The Canadian International Development Agency (CIDA) has announced that it will align itself more closely with the private sector- in particular the mining industry- to make their aid and long-term development projects “more effective.” The Canadian International Co-operation minister emphasized CIDA's role in preparing developing countries for foreign investment, suggesting the agency's work can help make countries and people "trade and investment ready" and even dissuade governments from nationalizing extractive industries. Critics argue that the private sector, which is driven by the profit motive, has little incentive to work for the benefit of aid-recipient countries. The fact that this scheme will be functioning under a national initiative is an even bigger cause for concern.
By Kim Mackrael
The federal government is signalling a profound shift in its approach to foreign aid that could see Canada's international development agency align itself more closely with the private sector and work more explicitly to promote Canada's interests abroad.
International Co-operation Minister Julian Fantino outlined his vision for the agency's future in an address to the Economic Club of Canada Friday morning, his first major speech since taking the job several months ago. The Canadian International Development Agency funds humanitarian aid and long-term development projects intended to help people living in poverty.
Mr. Fantino's remarks focused on the role private companies – particularly in the mining sector – can play in helping CIDA achieve its development objectives, part of a controversial change in emphasis for an agency that has historically been careful to differentiate between its work with corporations and non-governmental organizations.
"While we have a long history of working with the private sector as executing agencies, the fact is that we need to engage even more," he said.
"The private sector is the driver of long-term economic growth globally for us. And without an increasing presence in the developing world, we will not achieve the development goals we're committed to achieve at CIDA."
He said part of CIDA's work is to help small and medium enterprises in developing countries find their footing. But he also emphasized CIDA's role in preparing those countries for foreign investment, suggesting the agency's work can help make countries and people "trade and investment ready" and even dissuade governments from nationalizing extractive industries.
"CIDA can help develop the capacity to negotiate with other countries, implement international commercial agreements with Canada and other trading partners and help firms benefit from these agreements. We will be doing more of this in the future," he said.
Mr. Fantino's speech came shortly after the release of a House of Commons committee report on the private sector and international development, which called for CIDA to update its policy on the role Canadian corporations should have in achieving international development goals. The minister will table a formal response to the report in Parliament, but his speech on Friday offered a first look at the direction CIDA is likely to take.
Stephen Brown, who teaches international development at the University of Ottawa, said CIDA has not dramatically shifted its spending toward private-sector partnerships. "But in terms of signals and signs of things to come, [the shift] is quite profound," he said.
Last year, the aid agency matched three mining companies with NGOs to work on jobs training, education and clean water projects in specific African and Latin American mining communities. CIDA says the strategy will help leverage corporate investments to bolster development goals, while critics suggest it leads the agency away from its core strategy.
Pierre Gratton, president of the Mining Association of Canada, said mining companies have been accused of making mistakes on corporate social responsibility projects in the past, and working with CIDA-funded NGOs could help them become more effective.
"We're miners, we're not in the business of social and community development that the NGOs are experts at," he said. "Why not bring the experts in, and mining can be a partner, along with those experts, to help deliver more sustainable outcomes when these major capital investments do take place."
Dr. Brown said some partnerships with the private sector can be useful, but questioned Canada's eagerness to work with the extractive industry when mining rarely offers much benefit to the communities in which it occurs. "If our real goal is poverty reduction, that's not the strategy we would choose," he said.
MiningWatch Canada says the projects CIDA has pursued so far amount to subsidization of Canadian mining companies – a suggestion both CIDA and mining industry representatives dispute. "This is not about development, it's about helping our mining companies deal with the conflicts they're facing on the ground," said Catherine Coumans, a research co-ordinator for the organization.
Last fall, Prime Minister Stephen Harper said Canada would develop a mining institute capable of offering advice to developing countries on managing their natural resources. Mr. Fantino announced on Friday that the University of British Columbia and Simon Fraser University will host the centre, which will be called the Canadian International Institute for Extractive Industries and Development.