Key Department of Finance Official Development Assistance investments
International Development Association
The International Development Association (IDA) is the World Bank Group’s principal financing tool for the world’s poorest countries, providing them with zero and low-interest loans and grants. One hundred and seventy-four member countries oversee the support IDA provides to 74 of the world’s poorest countries. IDA development activities include investments in primary education, basic health care, clean water and sanitation, infrastructure, and other activities that promote equality, economic growth, and better living conditions. All IDA lending is subject to safeguard policies aimed at ensuring that projects do not inadvertently harm people and the environment. For more information, visit the Environmental and Social Framework website.
New IDA commitments are financed through contributions from donor governments, including Canada, the issuance of bonds, income transfers from the World Bank’s International Bank for Reconstruction and Development, and principal repayment on past loans. Every three years, IDA funds are replenished through donor government pledges. IDA’s 20th replenishment is occurring one year early, in recognition of the significant impacts of COVID-19. As part of IDA’s 20th replenishment, the Government of Canada will be providing $1.46 billion to IDA between 2022 and 2025. This funding supports IDA’s efforts to enhance aid effectiveness, invest in climate action and gender equality, and provide special assistance for fragile states such as Haiti, while ensuring countries do not take on unsustainable levels of debt.
In December 2019, Canada committed $1.27 billion over three years, coupled with a 25-year concessional loan of up to US$575.4 million, to IDA’s 19th replenishment.
More information is available on the IDA website.
Multilateral Debt Relief Initiative
As per the 2009 Economic Recovery Act, Canada is committed to supporting the International Financial Institutions which assist their member countries under the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative (MDRI). Debt relief provided through these processes allows recipient countries to redirect resources to investments that are consistent with their government’s poverty reduction strategies.
Canada has committed to provide multilateral development banks, such as the World Bank Group’s IDA and the African Development Fund, with $2.5 billion over the life of the MDRI, which extends until 2054.
In 2021-2022, Canada provided $53.1 million to the initiative.
More information is available on the MDRI website.
International Finance Corporation
The International Finance Corporation (IFC) is the World Bank Group’s main institution that supports private-sector development in developing economies. As part of Budget 2021, the government decided to purchase US$175.9 million in IFC shares allocated to Canada, in fiscal year 2021-22. The IFC has been responding to converging crises across countries. For example, between March 2020 and June 2022, the IFC invested and mobilized more than $2.2 billion to help get vaccines, personal protective equipment, and medical supplies into emerging markets. The IFC is also continuing to support opportunities that connect individuals with training, digital resources, and capital to launch businesses. These investments are key to driving the economic engines of emerging markets and promoting the kinds of innovation that can reshape the world.
More information is available on the IFC website
Asian Infrastructure Investment Bank
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank, established in January 2016. Canada joined the AIIB in March 2018 and as of September 27, 2022, the total amount of AIIB shares purchased by Canada amounts to US$159.3 million.
High-quality infrastructure projects in some of the least developed countries in the region are promoting economic growth and providing significant benefits for the poor. The AIIB is also making significant investments to mitigate the economic and public health challenges from COVID-19, including investing in medical equipment and health system capacity, to support its members in managing the global pandemic.
The AIIB undertakes public consultation on all of its projects, guided by the AIIB’s policies and frameworks. This includes the Environmental and Social Framework, which lays out social standards related to environmental and social assessment and management, involuntary resettlement, human rights, and Indigenous Peoples.
More information is available on the AIIB website.
Bilateral Financial Assistance to Ukraine
Canada has disbursed $1.95 billion in loan support to Ukraine so far in 2022. Canada fully disbursed a $500 million bilateral sovereign loan to Ukraine (in two tranches – $300 million on April 20, 2022 and $200 million on May 6, 2022). An additional $1.45 billion in loan resources was provided to Ukraine in June and August 2022 via the International Monetary Fund Administered Account for Ukraine. These loans were provided pursuant to the Bretton Woods and Related Agreements Act. Canadian officials are coordinating with the Organisation for Economic Co-operation and Development’s Development Assistance Committee to determine what portion of these loans will count as Official Development Assistance.
Canadian International Assistance Reporting
In Budget 2018, Canada committed to enhancing its international assistance reporting. The Government of Canada has introduced the International Assistance Report, through which it meets its reporting requirements under the Bretton Woods and Related Agreements Act and the European Bank for Reconstruction and Development Agreement Act. Views on how this reporting could be enhanced would be welcomed.
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