Budget 2021: Key Highlights for CanWaCH Members and the International Development Sector

This summary includes immediate highlights of Federal Budget 2021 tabled by Finance Minister Chrystia Freelend in the House of Commons on April 19, 2021. Please see commentary and analysis on Budget 2021 from our members and sector partners here.

International COVID-19 Response [Page 64]

  • Budget 2021 proposes to provide up to $375 million, in 2021-22, to Global Affairs Canada to support Canada’s international COVID-19 response, with a focus on addressing the health needs of developing countries. 
    • The intent is to facilitate the world’s poorest countries to access the tools necessary to help contain the spread of COVID-19.
    • Canada is a founding member of the Access to COVID-19 Tools (ACT) Accelerator and the COVID-19 Vaccines Global Access Facility (COVAX), and plays a major role within the Advance Market Commitment initiative

Increasing International Humanitarian Assistance [Page 293]

  • Budget 2021 proposes to allocate an additional $165 million in 2021-22 to Global Affairs Canada to provide international humanitarian assistance to save lives and alleviate suffering resulting from conflicts, food insecurity, and other crises in developing countries.
    • This support would be used by trusted humanitarian partners to provide needs based and gender-responsive assistance in vulnerable countries affected by protracted crises.
    • This funding is in addition to the $1 billion increase to Canada’s loan commitment to the International Monetary Fund’s Poverty Reduction and Growth Trust, which provides interest-free loans to low-income countries.
    • Additionally since May 2020, Canada has provided more than $70 million in temporary debt service relief for the poorest countries through the G20 and Paris Club agreed Debt Service Suspension Initiative (DSSI). For the final DSSI extension to the end of 2021, announced by the G20 on April 7th, Canada could provide up to an additional $33 million in relief. Canada also strongly supports the G20 Common Framework for Debt Treatments which will enable more comprehensive debt relief for the poorest countries.

Responding to the Rohingya Crisis [Page 293]

  • Budget 2021 proposes to allocate $288.3 million over three years, starting in 2021-22, to Global Affairs Canada to respond to the Rohingya crisis. 
    • The intent is for Canada to continue to respond to this humanitarian crisis, encourage positive political developments, ensure accountability for the crimes committed, and enhance international cooperation

Response to the Venezuelan Migrant and Refugee Crisis [Page 294]

  • Budget 2021 proposes to provide $80.3 million over two years, starting in 2021-22, to Global Affairs Canada and Immigration, Refugees and Citizenship Canada to respond to the Venezuelan migrant and refugee crisis. 
    • The intent of this investment is to enable Canada to help reduce human suffering, irregular migration, and security threats in the region, while improving the integration of migrants and refugees into host communities.

Extending Canada’s Middle East Strategy [Page 294]

  • Budget 2021 proposes to provide $527 million in 2021-22, on a cash basis, to Global Affairs Canada, the Department of National Defence, the Communications Security Establishment, and the Canadian Security Intelligence Service to extend Canada’s Middle East Strategy for another year.
    • Since 2016, Canada has been a major contributor to the international response to the crisis in Iraq, Syria, and neighbouring countries. Canada has worked with its allies to reduce instability in the region and counter terrorism by groups like Daesh through the NATO Mission in Iraq and Operation IMPACT.

Recapitalization of FinDev Canada [Page 294]

  • Budget 2021 proposes to provide a $300 million recapitalization over three years, starting in 2023-24, to FinDev Canada, from the retained earnings of Export Development Canada, to allow FinDev Canada to build a portfolio totaling $1.4 billion.
    • The intent is to support private sector growth and sustainability in developing countries to economically empower women, and mitigate and adapt to climate change.

Supporting Developing Economies Through the International Finance Corporation [Page 295]

  • Budget 2021 proposes to provide US$175.9 million (an estimated $224.4 million) to the Department of Finance Canada through the International Assistance Envelope, to fully purchase the International Finance Corporation (IFC) shares allocated to Canada in 2021-22. Fully purchasing the shares allocated to Canada in 2021-22 would enable the IFC to rapidly expand its support in response to the COVID-19 crisis. 
    • The IFC supports private-sector development in developing economies.

Supporting the African Development Bank [Page 295]

  • Budget 2021 proposes to accelerate and complete Canada’s purchase of shares of the African Development Bank in 2022-23, rather than in 2027-28, to help alleviate the financial strain during the COVID-19 crisis and enable it to maintain support to its client countries through the recovery. Funding for Canada’s purchase of shares is allocated to Global Affairs Canada from the International Assistance Envelope.
    • The financial capacity of the African Development Bank (AfDB) has been eroded by the COVID-19 crisis. This bank is a core development partner of Canada that plays a critical role in economic growth and development in Africa. In May 2020, Canada committed to provide US$253.4 million over eight years, starting in 2020-21, to purchase shares in the latest general capital increase of the AfDB.

Canadian Ombudsperson for Responsible Enterprise [Page 295]

  • Budget 2021 proposes to provide an additional $16.0 million over five years, starting in 2021-22, and $3.3 million per year ongoing, to Global Affairs Canada to support the Canadian Ombudsperson for Responsible Enterprise (CORE). This would enable the CORE to fulfil its mandate of ensuring ethically, socially, and environmentally responsible practices of Canadian corporations when doing business abroad. To this end, the CORE will conduct reviews of human rights abuse allegations involving Canadian companies in the resource mining, oil and gas, and apparel sectors overseas.

By the Numbers (millions of dollars) [Page 298]

Commentary and Analysis

Cooperation Canada Reacts to Budget 2021

Federal Budget: UNICEF Canada welcomes new funding for child care

Save the Children Canada Statement: Budget 2021

Results Canada: Canada’s budget is missing a recovery plan for the world

Care Canada statement on budget 2021: Canada will not recover unless the world recovers

CBC: Canada’s humanitarian groups call new federal budget a ‘missed opportunity’


April 19, 2021