Government of Canada

Global Affairs Canada

www.international.gc.ca

Canada Fully Unties its Development Aid

September 5, 2008

The Honourable Beverley J. Oda, Minister of International Cooperation, today announced the Government's plan to fully untie Canada's development assistance by 2012-13.

"By fully untying Canada's international development programs within 5 years means, this government is fulfilling its promise for effectiveness and greater efficiency in its international assistance," said Minister Oda. "This significant step means that those who need our help will get the most value from Canada's contributions."

By fully untying Canada's aid, the Government is delivering on its commitment in the 2006 Speech from the Throne to support "a more effective use of aid dollars" and the 2007 Budget's promise to not only increase the amount of Canada's international assistance envelope, but also "to make our existing resources work more effectively".

"We welcome this important announcement which demonstrates that the Government is serious about making aid more effective," said Karen Takacs, Chair of the Board of the Canadian Council for International Cooperation, a coalition of approximately 100 organizations working to end global poverty. "Untying aid will ensure that Canada's official development assistance can be used appropriately and more quickly, often locally and/or regionally, to support sustainable development."

This initiative builds on the Government's announcement in April 2008 to untie 100 percent of Canada's food aid. The Government will begin the process of untying its development assistance, and will reach the target of 100 percent untied aid by 2012-13, in line with the international recommendations of the Organisation for Economic Cooperation and Development's Development (OECD).

Moving to global procurement for bilateral development assistance will increase efficiency by ensuring Canada gets the best value for money with its aid dollars. Untying aid will also give developing countries greater opportunities to be suppliers of goods and services and, in that way, generate economic growth within their local markets.

For the full text of Minister Oda's statement, please visit the CIDA website.

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Information:

Joanna Bailey
Press Secretary
Office of the Minister of International Cooperation
Telephone: 819-953-6238

Media Relations Office
Canadian International Development Agency (CIDA)
Telephone: 819-953-6534
E-mail: media@acdi-cida.gc.ca


Backgrounder

September 5, 2008

Canada Fully Unties Its Development Aid

Making Aid Dollars Go Further

One of Canada's priorities for making aid more effective is to improve its efficiency. This means fully untying our aid in line with international best practices.

In April 2008, the Government of Canada untied 100 percent of Canada's food aid. To further increase the effectiveness of Canada's aid dollars, the Government will now untie all of its development aid funding. Canada is currently taking steps to untie its aid, and will reach the target of 100 percent untied aid by 2012-13. Canada will follow established international practice and report its annual aid untying levels to the Organisation for Economic Cooperation and Development's Development Assistance Committee.

Prior to April 2008, 50 percent of Canada's food aid had to be used for purchases in Canada. Moreover, for the past decade, over one-third of Canada's bilateral aid (non-food) was tied in this manner. However, it has been demonstrated that tying aid often leads to inefficiencies and does not always benefit the intended recipients.

By untying aid we can increase the impact of Canada's development assistance in the reduction of global poverty and the promotion of sustainable development. Untying aid means that Canada's aid dollars will have greater impact and demonstrates that Canada's international aid is first and foremost about helping others:

  • through faster response times during crises,
  • by making aid dollars go further by purchasing goods where they are cheapest, and
  • by reducing transportation costs.

Untying aid also supports developing country economies and the development of local markets through the purchase of local supplies when these are available. In addition, local products are often best suited to local consumer needs.

For Canadian firms and non-governmental organizations, untying aid will mean greater access to development assistance contracts around the globe, as some donors use the principle of reciprocity to open up to international bidding. To this end, the Government's untying initiative will also include an engagement strategy to assist Canada's private sector to capitalize on these new international opportunities.