Canada cuts direct foreign aid to China as feds rethink bilateral programs

OTTAWA - Canada has cut direct foreign aid to China as part of an overhaul of international assistance spending.

It's one of 14 countries that will see their aid either reduced or eliminated by the end of next year as the Canadian International Development Agency slashes $377 million in aid spending by 2014-2015.

The cuts are part of an overhaul of bilateral aid programming, with CIDA aiming to target funds more precisely and work more with the private sector.

Many have persistently questioned why China received bilateral aid from Canada, given its economic superpower status, military muscle and increasing influence on world affairs, including a growing development budget of its own.

"When you go to the eastern part of China, which is where probably where 99 per cent of Canadians, if they go to China, do go, places like Beijing or Shanghai, they would put to shame almost any Canadian city," said Bruce Muirhead, associate vice-president of external research at the University of Waterloo, who has studied the issue of Canadian aid to China.

"But if you go a little bit into the interior, it's a completely different situation. ... It's not the urban areas where CIDA puts its money, it's in the rural areas. Those people really need help."

In 2010-2011, Canadian taxpayers contributed close to $30 million to China, via both bilateral and multilateral channels.

Most was funnelled to capacity-building programs that worked on helping the Chinese reform their legal and environmental policy.

Aid will continue through international groups and humanitarian channels, if required, but CIDA Minister Julian Fantino says the end of the China program is recognition of the country's emergence as the world's second-largest economy.

"CIDA has and will continue to evaluate and adjust international development investments so that they can deliver tangible results for those most in need around the world and contribute to Canada's values and interests," Fantino said in an email.

"We look forward to continuing to build a partnership with China that advances our common interests, Canadian values and the friendship between the peoples of our two countries."

Other countries seeing bilateral aid budgets eliminated are Cambodia, Malawi, Nepal, Niger, Rwanda, Zambia and Zimbabwe, for a total of $39 million in savings.

Budgets for aid to Bolivia, Pakistan, Mozambique, Ethiopia, Tanzania and South Africa are being reduced to save $76 million.

Of the six countries seeing their budgets pared back, five belonged to the so-called "countries of focus," a select group of 20 nations who together received 80 per cent of Canada's international aid.

The program was started in 2009 by the Conservatives after criticisms aid was too scattershot and not reaping enough rewards either for taxpayers or for the countries in need.

But now the concept of "focus" countries seems to be falling out of favour.

Security problems and accountability issues have made many countries less attractive for direct support than they were in the past.

Meanwhile, the idea of the program is seen by the Conservatives as potentially restricting their desire to align aid spending with their declared policy priorities.

That includes focusing on helping specific industries grow in the developing world.

"We will continue to seek out innovative ways to partner with the private sector, such as the agriculture industry, so that we can achieve greater development results which are more sustainable over the long-term," Fantino said.

The New Democrat critic for international development said her concern is that aid budgets seem to shift on a whim.

"CIDA is not the minister's pet toy to do with what he wants to do with it," said Helene Laverdiere.

The non-governmental organization sector says while it would obviously like to see more international assistance spending, the real issue now is a lack of clarity on where — and how — the government wants to spend what scarce dollars remain.

It's been two years since CIDA actively solicited program ideas from the not-for-profit sector.

All eyes are on Thursday's budget to see whether aid funding is further reduced or whether a new program direction is clearly laid out.

"Suddenly, there are no more funds available and no direction whatsoever on what to expect, and how and why," said Chantal Havard, a spokeswoman for the Canadian Council for International Co-operation.

She said some hints can be gleaned for which countries remain on the focus list — Columbia, Peru, Indonesia, Vietnam and Bangladesh, all trading partners for Canada.

"The trend that we see is that there is more and more an alignment of Canada's commercial interests, foreign policy and the international development agenda," Havard said.