing to invest in proactive development projects aimed at making countries more resilient, she said.

Former Prime Minister Lester Pearson has set a target for rich countries to spend 0.7 percent of gross domestic product on foreign aid. Canada reached just 0.38 percent last year.

Clark-Kazak said it’s important not to view foreign aid as a “zero-sum game,” with dollars flowing abroad instead of helping Canadians.

She argued that funding for refugees in Canada helps prepare them to be productive members of society during a labor shortage, pay taxes and support the economy.

Both aid experts said Ottawa should be more honest with Canadians about how and where the government spends aid money. As it stands, expenses are reported in different formats and terminology is inconsistent.

This spring’s budget did not include a consolidated figure for how much Ottawa plans to spend on aid. Development Minister Ahmed Hussen and his department also did not provide a specific number in the immediate aftermath of the budget.

It is difficult for analysts to gauge whether Canada is actually living up to the promises made on the world stage, Legault said.

“Government transparency is very important, especially on an issue like foreign aid,” she said.

“Canadians have the right to know how much we plan to spend, how much we spent and on what.”

This report by The Canadian Press was first published May 23, 2024.

Dylan Robertson, The Canadian Press