Aid and Organization

 

Prompted by Hugh Segal’s latest book Two Freedoms (Dundurn Press, 2016) concerning Canadian foreign policy, two further issues struck me, Canada’s aid policy, and the country’s relationship to the US. The former has a large and growing lobby of those wanting more, for results that are frequently disappointing, while the latter is the elephant in the room, and often means that foreign policy is tightly interwoven with domestic policy.

Previous postings resulting from reading this excellent book were made on April 20th and 22nd, 2016

Foreign Aid

There is widespread support in Canada for foreign aid in general, but intense competition by NGOs clamoring for a larger share, in addition to a well organized lobby of those wanting a bigger overall budget. It is now just under C$5 bn a year. That’s not much when spread around the world.

What would C$5 bn buy in 2016?  Remax reports prices for different Canadian cities. Assuming C$500,000 to buy a house, the aid budget would buy the equivalent of 10,000 houses a year spread over Asia, Africa and Latin America, where much of the aid is spent. And part of the budget is used for administrative purposes at home and abroad. As I see it, Canada, at the federal level, is not spending much on foreign aid, and there is a substantial literature documenting the way it is often misspent abroad….and sometimes at home.

A more hopeful sign is the amount sent abroad from Canada as remittances by, for example, Haitians in Canada to their families in Haiti. In total to all countries, remittances are about five times the amount of official Canadian aid (see http://cidpnsi.ca/canadas-foreign-aid-2012/). Should this be considered as part of a country’s foreign aid? Should more of it be encouraged? Can the cost of transferring private remittances be lowered?

Then there is the issue of reverse aid. Canada and other developed countries encourage students from developing countries to study in Canada. If they don’t return to their homelands, this does not help development abroad, but it may help the Canadian economy. Canada, similar to other countries, makes it easier for those who have studied in Canada to stay……good for us, not so good for them.

Too much emphasis, in my view, is placed on the size and distribution of the federal aid budget, and too little on closely related activities like remittances and reverse aid flows. Not surprisingly this is due to the pot of federal money being available for aid projects, and the lobby groups which spring up to administer them. One suggestion – if aid is to contimue, it should be concentrated on the education of women in developing countries. Studies show that this leads to positive results.

 

The US – a mix of domestic and foreign policy interests

Canadians often resent the impact that the US has on Canada, combined with a perceived lack of attention given by the US to Canada – an exception perhaps being sports. When there is an emergency like an ice storm, crews are sent from the US to provide assistance, and the reverse is true, leading to times of increased public awareness. In many policy arenas however, Canada is not a problem, and there are many other countries for the US to contend with abroad.

The two countries have extensive official presences. Canada has an embassy in Washington and consulates or trade missions in thirteen US cities. The US has an embassy in Ottawa and consular offices in seven Canadian cities across the country. Provincialy, Alberta, Ontario and Quebec have fully-staffed Washington offices, while Manitoba has a part-time representative. Other provinces are represented by lobbyists in Washington, a nice gig for former US ambassadors to Canada.

 In 2015, 75% of Canada’s exports and 66% of imports came from the US. At one point, the Ambassador Bridge linking Windsor and Detroit, an estimated 10,000 commercial trucks cross per weekday in both directions (over 2.5 mil per year). In other provinces, there are land, air and water crossings of persons and commerce, as well as the transmission of electronic signals over the air and by satellite and other means. Various statistics of trade and people flows illustrate how particular parts of Canada (and the US) are affected.

The US has an enormous impact on Canada in so many areas that Canadian foreign policy becomes increasingly intertwined with  parts of domestic policy, leading provinces and cities to want to be at the table when foreign policy negotiations are underway. While this has always been the case to some extent, today’s interdependencies between foreign and domestic policy require thought to be given to the administrative structure for their management. Today’s world is far different from when the forerunner of Global Affairs Canada was established, and while changes have taken place they perhaps need further revision. One alternative, which has happened, is for foreign policy to be made in the Prime Minister’s office, and the department bypassed entirely.

 

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