On paying its global share, Canada’s not back—it’s far back

For the second year, we examined Canada’s share
of national income committed to defence and development. We compared Canada
with its closest international peer group: the G7 and a set of mid-sized,
advanced, open economies (Australia, Netherlands, Switzerland, Sweden and
Norway) often referred to as “like-minded” countries.  

Collective security and international
assistance are two of the most important measures of a country’s commitment to
international peace and development. The OECD measure of international
assistance, Official Development Assistance (ODA), is particularly useful as it
includes most actions by a government to support developing countries and
vulnerable populations: from humanitarian aid, development support, and environmental
assistance to refugee resettlement and supporting international students.  

When we first performed this analysis just
over a year ago with 2014 data, Canada ranked a disappointing last — tied with
Japan, a country with constitutional constraints on defence expenditures and
two decades of economic malaise. This
year, using 2015 data, Canada arrived last again. Canada’s global engagement in
2015 as a share of Gross Domestic Product (GDP) was a full 40 percent below its
peers (Exhibit 1).

Countries focus their engagement
differently: the U.S. and Australia emphasize collective security; Norway and
Germany put a stronger focus on international assistance; the UK commits
through national legislation to meet international benchmarks for both collective
security (two percent of GDP) and international assistance (0.7 percent of Gross
National Income, or GNI).

Canada and Japan are the only countries
that fail to get halfway to either benchmark (Exhibit 2). Canada’s 0.97 percent
of GDP on collective security is less than half the two percent NATO benchmark.
Even more striking for a former leader in development, Canada’s international
assistance of 0.28 percent of GNI is barely a third of the 0.7 percent benchmark
adopted by the United Nations — a benchmark met in full by the UK, Netherlands,
Sweden and Norway.

At a time of national self-congratulation on our
role in the world, it is worth pausing for a moment on these conclusions: Canada
is last in its peer group, it contributes a full 40 percent less than average,
and it is not even half way to international benchmarks for either collective
security or international assistance. 

Quality and innovation are critical aspects
of international assistance. However, quantity is also key.

At a time of unparalleled need, with
regions in turmoil and more displaced people since the end of WWII, Canada’s
international assistance as a share of national income is close to an all-time
low (Exhibit 3).  

How can this be? The inconvenient truth of
Canada’s fiscal turnaround is that the cost of cuts was borne
disproportionately by the most vulnerable of the planet. Cuts to international
assistance, as a share of national income, were more than three times deeper
than cuts to domestic programs (Exhibit 4).  

Twice in 20 years, Canada’s books were
balanced on the backs of the poorest in the world. The
first set of deep cuts took place in the mid 1990s. This was followed by a slow
recuperation of less than half the cuts from 2002 to 2010, thanks to
commitments made by prime minister Jean Chrétien at the Monterrey Conference on
Financing for Development.

Then, from 2010 to 2014 there was a second
round of deep cuts. Whereas the first round occurred in a time of fiscal and
political crisis, this second round took place solely so that the government
could balance its books before the 2015 federal election. Spending on
international assistance at the end of Harper’s government was cut well below
its average commitment.  

This was the situation the Trudeau government inherited. It was not its fault, but is now its responsibility.  

By keeping most of the discretionary cuts imposed in the last years of the Harper government, the first Liberal budget actually had a lower commitment to development (0.26 percent of GNI) than the average of the Harper government (0.30 percent).

If the Trudeau government remains on its present course, it will have the lowest commitment to international assistance of any Canadian government in the last half-century, significantly below the already low performance of the Jean Chrétien, Paul Martin and Stephen Harper governments (Exhibit 5).

Not surprisingly, Canada’s present performance is below all international benchmarks.   

·      Canada’s commitment to development (0.26 percent of GNI) is half that of its peer group (0.54 percent). In other words, we would need to double our international assistance to do our fair share compared to the G7 and like-minded countries (Exhibit 6).

·      A common reference point is the average country effort of the OECD Development Assistance committee (DAC). The DAC is less relevant than Canada’s peer group, as it includes former aid recipients such as the Slovak Republic who are just starting as donors at a very low level. Nevertheless, Canada’s performance is well below this less ambitious DAC average country effort (0.41 percent).

·      The cheapest, although arguably least relevant, international benchmark is the weighted average commitment of DAC members. Weighting the average drags the number down further, as the two largest DAC economies — Japan and the U.S. — have very low commitments to development. Canada is below even this lowest of international benchmarks (0.33 percent).

In conclusion, Canada today is far behind its historical role and international benchmarks (Exhibit 7).

The world applauded when Trudeau said, the day after his election: “To this country’s friends around the world….We’re back.” However, when it comes to offering real help, we are not back — we are far back. 

Discussing hundredths of a percentage point
of gross national income sounds distant, academic, almost trivial. Yet the human impact is all too real.

A hundredth of a percent of GNI, is the
same as one cent per $100 of national income. With Canada’s gross national income this year of almost exactly $2
trillion, one cent represents $200 million. This one cent could provide food,
shelter and support for 160,000 Syrian refugees in Jordan, or primary schooling
for one million girls in Africa.

There are many effective uses for
development assistance, but perhaps the most fundamental is to save lives. So
how many lives could one more cent per $100 of national income save? Using a
conservative estimate of $8000 per death averted, one more cent per 100 dollars
of national income would save a minimum of 25,000 people every year, mostly
women and children.

How did we come to $8000 per death averted?
We assembled four categories of estimates:

·     
Specific health interventions. Canada
has supported highly effective, low-cost health interventions such as vitamin A
capsules ($450 per death averted), and insecticide-treated bed nets ($1600 per
death averted).

·     
Global initiatives. At the 2016 Global
Fund replenishment, hosted by Prime Minister Trudeau, the Global Fund declared
that the US$12.9 billion raised would “save over eight million lives” from 2016 to
2020, with a cost per death averted of US$1600. GAVI’s latest round of US$7.5 billion
in pledges is expected to lead to “5-6 million premature deaths being averted.”
Including allocations by implementing countries of US$1.2 billion, the
estimated cost per death averted is US$1450 to 1740.

·     
Health-system wide improvements. The
incremental cost per child saved in low-income countries from 2000 to 2013 is
estimated at US$4205.

·     
Future-looking scenarios. Recent studies
suggest that two million maternal death, stillbirths and neonatal deaths could
be averted annually by 2020 at a cost per death averted of US$1928; and
low-income countries could have health outcomes similar to those of advanced
economies within a generation, at a cost of US$5700 per death averted.   

In order to be prudent, we have used $8000
per death averted, which is above all these estimates (Exhibit 7A).

Of course, the total human impact of health interventions goes well beyond lives saved. For example, one more cent on Sexual and Reproductive Rights and Health (SRHR) would save the lives of over 25,000 mothers and newborns each year. At the same time, it would empower nine million women with control over their own bodies, preventing two million unwanted pregnancies and half a million unsafe abortions each year. Studies show that giving women control over their bodies increases earnings, health and education outcomes for the entire family. The overall impact, beyond the crucial 25,000 lives saved, would be far-reaching and powerful. 

Depending on the development context, there may be other development priorities that are even more impactful than health investments. However, given the critical importance of health, the proven impact of large-scale health interventions, and the underfunded opportunities to do significantly more, we use lives saved through health investments as the common metric to assess the human impact of Canada’s commitment gap: i.e. one cent of national income equals 25,000 Lives-Saved Equivalents (LSE).

The potential to save tens of thousands and to transform the futures of millions with each additional cent is clear. However, there is a tragic corollary. For each cent that is not spent, the same number of lives are lost. The gap between what Canada is spending and what Canada should be spending can be measured in lives that were not saved. 

For a quarter of a century, across Conservative and Liberal governments, Canada committed an average of 0.46 percent of its GNI to international assistance, or 46 cents in every $100 of national income. Today, we are committing only 26 cents. Using the metric of 25,000 LSEs per cent, the gap of 20 cents is equal to the equivalent of 500,000 lives that were not saved in 2016. (The more detailed analysis used in Exhibit 8 refines the estimate to 491,000 lives.) For comparison, the total number of people who have died in the Syrian conflict since March, 2011 is estimated at about 400,000.

The gap between the Trudeau government in its first year (26 cents) and the average of the Harper government (30 cents) is four cents, or 100,000 lives-saved-equivalents. In other words, if the government had merely committed the same share of national income as the average of the Harper government, and had focused this spending on proven health interventions, 100,000 additional lives could have been saved in 2016.

Since 1995, the total cost of Canada’s failing to meet its historical commitment to development is a staggering seven million Lives-Saved-Equivalents (Exhibit 8).

The human cost of the Canadian government’s financing gap cannot be closed by private sector financing. The private sector has a key role to play in funding infrastructure, creating businesses and supporting economic growth. However, the private sector cannot fund the vaccines and primary health care that could save millions of lives. It cannot support the 65 million refugees and displaced people needing shelter and care. It cannot feed the millions requiring food aid. It cannot pay for large scale basic education in low-income or fragile states. The private sector and private sector financing are complements to — not substitutes for — the critical role played by official development assistance to save lives and build futures in the most challenging places of the world.

The Lives-Saved-Equivalent metric is new, and the results are shocking, so there will naturally be pushback. The metric of $8,000 per death averted is conservative. However, let us assume for argument’s sake that the cost per death averted is twice as high ($16,000). The annual impact of Canada’s stepping back from our traditional level of commitment would still be 250,000 lives per year, with a total lives not saved since 1995 of 3.5 million. These are not numbers that we can in good conscience ignore. 

In 2015, the tragic death of three-year-old Alan Kurdi put a face and a name to the thousands of refugees perishing in the Mediterranean. However, all too often the most vulnerable suffer and die in obscurity. The sad, inescapable reality is that, because of Canada’s reduced assistance, people are dying around the world each year even if we do not see them expire. With restored assistance, hundreds of thousands of lives would be saved and millions of futures transformed.

A strategic way to shape a better world

In addition to its crucial direct impact on
people’s lives, international assistance helps shape a better world. International assistance contributes to a
positive system dynamic of economic, political and social development within
countries and across regions.

International assistance was conceived with
this strategic perspective in mind. The
Marshall Plan was an inspired response to the challenge of a Europe verging on
economic and political collapse. Secretary of State (and former U.S. Army Chief
of Staff) George C. Marshall understood that to avoid war you must invest in
peace. He argued that: “the United States should do whatever it is able to do
to assist in the return of normal economic health in the world, without which
there can be no political stability and assured peace. Our policy is…against hunger, poverty,
desperation, and chaos.”   

Similarly, the Colombo Plan of 1950 was
designed to encourage socio-economic progress and political stability in South
Asia, the region with the most poverty in the world. Canada was one of the key
architects of the Colombo Plan. In the
middle of the Korean War, the Louis St. Laurent government underlined that
“equally important” to military force were “constructive endeavours to improve
the standards of human welfare in under-developed countries.”

Of benefit to Canada

International assistance benefits Canada. China has gone from being the second largest
recipient of Canadian aid 20 years ago to the second largest market for
Canadian products today. Some point to China’s success to argue for “trade not
aid.” In fact, China was for many years
the world’s largest recipient of international aid.  US$40 billion of international assistance
since 1979 laid the foundations for China’s present market and trade driven
success. Aid begat trade.

South Korea was a fragile, war-torn state
in the 1950s and a top five recipient of aid in the early 1960s. Today it is an
advanced economy and has been a net donor for over a decade. It is an important
partner and growing market for Canadian products.

Infectious diseases are another obvious
example of Canadians benefitting from assisting others. Polio infected thousands
of Canadian children into the 1950s and still affected over 300,000 children
annually around the world until the 1980s. Every Canadian child still needs to
be vaccinated against it. It is on the
verge of being eliminated. The net present value to Canada and other countries
of total elimination is estimated at over $20 billion. Strengthening health
systems around the world helps protects Canadians from infectious diseases at
home. 

International assistance provides root
cause problem-solving and preventative maintenance for the planet. For example,
with 65 million displaced people in the world, generous refugee resettlement
programmes such as the thousands of Syrian refugees taken in by Canada will
never be sufficient. By helping to increase prosperity and reduce conflict in
fragile states, international assistance can reduce the number of people taking
refuge in the first place. It helps rebuild communities and economies after
conflict, allowing refugees and internally displaced people to return to their
homes.

Effective international assistance has positive
system-wide effects that benefit Canada. It enhances global prosperity,
stability and security. It builds ‘global public goods’ such as human rights,
health systems, and peace. It helps reduce ‘global public bads’ such as crime,
terrorism and infectious diseases.

Lester B. Pearson wrote in 1970: “It
becomes more apparent with every passing day that the interests of each nation
and each [hu]man are inseparable from those of all others.” This is even more true
today. 

The world today at a crossroads

The world today is at a crossroads. Rarely
have the two choices been more stark.  

One path leads upwards in a virtuous
circle. Sustained development results in the effective elimination of extreme
poverty by 2030. Many of today’s fragile states in Africa and the Middle East
stabilize, with increased prosperity and rule of law. More low-income countries
such as Ghana, Bangladesh and Vietnam graduate to middle income status. Building
on the base established with international assistance, private sector driven
growth and domestic mobilization of government resources allow these countries
to increasingly control their own destinies. Women’s and girls’ rights are more
fully respected. A demographic transition to smaller families and an increased focus
on the environment allows more developing countries to address critical issues
such as resource (e.g. water, soil, forest) depletion and climate change.

Over time and as a result of sustained progress, there is a reduced need for
international assistance and an increased number of players able to share the
remaining burden.

There is another path, however; a downward
spiral. In a time of economic and political uncertainly, development assistance
is cut or shifted to humanitarian aid.  Fragile
states falter and in too many cases fail — increasing human misery and
conflict, creating safe-havens for criminality and terrorism, and resulting in
new waves of refugees. Refugees and terrorist threats engender nativist reactions
in advanced economies. Human rights are degraded in developing and advanced
economies as security trumps everything else. The movement of people and goods
are restricted, growth falters, and countries look inward. Support for global
public goods, such as actions to address climate change, plummets. There is a
real danger of global system collapse, and with it the relatively peaceful and
prosperous world that we have taken for granted over the last seven decades.

While it is difficult to put a probability
on either outcome, the chances of the negative scenario are increasing to a
point where we should all be concerned. Canada’s values as well as core strategic
interests are at stake.

Canada has a significant role to play

Canada has a significant role to play in
helping to influence which scenario becomes reality. Perhaps to the greatest
extent since the decade after WWII, Canada’s actions really matter. We have a charismatic, globally committed
prime minister with a strong majority in parliament who has caught the world’s
imagination. We have broad public support for Canada making a difference in the
world. We have the healthiest government balance sheet in the G7. We are uniquely positioned within the G7 to
make a significant difference at this critical time, through our own actions
and through the influence we have on others. 

With increased international assistance and innovative approaches, Canada could influence the future direction of key fragile states such as Mali, Niger, Haiti and Afghanistan. Across developing countries, Canada is well positioned to engage constructively on sensitive issues with important development impacts, such as good government, rule of law, and sexual and reproductive rights and health. 

Given the global attention on Canada and its upcoming G7 leadership role, Canadian leadership could have a significant influence on the actions of others. We saw this very concretely during Canada’s successful leadership of the Global Fund Replenishment Conference in September 2016.

To recap, international assistance plays a strategic role that helps create the conditions for prosperity and security. Canada has benefited greatly from this. At a time when the world is at a crossroads, Canada has a particularly important role to play. What a pity, and potential tragedy, therefore that Canada has been taking such a minimalist approach to international assistance.   

The strategic and human arguments are
clear. Canada’s stepping up at this critical time could contribute to a more
stable and prosperous world while saving hundreds of thousands of lives. So
what does it take to make it happen?

Support for international assistance is not
a partisan issue. It is a generational and, above all, a leadership issue. For
two generations after WWII, leaders on both sides of the House of Commons,
remembering what happened when international obligations were neglected,
supported Canada’s playing a strong role in international assistance. Over the last 20 years, a generation of
leaders on both sides of the House stepped back from Canada’s international role
and let other countries do the heavy lifting.

Many have expressed concern at U.S. President-elect
Donald Trump’s rhetoric around “America First” and his possibly stepping back
from NATO commitments and nation building abroad. In fact, Canada has been the
one quietly playing a “Canada first” approach to international burden-sharing
for the last two decades, shirking its fair share.

That time is gone. Other countries are
tapped out. The world is looking to Canada to step up again. It is in our own
strategic self-interest, as well as in accordance with our deepest values, to
do so.

A whole of cabinet decision

However, closing Canada’s commitment gap cannot
depend on the minister of international development convincing the minister of finance
of aid’s short-term Return On Investment (ROI) for Canada. Short-term ROI is
not the right metric for international assistance. International Development ministers are not the
only members of cabinet that should be making the strategic case for international
assistance.

Countries step up on international
assistance when heads of government and/or senior cabinet ministers (especially
foreign affairs, defence and finance) champion the strategic imperative of
investing in a more stable, prosperous world and reach-out across the aisle to
build long-term, cross-partisan support.

Canada endorsed the Colombo Plan because Defence
Minister Brooke Claxton actively supported Secretary of State for External
Affairs Lester B. Pearson in making the case to an initially sceptical cabinet. They jointly approved the memo endorsing Canadian
support. Claxton argued to cabinet that the strategic aspect of the Colombo
Plan was “real and considerable.” It moved forward when prime minister Louis
St. Laurent threw his weight behind it. 
The Conservatives supported the investment and on the Colombo Plan’s 10th
anniversary, prime minister John Diefenbaker applauded “the realization that
the economic progress of all parts of the world is an essential element of any
satisfying and enduring peace.”

The Marshall Plan succeeded, despite
considerable initial misgivings in the Republican-controlled Senate, thanks to
the strong support of president Harry Truman and Republican
isolationist-turned-internationalist senator Arthur Vandenberg. 

Starting with the prime minister himself, the
Trudeau cabinet is one of the most globally engaged in history. The cabinet
shuffle on Jan. 10 reinforced that quality. In addition to a minister of foreign
affairs who is a leading expert on global issues, a minister of international development
with a deep personal understanding of development, and an international trade minister
with deep business experience around the world, the cabinet includes a:

·     
Defence minister who served in
Afghanistan·     
Health minister who spent nine
years in Niger

·     
Finance minister who supported
schools in Africa

·     
Environment minister who lived
in East Timor

·     
President of the Treasury Board
who negotiated human rights agreements with Colombia

Champions from this group will be critical to making the case that international
assistance is in Canada’s strategic best interest. 

The UK example

Canada’s situation today is similar to the
UK in 1997 when Tony Blair’s Labour government was first elected. The UK’s
international assistance in 1997 was the same as Canada’s today: 0.26 percent
of GNI (Exhibit 9). The economic
situation was challenging and the new government had a very ambitious domestic
agenda.  

Thanks to the strong leadership of prime
minister Tony Blair and chancellor Gordon Brown, which was continued by
Conservative prime minister Cameron, the UK transformed its international
assistance performance. The UK’s development agency became the most effective
and respected on the planet. In 2013, after 16 years of sustained effort, the
UK became the first G7 country to reach 0.7 percent.   In recognition of the UK’s development
leadership, prime minister Cameron was asked to co-chair the UN high-level
panel that crafted what became the Sustainable Development Goals (SDGs) — setting
the global agenda for the next 15 years. In 2015, with strong cross-party support, the UK enshrined its 0.7
percent commitment into law. The UK’s international assistance has had a
significant global impact, shaping a better world.  

If the UK, starting from the same base,
could accomplish this, why not Canada?

Cross-partisan and public support for Canada to step up

There is cross-partisan and public support for government action. Engineers Without Borders has found that: 94 percent of Canadians believe it is important to improve health, education, and economic opportunity for the world’s poorest people; 62 percent agree that Canada should be one of the leading countries in providing international assistance.

The Standing Committee on Finance recently recommended that Canada “increase its investments in official development assistance with the goal of investing 0.35 percent of gross domestic product in the next three to four years.” The Standing Committee on Foreign Affairs and International Development recommended Canada spend “0.7 percent of gross national income (GNI) on official development assistance (ODA) by 2030. The first stage of that plan should see the government increase spending to 0.35 percent of GNI on ODA in 2020.”

The Trudeau government has inspired Canadians with the notion that “better is always possible.” They have taken real action to give life to this notion on climate change, on child tax credits, on reconciliation with Indigenous peoples, on infrastructure. It is now time to show that “better is always possible” with international assistance. 

Although the discussion of getting to 0.7 percent is a legitimate longer-term goal, Canada is very far from that right now. For the 2017 budget that will be “informed” by the International Assistance Review the issues are:

·      Not about getting to 0.7 percent, but about getting back to at least half of 0.7 percent

·      Not about the Trudeau government being the best for international assistance, but about changing course from being the worst

·      Not yet about being a development leader, but about doing our fair share

Despite being a key tool for shaping a better world, international assistance is a mere two percent of the federal budget. Fiscally, significant improvements in international assistance are possible. In Budget 2017, as in every budget, tough decisions will have to be made, and red lines will have to be drawn. However, this time, the red line should not be drawn across the backs of the poorest and most vulnerable of the planet.

Budget 2017 can be the moment when the Trudeau government puts Canada, after two decades of free-riding, back on a path to being a fully paid-up member of the international community.