Federal Budget 101: Making sense of the numbers on aid

CCIC presentation to PE-Hub webinar, April 24, 2012

Overview of presentation

•What is ODA?

•What is IAE?

•International assistance, IAE and ODA

compared

•Federal Budget 2012

•CCIC analysis

•Institutional impacts

•Geographic programs

What is official development

assistance?

“Flows of official financing administered

with the promotion of the economic

development and welfare of developing

countries as the main objective, and which

are concessional in character with a grant

element of at least 25 percent.”

•Bilateral or multilateral

OECD

What is official development

assistance? (Take two) ODA is international assistance

(a) identical to the OECD definition, but that also

“meets the requirements set out in section 4; or

(b) that is provided for the purpose of alleviating

the effects of a natural or artificial disaster or

other emergency occurring outside Canada” (but

is not required to meet the three criteria).

ODA Accountability Act, 2008

What is official development

assistance? (Take two) Article Four relates to the three criteria of

the ODA Accountability Act:

(a) contributes to poverty reduction;

(b) takes into account the perspectives of the

poor; and

(c) is consistent with international human rights

standards.

ODA Accountability Act, 2008

What is the international

assistance envelope? •Much of Canada’s ODA falls within an IAE

•IAE contains budgetary allocations by the

federal government for int’l cooperation.

•CIDA (63%), Finance (15%), DFAIT (8%),

IDRC (3%), Other (15%) etc.

•Traditionally five components

•BUT, not all IAE is ODA

•Not all ODA is in the IAE

•Some of the ODAAA is not ODA

Int’l Assistance, IAE and ODA

ODA Statistical Report 2009-10

So what isn’t ODA in the IAE?

•DFAIT

•Global Partnership Program ($117.55 mn)

•Counter Terrorism Capacity Building Program

($20.91mn)

•Anti-Crime Capacity Building Program

($13.6mn)

•Afghanistan Counter-Narcotics Program

($12.2mn)

•Specific to the ODA Accountability Act:

•Provincial refugee costs and transfers

Federal Budget 2012 2012–13 2013–14 2014–15 Ongoing

International Assistance Envelope (IAE)

180.7 242.1 377.6 377.6

Canadian International Development Agency

152.7 191.6 319.2 319.2

Foreign Affairs and International Trade Canada (IAE only)

15.5 28.8 29.1 29.1

International Development Research Centre

6.2 15.3 23 23

Royal Canadian Mounted Police (IAE only)

1.3 1.3 1.3 1.3

Natural Resources Canada (IAE only)

5 5 5 5

Note: Totals may not add due to rounding.

CCIC analysis of Budget 2012

•FY 2011/12 FY2014/15, IAE will decline

by 7.6% (CIDA’s cut, about 4.3%)

•Between FY2011/2012 and FY2015/16, Cdn

IAE will have been cut by about $1.2 bn

•Cf. CIDA analysis

•Cf. 8 % continued increase to $7.7 billion

CCIC analysis of Budget 2012

Fiscal Year FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16

International

Assistance

Envelope

(IAE)

$5,100.7 $5,000 $4,819.3 $4,757.9 $4,622.4 $4,622.4

IAE

Percentage

decline

relative to

FY2011/12

N/A N/A 3.6% 4.8% 7.6% 7.6%

Estimated

ODA ($mn) $5,511.4 $5,767.4 $5,174.3 $5,112.9 $4,977.4 $4,977.4

ODA

Percentage

decline

relative to

FY2011/12

N/A N/A 10.5% 11.6% 14.0% 14.0%

ODA as a

percentage

of GNI

0.34% 0.34% 0.29% 0.28% 0.26% 0.25%

Institutional Impacts

Agency Share of IAE in 2010/11 (Total $4925.73) in millions

Percentage share of the IAE (FY 2009/2010)

Departmental cut as a percentage of the total cuts (FY2012/13)

Departmental cuts by 2014/15 as a percentage of current budget

Total dollar cuts per Department (for FY2012/13 to 14/15)

Canadian International Development Agency

$3,583.53 72.8% 84.5% 8.9% $663.5 million

Department of Foreign Affairs and International Trade

$303.25 6.2% 8.6% 9.6% $73.4 million

Finance Canada $810.20 16.4% 0 0 $0

International Development Research Centre

$170.88 3.5% 3.4% 13.2% $44.5 million

Institutional Impacts

•CIDA will get disproportionately hit (relative

to its share of the IAE).

•IDRC cuts are proportional to their IAE

share, but hit their actual budget the hardest

•The cuts to DFAIT are in proportion to their

share of the IAE and the size of their budget.

•Finance Canada (which provided $384

million to the World Bank in 2010-11) is

untouched by the cuts in the IAE.

CIDA- Geographic programs

Countries of Focus Human Development Index (2011) Position relative to 187 other HDI countries

Cut from funding

1. Bolivia 108 Lower-middle Reductions

Colombia 87 Upper-middle

Peru 80 Upper-middle

2. Pakistan 145 Bottom quarter Reductions

Ukraine 76 Upper-middle

3. Ethiopia 174 Bottom quarter Reductions

4. Mozambique 184 Bottom quarter Reductions

5. Tanzania 152 Bottom quarter Reductions

Non-Countries of Focus Human Development Index Cut from funding

6. Cambodia 139 Lower-middle Completely cut – previously downgraded by the Conservatives

7. China 101 Lower-middle Completely cut

8. Malawi 171 Bottom quarter Completely cut

9. Nepal 157 Bottom quarter Completely cut

10. Niger 186 Bottom quarter Completely cut – previously downgraded by the Conservatives

11. Rwanda 166 Bottom quarter Completely cut – previously downgraded by the Conservatives

12. Zambia 164 Bottom quarter Completely cut – previously downgraded by the Conservatives

13. Zimbabwe 173 Bottom quarter Completely cut

Budget specifics for CIDA

•Three of CIDA’s countries of focus

(Colombia, Peru and Ukraine) unaffected

•Ten of the 13 countries affected lie in the

bottom quarter of the HDI ranking.

•Decision-making criteria for cuts

•Colombia and Peru, as well as Indonesia,

Vietnam and Bangladesh have become

important trading partners – all unaffected

•Africa takes the biggest hit – 8 of 13

No of hte

Fraser Reilly-King

Policy Analyst (Aid)

+1 613 241-7007, ext. 306

freillyking@ccic.ca

www.ccic.ca

ccic-ccci.blogspot.com

THANK YOU!!