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Minister of International Development - Briefing book

2021-10

A. Key portfolio responsibilities

Strategic overview

Context

As Minister of International Development, you have lead responsibility for delivering Canada’s international development priorities in a department that brings together Canada’s foreign policy, trade and international assistance capabilities in an integrated way to advance Canada’s interests in the world under the rubric of the government’s broader feminist foreign policy. You will be particularly focused on implementing the Feminist International Assistance Policy so that Canada’s international assistance fosters sustainable development and poverty reduction in developing countries. You are also accountable for Canada’s response to humanitarian crises in developing countries.

Canadian international assistance is guided by the 2030 Agenda for Sustainable Development, a landmark global agreement that sets out 17 Sustainable Development Goals (SDGs) and provides the globally-recognized blueprint for pandemic recovery.

The majority of Canadian international assistance is composed of ODA and is subject to Canada’s Official Development Assistance Accountability Act (2008). The act requires that Canadian aid support poverty eradication efforts, consider the perspectives of the poor and be consistent with international human rights standards.

International assistance enables Canada to effect long-term, transformative change abroad that cannot be achieved through other means. Canada’s contributions over the past decades has extended life expectancy, reduced poverty, improved education outcomes, built better government systems and strengthened countries’ resilience to external shocks.

Canada’s international assistance programming includes initiatives to advance peace, security and governance that require close collaboration with the Minister of Foreign Affairs. Canada’s aid also complements the work of the Minister of International Trade, strengthening and stabilizing the economies of low- and middle‑income countries, creating opportunities for mutually beneficial trading partnerships and contributing to wider sharing of trade benefits.

To advance your portfolio, you are supported by the Deputy Minister of International Development and a dedicated team of international assistance experts based in Ottawa and in Canadian embassies around the world.

The international development landscape

The last 18 months have seen Canada’s international assistance policies and programming confront unique challenges. The COVID-19 pandemic has reversed 3 decades of development gains, leading to the first rise in global poverty rates in 2 decades and contributing to the single greatest increase in global hunger recorded to date.

¶¶ÒùÊÓƵ has focused its efforts on fighting the pandemic by strengthening capacities and reinforcing the delivery of health services; stabilizing economies through restored global supply chains and enabling financial stability; and supporting the most vulnerable, both through its humanitarian response and by addressing longer term impacts of the pandemic. The health, economic and social impacts of COVID-19 continue to evolve and will require a long-term, well-coordinated international response.  

Canada is collaborating with bilateral, multilateral and Canadian partners to consider the long-term investments required to support a sustainable pandemic recovery. This involves addressing, in particular, vaccine requirements, health systems strengthening, the serious economic setbacks that have contributed to increasing global poverty and inequality, the shadow pandemic related to a rise in gender-based violence, and the unprecedented increase in global hunger and malnutrition. Canada and the wider international community continue to be confronted by complex global issues, such as climate change, humanitarian crises and challenges to human rights, democracy and rule of law that are key constraints to accelerating progress toward achieving the SDGs. 

Moreover, fragility, conflict and instability in Afghanistan, Haiti and Ethiopia – among the top recipients of Canadian aid – have highlighted that international development assistance efforts on their own are insufficient to procure stability, peace and prosperity. While development assistance can help create the conditions that lead to stability – for instance, by moving people from poverty to the middle-class, and empowering women and girls to be active leaders in their communities – complex processes of social, political and economic change take time and do not happen in a vacuum.

Indeed, the development community has learned that development efforts must be well-coordinated with humanitarian assistance and peacebuilding activities, and help set in place strong, locally-led institutions and enabling environments to build resilience and safeguard development gains over time.

The global issues that fall under your remit as Minister of International Development are unfolding against a shifting international development landscape where development actors are diversifying and development challenges are increasingly interconnected and complex. There is an increasing competition of ideas around the norms and approaches to delivering international assistance.

In addition to traditional donors and private sector and philanthropic actors, emerging donors are presenting alternative development models. Countries such as China, Brazil and India are investing in international development, bringing their own perspectives and approaches to bear, which are not always aligned with Canada’s values and interests. This increasingly dynamic landscape presents opportunities for Canada to continue to evolve its engagement and forge common ground with a broad spectrum of development partners – donor and recipient countries alike.

Canada's contribution to eradicating global poverty and addressing humanitarian crises

Canada has a long and well-respected tradition of working internationally to help eradicate global poverty. Canada has been an active and engaged international donor since the 1950s. It has earned a reputation for effective collaboration with developing-country partners in Asia, Africa, Europe, Latin America and the Caribbean, in areas such as gender equality, health and nutrition, education and skills development, humanitarian assistance, and human rights and inclusion.

Canada’s international assistance contributes to global public “goods” (such as reducing carbon emissions, improving food security and addressing health emergencies) that have long-term benefits for Canada and Canadians. International assistance is an important foreign policy tool, helping to strengthen Canada’s relations with bilateral partners and allies and facilitating collaboration with stakeholders in key multilateral forums such as the UN system, the Commonwealth and La Francophonie.

In June 2017, Canada launched its Feminist International Assistance Policy, which outlines what, how and where Canada will deliver its international assistance. The policy seeks to eradicate poverty and build a more peaceful, inclusive and prosperous world. It emphasizes that promoting gender equality and empowering women and girls is the most effective approach to achieve this goal.

Building on Canada’s strong leadership on gender equality since the 1980s, the policy lays out ambitious targets. For example, at least 95% of Canada’s bilateral development assistance should either target or integrate gender equality and the empowerment of women and girls by 2021/22. Concretely, this has meant investments in actions that enhance women and girls’ participation in decision-making, advance their human rights and access to resources, and their ability to fully benefit from development.

Canada is supporting women’s rights organizations and movements around the world and is one of the few donor countries that has committed funding ($100 million over 5 years) to address inequalities in paid and unpaid care work. In 2019/20, Canada reached more than 28.9 million people with projects that helped prevent, respond to and end sexual and gender-based violence; and improved the sexual and reproductive health and rights of over 3 million people, including at least 2.3 million women^{Footnote 1}.

Investments in health have been crucial to increasing life expectancy and to reducing infant, child and maternal mortality. Canada has been a global thought-leader and investor in health and nutrition for 2 decades. Following on 2 previous global health commitments, in 2019, Canada committed to increase its funding for women’s, children’s and adolescents’ health and nutrition around the world to $1.4 billion annually by 2023. Canada has continued its leadership in the health sector throughout the pandemic, committing $2.6 billion in international assistance to the global response to COVID-19. This includes more than $1.3 billion in funding for the Access to COVID-19 Tools (ACT) Accelerator, through which Canada is supporting the COVAX Facility in the procurement, distribution and delivery of over 165 million doses of COVID-19 vaccines to 86 low- and lower-middle-income countries. The need to give increased attention to future pandemic preparedness can be expected going forward.

Canada’s international assistance also supports education and skills training; promotes inclusive governance and human rights; improves food systems; and addresses environmental and climate change issues – including with its recent commitment of $5.3 billion to support developing country efforts to adapt to and mitigate the impacts of climate change. Canada is also recognized for its leadership and commitment to women, peace and security. For instance, in 2019‑2020, Canada supported 532 civil society organizations, including women’s organizations, to increase participation of women in peace negotiations and conflict prevention.

Canada’s international assistance investments have made an impact over the longer-term in countries where we work. For example, through Canada’s more than $2.38 billion in international assistance to Tanzania since its independence in 1961, significant achievements have been made in health, education and economic growth. In the health sector, Canada’s successful partnership with the Government of Tanzania has contributed to a remarkable 58% reduction in the mortality rate of children under 5 since 2000.

In addition to its investments in long-term sustainable development, Canada has been a significant contributor to global humanitarian action. Canada is seen as an engaged and constructive supporter of the international humanitarian system, and has played a role in developing and/or negotiating key international agreements (e.g. Grand Bargain, Global Compact on Refugees) that seek to strengthen the global humanitarian response to crisis and enhance resilience to shocks. In 2019/20, Canada allocated $872 million in humanitarian assistance, which helped to save or improve the lives of over 98 million people in 60 countries, and respond to 37 natural disasters.

Canada delivers its international assistance in line with internationally agreed development effectiveness principles and promotes innovative approaches, using evidence and experimentation to find solutions to today’s complex development challenges. In the last several years, a number of new mechanisms have been created, including Canada’s development financing institution, FinDev Canada, as well as two new mechanisms that use blended finance and repayable contributions to mobilize and leverage private sector investments in sustainable development (the International Assistance Innovation Program and Sovereign Loans Program).

Canada also works with a range of partners including governments, civil society organizations, international organizations and private sector entities. Your regular engagement with Canadian and international partners will provide opportunities both to shape the international development agenda and advance Canada’s international assistance and foreign policy priorities.

Minister of International Development’s key portfolio responsibilities

Context

International assistance is a key part of how Canada engages with the world and an essential element in our Global Affairs toolkit. As Minister of International Development, your role is to provide specific leadership in overseeing Canada’s development and humanitarian assistance activities as part of a wider team of ministers focused on Canada’s role in a dynamic global context. In 2020‑2021, Canada’s International Assistance Envelope (IAE) totalled over $7.6 billion, although this reflects some extraordinary investments due to COVID-19 ^{Footnote 2}.

Supported by the Deputy Minister of International Development, your key responsibilities include:

• Providing strategic direction for policy and programming on international development and humanitarian action, and working closely with other ministers in support of coherent Canadian action across the development-humanitarian- peace and security-trade landscape;
• Managing Canada’s IAE together with the ministers of foreign affairs and finance, including attention to effectiveness and results;
• Reporting on Canada’s international assistance activities and expenses, including via 2 annual reports: the Report to Parliament on the Government of Canada’s International Assistance and the Statistical Report on International Assistance; and
• Providing governance oversight for the International Development Research Centre (IDRC) and tabling its annual reports in Parliament.

You will work with ministers, deputy ministers and other senior officials across the department to implement Canada’s Feminist International Assistance Policy, advance Canadian values of democracy and inclusion, promote development effectiveness and innovation and actively engage with Canadian stakeholders and priority international aid organizations.

You will also work with other Cabinet colleagues to advance joint portfolio responsibilities, such as the Minister for Employment and Social Development Canada (ESDC) on implementation of the 2030 Agenda for Sustainable Development, the Minister of Immigration, Refugees and Citizenship Canada (IRCC) on the migration file, and the Minister of Finance on international financial institutions (IFIs).

You will attend high-level events and meetings, deliver speeches and make announcements about Canadian aid goals and results. You will also interact with Canada’s international assistance partners in developing countries, and meet with local government officials, members of the development community, civil society organizations and private sector stakeholders. At home, you will play a lead role in engaging Canadians on global issues and in mobilizing their participation in international development initiatives. Through these and other actions, you will help shape Canada’s brand abroad, and strengthen key partnerships.

In carrying out this work, you will be supported by a team of officials with international assistance expertise, based in Ottawa and at Canadian missions abroad.

International Assistance Envelope

The IAE is the Government of Canada’s dedicated pool of resources and main budget planning tool to support international assistance objectives. The IAE funds most of Canada’s official development assistance (ODA) and non-combat security and stabilization activities in support of the 2030 Agenda for Sustainable Development.

As per its Cabinet-approved management framework, the IAE is co-managed by the ministers of foreign affairs, international development and finance. Alongside your colleagues, you will exercise a leadership role in developing consensus on policy direction for the IAE, in consultation with central agencies. IAE ministers also have specific spending authorities which can be described in conjunction with IAE pools for which they/you are responsible.

Programming Responsibilities

As Minister of International Development, you will play an important role in guiding the allocation of most aspects of Canada’s international assistance funding for programs and specific initiatives, based on Cabinet decisions and government priorities.

¶¶ÒùÊÓƵ follows a rigorous due diligence assessment process when preparing projects. This includes a gender equality plus assessment, which, among other things, rates a project’s level of integration of gender equality and the partner’s capacity in gender‑based analysis. Projects must also be in line with Canada’s Official Development Assistance Accountability Act (2008). The ODAAA requires that, with the exception of humanitarian assistance, projects contribute to poverty reduction, take into account the perspectives of the poor and are consistent with international human rights standards. In accordance with the Impact Assessment Act (2019) and the Cabinet Directive on Strategic Environmental Assessments, all proposed projects are also analysed for environmental risks and opportunities, to ensure they protect the environment and do not result in significant adverse environmental effects. Multilateral, civil society and private sector organizations and governments of international assistance recipient countries are all potential implementing partners of the Government of Canada.

Governorship of development banks

The Minister of International Development is Canada’s governor to the:

• African Development Bank (AfDB);
• Asian Development Bank (ADB);
• Caribbean Development Bank (CDB);
• Inter-American Development Bank (IDB).

These regional IFIs have been established by multiple countries to support international cooperation and help manage the global financial system. For some other IFIs, like the World Bank, the International Monetary Fund (IMF) and the Asian Infrastructure Investment Bank (AIIB), the Minister of Finance is the Canadian governor.

IFI programs and projects aim to:

1. Reduce poverty;
2. Support sustainable economic and social development; and
3. Promote regional cooperation and integration, using loans to middle-income countries and through concessional loans and grants to the poorest countries, including fragile states.

As a governor, you are responsible for Canada’s oversight and overall governance of these institutions, including their strategic policy direction, accountability, institutional effectiveness, and financial and programming decisions. Executive directors represent Canada on the boards of directors of these institutions, which are responsible for overseeing their general operations.

International Development Research Centre

The International Development Research Centre (IDRC) is a Crown corporation established by an act of Canada’s Parliament in 1970 (the IDRC Act) with a mandate “to initiate, encourage, support and conduct research into the problems of the developing regions of the world and into the means for applying and adapting scientific, technical and other knowledge to the economic and social advancement of those regions,” with gender equality as a cross-cutting theme.

IDRC is governed by a board of up to 14 governors, whose chairperson reports to Parliament through the Minister of International Development. As per the IDRC Act, you receive the Auditor General’s annual audit report of IDRC, which you then table in Parliament, as part of the centre’s annual report. You are also responsible for tabling the annual report on IDRC’s administration of the Access to Information Act and the Privacy Act, and making recommendations on Board of Governors appointments to the Governor-in-Council. On an annual basis, IDRC seeks agreement from the Minister of International Development on the centre’s estimates, and will consult with you on CEO performance agreements and performance evaluation.

FinDev Canada

Canada’s Development Finance Institution (FinDev Canada), launched in February 2018, is a wholly-owned subsidiary of Export Development Canada (EDC). FinDev Canada expands Canada’s development finance toolkit by investing in the private sector in developing countries using a gender lens approach to promote economic growth and reduce poverty. Addressing and mitigating the impacts of climate change is also a key priority.

To date, FinDev Canada has signed commitments for 26 investments worth over US$338.3 million (approximately Can$436 million). Starting in 2023-24, FinDev Canada will receive a $300 million recapitalization over 3 years – drawn from EDC’s retained earnings – allowing it to build a portfolio totalling an estimated $1.4 billion.

As per the Export Development Act, the Minister of International Trade is accountable for EDC, but works in consultation with the Minister of International Development on matters related to FinDev Canada’s mandate. As such, you will review and provide advice on FinDev’s strategic priorities, corporate planning and annual reporting, and legislative and regulatory matters.

*See also Department at a Glance.

Ministerial high-level events

November 2021

• 26th Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) – Glasgow (Scotland), UK – October 31-November 12
• Co-host SheDecides Champions meeting with 25x25 – Virtual – Early November
• Grand Challenges Annual Meeting – Virtual – November 8-11
• Canadian Conference on Global Health – Virtual/Canada/Ghana – November 24-26
• Canada's Together for Learning Campaign: Made in Canada high-level event – Virtual – November
• Generation Equality Forum (GEF) – Virtual, November

December 2021

• Co-Chair the COVAX AMC Engagement Group Meeting – Virtual – December 6
• Tokyo Nutrition for Growth (N4G) Summit to conclude the Year of Action on Nutrition – Tokyo, Japan – December 7-8
• Global Financing Facility’s 3rd campaign event on the margins of the N4G Summit – Virtual – December 7-8
• Second G7 Foreign and Development Ministers’ Meeting, Liverpool, United Kingdom– December 10-12
• Canada's Together for Learning Campaign: Third ministerial roundtables with the Refugee Education Council (REC) – Virtual – December

B. The department

The department at a glance

Issue

• ¶¶ÒùÊÓƵ is responsible for shaping and advancing Canada’s integrated foreign policy, trade and international assistance objectives, and supporting Canadian consular and business interests. We are a networked department with 12,737 employees working in Canada and 110 countries (at 178 missions), with a total budget of $6.7 billion.

Who We Are

Canada’s first foreign ministry was established in June 1909. At punctual moments since then, the department has been renewed to reflect the changing international environment. The most significant adaptations include its amalgamation with the Department of Trade and Commerce in 1982 and with the Canadian International Development Agency in 2013.

While its legal name remains the Department of Foreign Affairs, Trade and Development (as per the June 2013 act), its public designation under the Federal Identity Program is ¶¶ÒùÊÓƵ.

What We Do

The department manages Canada’s diplomatic and consular relations with foreign governments and international organizations, engaging and influencing international players to advance Canadians’ security, prosperity and health in a dynamic global context. It advances a coherent approach to Canada’s political, trade and international assistance goals based on astute and evidence-based analysis, consultation and engagement with other government departments, Canadians and international stakeholders. The department is constantly monitoring global developments and assessing their potential implications on the government’s ability to deliver on its mandate.

The department’s work is focused on five core responsibilities:

1. International advocacy and diplomacy: promote Canada’s interests and values through policy development, diplomacy, advocacy and engagement with diverse stakeholders. This includes building and maintaining constructive bilateral and multilateral relationships to Canada’s advantage, primarily through our network of missions; taking diplomatic leadership on select global issues and negotiations; and supporting efforts to build strong international institutions and respect for international law, including through the judicious use of sanctions.
2. Trade and investment: support increased trade and investment to raise the standard of living for all Canadians. This includesbuilding and safeguarding an open and inclusive rules‑based global trading system; support for Canadian exporters and innovators in their international business development efforts; negotiation of bilateral, plurilateral and multilateral trade agreements; administration of export and import controls; management of international trade disputes; facilitation and expansion of foreign direct investment; and support to international innovation, science and technology.
3. Development, humanitarian assistance, peace and security programming: contribute to reducing poverty and increasing opportunity for people around the world. This includes alleviating suffering in humanitarian crises;
   reinforcing opportunities for inclusive, sustainable and equitable economic growth; promoting gender equality and women’s empowerment; improving health and education outcomes; and bolstering peace and security through programs that counter violent extremism and terrorism, support anti-crime capacity building, peace operations and conflict management.
4. Help for Canadians abroad: provide timely and appropriate travel information and consular services for Canadians abroad, contributing to their safety and security. This includes visits to places of detention; deployment of staff to evacuate Canadians in crisis situations; and provision of emergency documentation.
5. Support for Canada’s presence abroad: deliver resources, infrastructure and services to enable a whole-of-government and whole-of-Canada presence abroad. This includes the management of our missions abroad and the implementation of a major duty of care initiative to ensure the protection of Government of Canada personnel, overseas infrastructure and information.

Through these 5 pillars of action, ¶¶ÒùÊÓƵ provides an integrated and agile platform from which to deploy and leverage a strong and diverse toolkit, including those skills and assets that come from Canada’s Parliament, other orders of government, the judiciary, Canadian civil society, research institutions and the private sector. These efforts are aligned carefully with government priorities and are amplified through targeted public diplomacy, including on social media.

The department is also supported by a 24/7 Emergency Watch and Response Centre in Ottawa which is always on guard to assist Canadians in need of consular assistance abroad or to respond in real time to natural disasters and complex emergencies around the globe.

Legal responsibilities

The department is the principal source of advice on public international law for the Government of Canada, including international trade and investment law. ¶¶ÒùÊÓƵ lawyers develop and manage policy and advice on international legal issues, provide for the interpretation and analysis of international agreements, and advocate on behalf of Canada in international negotiations and litigation. There are also a number of Department of Justice lawyers at the department, who provide legal services under domestic law, including on litigation and regulations such as sanctions implementation.

Our workforce

To deliver on its mandate, the department relies on a workforce that is flexible, competent, diverse and mobile.

The department counts 12,737 active employees; 7,235 of them are Canada‑based staff (CBS), serving either in Canada or at our missions abroad. The remaining 5502 employees are locally engaged staff (LES), usually foreign citizens hired in their own countries to provide support services at our missions. Currently, 56% of CBS are women (compared to 59% of LES) and 59% of the CBS population has English as their first official language (41% French).

A distinctive human resources system allows the department to meet its complex operational needs in a timely manner.
Our staff work in some of the most difficult places on earth, including in active conflict zones. Among the various occupational groups and assignment types, a cadre of rotational employees supports delivery of the department’s unique mandate through assignments typically ranging between 2 to 4-year periods, alternating between missions abroad and headquarters or Canadian regional offices. They are foreign service officers (in trade, political, economic, international assistance, and management and consular officer streams), administrative assistants, computer systems specialists, and executives, including our
heads of mission.

Heads of Mission serve the Minister further to a cabinet appointment. They develop deep expert knowledge of their countries
of accreditation, establish wide networks, and provide advice and guidance on pressing matters of bilateral and international concern. They are responsible for Canada’s “whole of government” engagement in their countries of accreditation and for the supervision of all federal programs present at mission. 

Our finances

The department’s total funding requested in the 2021-22 main estimates was $6.7 billion. This amount is broken down as follows:

• Vote 1 (Operating): $1,878.2 million
• Vote 5 (Capital): $106.4 million
• Vote 10 (Grants and Contributions): $4,275.9 million
• Vote 15 (LES pension, insurance, social security programs): $85.5 million
• Statutory items (e.g. direct payments
  to international financial institutions; contributions to employee benefit plans): $377.3 million.

The budget distribution by core responsibility of the department in the 2021-22 Main Estimates was reported as follows:

Alternative Text

2021-2022 Main estimates by Core Responsibility (in millions)

International Advocacy and Diplomacy	929
Trade and Investment	377
Development, Peace and Security Programming	4015
Help for Canadians Abroad	54
Support for Canada's Presence Abroad	1071
Internal Services	277

Chart summarizing 2021-2022 planned spending by core responsibility:

International Advocacy and Diplomacy: $929 million
Trade and Investment: $377 million
Development, Peace and Security Programming: $4015 million
Help for Canadians abroad: $54 million.
Support for Canada’s presence abroad: $1071 million
Internal services: $277 million

Our network

The department’s extensive network abroad counts 178 missions in 110 countries (see attached placemat for an overview of the network). They range in type and status from large embassies, to small representative offices and consulates.

The department’s network of missions abroad also supports the international work of 37 Canadian partner departments, agencies and co-locators (such as Immigration, Refugees and Citizenship Canada; National Defence; Canada Border Services Agency; Public Safety; Royal Canadian Mounted Police; Export Development Canada), and provinces and territories.

The department’s headquarters offices are located in the Ottawa-Gatineau region. Most staff are located in the first 3 buildings:

• Lester B. Pearson Building (125 Sussex)
• John G. Diefenbaker Building
  (111 Sussex)
• Place du Centre (200 Promenade du Portage)
• Queensway Corporate Campus
  (4200 Labelle)
• Cooperative House (295 Bank)
• National Printing Bureau
  (45 Sacré-Coeur)
• Fontaine Building (200 Sacré-Coeur)
• Bisson Centre (the Canadian Foreign Service Institute Bisson Campus)  

The department also has six Canadian regional officesto engage directly with Canadians, notably Canadian businesses, located in Vancouver, Calgary, Winnipeg, Toronto, Montréal and Halifax.

Senior leadership and corporate governance

In support of ministers, the department’s most senior officials are the Deputy Minister of Foreign Affairs (USS); the Deputy Minister of International Trade (DMT); the Deputy Minister of International Development (DME); and the Associate Deputy Minister of Foreign Affairs (DMA). See attached biographies for USS, DMT and DMA.

Sixteen branches, headed by assistant deputy ministers, report to the deputy ministers and are responsible for providing integrated advice across all portfolios, ranging from geographic regions to functional and corporate issues.

The department has a robust corporate governance framework with specific committees for audit, evaluation, security, financial operations, corporate management, policy and programs, and diversity and inclusion. Senior managers from headquarters and the mission network manage and integrate the department’s policies and resources in this context to maximize our assets, and ensure accountability for the delivery of departmental programs and results.

Alternative Text

Chart summarizing 2021-2022 Corporate Governance Committee Structure:

External Committee:  Departmental Audit Committee
DM-chaired Committees: Executive Committee; Performance Management and Evaluation Committee
ADM-chaired Committees: Security Committee; Financial & Operations Management Committee; Corporate Management Committee; Policy & Programs Committee; Diversity & Inclusion Council. (All 5 ADM-chaired committees report to the Executive Committee)

Planning and reporting

The department’s annual planning and reporting process is structured around its Departmental Results Framework.

A Departmental Plan establishes the government’s foreign affairs, international trade and development agenda for the coming year. It provides a strategic overview of the policy priorities, planned results and associated resource requirements for the coming fiscal year. The document is approved by the ministers and tabled in Parliament (usually in March/April). The plan also presents the performance targets against which the department will report its final results at the end of the fiscal year through
a Departmental Results Report, typically tabled in Parliament in the fall.

The department’s top corporate priorities are identified each year to ensure that the enabling functions of the department (human resources, finance, IM/IT, accommodations, etc.) are able to provide optimal services to support the department’s mandate. As well, top departmental risks are identified and communicated in the Enterprise Risk Profile. For 2021-22, the department is focusing on mitigating risks related to its workforce (i.e. health, safety and wellbeing of staff, and human resources capacity), IM/IT capacity (i.e. digital transformation and cyber/digital security and resilience), and to the management and security of its real property and assets. Both the corporate priorities and risks are managed through the department’s governance system and re-evaluated on an annual basis.

In the context of COVID-19, there has been an intensified focus on advancing the digital transformation agenda.  In particular, the pandemic has highlighted the need for the department to focus on transitioning towards newer digital solutions to enable the nimbleness and effectiveness required to deliver on its mandate and service Canadians. Investments in data driven decision-making, strong collaboration and engagement platforms, and a solid digital foundation will help the department move away from the traditional bricks and mortar and embrace more modern engagement methods to drive diplomacy, trade and international development.

Deputy ministers

Deputy Minister of Foreign Affairs, Marta Morgan

On April 18, 2019, Prime Minister Justin Trudeau appointed Marta Morgan to the position of Deputy Minister of Foreign Affairs, effective May 6, 2019.

Prior to joining ¶¶ÒùÊÓƵ, Ms. Morgan was Deputy Minister of Immigration, Refugees and Citizenship for three years. In that role she led the development of immigration policies and programs to support Canada’s economic growth, developed strategies to manage the significant growth in asylum claims and improved client service. 

Ms. Morgan has had extensive leadership experience throughout her career in a range of economic policy roles both at Industry Canada and the Department of Finance. She provided leadership in telecommunications policy, spectrum policy, aerospace and automobile sectoral policy, and the development of two federal Budgets.   

Ms. Morgan has also held positions at the Forest Products Association of Canada, the Privy Council Office, and Human Resources Development Canada.

Ms. Morgan attended Lester B. Pearson College of the Pacific, she has a Bachelor of Arts (Honours) in Economics from McGill University and a Master in Public Policy from the John F. Kennedy School of Government at Harvard University.

Deputy Minister of International Trade, John F.G. Hannaford

On December 7, 2018, the Prime Minister appointed John F.G. Hannaford as Deputy Minister of International Trade at ¶¶ÒùÊÓƵ, effective January 7, 2019.

From January 2015 to January 2019, Mr. Hannaford was the foreign and defence policy adviser to the Prime Minister and Deputy Minister in the Privy Council Office of the Government of Canada.

Until December 2014, Mr. Hannaford was the assistant secretary to the Cabinet for foreign and defence policy in the Privy Council Office. Prior to December 2011, Mr. Hannaford was Canada’s ambassador to Norway. Before that, for two years, Mr. Hannaford was director general of the Legal Bureau of the Department of Foreign Affairs and International Trade. As a member of Canada’s foreign service, he had numerous assignments in Ottawa and at the Canadian embassy in Washington, D.C., during the early years of his career.

Mr. Hannaford graduated from Queen’s University in Kingston, Ontario, with a Bachelor of Arts (First Class) in history. After earning a Master of Science in international relations at the London School of Economics, he completed a Bachelor of Laws at the University of Toronto and was called to the bar in Ontario in 1995.

In addition to his work as a public servant, Mr. Hannaford has been an adjunct professor in both the Faculty of Law and the Graduate School of Public and International Affairs at the University of Ottawa.

Associate Deputy Minister of Foreign Affairs, Christopher MacLennan

On February 7, 2020, the Prime Minister appointed Christopher MacLennan as the Associate Deputy Minister of Foreign Affairs. Since May 28, 2021, he has also served as the Personal Representative (Sherpa) to the Prime Minister on the G20. Prior to this, Mr. MacLennan was the Assistant Deputy Minister for Global Issues and Development at ¶¶ÒùÊÓƵ. In that role, he led on Canada’s development assistance efforts through multilateral and global partners, humanitarian assistance and priority foreign policy relationships with the United Nations, the Commonwealth and La Francophonie. In addition to this, Mr. MacLennan served concurrently as Canada’s G7 foreign affairs sous-Sherpa.

Previously, Mr. MacLennan was acting Assistant Secretary to the Cabinet for Priorities and Planning and Assistant Deputy Minister of Policy Innovation at the Privy Council Office. Prior to that, Mr. MacLennan was Director General for Health and Nutrition at Foreign Affairs, Trade and Development Canada. Mr. MacLennan led the team that organized the Prime Minister’s Saving Every Woman, Every Child Summit on maternal, newborn and child health (MNCH) in 2014. This work followed his previous role on the G8 Muskoka Initiative on MNCH in 2010.  Prior to this, Mr. MacLennan worked in various capacities at the Canadian International Development Agency, Environment Canada and Human Resources and Skills Development Canada.

Mr. MacLennan holds a Ph.D. from Western University specializing in constitutional development and international human rights and has written numerous publications including Toward the Charter: Canadians and the Demand for a National Bill of Rights, 1929-1960.

Organizational structure

04b - MINA-MINT-MINE - Organizational structure.pdf

¶¶ÒùÊÓƵ Executive (EX) Organizational Structure

Level 1 – Deputy Ministers and Coordinator

Deputy Minister of International Development – Vacant (DME)

Deputy Minister of Foreign Affairs – Marta Morgan (USS)

Associate Deputy Minister of Foreign Affairs – Christopher MacLennan (DMA)

Deputy Minister of International Trade – John Hannaford (DMT)

Level 2 – Assistant Deputy Ministers and Directors General

Reports to the Deputy Minister of International Development:

International Assistance Operations – E. Wega (DPD)

Reports to all Deputy Ministers:

Assistant Deputy Minister Human Resources – Francis Trudel (HCM)

Assistant Deputy Minister International Platform – Dan Danagher (ACM)

Assistant Deputy Minister Corporate Planning, Finance and IT (Chief Financial Officer) – Anick Ouellette (SCM)

Assistant Deputy Minister Public Affairs – Stéphane Levesque (LCM)

Assistant Deputy Minister Strategic Policy – Heidi Hulan (PFM)

Assistant Deputy Minister Global Issues and Development – Peter MacDougall (MFM)

Assistant Deputy Minister International Security and Political Affairs (Political Director) – Dan Costello (IFM)

Assistant Deputy Minister Partnership for Development Innovation – Caroline Leclerc (KFM)

Assistant Deputy Minister International Business Development and Chief Trade Commissioner – Sara Wilshaw (BFM)

Assistant Deputy Minister Trade Policy and Negotiations and Chief Trade Negotiator NAFTA – B. Christie (TFM)

Assistant Deputy Minister Consular, Security and Emergency Management (Chief Security Officer) – Cindy Termorshuizen (CFM)

Legal Advisor – Alan Kessel (JFM) – Special Deployment Position

Assistant Deputy Minister Sub-Saharan Africa – Mala Khanna (WGM)

Assistant Deputy Minister Europe, Arctic, Middle East and Maghreb – Sandra McCardell (EGM)

Assistant Deputy Minister Americas – Michael Grant (NGM)

Assistant Deputy Minister Asia Pacific – Paul Thoppil (OGM)

Executive Director and General Counsel – P. Hill (JUS)

Chief Audit Executive – J. B. Stephens (A) (VBD)

Director General, Inspection, Integrity and Values and Ethics – R. Sinclair (A) (ZID)

Corporate Secretary and Director General – C. Calvert (A) (DCD)

Chief of Protocol – S. Wheeler (XDD)

Ambassador for Women, Peace and Security – J. O’Neill (WPSA)

Head of the Anti-Racism Secretariat – M. Montrat (Sec) (DMAX)

Planning International Summits and Major Events – Vacant (DSMO)

Level 3 – Directors General

Reports to the Assistant Deputy Minister Human Resources

HR Corporate Strategies and Operational Services – M. P. Jackson (HSD)

Assignments and Executive Management – V. Alexander (A) (HFD)

Workplace Relations and Corporate Healthcare – C. Houde (HWD)

Canadian Foreign Service Institute – L. Marcotte (CFSI)

Foreign Service Directives – M. Cameron (A) (HED)

Locally Engaged Staff – P. Kitnikone (A) (HLD)

Reports to the Assistant Deputy Minister International Platform

Client Relations and Mission Operations – L. Almond (AFD)

Planning and Stewardship – D. Schwartz (ARD)

Platform Corporate Services – D. Bélanger (AAD)

Platform Planning, Engagement and Results – A. Stirling (ABD)

Project Delivery, Professional and Technical Services – G. Stephens (A) (AWD)

Reports to the Assistant Deputy Minister Corporate Planning, Finance and IT (Chief Financial Officer)

Financial Planning and Management – A. Boyer (SWD)

Financial Operations – S. Bainbridge (SMD)

Grants and Contributions Management – M. Collins (SGD)

Information Management and Technology (CIO) – K. Casey (SID)

Corporate Procurement, Asset Management and National Accommodation – D. Pilon (SPD)

Corporate Planning, Performance and Risk Management – L. Smallwood (SRD)

Senior IM/IT Project Executive – R. Dussault (SED)

Reports to the Assistant Deputy Minister Public Affairs

Development Communications – L. Belmahdi (LCA)

Public Affairs – Charles Mojsej (LCD)

Corporate and E Communications – C. Brisebois (LDD)

Trade Communications – V. Sharma (LCC)

Reports to the Assistant Deputy Minister Strategic Policy

Evaluation and Results – T. Denham (A) PRD)

Foreign Policy – P. Pena (POD)

International Assistance Policy – A. Smith (A) (PVD)

International Economic Policy – M. McDonald (PED)

Reports to the Assistant Deputy Minister Global Issues and Development

International Humanitarian Assistance – S. Salewicz (MHD)

Economic Development – C. Urban (MED)

Food Security and Environment – C. Campbell (MSD)

Health and Nutrition – J. Tabah (MND)

Social Development – L. Holts (A) (MGD)

International Organizations – A. Lalani (MID)

Innovative and Climate Finance Bureau – S. Szabo (MLD)

International Summits Programs – M. G. Mounier (DWD)

Reports to the Assistant Deputy Minister International Security and Political Affairs (Political Director)

International Security Policy – K. Hamilton (A) (IGD)

Peace and Stabilization Operations Program – G. Kutz (IRD)

Counter-Terrorism, Crime and Intelligence – M. Benjamin (IDD)

Human Rights, Freedom and Inclusion – C. Godin (A) (IOD)

International Crime and Counter-Terrorism – J. Loten (ICD)

Reports to the Assistant Deputy Minister Partnership for Development Innovation

Engaging Canadians – S. Savage (KED)

Inclusive Growth, Governance and Innovation Partnerships – C. Hogan Rufelds (KGD)

Canadian Partnership for Health and Social Development – J.B. Parenteau (KSD)

Reports to the Assistant Deputy Minister International Business Development and Chief Trade Commissioner

Trade Portfolio Strategy and Coordination – C. Moran (BPD)

Trade Commissioner Service - Operations – S. Goodinson (A) (BTD)

Trade Sectors – R. Kwan (BBD)

Investment and Innovation – E. Kamarianakis (BID)

Regional Trade Operations and Intergovernmental Relations – F. Rivest (A) (BSD)

Chief Economist – M.F. Paquet (BED)

Reports to the Assistant Deputy Minister Trade Policy and Negotiations and Chief Trade Negotiator NAFTA

Associate Assistant Deputy Minister, Trade Policy and Negotiations – A. Alexander (A) (TFMA)

Trade Negotiations – K. Hembroff (TCD)

North America, Trade Policy and Negotiations – A. Renart (TND)

Market Access – D. Forsyth (TPD)

Chief Air Negotiator and Director General for Services, Intellectual Property and Investment – M. Shendra (A) (TMD-ANA)

Trade and Exports Control – S. Anand (TID)

Reports to the Assistant Deputy Minister Consular, Security and Emergency Management

Consular Policy – A-K. Asselin (CPD)

Consular Operations – B. Szwarc (A) CND)

Security and Emergency Management (Departmental Security Officer) – J. Sunday (CSD)

Security & Emergency Management Strategy and Policy – D. Stewart (A) (CED)

Reports to the Legal Adviser

Trade Law – S. Spelliscy (A) (JLT)

Legal Affairs – K. Knobel (A) (JLD)

Reports to the Assistant Deputy Minister Sub-Saharan Africa

West and Central Africa – M. Lebleu (WWD)

Southern and Eastern Africa – T. Guttman (WED)

Pan-Africa – T. Khan (A) (WFD)

Reports to the Assistant Deputy Minister Europe, Arctic, Middle East and Maghreb

European Affairs – R. Fry (EUD)

Middle East – J. Dutton (ESD)

Maghreb, Egypt, Israel and West Bank and Gaza – A. F. Whalen (A) (ELD)

Senior Arctic Official and Director General, Polar, Eurasia and European Affairs – H. Kutz (ECD)

Reports to the Assistant Deputy Minister Americas

North America Strategy – E. Walsh (NGD)

North America Advocacy and Commercial Programs – L. Blais (NND)

South America and Inter-American Affairs – S. Cohen (A) (NLD)

Central America and Caribbean – S. Cesaratto (A) (NDD)

Geographic Coordination and Mission Support – S. Thissen (NMD)

Reports to the Assistant Deputy Minister Asia Pacific

Southeast Asia – P. Lundy (OSD)

North Asia and Oceania – W. Epp (OPD)

South Asia – D. Hartman (OAD)

Level 4 – Outside of Main Organizational Structure

Canadian Ombudsperson for Responsible Enterprise – Sheri Meyerhoffer (CORE)

Source of information: Human resources Management System (HRMS)

In some cases, adjustments have been made by HFR to reflect the most current employee or positional information

Link to ¶¶ÒùÊÓƵ Corporate Governance Structure

Updated on October 31, 2021

Network map

Alternative Text

Network Map as of September 1st, 2021

Canadian Regional Offices	6
Offices Abroad	178
Canada-based Staff	2372
Locally engaged staff	5999
Embassies	78
High Commissions	22
Offices	24
Representative Offices	2
Multilateral Missions	11
Consulates General	25
Consulates	10
Consular Agencies	6

Response to international emergencies

Issue

• In response to an increasingly complex and volatile global context, Canada has in place a framework of crisis response tools and strategies.
• Canada provides consular services to Canadians in need, and technical and financial support for developing countries, as part of wider international life saving efforts.
• Global humanitarian needs have grown significantly in recent years, due to the increasingly protracted nature of conflict situations, rising food insecurity and forced displacement.

Context

Political violence, armed conflict and natural hazards are a prevalent feature of the current international context. Where the intensity demands a comprehensive global response, notably if catastrophic in nature or if the impact is transnational, Canada must be ready to react and contribute.

From 2010-2019 the number of active violent conflicts in fragile contexts has increased 128%. Absent political solutions, many of these conflicts are protracted with significant social, economic and security consequences. In addition, natural disasters, which affect some 350 million people each year, are increasing in magnitude and frequency due to climate change. In 2020, this resulted in $210 billion in financial losses. This type of emergency is highly visible and requires a timely response. These events have led to a near tripling in humanitarian need over the last decade and continue to rise. In 2021, approximately 235 million people across the world are in need of humanitarian assistance and protection, resulting in UN and Red Cross appeals exceeding US$37.5 billion. This is the highest of any annual global appeal to date.

At the same time, Canadians are increasingly mobile, and live and travel in areas of the world where civil and political instability, or the threat of natural disasters is more prevalent. Emergency management service demands are growing, as are Canadians’ expectations.

Coordination of international crises

Canada draws on a range of tools to respond to international emergencies, including: the network of Canadian embassies abroad; deployment of financial resources; or technical surge capacity and expertise as needed. In exercising its mandate to coordinate Government of Canada response to international crises, ¶¶ÒùÊÓƵ provides a broad platform of facilities and personnel to enable a robust “all hazards” approach in preparing for, and mitigating against, impacts to Canadian interests overseas.

¶¶ÒùÊÓƵ monitors international incidents 24/7 to plan and prepare for international emergency response. When emergencies occur, ¶¶ÒùÊÓƵ leads the coordination of interdepartmental task force groups and carries out cooperation with international and non-governmental entities, allies and partners.

¶¶ÒùÊÓƵ supports Canadians abroad through the delivery of consular services, including the provision of up-to-date travel advice and advisories for more than 230 destinations to ensure that Canadians are prepared for safe and responsible international travel. The Emergency Watch and Response Centre provides after-hours support to missions and consular clients through 24/7 operations. During a crisis, the centre may act as the first line of communication with Canadians abroad or with their families in Canada. Standing rapid deployment teams are trained and ready to deploy on short notice to provide surge capacity to the network of missions abroad.

The provision of emergency assistance, including the repatriation or evacuation of Canadians, is a function of the royal prerogative over international relations and is exercised by the Minister of Foreign Affairs pursuant to section 10 of the Department of Foreign Affairs, Trade and Development Act. Pursuant to the Emergency Management Act (2007), the Department is responsible for coordinating Canada’s response to international emergency events and supporting business continuity. The Minister of International Development has an important role in responses involving humanitarian assistance programming.

In 2020 and 2021, critical emergency consular operations included support to the Ukraine International Airlines Flight 752 (PS752) disaster and the repatriation of 62,580 Canadians and permanent residents from 109 countries during the COVID-19 pandemic.

Canada may also provide International Humanitarian Assistance in response to complex, protracted emergencies and natural disasters, and is among the top 10 contributors globally, providing over $800 million annually in recent years. This assistance is largely provided via humanitarian funding to experienced UN, Non-Governmental Organisation, and Red Cross and Red Crescent Movement partners. Humanitarian assistance represents a significant part of Canada’s total official development assistance (ODA).

In determining the level and composition of Canada’s funding in response to an emergency, the severity of the impact/crisis, the number of people affected, and the capacity of local/national authorities to respond is considered.

Canada’s humanitarian aid is people-centered, with a gender-responsive approach that is human rights-based and inclusive. It provides humanitarian assistance within a proven global system. Doing so avoids duplication of efforts, and allows for a proportional, timely, coordinated and needs-based response in line with consolidated and prioritized appeals.

Humanitarian assistance is guided by 4 core principles:

Humanity: Human suffering must be addressed wherever it is found.

Neutrality: Humanitarian actors must not take sides in hostilities or engage in activities of a political, racial, religious or ideological nature.

Impartiality: Assistance must be delivered solely on the basis of need, making no distinctions on the basis of nationality, race, gender, religion, class or political opinions.

Independence: Humanitarian assistance must be distinct from political, economic, military or other objectives.

The application of these principles helps organizations build trust and acceptance for their activities, particularly in armed conflicts, which is critical for establishing and maintaining access to affected populations.

In the case of natural disasters, Canada’s response to support the affected population is civilian-led, coordinated, needs-based, and provided upon request from the affected nation(s). A well-established, whole-of-government approach exists to respond to natural disasters abroad.

Depending on the scale of the disaster, Canada may need to deploy additional or targeted assistance beyond financial assistance to trusted partners. Canada’s tool kit supports: 

• The provision of in-kind relief supplies and field hospitals, through partnership with the Canadian Red Cross;
• The deployment of humanitarian expertise; and,
• The use of a matching fund as a public engagement tool.

For example, in response to the recent Haiti earthquake (August 2021), Canada is providing $5 million to support humanitarian relief efforts as well as supplies from the stockpile managed by the Canadian Red Cross. In some cases, Canada may also launch matching funds with Canadian NGOs to increase public engagement and to support NGO fundraising efforts, as was done in response to Cyclone Idai (2019) in Malawi, Mozambique and Zimbabwe.

Following large-scale natural disasters, as a last resort when the ability to respond exceeds civilian capacity, the Canadian Armed Forces’ unique capabilities such as the Disaster Assistance Response Team (DART) may also be engaged. Since 1998, Canada has sent the DART to help when natural disasters and crises have struck other countries and when local responders are overwhelmed. The most recent DART deployments include: Nepal earthquake (2015); Typhoon Haiyan in the Philippines (2013); and Haiti earthquake (2010).

Beyond operational responses, Canada is actively engaged at the global level in multilateral and multi-stakeholder forums to enhance the effectiveness of the international humanitarian assistance system. Canada works to safeguard humanitarian access and uphold international humanitarian law through multilateral and country-level diplomatic engagement and advocacy, and has also helped establish international norms and standards on the protection of civilians.

Litigation update

Issue

Havana Syndrome

• A group of government employees and their dependants have commenced litigation against the Crown with respect to ‘Havana Syndrome’.
• The plaintiffs allege the Crown failed in its duty of care to them by not protecting their health and safety while at Canada’s embassy in Havana; [REDACTED].  
• [REDACTED]

[REDACTED]

• [REDACTED]
• [REDACTED]
• [REDACTED] 

Context

Havana Syndrome

In February 2019, an action commenced against the Crown in Federal Court by 9 employees of ¶¶ÒùÊÓƵ and 18 of their dependants seeking damages in excess of $20 million as a result of what they referred to as ‘Havana Syndrome.’ The Attorney General has delivered a Statement of Defence on behalf of the Crown, denying any liability.

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C. Global overview

Global trends

Issue

• A complex and destabilizing global landscape has repercussions for Canada’s international agenda. COVID‑19 has introduced further uncertainty, accentuating challenges to institutions, alliances, practices and norms, while demonstrating the importance of international cooperation. As Canada contributes to fighting the pandemic and promoting an inclusive, equitable and sustainable global recovery, it must do so with an eye to the geostrategic environment, and identify opportunities to shape the rules‑based system in a manner that supports its values and long-term national interests.

Context

Overview

Diverse inter-related geostrategic trends are imposing new strategic choices on Canada’s foreign policy. Four stand out. First, there has been a sharpening of great power competition, most importantly the rivalry between the United States and China, which affects the strategic choices of every country. Second, authoritarianism and illiberal populism persist in many countries, while even robust democratic systems are experiencing strains. Third, deepening inequality within and across countries is driving questions about who shapes and benefits from current national and global systems. This is occurring in tandem with deliberate action to roll back progress on human rights and gender equality in all regions and across some international bodies. Fourth, therole of technology, and those who develop and deploy it, is evolving rapidly. A more digital world offers significant potential to improve lives, but is also leading to increasing disruption across a wide range of economic, social and political spheres.

COVID-19 introduced new uncertainty to a global system already in flux, exposing the risks and opportunities of our interconnected world. The pandemic has exacerbated inequities and vulnerabilities, and significantly reversed poverty reduction and development gains, notably for women, children and marginalized groups. It has also demonstrated the importance of cooperation, and the key role played by multilateral bodies, including international financial institutions and many UN agencies, funds and programs. There has also been cooperation on global health and vaccines, such as the COVAX Facility, and for economic recovery, such as the World Bank COVID-19 Strategic Preparedness and Response Program. And yet, COVID-19 has also accentuated challenges facing institutions (such as the United Nations Security Council (UNSC), World Health Organization (WHO) and World Trade Organization (WTO)), and sparked reflections about self-reliance in strategic sectors. With the development of new vaccines, though inequitably distributed, there is a new focus among policy makers on the future strategic landscape and opportunities to revitalize a strained rules-based system.

Geopolitical competition, peace and security

The historic shift of geopolitical and economic power from the Atlantic to the Pacific is still underway as emerging Asian countries (including China and India) are projected to continue growing at a faster rate than advanced transatlantic economies. This is occurring at a moment when the system of agreed international laws and institutions that govern inter-state behaviour are under strain due to a confluence of factors, all of which contributes to an unpredictable international strategic environment. Shaping this environment is a key focus of the Biden administration, which has swiftly sought to re-establish U.S. leadership on a range of international issues, including by re-joining the Paris Agreement, re-engaging with the UN Human Rights Council, arranging high-level meetings with China and Russia, initiating nuclear discussions with Iran, hosting a climate summit, planning a summit for democracy and seeking to improve transatlantic cooperation. The quick agreement on a Roadmap for a Renewed Canada-U.S. Partnership outlines how our 2 countries can face a range of challenges, including on multilateral issues. While these shifts are welcome, [REDACTED]

For its part, China continues its economic, political and military ascent, overtly using levers of influence [REDACTED]. China is becoming a systemic actor in some areas, including technology, outer space, climate and energy, [REDACTED] while seeking to shape the context across multiple issues, regions and forums to align with the goals of the ruling regime. [REDACTED] (China was viewed unfavourably by majorities in every country in a 2020 Pew survey of 14 advanced economies).

The pandemic has sharpened a U.S.-China rivalry, and both are increasing pressure on third countries to align on key issues. While some bilateral cooperation and much trade will continue, the United States and China are seeking some degree of strategic decoupling, especially in advanced technology, putting the world on a path towards less digital and technological interoperability. [REDACTED]

Increased rancor between democratic and authoritarian states is another key trend whereby assertive authoritarian states such as [REDACTED]interfere in democratic processes abroad, seek to weaken multilateral work on democracy, human rights and media, and use coercive tactics for diplomatic and economic leverage, including arbitrary detentions of foreign citizens. Illiberal populists in [REDACTED] also weaken democratic institutions in the pursuit of nationalist goals [REDACTED]

These dynamics hinder multilateral action, including on global security challenges. Just in the last year, there have been coups in Myanmar and Mali, evidence of egregious human rights violations by Chinese authorities in Xinjiang, conflict in Tigray and Nagorno Karabakh, fighting between Hamas and Israel, border clashes between India and China, and political protests and violence in Colombia, Belarus and Haiti. Violent extremists (e.g. Daesh, Boko Haram, Al-Qaeda) continue to threaten, compounded in fragile states with low resilience. Protracted crises, notably in Syria, Libya, the DRC, Lebanon, Venezuela, Iraq, Afghanistan, and the Sahel, destroy lives and livelihoods with regional and international implications. Currently, no fragile and conflict affected state (FCAS) is on track to meet the UN Sustainable Development Goals on hunger, health, gender equality and women’s empowerment, and millions of people continue to be displaced due to conflict and instability.

More peaceful regions and issues are also vulnerable to increased contestation. The Arctic, for example, is changing rapidly in the face of climate change, further opening to maritime navigation and resource exploration. While Arctic states remain committed to a rules-based, peaceful and stable Arctic region, growing interest from non-Arctic states will make this more challenging. Nuclear non‑proliferation challenges also remain (e.g. Iran, North Korea) though the revival of negotiations regarding Iran under the Biden administration is being met with cautious optimism. Non-traditional security issues, from health security (e.g. infectious diseases prevention and preparedness, concerns over the potential weaponization of biological agents) to space security, have also been given added primacy by the pandemic. Cyberspace is an increasingly active domain for geopolitical rivalry and criminal action, with a multiplication of malicious state-sponsored cyber activities, including misinformation and disinformation campaigns, and industrial espionage efforts.

More broadly, rising geopolitical tensions may make it more difficult to reach agreement among major powers, or to advance major multilateral initiatives. To address these challenges, multilateralism will continue to be practiced by the vast majority of states, but the mechanisms by which this proceeds will evolve.Where old forums no longer meet the challenge, it may be necessary to create new forums (i.e. ad hoc coalitions and plurilateral groupings) to address emerging issues in different ways.

Democracy, human rights and gender equality

Achieving greater respect for human rights, gender equality, and inclusion is a significant challenge in the face of eroding respect for human rights and democracy globally. For 2020, Freedom House recorded the 15th consecutive year of overall decline in democracy around the world. Connected with this trend, segments of the population in many countries feel excluded from decision-making or economic opportunities. In some liberal democracies, political polarization has increased the visibility of narratives questioning the integrity and effectiveness of democratic institutions and systems.

At the same time, a deliberate anti-human rights and gender backlash is targeting feminist movements and women’s rights, including sexual and reproductive health rights, gender equality and the rights of LGBTQ2+ persons. Meanwhile, Indigenous, Black, Asian and other racialized people feel the consequences of systemic racism and discrimination both in Canada and abroad. Persons with disabilities encounter barriers to accessing health care, social protection and employment, and are more susceptible to poverty, exclusion and violence. Indigenous peoples suffer disproportionately high rates of landlessness, malnutrition, maternal mortality, and displacement. Due to the pandemic, women and girls face particular health and socioeconomic threats, exacerbated by intersecting forms of discrimination and violence. Women remain systematically underrepresented in decision-making and leadership positions, whether in elected office, civil services, the private sector or academia, which increases the risk of their specific needs and interests being overlooked in policies, plans and budgets.

New and emerging technologies are double-edged swords for democracy and human rights. Such technologies allow regimes to violate human rights and weaken democratic institutions, and are used by non-state actors to commit abuses and undermine democracies. These technologies also enable and connect civil society, human rights defenders, and pro-democratic voices in support of freedom of expression and association, facilitating citizen engagement and the monitoring of rights violations.

Development, economics and trade

Economically, with divergent recoveries underway, much remains to be seen about how quickly vaccines will roll out beyond developed countries and how the evolving pandemic affects recovery efforts. The effects of the pandemic on global poverty and efforts to achieve the SDGs are expected to be long lasting. In 2020, the world experienced the single largest increase in global hunger ever recorded, and the World Bank estimated that COVID-19 pushed 119 to 124 million people into extreme poverty, representing the first increase in the global extreme poverty rate since 1998. Youth, women, workers with relatively lower educational attainment and the informally employed were hit hardest, and income inequality is likely to increase significantly, particularly in low-income and developing countries.

International migration experienced a significant shock from COVID-19. While regular migration routes have slowed/stopped, irregular migration routes have not, with significant negative impacts on migrants and the communities that host them. Despite COVID-19, remittance flows remained resilient in 2020, registering a small decline (1.6%). The fall in foreign direct investment (FDI) flows to low- and middle-income countries was more acute – excluding flows to China, those fell by over 30% in 2020.

Trade flows did better than had been feared in 2020 and are further rebounding in 2021.  However, the international trade landscape may become more fragmented as geopolitical competition and activist industrial strategies create new distortions. The multilateral trading system, underpinned by the WTO, has struggled to accommodate emerging economic players and global issues. Two major challenges are the ongoing digital and technological transformation and the shift toward a greener global economy. New disruptive technologies and the rising power of big technology companies represent challenges for policymakers, notably as a growing share of economic activity as well as because everyday social and political interactions are mediated through digital tools and platforms.

The disruptions of the pandemic have also encouraged states to review their exposure to global risks and the resilience of key supply chains, notably for critical minerals, bio-manufacturing (pharmaceuticals, vaccines), food and high tech products and services. Many countries, including many of Canada’s larger trading partners, have leveraged pandemic recovery spending to reposition key sectors for a more digital and green future, and greater economic resiliency.

Meanwhile, international developmentremains an important domain for geopolitical influence among leading powers, including China, the United States and Japan. As the pandemic recovery continues, donors are struggling to preserve official development assistance levels due to domestic fiscal requirements. This has led to a renewed focus on aid and development effectiveness, including on “localisation” as a new way of approaching the ideal of local ownership, and greater coherence of humanitarian, development and peace efforts (triple nexus). Debt financing has become an acute issue as many developing countries had high debt loads before the crisis, which now limit their ability to respond to and move beyond the pandemic. International financial institutions are using all instruments at their disposal to help countries in need, offering unprecedented emergency financing facilities and new projects, while the G20 committed to temporarily suspend debt payments on the part of the poorest countries.

Looking forward

In this new and uncertain era, Canada needs all the tools at its disposal to navigate difficult terrain ahead. It will need to reinforce existing partnerships while pursuing non-traditional ones. It will need to invest, with others, in shaping the international order, including to protect, promote and reform elements of the existing rules-based system that are core to its interests and support its values. At the same time, Canada needs to be discerning and strategic in its prioritization of institutional and bilateral support, multilateral and technical initiatives, and domestic measures designed to protect national interests.

State of the global economy

Issue

• The global economy continues to rebound from the COVID-19 recession, but momentum is weakening. As a group, advanced economies are rebounding much faster and are expected to emerge from the pandemic with far less economic scarring than most emerging and developing economies, many of which are facing downgraded prospects in recent months.
• The Canadian economy is forecasted to grow by 5.7% in 2021 and 4.9% in 2022 (IMF), thanks to the ongoing vaccine rollout and robust U.S. demand.
• The pandemic has accelerated structural shifts towards the digital and green economy, with many countries launching recovery plans and investments to increase supply chain resilience and to support strategic sectors. Trends to watch include COVID-19 variants’ impacts on recovery; growing social and economic inequalities; exposure of highly indebted states; rapidly rising energy costs; and potential inflation.

Context

Global growth

The most recent quarterly economic outlooks released by the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) both project a continuing global economic recovery, albeit with slowing momentum and persistent divergences between the prospects for advanced and developing countries. The IMF’s current expectation is that after contracting by 3.3% in 2020, the global economy is projected to grow by 5.9% in 2021, and by 4.9% in 2022. While this represents a much better outcome than previously feared, global income will still be trillions of dollars less than was expected before the crisis hit, and below the headline indicators of the global recovery in progress, the prospects for many countries are being downgraded.

Both institutions also warn about similar broad risks in the recovery. First, that the economic rebound will be highly uneven within and between countries, threatening to leave many countries and more vulnerable people behind. Advanced economies, led by the United States, are expected to move more quickly toward closing the gap with what had been their pre-pandemic growth trend. The IMF projects that advanced economies will regain their pre-pandemic trend path in 2022 and exceed it by 0.9% in 2024. Meanwhile, many emerging market and developing economies, apart from China, face significant economic scarring in the form of lost growth relative to what had been forecast before the pandemic. The IMF projects that these countries will remain 5.5% below their pre-pandemic forecast in 2024 [REDACTED].

[REDACTED].

Second, limited global access to vaccines and vaccine hesitancy will increase vulnerability to persistent COVID-19 and the potential for new variants that are jeopardizing the global recovery. Inconsistent roll-out of vaccines will add to the stop-start nature of re‑openings and supply challenges that are straining the economic recovery. The risks of limited vaccine access will continue to disproportionately impact vulnerable countries and people in precarious work, but advanced economies are also at risk because of higher levels of vaccine hesitancy. The IMF warns that the downside scenario of continued vaccine rollout disparities could take more than 1% – or $5.3 trillion – off the level of global GDP by 2025 relative to its current projection.  

Factors affecting growth

Whereas the pandemic’s initial lockdown shocks on consumption were broadly negative – with the notable exception of surging demand for essential goods, medical products, and technology facilitating remote interactions – the increasingly divergent trajectories have greatly depended on the social and economic circumstances of individual countries. A primary determinant has been countries’ relative wealth allowing for fiscal and monetary supports as well as access to vaccination, but so too has been their mix of economic activities.

For example, economic losses have been particularly large for countries that rely on tourism, which plunged during the 2020 recession and which has seen very little rebound given reduced mobility and face-to-face interactions. In all countries this has meant a challenge for firms participating in and supporting the travel, tourism and hospitality sectors, but is especially problematic for a number of developing countries which rely heavily on these sources of international income, in particular small island developing states, which are lagging in procuring vaccines.

After a sharp decline in the early days of the pandemic, commodity priceshave risen rapidly to feed the accelerating demand for goods, housing, and the prospect of easing mobility restrictions. Oil prices are expected to increase in 2021, close to 60% above their low in 2020, while non-oil commodity prices (especially metals and food) are expected to rise almost 30% above their 2020 levels. This rise in commodity prices is buoying the economic prospects for some commodity exporters and, as the IMF argues, is sizeable enough to offset some of their other downgrades to global growth. However, it is simultaneously contributing to concerns about consumer price inflation and food insecurity, to which developing countries are especially vulnerable.

While improved, the employment picture in most countries has yet to erase losses from the pandemic. Globally, women, youth and low-income workers have been particularly exposed to the risk of job losses, in large part because of their over-representation in hardest-hit service

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sectors – and for women more generally, because of the disproportionate burden of unpaid caregiving responsibilities. Impacts have also been more severe in places characterized by informal and low-paid precarious work, where fewer social protections exist.

The combination of divergent recovery paths affecting countries, sectors, and individuals are likely to aggravate existing inequalities in the years ahead. Wider gaps in living standards compared to pre‑pandemic expectations not only represent increasing inequality but a reversal of recent gains in poverty reduction. The World Bank has also more broadly drawn attention to the erosion of human capital through lost work and schooling, which will affect potential growth in the decade ahead.

Issues to watch in the recovery

Almost overnight, the pandemic hastened an accelerated phase of digital transformation, which has continued to supercharge profits and valuations for big tech firms. Many advanced economies have leveraged their COVID-19 recovery plans to build their domestic economies ‘back better’ as not only more equipped for a digital future, but also to be more resilient, productive, inclusive and green than before. Attention to gender and to marginalized countries will be needed so as to not further exacerbate existing gaps.

Ambitious build back better recovery goals present a different challenge for each country. As countries seek to establish competitive advantages in a dynamic global context, even governments earnestly seeking to ‘build back better’ may induce a period of uncertainty about rules and standards, create market distortions, and generate less of an even playing field. Prospects for shared economic growth will best be achieved if countries can work together to increase the level of certainty, limit protectionist tendencies and reduce the escalating trade tensions that marked the global economy in recent years.

Much of the spending on recovery plans is being financed through increased debt. The Institute of International Finance estimated that overall government debt reached 105% of global GDP in 2020, up from 88% in 2019. This rise was largely driven by massive spending by advanced economies, which undoubtedly blunted the effects of the downturn, and to some extent may representing a long-term investment in future growth. Debt in emerging markets and developing economies have also mounted, and faced with tighter financing and other conditions, many are withdrawing policy support more quickly despite larger shortfalls in output. Unsustainable debt burdens in those countries risk undermining development gains and capacity to make progress toward achieving the Sustainable Development Goals.

The realities of increased debt loads are complicated, having been largely necessary, and in many cases currently affordable, but doubtlessly increasing systemic risks. While interest rates are currently historically low and the pace of borrowing has tapered in 2021, some countries, especially least developed ones, will struggle with carrying costs, which could lead to acute crises. High levels of debt will more generally constrain public policy responses, such as addressing social priorities, and the ability to respond to future crises. 

Investments in green and sustainable growth have been a long-term transition but strategic investments by governments and the private sector are being made now in the policy opening created by the pandemic disruption. There is increasing investor interest in environmental, social and governance (ESG) measures and compliance in identifying growth opportunities. Immediate efforts to decarbonize the global economy and implement next-generation technology are critical to meeting agreed targets, but the International Energy Agency (IEA) and Intergovernmental Panel on Climate Change (IPCC) have recently reported that more investment is needed.

Against this longer-term trend, rapidly rising energy costs in recent months are generating concerns and will weigh on the global recovery in the form of supply challenges and inflationary pressures. Various environmental factors and low energy reserves have contributed to a situation in which global prices are spiraling, and acute shortages, most visible in Europe and China, have led to episodes of rationing and halted production. Short-term responses to the current energy scare are in development, and longer-term, the risk is that this shock may divert resources or delay making the investments urgently needed for a green energy transition.

Finally, inflation trends are being closely watched with measured concerns as to whether higher prices will be short lived or likely to persist. For example, Canada’s annual pace of inflation rose again to 4.1% in August, well above the 2% midpoint of the bank's 1-3% control range. The Bank of Canada, like many central banks, has stated that the current high inflation is due to temporary factors including rapidly rebounding prices for gasoline and other pent up demand, as well as various supply constraints. The outlook as to whether inflation dissipates depends on a number of factors, including slack in the labour market, spending re-balancing toward services, and that “excess” household savings get retained rather than financing more spending. Rising inflation, should it happen, can help debtors in outpacing their past borrowing, but higher debt burdens, especially for struggling developing countries vulnerable to capital outflows and balance of payment issues, would mean elevated risks. The potential for higher inflation and interest rates would also be unfavourable to large-scale investments, perhaps especially in the type of projects envisioned in a green energy transition.

Development landscape and challenges

Issue

• The global development landscape is increasingly complex and dynamic, with geo-political competition influencing the development sphere.
• Interconnected development challenges require coordinated responses among a growing number of actors, and consideration of innovative approaches, financing mechanisms and partnerships.
• The COVID-19 pandemic has reversed decades of progress, increasing poverty and exacerbating existing inequalities, with notable consequences for women, youth and marginalized communities.

Context

The last 3 decades have seen unprecedented global development progress. Hundreds of millions of people have been lifted from poverty. Maternal and child mortality rates have fallen sharply, millions more girls are in school, and deaths from diseases have declined dramatically. However, rising inequality, climate change, protracted conflict and the impacts of the COVID-19 pandemic threaten to roll back progress made.

In a multinodal world with shifting power relationships, the development cooperation landscape is increasingly dynamic, with new actors and sources of funding present. The growing prevalence of a competition of ideas, governance and development models will influence bilateral relations and funding choices. These tensions are also evident in multilateral forums, where attempts to weaken norms and standards is a concern. At the same time, the pandemic has showcased the importance of multilateral co-operation and agencies.

The complexity of global challenges will require enhanced global coordination and improved synergies between development, humanitarian, peace and security and trade actors.

I – Advancing development goals and setbacks in eradicating poverty

Alternative Text

The forecasted proportion of people living below $1.90 a day has increased following the COVID-19 pandemic.

Long description:

The COVID-19 pandemic has shifted the forecast on the global goal to end extreme poverty. In 2019, the proportion of people living below $1.90 per day was 8.2%. In 2020, the rate of extreme poverty rate was initially forecasted to be 7.7% but this forecast was revised to 8.8% due the pandemic. Similarly in 2021, the extreme poverty rate was forecasted to be 7.4% but was revised to 8.7%.

Despite recent progress, the COVID-19 pandemic pushed an estimated 119 to 124 million people back into extreme poverty in 2020, representing the first rise in global poverty since the Asian financial crisis of 1998 (see figure 1 above).

Over 680 million people (9.2% of the global population) live in extreme poverty. The majority are in middle-income countries where investments in social safety nets can be particularly useful in targeting the poor. Extreme poverty is most entrenched in sub‑Saharan Africa where 40% of the population live below the poverty line. Global levels of extreme poverty are growing in fragile and conflict-affected states, where the World Bank projects up to two thirds of the world’s extreme poor will live by 2030.

In this context, the world will not reach the goal of lowering global extreme poverty to 3% by 2030 unless swift and sustained action is taken. More coordinated efforts by all development actors are needed to scale up improvements to service delivery, products and policies, in addition to developing new partnerships and funding modalities such as blended finance with the private sector that aim to deliver more efficient and effective international assistance at scale.

Challenges to education, health and food systems

The pandemic disrupted education and learning for 1.6 billion children worldwide, and is likely to increase the learning poverty rate (measured by the proportion of 10-year-olds unable to read a short, age-appropriate text) by as much as 63%. This disruption will have ramifications for years to come, particularly for children and youth already facing challenges accessing education prior to the pandemic and who will not return to school. UNESCO estimates that more than 11 million girls and young women will not return to school, many of them at the pre-primary level.

The pandemic is expected to reverse decades of improvements in morbidity and mortality. Childhood immunization programs in around 70 countries have been interrupted due to the pandemic, and, as a result, illness and deaths from communicable diseases are expected to spike. The uneven rollout of COVID-19 vaccines to developing countries is a stark example of global inequality, with lower income countries only expected to vaccinate their populations in 2022 or even later. This is likely to lead to corresponding delays for economic recovery in these countries.

Food systems were already under strain before COVID-19 due to conflict and the impact of climate change on agriculture, with moderate or severe food insecurity affecting 26% of the global population in 2019. The pandemic has exacerbated the situation by reducing purchasing power and the capacity to produce and distribute food. In 2021, the Food and Agriculture Organization (FAO) reported that the world is experiencing the single largest increase in global hunger ever recorded. An estimated 41 million people in 43 countries are teetering on the edge of famine, up from 27 million just two years ago. Malnutrition is also a significant concern, due to pandemic impacts such as the reduction of school feeding programs and other nutrition services in low- and middle-income countries.

Gender equality and youth

Women and girls are more severely impacted by poverty due to existing inequalities, often with limited control over their own bodies and reproductive choices and fewer economic opportunities. Their circumstances can be even further complicated if they are Indigenous, displaced or from a minority community. This has further been exacerbated by COVID-19. For instance, family planning and contraception are among the most disrupted health services and a rise in gender-based violence, particularly domestic violence, has been observed. Employment opportunities, especially for women employed in informal economies, have also been impacted. The essential nature of care work to societies has been exposed during the pandemic, along with the gender inequality that characterises it.

Pre-pandemic, encouraging advances were being made. Girls’ enrollment in primary and secondary school had increased significantly; fewer girls were forced into early marriage; and more women were serving in parliaments. Gains in gender equality have had a demonstrable impact across all development sectors. For example, when a girl attends secondary school, she will marry later; have fewer and healthier children; and her future income will increase, compared to girls who have only attended primary school.

The global youth population aged 15-24 is expected to reach 1.3 billion by 2030 – notably in Africa. Young people have the potential to drive economic growth in developing countries, building on opportunities flowing from the digital revolution if they can access it. However, youth in rural areas or with lower education levels risk falling behind, and this can generate political and economic instability. The pandemic has inflicted a heavy toll on young workers – with youth employment at 8.7% in 2020, compared to 3.7% for adults.

Poor governance is an obstacle to sustainable development

Many countries continue to grapple with governance challenges, undermining the effectiveness and accountability of public institutions and systems for service delivery, the promotion and protection of human rights and equitable access to justice, particularly for marginalized groups.

Recent years have seen a rise in authoritarianism and illiberal populism. Between 2008 and 2020, the share of ‘not free’ countries rose from 22% to 38%, marking the 15th consecutive year of decline in global freedom. In this context, civic space is shrinking. In 2019, 39 countries and territories experienced major prodemocracy protests. Of these, 23 experienced a decline in freedom for 2020, marked by arrests and prosecution of demonstrators and the passing of restrictive laws.

In many countries, women’s rights and the rights of LGBTQ2+ and those of marginalized religious and ethnic groups are limited, not promoted or protected, and these communities often face exclusion from economic and political life. The weak enforcement of human rights, along with related challenges such as corruption and discrimination, are serious obstacles to sustainable development.

II – Complex global challenges

A number of highly complex global challenges pose significant obstacles to achieving the Sustainable Development Goals. Protracted humanitarian emergencies, climate change, and irregular migration are closely inter‑related development challenges for which straightforward solutions are lacking. Sustainable outcomes require above all active constructive political engagement. Development actors, for their part, must show a commitment to innovation using evidence and experimentation to approach international assistance differently.

Humanitarian needs

Prior to the pandemic, humanitarian needs were already at record levels due to protracted conflicts, an increase in the frequency and impact of natural disasters and health emergencies of international concern, such as Ebola outbreaks.

In June 2021, the UN requested US$35.1 billion through its annual appeal to assist those affected by crises. This is 40% higher than 2019 ($26.4 billion). These figures reflect how severely the COVID-19 pandemic has exacerbated humanitarian needs. The number of forcibly displaced people (82.4 million as of the end of 2020) is unprecedented since the Second World War, and developing countries host most of these people. Humanitarian access continues to be a major challenge, exacerbated by COVID-19 mobility restrictions for humanitarian workers and cargo, and heightened attacks on medical and humanitarian workers.

To support localized approaches and increase efficiencies, humanitarian actors are exploring how to best harness new and emerging technologies, while respecting data protection, privacy and humanitarian principles.

Climate change

Climate change, biodiversity loss and environmental degradation represent not only existential threats in their own right, they are also catalysts for instability, conflict, famine and pandemics.

Extreme weather events and water shortages are affecting long-term development gains, impacting vulnerable communities who struggle to build resilience to the impacts of changing weather patterns on their homes and businesses. Poor communities, particularly in least developed countries and small island developing states (SIDS), are disproportionately affected by climate change impacts, including drought, flooding, heat waves, land degradation, sea level rise, coastal erosion and loss of biodiversity.

All credible international modelling efforts have indicated that Paris Agreement goals will not be met absent an urgent and global transition to low-carbon energy systems. Energy production and consumption is accountable for 78% of global greenhouse gas (GHG) emissions from human activities. Historically, developed countries produced the largest amount of GHG emissions, but in recent decades there has been a significant rise in emissions in the rest of the world, particularly across Asia and most notably, China. Low- and middle-income countries will need enhanced support for green and just transitions to help them move away from unabated fossil fuels towards sustainable energy sources, and to help adapt to the negative impacts of climate change.

Small island developing states

SIDS have significant vulnerabilities to external economic shocks and climate change-related risks. Low-income and lower-middle-income SIDS tend to have a weaker per capita economic growth rate than other developing countries in the same income group. Their small internal markets require them to trade for supplies of critical goods, making them highly exposed to international market volatility. The impact of the pandemic on tourism (the main economic engine of many islands) has brought these economies to a halt. In addition, SIDS are highly exposed to natural disasters. Between 1970 and 2018, natural disasters caused annual average damage equivalent to 2.8% of GDP for Caribbean SIDS, compared to only 0.3% of GDP for the rest of the world.

Migration

Pandemic-related border closures and lock-downs brought a halt to regular migration pathways, leaving many migrants stranded and with no choice but to select irregular migration routes, putting their safety at risk. This has exacerbated existing situations of vulnerability for some migrants, especially at‑risk women and girls.

During the COVID-19 pandemic, migrants worked on the front lines, in key sectors such as health care and agriculture, and faced higher risks of COVID-19 infection, with less access to health care. Despite these challenges, migrants have proven their resiliency and dedication to their families in their countries of origin throughout the pandemic, with remittance flows in some regions, such as Latin America and the Caribbean, increasing by 6.5% in 2020, defying previous predictions.

Displacement within countries continues to be affected by climate change, social instability, poverty and poor infrastructure. Although the links between the environment and migration are rarely linear, it is estimated that over 140 million people could be displaced within their countries’ borders by 2050, as a result of impacts of extreme weather, rising sea levels and other climate change effects.

III – Emerging issues

In addition to pandemic-related backsliding and complex ongoing challenges, the current development landscape is also characterized by a series of emerging issues. These trends reflect unequal access to new technologies, geopolitical shifts that are undermining established global development norms, evolving global demographic trends, efforts to localize and “decolonize” international assistance, a renewed threat of indebtedness and a rapidly evolving global financing for development architecture.

The digital revolution’s impact on developing countries

The digital revolution has the potential to raise global income levels and improve quality of life. It offers new tools for development, providing opportunities to take greater advantage of data, science and technology to address poverty reduction goals. But the advancement of artificial intelligence and automation will have a major impact on the nature of work in the coming years and has the potential to exacerbate inequalities, particularly for marginalized communities, if conscious actions are not taken. Support for building digital infrastructure and skills in developing countries, and advocating for rights-based digital ecosystems, need to be integrated into development aid.

Rapid urbanization will strain resources

By 2050, two thirds of the world’s population will live in urban centres, many of them in low‑income countries in Africa and Asia. Water and sanitation services, along with housing, transportation and urban planning, are struggling to keep pace with rapid – and often poorly planned – urbanization.

Crowd-sourcing, smart technology, and cross-sectorial collaboration and planning to address the needs of urban populations can help achieve progress.

New development actors are emerging

Distinctions between rich and poor, developed and developing, donors and recipients are becoming less and less clear. Many countries are transitioning to middle- and upper-income status and their roles in the world and relations with former donors are evolving. These countries bring different approaches and models of development cooperation – some of them Canada agrees with, others less so. For example, China’s approach blurs the line between official development assistance (ODA) and commercial investments, providing large-scale development financing on competitive terms. While their investments are responding to real market needs especially for infrastructure, this lending risks undermining debt sustainability, particularly in sub-Saharan African.

Local development and humanitarian actors will play a greater role

While international actors will continue to play an important role in supporting development and humanitarian efforts, the participation of national and local actors is required to better identify and address the needs of affected populations. The idea of localizing and decolonizing aid, in the humanitarian sector in particular, was expressed at the 2016 World Humanitarian Summit culminating in the ‘Grand Bargain’, where signatories committed to supporting humanitarian action that was “as local as possible, and as international as necessary”. The concept of localization has continued to gain traction by necessity, as the COVID-19 pandemic increased reliance on local organizations and staff, partly due to travel restrictions reducing international access to communities.

Debt burdens have increased

Developing nation debt has more than doubled in the past decade, and the pandemic has aggravated this issue. The Organisation for Economic Co-operation and Development (OECD) estimates that developing countries will have seen a drop of $700 billion in external private finance (i.e. inflow of foreign direct investment (FDI) and other investment such as bank lending) in 2020. Sovereign debt levels are expected to rise by 12% of GDP in emerging markets in 2021. More than 90 countries approached the International Monetary Fund (IMF) in 2020 to access emergency financing instruments, signalling that the problem of debt burden and limited access to liquidity is widespread.

Debt restructuring and debt suspension initiatives are underway and loom large in policy discussions linked to COVID-19 recovery and financing for development, where Canada has been a thought leader at the UN since 2016.

More diverse sources of development finance

The relative importance of ODA for development finance is evolving as other financial flows to developing countries, including remittances and flows from the private sector and philanthropic organizations, increase. Due to the pandemic, however, in 2020 FDI to developing countries declined by about 12%, while ODA reached a high of US$161 billion, equivalent to 0.32% of OECD Development Assistance Committee (DAC) member countries’ combined gross national income.

There is widespread recognition that financing for development from a range of sources is required, including blended public-private finance, but even with new funding sources, ODA continues to play an essential role, particularly for the poorest and most vulnerable. In least developed countries, ODA accounts for over two thirds of external finance and in fragile and conflict-affected contexts, it is often the only option for the provision of basic services.

Effectively addressing key financing for development challenges, such as debt sustainability and pressure on global ODA levels, is critical to enabling a credible global pandemic response and supporting efforts to build back better. Canada, alongside Jamaica and the UN Secretary General has taken a leadership role in these discussions, through the Financing for Development in the Era of COVID-19 and Beyond Initiative, a large-scale, multilateral initiative focused on developing and implementing recovery solutions aligned with the 2030 Agenda for Sustainable Development.

IV – Global development frameworks

A series of global commitments were agreed to between 2015 and 2018 in recognition of these trends and challenges, recognizing the international community can do better to meet needs and improve the resilience of hundreds of millions of people living in poverty or facing insecurity. These global frameworks are helping guide current efforts to re-assess existing approaches and partnerships, in the context of pandemic recovery:

• 2030 Agenda for Sustainable Development (2015), which includes 17 Sustainable Development Goals - successor to the Millennium Development Goals;
• Addis Ababa Action Agenda on financing for development (2015), a global framework for financing sustainable development;
• Paris Agreement on Climate Change (2015), agreed at UN Framework Convention on Climate Change (UNFCCC) 21st Conference of Parties (COP21);
• Sendai Framework for Disaster Risk Reduction (2015), a global cooperation framework of particular importance to SIDS vulnerable to extreme weather events and sea-level rise;
• World Humanitarian Summit (2016), where the largest donors and humanitarian agencies agreed to a ‘Grand Bargain’ to improve effectiveness and efficiency of humanitarian action;
• Global Compact on Migration (2018), the first-ever UN global agreement on a common approach to international migration;
• Global Compact on Refugees (2018), which aims to move towards more comprehensive refugee responses.

Additionally, a set of aid effectiveness principles adopted in Paris (2005), Accra (2008) and Busan (2011) form the foundation for effective development cooperation.

D. Geographic – Integrated regional overviews

Asia

Issue

• Asia is experiencing changes in economic and power relations that are disrupting contemporary global and regional security dynamics.
• This dynamic region features acute risk, intensified by China’s assertiveness and COVID-19.
• Events and decisions in and about Asia increasingly drive both positive and negative outcomes for Canada’s prosperity, security and global interests.

Context

Asia is home to 60% of the world’s population and represents one third of global output. It includes 3 of the world’s 6 largest national economies (China, Japan, and India), and the 10 countries of the Association of Southeast Asian Nations (ASEAN).

China’s influence on trade, diplomacy, aid and security issues continues to increase, and its more assertive posture seeks to challenge U.S. strategic primacy in East Asia and the Western Pacific. The return of “great power politics” increases the risk of destabilization and conflict.

Asia is the fastest growing economic region in the world, and stands to deliver nearly two‑thirds of global growth by 2030. It remains a critical hub for global trade, investment, production and supply chains.

These successes, however, mask persistent challenges. The region remains home to 1.1 billion poor, including 287 million people living in extreme poverty, whose situation has been aggravated by COVID-19. Infrastructure needs are acute, with demand expected to exceed $1.5 trillion per year to 2030. It is also the world’s most disaster-prone region and is greatly impacted by climate change. Asia accounts for 53% of global CO₂ emissions and is therefore key to any global cooperation on climate change. Several countries also face major human rights and governance challenges and threats to democracy (e.g. Myanmar, Afghanistan, Hong Kong).

Asia is a hotspot for emerging infectious diseases, including those with pandemic potential (e.g. severe acute respiratory syndrome and bird flu). While COVID-19 caused severe economic disruption in the region, countries in East and Southeast Asia have proven the most resilient by global standards. In 2020, developing Asia contracted by 0.2% – the first recession in nearly 6 decades – although GDP is expected to grow by 7.3% in 2021.

The region faces a complex web of security challenges, including a more assertive China in the East and South China seas, in Hong Kong, with India, and across the Taiwan Strait; ongoing tensions on the Korean Peninsula; the India-Pakistan rivalry; and more recent crises in Myanmar/Bangladesh (Rohingya) and in Afghanistan.

Canada in Asia

Canada’s people-to-people ties in Asia are extensive. Nearly half of Canada’s foreign‑born population is from the region and almost 18% of the overall Canadian population identify as having origins in Asia.

In recent years, Canada’s efforts in Asia have sought to:

1. Advance free and open markets for goods, services and investment;
2. Promote democratic values, governance, human rights and rule of law;
3. Contend with and adapt to the rise of China; deepen and strengthen engagement with countries of growing strategic importance, such as India; and,
4. Preserve and strengthen regional security and stability by working with and supporting regional allies.

Political/Security

Canada has deep diplomatic and security relationships in the region. Australia and New Zealand are close and long-standing partners with whom Canada regularly coordinates on intelligence, defence and diplomatic matters. Cooperation with Japan, a pivotal diplomatic and security actor, is now structured to more effectively engage on economic, energy and regional security issues following an agreement to work together in the Indo-Pacific context under the framework of “six areas of cooperation”. Canada also has strong diplomatic relations with the Republic of Korea (South Korea), strengthened by the Canada-Korea Free Trade Agreement.

Canada has a strong and growing bilateral relationship with India, but relations have yet to reach their full potential. Cooperation with Bangladesh has expanded in the last few years given Canada’s leadership on the Rohingya crisis and a growing trade relationship. [REDACTED] bilateral engagement with Pakistan, Canada endeavours to maintain a constructive dialogue and expand the relationship.

[REDACTED]

As the United States remains a central diplomatic and security actor in the region, Canada also works closely with the United States to promote regional stability, notably in the area of maritime security. Canada was not associated with the process leading up to the signing of the recent AUKUS security agreement between the US, Australia and the UK but is supportive of its objective to reinforce the security posture of close partners in the region. While AUKUS does not affect Canada’s Five Eyes relationships, it will be to Canada’s advantage to remain actively engaged with AUKUS signatories on matters related to regional security and critical technologies.

The Association of Southeast Asian Nations (ASEAN) collectively represents the world’s fifth largest economy, and has positioned itself at the center of Asia’s regional security, political and economic architecture. As a dialogue partner of ASEAN, Canada works with ASEAN on political and security issues, regional integration, economic interests, development cooperation, transnational crime and counterterrorism. Canada participates in the ASEAN Post-Ministerial Conference and is an active contributor to the ASEAN Regional Forum, including on issues such as the Law of the Sea; Women, Peace and Security; and Disaster Relief and Assistance. Canada is currently seeking membership in the “ASEAN Defence Ministers Meeting Plus”. There exists significant potential for developing Canada’s relations with a number of Southeast Asian nations.

Trade

In 2020, Canadian exports to the region accounted for 11.6% of total Canadian exports; while Canadian investments in the region totalled $116.5 billion. Canadian trade and investment is expanding in Asia, anchored by the Comprehensive and Progressive agreement for Trans-Pacific Partnership (CPTPP), the Canada-Korea Free Trade Agreement, and 5 investment agreements. Canada has sought to expand its market access to the region through the pursuit of new trade and investment agreements with Indonesia, India and ASEAN, as well as CPTPP expansion through an accession process that, in addition to the UK, now includes formal applications from both China and Taiwan.

APEC, as Asia’s preeminent forum on matters of trade and the economy, provides Canada with the opportunity to further strengthen trade and economic ties with Asia-Pacific’s most dynamic economies (which accounted for 83.3% of Canada’s merchandise trade pre‑pandemic). It serves as a critical platform to pursue regional objectives, including trade liberalization and market reforms, as well as broader foreign policy goals.

Canada’s strengths in industries like minerals, energy, financial services, infrastructure, environmental technologies and agri-food, are closely aligned with the needs of the region, and offer important avenues for export diversification. Canadian companies also have significant investment in the region, and Asian manufacturing centres form a critical backbone for Canadian supply chains, with up to 15% of our intermediate goods coming from China, Japan and South Korea.

Opportunities notwithstanding, governance issues and the use of arbitrary trade measures constrain commercial prospects. Notably, China’s linking of political and economic issues adds uncertainty and increases the costs of doing business.

Development

Canada’s international assistance remains an important component of our engagement in Asia. In 2019-20, Canada’s total international assistance to Asia and the Pacific totalled $1.35 billion (25% of the total Canada spends worldwide).

International assistance priorities include pandemic preparedness, response and recovery, climate change resiliency, gender equality and women’s empowerment. Significant efforts in the areas of environmental sustainability, and inclusive governance and economic growth are essential to supporting the region in achieving the United Nations 2030 Sustainable Development Goals.

Canada also helps to increase understanding of the benefits of, and support for, the rule‑based international system through its efforts to improve governance and to foster appreciation for the rule of law, democracy, and respect for human rights.

In Afghanistan, following the Taliban’s overthrow of a legitimately elected government and its seizure of power by force, Canada’s international development assistance has been paused and some funds diverted to help address the humanitarian crisis. Significant questions will have to be addressed, not least of which are legal and sanctions-related, before Canadian programming can continue. 

In 2018, Canada launched the first phase of a strategy to respond to the Rohingya crisis in Myanmar and Bangladesh ($300 million, 2018-2021). The second phase of the strategy ($288.3 million, 2021-2024) is underway, and will provide medium-term support to meet the needs of crisis-affected populations, intensify efforts to advance an inclusive and sustainable peace in Myanmar, and target support to advance the restoration of democratic rule and increase pressure on malign actors, including through the continued pursuit of accountability for human rights violations.

Indo-Pacific approach

Faced with both significant opportunities and challenges in Asia, Canada is developing a strategic approach to the Indo-Pacific, which refers to the land and maritime areas situated between Northeast Asia and the Indian sub‑continent. Canada works with likeminded partners from the region to protect the rules‑based international system and promote shared values and principles, recognizing that key decisions affecting Canada’s prosperity and security will increasingly be made in the Indo-Pacific region. In light of the evolving strategic environment, a trade-centric approach needs to be balanced with other measures to protect Canada’s broader foreign policy and security interests.

A growing number of like-minded countries seek to maintain an inclusive, sustainable and stable order in the Indo-Pacific. Australia (2013), Indonesia (2013) and, most particularly, Japan (2016) were early proponents of Indo-Pacific cooperation. Many others have followed suit and adopted their own Indo-Pacific framework, including the United States (2017), India (2018), France (2018), ASEAN (2019), Germany (2020), Netherlands (2020), the United Kingdom (2021) and the European Union (2021). The G7 foreign ministers also collectively endorsed the broad principles and values underpinning a “free and open Indo‑Pacific” during their May 2021 meeting, to which Australia, South Korea, India and ASEAN were all invited.

Europe and Eurasia

Issue

• Canada’s relationships in Europe represent important partnerships in advancing shared global interests.
• There are risks associated with Russia’s and Turkey’s regional engagement, and China’s increasing influence in Eastern Europe and Central Asia, with the latter now facing refugees and instability from Afghanistan.

Context

Europe

European countries are often partners of choice across the full range of Canada’s foreign policy, security, development, economic and commercial interests. The COVID-19 pandemic reinforced these ties, including to support the repatriation of Canadian travellers, to improve global public health coordination, to advocate for supply chain security and, going forward, to promote a sustainable and inclusive global economic recovery.

Within Europe, however, the dynamics are evolving, due to the [REDACTED] departure of the United Kingdom from the European Union, and the realignment and rebalancing of influence among EU members in its aftermath. Meanwhile, the rise of populism has led to illiberal backsliding on the rule of law [REDACTED] and grave divisions remain over migration to the continent, recently heightened by the Taliban takeover of Afghanistan. 

The European Union, with 27 member states and 445 million people (post-Brexit), is a top-tier and like-minded strategic partner in protecting and promoting shared interests and values, across the policy spectrum. Canada benefits from a uniquely broad bilateral cooperation framework in the Canada-EU Strategic Partnership Agreement (SPA).

The current European Commission has made clear that its geopolitical ambitions have heightened, although its internal processes continue to present challenges. Unanimity rules make decision-making challenging among the EU member states on vital issues such as the geopolitical competition between the United States and China, where the European Union is trying to find and plot its own path. Despite shared concerns on human rights, Hong Kong, Taiwan, Tibet and the South China Sea, [REDACTED] Nonetheless, the European Union is standing up to China more publicly than in the past, including maintaining public solidarity with Canada on the two Michaels, and applying sanctions against China over treatment of the Uighurs. Despite some of these challenges the European Union is a major like-minded player and a strong and engaged European Union remains vital to promoting Canada’s global interests.  

The European Union is Canada’s second‑largest global market. Five of its individual member states are in the top 15 Canadian export destinations, and six were in Canada’s top 15 foreign direct investment sources in 2020. The Comprehensive Economic and Trade Agreement (CETA) has been provisionally applied since September 2017. Bilateral merchandise trade has risen by 15.2% between the 2016 baseline and 2020. Canada will continue to promote the benefits of the accord to companies of all sizes, and enable success through the efforts of the Trade Commissioner Service. CETA ratification has now been achieved in 15 member states, [REDACTED]

These are sophisticated and wealthy markets recognized as global standard-setters. The European Commission’s Digital and Green agendas will open promising commercial opportunities for Canadian entities and firms. However, some EU regulatory measures can present certain risks. 

Canada continues to cultivate relationships with individual EU member states. France and Germany, the “engine” of the European Union, remain key partners on a range of issues including support for the rules‑based system, human rights, and regional flashpoints such as Ukraine, Belarus, Afghanistan, Lebanon and Venezuela. Elections in both countries, coupled with the rise in influence in the European Union of states such as the Netherlands, Italy and Spain, bring a need to renew relationships and priorities. 

Canada has a particular historical affinity for the United Kingdom, with a shared transatlantic and Commonwealth identity. The United Kingdom remains Canada’s single largest trading partner in Europe, with our exports heavily focused in non-monetary gold.  Following the United Kingdom’s exit from the European Union, a trade continuity agreement, based on CETA, entered into force in April 2021. It set up the launch of negotiations of an ambitious free trade agreement within one year. The United Kingdom is also a significant security and defence ally, including at NATO and in the Five Eyes intelligence community. Continuing to find the right balance [REDACTED] will remain essential.  

Canada’s contributions to NATO are especially well appreciated on the eastern edges of the territory. The Ukraine deployment is up for renewal next year, and the Latvia deployment, Canada’s largest in the world, is authorized until 2023. 

Eurasia

Canada is increasingly affected by developments in ‎awider Eurasia that stretches eastward to include Russia and Central Asia, and southeast to the Western Balkans as well as Turkey and the Caucasus.  In this area, some prominent fault lines are emerging in the global order, such as renewed crisis and protracted conflict in Belarus and Nagorno-Karabakh.

Russia continues to take aggressive and illegal steps to assert its geopolitical ambitions and protect its national interests, particularly in what it considers its historical sphere of influence. These include violations of its neighbours’ sovereignty (Ukraine and Georgia), efforts at interference and destabilization (Western Balkans), and further signals that it would potentially intervene to protect Russian-speaking minorities in neighbouring countries. Russia has targeted NATO, the United States, Germany, France, Ukraine and others with disinformation and cyber campaigns, including interference in electoral processes.  Russia is also exerting its military, economic and political heft among other Arctic states, as melting sea ice and new technologies offer new economic opportunities. Nonetheless, there is scope to pursue certain common interests, including in the context of Russia’s chairing of the Arctic Council in 2021-23.

Meanwhile, post-Soviet countries in the Caucasus and central Asia are struggling to de-link from Russia’s sphere of influence – whether to choose a Euro-Atlantic orientation, to establish a balance between Russia and the West, or to seek partnerships with China on inward investment and commercial linkages. Refugees and the risk of terrorism following the Afghanistan crisis threaten regional stability, prompting increased Canadian engagement with neighbouring countries but emphasizing Canada’s limited presence in Central Asia. ‎ 

Canada has been heavily engaged in Ukraine, particularly since the 2014 Revolution of Dignity, unequivocally condemning Russia’s illegal invasion and annexation of Crimea, and actively supporting Ukraine’s sovereignty and territorial integrity.  Canada’s political, trade, development, and security support are highly appreciated by Ukrainian leaders, as well as by the active 1.35 million Ukrainian Canadian diaspora.

‎Turkey – a NATO ally, G20 partner and emerging market – sits at the crossroads of East and West, with broad regional influence. As EU aspirations fade, Ankara’s focus has shifted to the Middle East and Caucasus, helping to check Russian influence, preventing the Assad regime from capturing Idlib, and playing a vital role in hosting over 4 million refugees. However, it also intervened militarily in Libya, Syria and Iraq, and supported Azerbaijan in the 2020 Nagorno‑Karabakh conflict. Combined with concerns over increasing authoritarianism, such actions have increased tensions with NATO allies and led Canada to suspend the export of military goods. However, overall cooperation continues, including through a Joint Economic and Trade Committee to be held later this year, and Canada seeks to retain Turkey within the Euro-Atlantic sphere.

Latin America and the Caribbean

Issue

• Canada has significant security and economic interests in Latin America and the Caribbean (LAC).
• Strong bilateral relationships underpin diplomatic engagement and position Canada as a privileged partner for countries seeking to address common challenges.

Context

Strong economic growth in the region stagnated in the 2010s. In the fall of 2019, while the Caribbean remained relatively stable, Latin America saw widespread civil unrest driven by dissatisfaction with progress in improving social conditions and inequality. Protests largely came to a halt in March 2020 due to COVID-19 lockdown measures, but political dynamics in many countries remain volatile. Many of the issues that fuelled protests remain unresolved.

The region is among those hardest hit by COVID-19, accounting for 32% of deaths worldwide despite representing less than 10% of the global population. Vaccine procurement and distribution remains a challenge in LAC. Canada has offered significant support to the region to address this challenge, including through the Pan-American Health Organization and COVAX – this includes Canada’s donation of 40 million vaccine doses through COVAX with a regional earmark of up to 50% to LAC, and over 750,000 of Astra Zeneca doses donated bilaterally to the region. Meanwhile, China has sought to use the crisis as a means of making inroads in the broader geostrategic competition of ideas and governance.

The pandemic further exposed long-standing weaknesses with democracy in some parts of Latin America. Many citizens do not trust democratic institutions to act in their best interest, particularly due to corruption, and election results are indicative of increased polarization in some places. In Central America, violence and poverty have resulted in significant migration within LAC, as has the continued crisis in Venezuela, straining the capacities of key Canadian allies to cope. Despite ongoing challenges, there is opportunity and appetite for continued strong Canadian diplomatic engagement and leadership in LAC. Canada is trusted, offers a strong governance model, and is home to a large diaspora. The region offers opportunities for Canadian exporters and investors, helping meet Canada’s prosperity and trade diversification objectives. Geographic proximity makes the region uniquely important to Canada’s security. The region remains of interest to the United States, which will seek to work with Canada to advance shared interests, including on democratic governance, economic growth, crime, climate change and migration, particularly in the lead‑up to the U.S.-hosted Summit of the Americas in 2022.

Gender inequality remains very high, particularly for Black and Indigenous women, human rights defenders, and marginalized groups including female politicians, journalists and LGBTQ2+ persons.

Areas of particular concern: Haiti, Nicaragua, Cuba, Venezuela

The pandemic has exacerbated protracted crises in Haiti, Nicaragua, Cuba and Venezuela. Haiti remains the poorest and most fragile state in LAC and is Canada’s largest recipient of development assistance. The recent assassination of the president has resulted in a period of uncertainty, and parliament remains non-functional. The August 14 earthquake added to the country’s precarious humanitarian situation.

In Nicaragua, the Ortega regime has enacted a series of laws restricting media freedom, arbitrarily arrested political opponents, and is doing everything it can to curtail any opposition in the lead up to the November 2021 elections. Canada is increasing public pressure on Cuba to respect freedom of expression and assembly, following a series of protests in summer 2021. The dire political, economic, and humanitarian situation in Venezuela continues to have destabilizing impacts on democracy, security and prosperity in the region. Over 5.6 million Venezuelans have fled, creating the second-largest displacement crisis after Syria.

Canada is seen in the region and beyond as a convenor to find solutions in support of democracy in Venezuela [REDACTED]. On June 17, 2021, Canada hosted the International Donors’ Conference in Solidarity with Venezuelan Refugees and Migrants, securing US$2.35 billion in grants and loans. Canada pledged $115.4 million, the third-largest grant contribution.

Regional security

Illicit flows of arms, drugs and people that had slowed at the start of the pandemic have increased and remain a concern, particularly in Central America. Insecurity and violence in Central America is fueling a surge of irregular migration north, the largest corridor of migration in the world.

Weak judicial systems make it difficult to consistently protect human rights. Some governments have used the pandemic as cover to impose measures that curtail civil rights. Despite this, in many countries of the region, the space for public debate and independent media remains relatively strong.

Climate change is a threat to growth, as seen in widespread forest fires in Latin America and a record-breaking Atlantic hurricane season in 2020. This puts additional pressure on governments already grappling with the social and economic impacts of the pandemic.

Democracy, human rights and international assistance

In line with the Feminist International Assistance Policy, Canada’s international assistance programs in Central America, Caribbean, Haiti, Colombia, Peru, and Bolivia offer the opportunity to advance democracy, human rights, economic prosperity, and trade-development issues.

Canada is an active partner in the Organization of American States (OAS) and views the Inter-American System as an indispensable platform for its relationship with the region.

Indigenous movements are increasingly seen as legitimate political actors in LAC countries. Canada has established partnerships and collaboration with Indigenous peoples in the region, including through international assistance programming.

Economic opportunity

Each sub-region in LAC presents unique economic challenges and opportunities. Central America has strong ties to the U.S. market, but struggles with corruption and insecurity. South America has many middle‑income countries and regional trade agreements (Pacific Alliance and Mercosur), as well as large markets including Brazil that are important to Canada. Caribbean countries are highly dependent on financial services and tourism and vulnerable to climate change, but offer opportunities for investment in clean technology. The Temporary Foreign Worker program benefits Canada’s agricultural sector and food security, while supporting local economies, including in the Caribbean. The top 3 source countries (Mexico, Guatemala, and Jamaica) represent around 75% of all incoming workers in this program.

Canada has a significant investment presence in the region, and its commercial relationship will play a key role in the respective pandemic recoveries across the hemisphere. Key partners in the region support reform of the World Trade Organization, expansion of the Global Trade and Gender Arrangement, climate change mitigation and adaptation, frameworks for the digital economy, and seek to ensure that the benefits of trade are inclusive and distributed equitably.

Middle East and North Africa

Issue

• The complex geo-strategic environment of the Middle East and North Africa and its political, military and socio-economic exigencies is important for the prosperity and security of Canada and its allies.
• Canada has sought to build and maintain constructive bilateral relationships to support peace, democracy and respect for human rights and humanitarian laws, and gender equality. Canada’s role must be carefully calibrated in response to conflicts with wider international impact.

Context

Ten years after the Arab Spring, the Middle East and North Africa (MENA) region has seen increased geopolitical competition, changing relationships and the emergence of complex new conflicts. Hope of real democratic change has waned as many countries face weak governance and corruption, limited socio-economic prospects, security threats and social unrest, all exacerbated by COVID-19.

Geo-political strife

On a geostrategic level, Saudi Arabia and Iran compete for dominance through alliances and proxy groups, reflecting historic rivalries between Sunni and Shia Muslims. Both countries have provided support to competing factions in Yemen (where Saudi Arabia and the United Arab Emirates have supported the Yemeni government against Houthi rebel forces backed by Iran), and retain ties to groups in Lebanon and Iraq. Israel continues to view Iran as its primary threat [REDACTED]. At the same time, longstanding conflicts have had devastating consequences for Syria, Yemen and Libya, with serious implications for the wider region. Humanitarian crises in all 3 countries have resulted in millions of vulnerable people being displaced and fleeing as refugees and migrants in neighboring countries, Europe and beyond.

The United States has strong ties with Israel and Saudi Arabia and works closely with both to limit Iranian influence. For its part, Russia is heavily involved in the Syrian conflict as one of the Assad regime’s primary allies, alongside Iran. Turkey has sought to reassert its influence in the MENA region, including through heavy engagement in Syria and Libya.

The Israeli-Palestinian conflict remains a major source of tension and insecurity for the region. Interestingly [REDACTED] and other factors did result in normalization of relations with Israel by some Gulf countries and Morocco in 2020.

The U.S.-led Global Coalition against Daesh, of which Canada is a member, was critical to achieving the territorial defeat of Daesh in Syria and Iraq. In July 2021, President Biden announced that U.S. combat operations in Iraq will cease by year’s end.

The region’s monarchies in the Gulf and in Morocco have remained stable but struggle to respond to their people’s demand for socio-economic and political change. In Tunisia, similar frustrations exist, and President Saied’s July 25 decision to suspend Parliament and take on executive powers has generated serious concerns about the fragility of Tunisian democracy. Tunisia will host the Francophonie Summit in Djerba in November 2021.

In Libya, despite recent political progress with the creation of an interim Government of National Unity (GNU) in February 2021, the political and security situation remains volatile and national elections, currently scheduled for December 2021, remain uncertain.

Uneven economic growth

The region plays a pivotal role in the global economy, with the Gulf States home to one‑third of global oil and gas reserves. Geostrategic importance and natural resource wealth have prompted global powers to align themselves with regional players. Deep structural reforms are viewed by the World Bank as necessary to boost economic growth in the region. The reforms associated with a transition towards cleaner energy challenge the fossil fuel-driven economies of many of the MENA countries, whose capacities and readiness to pursue economic alternatives vary significantly.

The COVID-19 pandemic has adversely impacted economic growth and exacerbated development challenges for countries in the MENA region. Governments generally reacted rapidly to contain the virus during the early stages of the pandemic by closing their borders and imposing containment measures. However, many of them did not have the institutional resilience, resources and/or infrastructure to absorb the pandemic’s impacts, further increasing pressure on the health and economic sectors. The World Bank estimates that the combined regional and global effects of the pandemic threaten to push 192 million people in the MENA region into extreme poverty. GDP losses are expected to amount to US$227 billion by the end of 2021, and borrowing by MENA governments to finance emergency expenditure on essential health and social protection measures has created debt vulnerabilities.

The Arab Gulf monarchies were acutely and disproportionately affected by the negative economic impacts of the COVID-19 pandemic, as they faced the additional shock of declining oil prices and associated state revenues, which also took hold in March 2020. Heavy GDP losses are forecast for oil producers throughout the MENA region, compared to pre-pandemic levels. Disparities in vaccine access and reliance on foreign-developed vaccines have also created opportunities for China and Russia to strengthen their influence and commercial relationships across the region.

Middle East peace process

The peace process remains [REDACTED] on the final status issues – the fate of Palestinian refugees, the borders of the future 2 states, the status of Jerusalem and its religious sites, and security for both Israelis and Palestinians. Additional challenges such as [REDACTED] and the destabilizing influence of Gaza-based terrorist organizations add complexity to an already intractable conflict, and feed periodic eruptions in violence.

The new Israeli coalition government, composed of parties spanning the political spectrum, [REDACTED] The near-term prospects for direct peace negotiations towards a two-state solution [REDACTED].

Canadian engagement

Consistent with broader international efforts, Canada has sought to position itself as a constructive partner, for example in promoting human rights, accountability and gender equality; contributing to economic development; advancing stabilization and humanitarian efforts; supporting democracy and effective governance; and working to counter terrorism and violent extremism. Canada has led on the annual resolution on the situation of human rights in Iran at the UN General Assembly since 2003, and has been outspoken about arbitrary detentions in Saudi Arabia and the killing of journalist Jamal Khashoggi. Canada has, however, been criticized by some countries in the region for singling out the human rights records of specific countries and for its voting record at the UN on Israeli-Palestinian issues.

Canadian Armed Forces personnel are deployed in 7 MENA region operations and are an active part of the alliance that defeated Daesh in Iraq. Under Operation IMPACT – one of Canada’s largest international deployments – Canada contributes to building the military capabilities of Iraq, Jordan and Lebanon, provides equipment, personnel and intelligence capabilities to the Global Coalition against Daesh, and contributes to the NATO mission in Iraq. The authorities of Operation IMPACT, including the deployment of up to 850 Canadian Armed Forces personnel, were extended for one year as part of Canada’s renewed Middle East Strategy until March 31, 2022. In addition, Canadian officers contribute to the UN Truce Supervision Organization (UNTSO) and the Multinational Force and Observers (MFO) on Israel’s borders/separation lines with Lebanon/Syria and Egypt respectively. They also support capacity building and professionalization of the Palestinian Authority Security Forces.

In 2020, Canada’s bilateral merchandise trade with the MENA region was $13.2 billion. Bilateral trade in services with the MENA region in 2019 was valued at $5.1 billion. Known foreign direct investment from the region in Canada was nearly $4.6 billion in 2020.The region is regarded as an important potential source of foreign investment, especially given the size of the sovereign wealth funds held by the Gulf States (an estimated $2.5 trillion) as well as thousands of international students.

Free trade agreements exist both with Israel and Jordan. The Canada-Israel Agreement in Industrial Research and Development is one of only 5 funded Science, Technology and Innovation agreements for Canada; negotiations to modernize the agreement are underway.

In FY2019-20, total Canadian international assistance to the MENA region amounted to $716 million, or 11% of total assistance. Programming focused on humanitarian relief, inclusive governance, economic growth and women’s economic empowerment. Major MENA recipients include Iraq, Lebanon, Syria, Jordan, Yemen and the Palestinians, including Canada’s ongoing support to Palestinian refugees. Canada is one of the top donors in providing humanitarian relief to the Yemeni and Syrian people. It has also provided timely assistance in response to COVID-19. In 2020-21, an additional $31 million was channeled to support countries in the region to meet urgent pandemic induced health and nutrition challenges. 

Through the Middle East Strategy, Canada has committed over $4 billion over 6 years (2016-2022) to respond to the crises in Iraq and Syria, and their impact on the region, in particular on Jordan and Lebanon. This support helps set the conditions for security and stability; alleviates human suffering; enables civilian-led stabilization programs; and supports governance and longer-term efforts to build resilience.

Sub-Saharan Africa

Issue

• Sub-Saharan Africa is a region of vast economic potential – including trade and investment markets – and growing geopolitical importance, even as it grapples with challenges related to persistent poverty, conflict, insecurity, gender inequality and climate change.
• COVID-19 and lack of access to vaccines is having a devastating impact.
• Ethiopia, the Sahel, Mozambique and Somalia will require sustained diplomatic attention.

Context

Geopolitical importance

Sub-Saharan Africa is a diverse region of 48 countries that range from high-income countries to least developed and fragile states. It is home to one billion people, half of whom will be under the age of 25 by 2050, making this the region with the world’s youngest population and its fastest growing workforce (median age of 20, vs. 41 in Canada). It has a dynamic, entrepreneurial, and increasingly globally-connected population. It is also home to volatile, prolonged and destabilizing conflicts in Ethiopia, the Sahel region, Mozambique and Somalia, further complicated in some instances by links with global terrorist networks. Nevertheless, China, the United States, the European Union, Russia and the Gulf States are all competing for diplomatic, trade and security influence in Sub-Saharan Africa, albeit for diverse reasons.

Through the African Union, African countries are increasingly coordinated on global issues and have begun to exercise their collective influence at the United Nations (54 member states), La Francophonie (26), the World Trade Organization (39) and the Commonwealth (19). African leaders and the African Union are placing greater priority on partnership, trade and investment. To maintain and expand its influence in the region, Canada will need to engage more comprehensively and deliberately to be seen as a partner of choice by Africa’s leadership.

Economic progress challenged by COVID‑19

Prior to the pandemic, Africa was on an upswing. The region had 6 of the world’s 10 fastest growing economies; rates of extreme poverty were declining (from 60% in the late 1990s to 40% in 2015) and life expectancy was increasing (up by 10 years since 2000).

Due to the pandemic, however, Sub-Saharan Africa entered its first economic recession in 25 years, with economic activity contracting by 2% in 2020. Economic recovery is also expected to be muted, with slow rebounds in the region’s 3 largest economies over the next year: Nigeria (1.4%), South Africa (3.0%) and Angola (0.9%). In many countries, per capita income is not projected to return to pre‑crisis levels until at least 2025.

African public debt levels have increased significantly. Debt service payments are uniquely burdensome in Sub-Saharan Africa because they eat into already scarce fiscal space for social support programs.

An additional 20 million new private sector jobs are needed annually to 2035 to keep up with population growth. Some 70% of current jobs are in the informal economy, which was hit hard by COVID-19, with negative impacts disproportionately felt by women. In an effort to open up African markets and provide a more rules-based environment for business, 54 of the 55 Africa Union member states (Eritrea is the exception) joined in creating the African Continental Free Trade Agreement, which came into force in 2021.

Development progress reversed by COVID‑19:

Despite significant gains in recent decades, poverty remains a persistent problem in Sub-Saharan Africa. Increased conflicts, disruptions to food imports and the effects of climate change have resulted in 98 million people facing serious food crises (63% of the global total). The economic impacts of COVID-19 have pushed approximately 40 million more people into extreme poverty, adding to the 40% of the population already living below $1.90/day.

Addressing the impacts of the pandemic will remain a challenge for years to come. Health and education systems have been severely stressed. The continent has the lowest COVID-19 vaccination rates in the world (as of September 2021, less than 6% of the population has received one dose and less than 3% has received 2 doses). Canada has donated vaccines to African countries through COVAX (Kenya, Nigeria and Niger received doses in early September, with additional vaccine roll out anticipated), but it has not done so bilaterally; the United States, the United Kingdom, France, Denmark, Greece, Portugal, China, Russia, India and the United Arab Emirates have all made direct bilateral donations to the continent.

Canada’s engagement with Sub-Saharan Africa

Canada maintains a significant footprint in Sub-Saharan Africa with 21 bilateral missions and offices. The Trade Commissioner Service supports 48 markets across the region. Modest Canadian police and military deployments are present in United Nations peacekeeping operations in Mali, the Democratic Republic of Congo and South Sudan.

Despite having 8 foreign investment protection and promotion agreements in Sub‑Saharan Africa and recent growth in bilateral trade, Canadian trade with the region remains relatively small (in 2020, $7.7 billion in two-way merchandise trade). Canadian mining companies have large investments, with assets totaling $35.4 billion as of 2019.

Canada is also the fourth largest non-regional shareholder of the African Development Bank and a contributor to the African Development Fund, which provides concessional financing to the lowest income countries. Sub-Saharan Africa remains the region receiving the largest amount of Canadian bilateral international assistance at $1.5 billion annually. Canada is working to meet its goal of allocating at least 50% of its bilateral international development assistance toward Sub-Saharan Africa by 2021-22. The majority of this support is focused on human dignity (health, education) gender equality and humanitarian assistance. Sub-Saharan Africa is a significant beneficiary of the more than $2.5 billion in international assistance provided by Canada in response to COVID‑19. 

Canada is continuing its engagement in the following areas:

• Political engagement: [REDACTED] and is preparing to hold regular high-level consultations; both of these initiatives have been delayed by the pandemic and current events in Ethiopia. 
• Climate finance: Despite contributing the least to global warming, Sub-Saharan Africa is the region most vulnerable to the impacts of climate change. Canada’s new $5.3 billion climate finance program will include support for climate change adaptation in Africa.
• Trade/Development nexus: In support of joint trade and development objectives, Canada is focusing onclean economic growth, agriculture and the blue economy, and engaging with Canadian businesses to help implement the United Nations 2030 Agenda for Sustainable Development. Canada is also supporting the implementation of the Africa Continental Free Trade Agreement.

E. Top issues

COVID-19 response and recovery

Issue

• Canada has been effective at helping shape global efforts to respond to COVID-19. This has included facilitating global vaccine efforts to meet urgent humanitarian and development demands and creating ad hoc forums for joint action related to trade and financing a sustainable and inclusive economic recovery. Canada use its influence to frame future pandemic preparedness actions.

Context

Canada has taken strategic actions across a range of fields to address the international implications of COVID-19. Efforts have been framed by 3 strategic pillars for action where Canada can make an immediate direct impact: (1) fighting the pandemic, (2) managing financial stresses and stabilizing economies, and (3) supporting the most vulnerable and reinforcing recovery.

To fight the pandemic, Canada is strengthening capacities at home and abroad in a manner that also reinforces delivery of the health-related Sustainable Development Goals. This involves strengthening health systems and key institutions, and providing equitable access to COVID-19 tests, treatments and vaccines, notably through the Access to COVID Tools (ACT) Accelerator, and all of its pillars, including the COVAX Facility. To date, Canada has committed more than $2.6 billion in international assistance in response to the pandemic, including $1.3 billion for the ACT Accelerator and $740 million in humanitarian and development assistance to respond to the immediate needs created by COVID-19. It has also reinforced the delivery of pandemic and health-related international assistance, with a focus on the poorest and most vulnerable populations. In May 2021, Canada co-hosted a pledging conference on vaccines and therapeutics for vulnerable countries alongside the EU and Japan, which raised US$8 billion.

To manage financial stresses and stabilize economies, Canada has worked to enable financial liquidity and stability through the G20 Debt Service Suspension Initiative to provide debt relief to the poorest countries, and within the Organisation for Economic Co-operation and Development (OECD) to identify sound economic practices. Canada increased its loan commitment to the International Monetary Fund’s Poverty Reduction and Growth Trust from $2 billion to $3 billion to help meet unprecedented demand from low-income countries and supports the IMF’s allocation of US$650 billion in special drawing rights to increase fiscal space for vulnerable countries. Through the Ottawa Group and bilaterally, Canada has worked to foster sustainable supply chains by advocating for unrestricted export of critical health products and services, including personal protective equipment and essential workers. Finally, Canada launched the Financing for Development in the Era of COVID-19 and Beyond Initiative in April 2021 with Jamaica and the UN Secretary General to foster global engagement and develop financing solutions to address the socio-economic impacts of the pandemic. Three leader-level meetings and a meeting of finance ministers have been held to date as part of this initiative.

To support the most vulnerable and reinforce recovery, Canada has focused its efforts on a humanitarian response and addressing longer-term socio-economic impacts of the pandemic in developing countries. Canada’s support has focused in particular on agriculture, food security, nutrition, access to education, promoting economic recovery and growth, and humanitarian action. Efforts to advance gender equality and promote diversity and inclusion are at the centre of all of Canada’s international assistance efforts.

Supporting Canadians abroad

¶¶ÒùÊÓƵ’s consular response to the COVID-19 pandemic represented the largest and most complex peacetime repatriation of stranded Canadians in history and critical on-the-ground support to those unable to depart. Between March and July 2020, ¶¶ÒùÊÓƵ facilitated the safe return of nearly 63,000 Canadians, aboard nearly 700 flights from 109 countries and handled more than 350,000 calls and emails. The department also demonstrated ingenuity in creating new tools, such as the COVID-19 Emergency Loan Program, whereby 4811 loans totalling $20 million were disbursed to Canadians in distress.

Diplomatic response to COVID-19

Canada has demonstrated leadership in carving out spaces for dialogue and enabling international cooperation and action. It worked to enable the effective functioning of all multilateral institutions to which it is a member, and also led in the formation of multiple ad hoc plurilateral groupings to respond to the pandemic. Early in the crisis, Canada established a Ministerial Coordination Group on COVID-19, which met virtually 12 times between March and December 2020. This forum became a key channel for exchange on multilateral responses to trade and emergency measures; maintaining air, land and marine transportation links and supply chains; and coordinating support for international institutions. Canada and the United Kingdom also established a Development Ministers’ Contact Group on COVID-19. This group provides likeminded development donors with a forum to identify solutions to the development implications of the pandemic and to enable greater coherence and strategic impact in their assistance responses.

On international trade, Canada has worked closely with likeminded countries at the World Trade Organization (WTO), G20 and Asia-Pacific Economic Cooperation (APEC) to urge countries to keep global supply chains open and to report their trade measures immediately in compliance with WTO obligations so that policy decisions are based on current and reliable data. Canada also leads the Ottawa Group on WTO reform, a small representative group of WTO members which promotes concrete actions in support of current trade rules and seeks to address challenges that are putting the multilateral trading system under stress. Support has been provided to Canadian businesses both domestically and internationally with the introduction of programs such as Export Development Canada’s Business Credit Availability Program Guarantee. In addition, Canada has committed over $9 billion to procure vaccines and therapeutics and to provide international support. Most of this amount has been allocated for the up to 409 million doses of vaccines and vaccine candidates secured. Canada has also dedicated approximately $7.7 billion to buy personal protective equipment, medical equipment and supplies for federal departments and agencies, the majority of which are dedicated to equipping frontline workers through provincial and territorial health care agencies.

Looking ahead

Global efforts will remain two-pronged during 2021: concerted action to limit the spread of the pandemic as new, more virulent strains emerge, while also focusing on addressing the long-term impacts, as the pandemic has reversed decades of progress on poverty reduction, healthcare, education, gender equality and economic development globally. The key factor in limiting the spread of the pandemic will be the rapid equitable distribution of vaccines to populations around the world, which has been a key focus of G7 efforts to date and will be at the centre of G20 discussions as well, with the summit taking place in late October. Multiple reviews related to the COVID-19 response, including the Independent Panel on Pandemic Preparedness and Response, have highlighted the need to transform the global health security architecture to reduce the impacts of future pandemics. As various bodies take up these recommendations, there will be increasing pressure on Canada to identify its contribution moving forward.

International trade and investment during COVID-19

Issue

• Despite the pandemic, both trade and global supply chains held up relatively well in 2020. The latter is however experiencing various bottlenecks, and increasingly threatened with cyber-based disruptions.
• The trade outlook for 2021 is positive but uncertain, and largely dependent on subsiding pandemic restrictions and vaccination efforts. Fiscal stimulus packages, particularly in developed countries, are expected to strongly support global trade recovery throughout 2021.
• The shift to a digital economy continues apace, with important implications for global e-commerce and growing concerns about regulatory divergence and cyber threats to data, systems and financial resources.

Context

The global economy experienced one of the worst downturns since the Great Depression, surpassing lows experienced after the 2008 Global Financial Crisis. Economic growth has since resumed around the world; however, it took more than a year for global GDP to reach pre‑pandemic levels and there is an uneven path ahead across countries and sectors, and for historically underrepresented groups. In contrast, world merchandise trade was able to rebound much more quickly and reached pre-pandemic levels during the second half of 2020. This positive trend has continued into 2021, although impacts and recovery vary and future growth may be constrained as the pandemic persists around the globe.

Industrial production has largely returned to pre-pandemic levels, with durable products such as cars and electrical appliances accounting for a large proportion of global manufacturing recovery. Services, such as travel, arts, entertainment, tourism and brick-and-mortar retail still operate below their capacity, and remain hard hit by ongoing restrictions on movement.

Supply and demand dynamics across major trading blocs and value chains have experienced turbulence and shocks as choke points have disrupted the production and shipment of goods. In the initial months of the pandemic, there was also an amplification of a pre-existing trend toward protectionist measures, as countries introduced trade restrictions and export bans, notably on medical products. However, many trade restrictive measures have since been rolled back, and overall, the multilateral trading system has been resilient. According to the World Trade Organization (WTO), 57% of the 114 export restrictive measures put in place since the beginning of the pandemic have been repealed as of May 2021.

International trade is primed for a strong but uneven recovery in 2021. While trade fell 15% in the initial months of the pandemic, the subsequent recovery in the second half of year brought overall 2020 growth in the volume of merchandise trade to -5.3%. The WTO expects that these volumes will increase another 8.0% in 2021 and 4.0% in 2022. However, the 2021 outlook remains marred by regional disparities, continued weakness in services trade and lagging vaccine timetables as new waves of infection undermine and postpone recoveries.

Beyond the recovery, increasing geopolitical competition between the United States, China and other trading partners, especially pronounced in advanced technology spheres, will continue to influence the global trade and investment landscape, including the evolution of critical supply chains for strategic commodities and products.

Impact on businesses

The economic impact of the pandemic has generally had a disproportionate effect on micro, small and medium-sized enterprises (MSMEs), owing in part to their overrepresentation in sectors affected by distancing measures, but also because of more limited financial resources and borrowing capacity.

MSMEs face a variety of challenges during the recovery. Given their importance as engines of growth and primary employers, including of women and youth, better access to regulatory and market information, affordable trade finance, and streamlined customs procedures and requirements will be crucial to helping MSMEs and other under-represented groups in trade navigate through recovery. These needs are magnified in developing countries that will need international support.

Impact on trading partners

Important regional differences are being observed, coinciding with the timing of outbreaks, lockdowns, vaccination rates and associated re-openings. Many developing and emerging economies’ exports are still struggling to regain lost ground in 2021.

The United States: Despite being hard-hit by COVID-19, the U.S. economy experienced a shallower decline than many others thanks in large part to strong fiscal supports. However, trade suffered significantly, with the volume of exports of goods and services dropping 13% in 2020 and imports, by 9.3%. In 2021, the International Monetary Fund (IMF) expects import volumes to make a more rapid recovery (18.9%) compared to exports (10.5%) to support domestic production. Continued strength in the U.S. economy and U.S. government fiscal supports will continue to support demand for Canadian goods and services.

Europe: The Euro area’s economy suffered greatly from the effects of COVID-19, with GDP contracting 6.6% in 2020. Trade volumes also declined substantially, almost 10% lower than last year. The Euro area, which generally runs persistent trade surpluses, recorded a smaller surplus in early 2021, reflecting modest European export and import growth, and fewer goods exported globally. The IMF predicts that the volume of imports of goods of services will rise 5.7% this year with stronger gains of 7.1% in 2022. Exports are expected to rebound more rapidly in 2021, with volumes growing 7.9% and an additional 6.5% in 2022.

China: While the Chinese economy did manage to grow 2.3% in 2020, this slower pace stood in contrast to stronger growth in recent years.Similarly,China’s trade picture shifted abruptly in 2020.The volume of imports of goods and services dropped 1.5% in 2020, while exports grew by a weaker than usual 2.0%. However, China’s economy and merchandise trade levels have more than rebounded since the onset of the pandemic. China’s Q1 2021 goods exports (+20%) and imports (+22%) increased over Q1 2020 averages, with growth set to continue over 2021.

Many emerging markets and developing economies have faced a perfect storm in the wake of COVID-19, as a result of weakened exports, turbulent commodity prices, unprecedented capital outflows and depreciation of local currencies. East Asian developing economies have driven gains amongst this group, with relatively strong export growth and gains in global market share largely due to the earlier and stronger recovery in China and the benefits of soaring global demand for manufactured goods. Excluding those East Asian economies, exports from other developing economies in Latin America and Africa in particular remain below 2019 levels.

Impact on goods trade

The ongoing trade recovery comprises most sectors – not only pandemic-related (e.g. pharmaceuticals, information and communications technology (ICT), office equipment) –  but also increasingly minerals and agri-food. Lockdown consumption trends, and notably U.S. stimulus, has driven elevated demand for many goods as well as the inputs to produce them, fueling global trade.

Lifted by the global rebound and improved growth prospects, commodity prices rose substantially in early 2021, particularly for some food products, and oil and copper, but are expected to stabilize. Energy prices are forecasted to increase more than 33% in 2021 over 2020, while metal prices and agriculture prices are expected to climb 30% and 14% respectively, driven by supply shortfalls and strong demand from China. The rise in agricultural prices may lead to a growing number of countries facing acute levels of food insecurity, worsening pressures on eroding development gains.

Impact on services trade

After falling sharply during the initial phases of the pandemic, world services trade appears to be in an uneven recovery phase in 2021. While tourism, travel and transportation services have experienced substantial declines as a result of closed borders and travel advisories, other sectors such as telecommunication services, insurance and pension services have contributed to economic resilience. Trade in digitally deliverable services, such as computer and business services, continued to expand, particularly in East Asia. Although the WTO’s latest Services Trade Barometer points to a rebound via a short run above trend growth in 2021, most services sectors are not expected to fully recover until the pandemic wanes.

Supply chains

International supply chains by-and-large have continued to hold up rather well into 2021. The sharp rebound in global manufacturing activity caused a strong rise in international orders and resulted in some supply bottlenecks. Some incidents of critical supply chain disruptions, or large restructurings, have been documented, particularly semi-conductors and downstream products including the automobile sector. However, cyber intrusions have gained international attention and heightened attention of the challenges of maintaining secure data and IT networks.

Shipping costs have been another factor disrupting supply chains. During the first 7 months of 2021, global freight prices nearly tripled, due to a drastic shortage of shipping containers on the back of stronger manufacturing activity. Digitalization of supply chains is allowing firms to better balance efficiency and resiliency, and to better monitor their suppliers and pre-empt and manage disruptions. Geopolitical risks, and the continued pandemic-related disruptions, are of continued concern.

Competition and investment

The pandemic’s economic disruptions have created uncertainty for firms and investors, creating an increasingly unstable environment for decision-making. Global foreign direct investment (FDI) flows decreased by 35% in 2020. According to United Nations Conference on Trade and Development (UNCTAD), in 2021 global FDI flows are expected to recover some lost ground with an increase of 10 to 15%.

As for competition, concerns arose around the future of otherwise healthy companies weakened by the crisis through sudden changes in valuation or disrupted operations. These companies could, in some cases, become vulnerable to opportunistic buyers or takeovers, or default to creditors and may ultimately end up foreign-owned. In response, some governments have introduced more restrictive foreign investment screening, especially in sectors deemed strategic.

Digital economy

The pandemic has spurred a rapid shift towards digital transformation. The competitive landscape across all market sectors has evolved rapidly, and businesses are looking to technology to increase their agility and create new digitally enabled business models. A notable trend is the boost for e-commerce trade (e.g. retail sector transition from storefront to on-line platforms). Digitization among firms is increasingly understood as fundamental for keeping operations running. The Canadian digital economy has proven to be incredibly resilient to the crisis and sectors underpinned by a strong digital base have shown to be more insulated from lockdowns and travel restriction-related shocks.

The pandemic has also exposed important challenges. In many countries, as in Canada, significant digital divides exist when already disadvantaged groups are not in a position to equally benefit from an increasingly digital economy, including due to the lack or cost of broadband.

International and multilateral cooperation

Stresses to the multilateral rules-based trading system that emerged before the pandemic were magnified over the course of the pandemic. Important gaps in the rules, reduced ability to resolve disputes due to the U.S. block on WTO Appellate Body appointments and polarized positions amongst states on various issues contributed to uncertainty and unstable dynamics.

Canada has worked closely with likeminded countries at the WTO, G7, G20, Asia-Pacific Economic Cooperation (APEC) and other multilateral forums to urge countries to keep global supply chains open and to notify their trade measures immediately in compliance with WTO obligations.

As the negative impacts of the pandemic have become better understood, certain measures have been slowly removed. Canada continues to play an important role in this phase of the pandemic and economic recovery, including through its leadership of the Ottawa Group on WTO reform.

Feminist foreign policy

Issue

• Canada has made advocacy and action on human rights, gender equality, diversity and inclusion an integral element of its domestic and foreign policies.
• Over the past 5 years Canada has advanced a suite of feminist foreign policies and initiatives relating to diplomacy, trade, security, international development and consular services. These efforts have sought to focus on addressing fundamental structural barriers that prevent gender equality, and account for the needs of those most affected by multiple forms of discrimination.
• Work with civil society and other partners is ongoing to continue to develop Canada’s feminist foreign policy approach.

Context

Recent global trends point to an ongoing anti-human rights backlash targeting women’s rights, gender equality, and LGBTQ2+ rights. These efforts, which also reflect a more fractious and polarized geo‑political environment, see deliberate and in many instances coordinated action by some state and non-state actors to roll back, for instance, progress on a range of women’s sexual and reproductive health and rights and initiatives to combat gender‑based violence. This is manifesting itself in all regions and is also evident across some international bodies, [REDACTED].

Not only are the limited gender equality gains made in recent decades at risk of being rolled back, but recent events have also further exposed the consequences of systemic racism and discrimination faced by Black, racialized communities and Indigenous peoples – both in Canada and abroad. The COVID-19 pandemic and its associated economic crisis has compounded matters.

Reinvigorated leadership and coherent international action are needed to combat and reverse these dynamics. From a foreign policy perspective, constructive cross-regional alliances are forming to address some specific aspects of these dynamics. In this context, and building on Sweden’s pioneering efforts, some countries have publicly adopted “feminist foreign policies”, including France, Mexico, Spain, Luxembourg. [REDACTED].

Canada’s feminist approach

Canada’s feminist foreign policy is the international expression of ongoing, coordinated, and whole-of-government efforts to advance human rights, including diversity and inclusion and gender equality domestically. In doing so, it reinforces Canada’s overarching objectives of strengthening a rules-based international system, supporting lasting peace and security, fostering prosperity, and implementing the 2030 Sustainable Development Goals.

Canada currently applies a feminist approach across all of its international policies and programming, including diplomacy, trade, security, development and consular services. This builds on a series of sectoral policies and initiatives developed in recent years, notably the:

• Feminist International Assistance Policy;
• Trade Diversification Strategy, with its inclusive approach to trade;
• Second National Action Plan on Women, Peace and Security (WPS),
• Elsie Initiative for Women in Peace Operations, and the appointment of a dedicated WPS Ambassador;
• Defence Policy, “Strong, Secure, Engaged”.

These policies place a focus on dismantling persistent systemic barriers, discriminatory norms and inequalities based on sex and gender – including sexual orientation, gender identity and expression, and sex characteristics (SOGIESC) – as well as on the basis of other intersecting aspects of identity such as race, national or ethnic origin, religion, age, language or disability.

Diplomatically, Canada coordinates with likeminded countries and works closely with partners from various regions to stem if not reverse the worrying efforts to undermine human rights and gender equality. This includes an ambitious initiative to mark the 25th anniversary of the Beijing Declaration and Platform for Action (Beijing +25) – the UN resolution setting out a roadmap for gender equality worldwide. The Generation Equality Forum, led by UN Women, France and Mexico, in partnership with civil society, seeks to generate renewed action on gender equality and counter the ongoing anti-rights backlash. Canada has joined the forum’s Multi-Stakeholder Steering Committee and is a co-leader of the “Feminist Movements and Leadership” Action Coalition. It has also joined the Women, Peace and Security and Humanitarian Action Compact.

Feminist foreign policy dialogue and paper

In February 2020, then-foreign minister Champagne publicly announced his intention to strengthen the foundations of Canada’s feminist foreign policy by working with civil society towards the development of a policy paper. The objective of the paper was to provide an overarching public statement outlining Canada’s approach and commitments to promoting human rights, advancing gender equality, empowering women and girls, fostering diversity and inclusion, and upholding human dignity around the world.

In fall 2020 and early 2021, ¶¶ÒùÊÓƵ undertook dialogues with domestic and international partners and invited more than 400 domestic civil society, academics, and Indigenous partners to provide their views on Canada’s feminist foreign policy. A series of virtual roundtables and public webinars were organized by civil society partners and by the department, both in Canada and through embassies abroad. ¶¶ÒùÊÓƵ employees were also invited to provide input, including through the department’s Diversity and Inclusion Council and employment equity networks. In total, more than 150 written submissions were received, including 48 reports from Canada’s missions abroad.

The paper was pending finalization and was put on hold during the electoral transition period.

Feminist International Assistance Policy

Context

Adopted in June 2017, Canada’s Feminist International Assistance Policy is a pillar of its broader feminist foreign policy. It seeks to eradicate poverty and build a more peaceful, inclusive and prosperous world. Experience and evidence demonstrate that promoting gender equality and empowering women and girls is the most effective approach to achieving this goal. Sustainable Development Goal (SDG) 5—achieving gender equality and empowering all women and girls—is aligned with the policy and at the heart of Canada’s approach to implementing the 2030 Agenda for Sustainable Development because it can drive progress towards the other SDGs.

What we do

The Policy reflects input received through extensive consultations with Canadian and international partners and stakeholders, and is research- and evidence-based. The Policy focuses Canada’s efforts on providing international assistance that is human rights-based and inclusive, through 6 inter-linked action areas:

1. Gender equality and the empowerment of women and girls (core action area);
2. Human dignity (health and nutrition; education; and gender-responsive humanitarian action);
3. Growth that works for everyone;
4. Environment and climate action;
5. Inclusive governance; and
6. Peace and security.

In July 2019, Canada launched 6 action area policies, providing further guidance on what Canada aims to achieve in each. These are accompanied by a series of innovation and effectiveness guidance notes posted on the website.

The Feminist International Assistance Policy committed to directing 95% of bilateral international development assistance to initiatives that will advance gender equality by 2021/22. This percentage increased from 75% in 2015/16 to 97% in 2019/20. The Policy also committed to directing 50% of bilateral international development assistance to sub-Saharan Africa by 2021/22. In 2019/20, 42% of bilateral assistance went to sub-Saharan Africa.

More broadly, the Policy is aligned with the 2030 Agenda for Sustainable Development. This global agreement provides the framework for building a more inclusive, sustainable and resilient world and is seen as a vital roadmap for recovery from COVID-19. ¶¶ÒùÊÓƵ is implementing a departmental SDG strategy, which aims to integrate a sustainable development lens across all business lines and will increase the coherence, effectiveness, and impact of its international efforts. This work contributes to Moving Forward Together, Canada’s national 2030 agenda strategy, a whole-of-society initiative.

Canada has launched several “signature initiatives” to support implementation of the Feminist International Assistance Policy, including:

• $650 million over 3 years (2017-20) for “Her Voice, Her Choice” to help improve women’s access to comprehensive sexuality education, contraception, family planning, safe and legal abortions, and post-abortion care.
• $150 million over 5 years (2017-22) for the Women’s Voice and Leadership Program, which supports over 400 local women’s organizations and movements that advance women’s rights in developing countries.
• $123 million over 5 years (2017-22) to Canadian small and medium organizations to develop and implement innovative programming in partnership with local organizations in support of the 6 action areas, notably gender equality and the empowerment of women and girls.
• $2.65 billion (2015-21) to help developing countries transition to low‑carbon, climate-resilient economies. Canada is doubling this previous commitment to international climate finance to $5.3 billion over the next 5 years (2021-26).
• $300 million to work with the Equality Fund consortium to establish a “first of its kind” innovative global funding platform bringing together the granting, philanthropic and investment worlds.
• $400 million to improve access and reduce barriers to quality education for women and girls in crisis and conflict situations.
• A commitment to reach $1.4 billion annually by 2023, to support women’s and girls’ health and nutrition globally, announced at the 2019 Women Deliver conference.
• A commitment to implement Canada’s National Action Plan on Women, Peace and Security 2017-2022, and the creation in 2017 of the Elsie Initiative for Women in Peace Operations.

An annual internal stocktaking exercise reviews progress on implementing priority commitments and initiatives outlined in the policy. This review allows the department to identify strengths and successes as well as address risks and gaps, where necessary.

How we do it

The Policy also commits Canada to improving the effectiveness of its international assistance, including efforts to make it more flexible, integrated, and innovative. Actions taken include the creation of FinDev Canada (Canada’s development financing mechanism), more streamlined reporting, the implementation of innovative partnership mechanisms such as the Small and Medium Organizations initiative and the Equality Fund, and improving transparency through its reporting to Parliament and the International Aid Transparency Initiative.

The Policy also outlines a “Where We Work” approach that organizes Canada’s country partnerships according to evidence-based categorizations, and guides programs to deliver international assistance in response to local needs and opportunities. In March 2021, Canada issued a guidance note for working in productive partnerships for transition, to provide staff guidance on working in middle-income countries in terms of supporting their transition to becoming fuller, more self-sustaining economic partners for Canada.

Canada’s international assistance policy priorities also include a focus on trade and development, private sector engagement, and innovative development finance, all of which are of particular importance for Canada’s contribution toward sustainable development in middle-income countries.

COVID-19 response

The Policy has proven to be a robust and strategic framework in guiding Canada’s international assistance response to COVID-19, notably its focus on the world’s poorest and most marginalized, and the differentiated needs of women and girls.

Canadian international assistance has helped address immediate and long-term health impacts of the pandemic, including through COVID-19 testing, treatments, and vaccines. Canada’s strong support for the Access to COVID-19 Tools (ACT) Accelerator and COVAX Facility have been key pillars of this response.

Canada has also sought to buttress a global recovery in its response. This includes enabling access to education for children around the world, supporting ceasefires and peacebuilders working in fragile contexts, and reinforcing food security and nutrition. In recognition of the disproportionate impact the crisis has had on women and girls as frontline workers and caregivers, Canada has emerged as one of the main voices calling for greater attention to the issue of paid and unpaid care work.

Canada has been a leading advocate for continuity of trade, including as chair of the Ottawa Group on WTO reform, which endorsed a COVID-19 action plan on trade facilitation and trade and health, to support the free flow of essential goods and services.

Canada has focused on enabling financial liquidity and stability, particularly for least developed countries and small island developing states. For example, Canada helped develop the Debt Service Suspension Initiative with the G20 and other creditors, and allocated an additional $3 billion to the International Monetary Fund’s (IMF) Poverty Reduction and Growth Trust to help meet unprecedented demand from low-income countries for financial support to address crisis needs.

Canada has also promoted inclusive global discussions about effective policy responses to the pandemic. In spring 2020, Prime Minister Trudeau launched the Financing for Development in the Era of COVID-19 and Beyond initiative with the Prime Minister of Jamaica and the UN Secretary General to foster global engagement and develop financing solutions to address the socio-economic impacts of the pandemic. Four leader-level meetings and a meeting of finance ministers have been held to date. Since the launch of the initiative, concrete and specific actions have been taken on a number of key financing for development issues in the G7, G20, World Bank and IMF in areas such as financing for women and infrastructure, financial liquidity and debt relief, and climate and biodiversity financing.

Rules-based international system

Issue

• Growing strain on the system of laws, norms, and institutions that govern international engagement has heightened the need to protect, reform and revitalize them to meet 21st century requirements and expectations.

Context

The current rules-based international system (RBIS) is composed of institutions such as the UN and World Trade Organization (WTO); alliances such as NATO; and norms grounded in international laws such as the Humanitarian Law of Armed Conflict. This constantly evolving system has established parameters for inter-state behaviour that have largely been collectively shaped and where mutual accountability was expected, albeit with some exceptionalism notably by strong geopolitical and economic powers. While by no means consistent, the system has nevertheless contributed to the relative peace and gradually expanding prosperity of the last 75 years. It has proven resilient in the face of inter-state tensions (e.g. Cold War), and has facilitated vast trade growth (from 12% of global GDP in 1960 to over 30% today). It has also provided an expanding framework of global norms and expectations to manage diverse issues such as fishing rights, air transport, extradition, postal services, telecom regulations, peace operations and human rights.

Current challenges

While as many of its components continue to function well, the current system and the principles that underpin it are under increasing stress. While we may still not fully understand the effects the COVID-19 pandemic is having, the crisis has accelerated some previously observed trends:

• Increased geopolitical competition and great power rivalry have encouraged growing unilateralism among some states. This has been accompanied by a decline in support in some quarters for multilateral action. The deterioration of U.S.-China relations in particular has affected the nature and scope of international cooperation, including within the G20, the UN Security Council, the WTO and the World Health Organization (WHO). China has assumed an increasingly assertive posture in multilateral institutions, seeking to shape the RBIS in a manner that aligns with the interests of its ruling regime, requiring vigilance by Canada and close partners.
• Some states increasingly disregard principles and institutions they find inconvenient domestically, notably those related to human rights, rule of law and good governance. This trend deepened during the COVID-19 pandemic as some countries use excessive force and have violated fundamental rights and freedoms, including the suppression of human rights defenders and media.
• Protectionism has grown alongside isolationist domestic politics and illiberal populist movements in all regions, often coupled with a backlash against globalization. The 2020 economic crisis further exacerbated this challenge, and these trends as a whole risk being more prominent as citizens react to further pandemic waves and government actions (or perceived inaction).
• Concerns about the representativeness and performance of some global institutions and multilateral arrangements, from the WHO to the UN Security Council, have led to questions about their legitimacy and relevance. In other bodies, like the international financial institutions, some states feel excluded from decision-making, regarding them as unfair and outdated.
• Financial, organizational and leadership challenges affect the ability of some multilateral entities to effectively fulfil their mandates.

Revitalizing the system

In the short term, actions need to be taken by the vast majority of states that benefit from the current system to enable the continued effective and accountable functioning of international law and key institutions, including the United Nations, its technical agencies, and international financial institutions such as the World Bank and the IMF. In the medium-term, the pandemic opens space to assess how a refurbished system can better serve the interests of all, though there will be significant disagreement over the nature and extent of the changes required.

After 4 years of tensions, the Biden administration has exhibited openness to international cooperation, supportiveness toward multilateral institutions and alliances and actively developed U.S. leadership on several multilateral issues, from climate change to nonproliferation to threats to democracy. Closer alignment on a range of multilateral issues is embedded in the Roadmap for a Renewed United States‑Canada Partnership, though differences remain regarding the WTO, UN funding, NATO burden-sharing and other issues.

This bilateral alignment is reflective of a trend toward closer cooperation on a range of multilateral issues among a subset of partners in Europe, Asia and the hemisphere, in the face of aggressive actions by major non-democratic states.

There is a strategic opportunity over the next few years to expand the community of states that will support and revitalize the RBIS in a manner that protects and advances human rights, rule of law, good governance and sustainable economic growth for all peoples.

Canada’s role

For Canada, and for many other states, there is an urgent need to protect the current rules-based international system, and to reform and revitalize it to reflect 21st century dynamics, and serve our citizens’ interests for the near future.

It is of particular interest for Canada that the international system of the future be not merely cooperative or multilateral, but rules‑based. The extent to which this will involve the creation of new rules, norms or institutions, or the reform of older ones, depends on multilateral cooperation efforts involving a wide range of state and non-state stakeholders.

Bilateral relations, including listening to and working with a diverse range of partners about how the system can advance their interests, are an important element of any strategy. While most states continue to claim support for, and appreciate the benefits of the current RBIS, they may not actively work at promoting, protecting, or reforming it. In this regard, Canada has provided valued leadership in recent years in establishing new arrangements with traditional and new partners on a range of select issues, such as the Ottawa Group on WTO Reform, the Media Freedom Coalition, and the Global Partnership on Artificial Intelligence. Canada was also an early proponent of the Alliance for Multilateralism.

Canada is well-positioned to contribute substantively on a range of institutional, thematic, technical, and issue-based initiatives that can strengthen and expand the rules-based system, including in new areas and where gaps exist, such as for cyber governance, evolving dynamics in the Arctic and on human rights.

Canada’s international assistance

Issue

• In an interdependent and turbulent world, international assistance is an important element of Canada’s foreign policy toolkit. Through its international assistance, Canada contributes to poverty eradication, supports humanitarian action, and reinforces peace and security.
• Canada benefits directly from the prosperity, stability and partnerships its international assistance fosters. Throughout the pandemic, we have seen the direct impact that health and economic crises in other parts of the world can have on Canadians.
• Canada’s international assistance complements its diplomatic, defence, trade and immigration activities.

Context

While the last 3 decades have seen unprecedented global development progress, not everyone has benefitted equally. An estimated 689 million people still live on less than $1.90/day, and over 82 million people have been forcibly displaced due to conflict, violence and human rights violations. Women and girls are more severely impacted by poverty due to gender inequalities. Poverty is increasingly concentrated in fragile states and in low-income countries – those places least able to provide necessary supports without international help. The COVID-19 pandemic has only exacerbated these challenges. One stark example of this is the World Bank’s finding that the pandemic pushed an estimated 119 to 124 million people back into extreme poverty in 2020.

Canada has been an active donor since the 1950s, with international assistance contributing to advancing Canada’s broader foreign policy interests, diplomatic partnerships and international trade objectives. Poverty, inequality, violence and fragility matter for both global and Canadian stability and prosperity. Moreover, developing countries are important economic partners and sources of global growth: as economies stabilize and grow, Canada has opportunities to develop mutually beneficial trade relationships.

Canada’s international assistance supports the implementation of the United Nations’ 2030 Agenda on Sustainable Development, which includes 17 universal Sustainable Development Goals (to be pursued in all countries). The 2030 agenda reflects a global consensus to leave no one behind in the social, economic and environmental dimensions of sustainable development.

International Assistance Envelope

Canada’s International Assistance Envelope (IAE) totalled over $7.6 billion in 2020-21.^{Footnote 3} ¶¶ÒùÊÓƵ delivers the majority of these investments (82%). Canada’s official development assistance to gross national income (ODA/GNI) ratio was 0.31% in 2020, in relation to the global aspirational target of 0.7%.

The IAE is composed of 6 funding pools that address different types of international assistance activities: core development, humanitarian assistance, international financial institutions, peace and security, crisis, and strategic priorities funding. The Crisis Pool and Strategic Priorities Fund in particular are intended to facilitate the deployment of international assistance in exceptional circumstances. During the course of the pandemic, the department has made use of these mechanisms in response to demonstrated international needs and Canadian foreign policy considerations.

What we do

Canada takes an integrated approach to addressing poverty, humanitarian crises, and peace and security through its international assistance. Canada targets its aid to where it can make an impactful difference in the lives of the poorest and most vulnerable, including those living in fragile contexts. The thematic focus of Canada’s international assistance has evolved over the years in response to changing needs, opportunities and Canadian priorities.

In June 2017, the government launched the Feminist International Assistance Policy, which outlines the “what, how and where” of Canada’s international assistance. The policy seeks to eradicate poverty and build a more peaceful, inclusive and prosperous world. It emphasizes that promoting gender equality and empowering women and girls is the most effective approach to achieve this goal. The policy has proven effective and relevant in guiding Canada’s international assistance pandemic response. This is particularly true given the exceptional impact the crisis has had on women and girls as frontline workers and caregivers, and on fragile states.

Building on Canada’s strong leadership on gender equality since the 1980s, the policy lays out ambitious targets. For example, by 2021/22, at least 95% of Canada’s bilateral development assistance was meant to either target or integrate gender equality and the empowerment of women and girls. Canada has met this goal since fiscal year 2018/19.

More than half of Canada’s international assistance investments are in global health, humanitarian assistance, and environment and climate action. Its remaining funding addresses other critical areas such as equitable economic growth, education, governance, and peace and security.

Some key Canadian results in the last 18 months include:

• Saving or improving the lives of 98 million people in 60 countries, and responding to 37 natural disasters, through timely delivery of humanitarian assistance;
• Supporting the procurement, distribution and delivery of over 165 million doses of COVID-19 vaccines to 86 low- and lower-middle-income economies, through Canada’s support to the COVAX Facility;
• Reaching more than 28.9 million people with Canada-funded projects that help prevent, respond to, and end sexual and gender-based violence;
• Training 33,796 teachers according to national standards;
• Enabling 5.2 million entrepreneurs, farmers and smallholders to receive financial and/or business development services;
• Reducing or avoiding 2.31 metric megatons of greenhouse gas emissions.

Where we work

Canada disbursed international assistance in 149 countries in 2020/21 through diverse channels and partners. Programs are tailored to respond to specific needs and opportunities in each country. Canada has committed to directing 50% of its bilateral international development assistance to sub-Saharan Africa by 2021/22, although this is expected to fall slightly short due to COVID-19 and the need to address other urgent global crises. Canada’s top 10 bilateral recipients are shown in the following graph.

Alternative Text

Top ten recipients of Canada’s bilateral international assistance for fiscal year 2020-21- figures in millions of dollars.

Long description:

The chart provides a preliminary list of the top ten recipients of Canada’s international assistance from April 1, 2020 to March 31, 2021. 

The chart lists the top ten recipients in descending order, with the amount of bilateral and multilateral international assistance that Canada provides for each country.

Country	Bilateral IA in $ millions
Mozambique	96,91
Syria	98,02
Jordan	98,09
Bangladesh	106,56
Iraq	108,12
Mali	108,79
South Sudan	114,80
Lebanon	122,80
Ethiopia	140,17
Afghanistan	178,15

Bilateral international assistance is the disbursement of funds where the donor earmarks or controls the funds by specifying the recipient and/or other aspects of the initiative. It includes international humanitarian assistance, which is designed to save lives, alleviate suffering, and maintain and protect human dignity during and after an emergency.

Multilateral international assistance refers to contributions disbursed via multilateral development institutions, such as United Nations programmes and funds, regional development banks, global funds or the World Bank Group.

How we work

Canada is committed to internationally‑agreed development effectiveness principles, based on decades of experience, including the importance of countries leading their own development, focusing on results, working in inclusive partnerships, and transparency and accountability.

Canada’s international assistance is delivered through diverse partners including national governments, multilateral organizations, non-governmental organizations and private sector entities. Canada often works in multi-stakeholder partnerships, because effective development cooperation requires harnessing relevant knowledge and resources to achieve results. Partner organizations are selected based on their capacity to deliver impact in-country and an analysis of past performance.

Canada organizes its international assistance into 3 broad categories, which are complementary to other trade and diplomatic assets:

Long-term development assistance: seeks to help partner countries reduce poverty and implement sustainable long-term solutions to development issues and move forward towards self-reliance and inclusive sustainable development.

Humanitarian assistance: primarily in the form of financial support to experienced humanitarian partners to help save lives, alleviate suffering and maintain dignity in conflict situations and natural disasters.

Peace and security assistance: provides dedicated programming in conflict prevention and stabilization, security capacity building, anti-crime and trafficking, and weapons threat reduction.

Canada promotes approaches to delivering international assistance. Such innovations may involve new business models, policy practices, technologies, behavioural insights or ways of delivering products that have the potential to address an important development problem substantially more effectively and efficiently than the status quo. Canada also encourages experimentation and scaling-up of sustainable solutions. Innovation can support new or improved locally-driven solutions for better results and greater impact, to benefit and empower the poorest and most vulnerable people.

Canada has positioned itself as a leader in helping to unlock additional sources of development finance for the Sustainable Development Goals (SDGs). Canada is developing new partnerships and expanding its development financing toolkit to support more effective private sector engagement and mobilize additional resources, including from pension funds and impact investors. To this end, in 2018, Canada established a development finance institution, FinDev Canada, to support private-capital investment in developing countries, and has been experimenting with other new financial vehicles in its climate finance. In 2019, it stood up an International Assistance Innovation Program and Sovereign Loans Program, which expand the range of partnerships and funding mechanisms available, and committed $300 million to help establish the Equality Fund – an unprecedented collaboration that brings together the philanthropic community, the investing community, the private sector and civil society into a single platform to leverage more than $1 billion to advance gender equality in developing countries.

COVID-19 response

In response to the COVID-19 pandemic, Canada is focusing its global leadership efforts, including its international assistance contributions, on 3 strategic objectives:

1. Fighting the pandemic by strengthening capacities at home and abroad through reinforcing the delivery of the health-related SDGs;
2. Managing financial stresses and stabilizing economies through restored global supply chains; and
3. Supporting the most vulnerable and reinforcing recoveryboth through its humanitarian response as well as efforts to address longer term socio‑economic impacts of the pandemic.

Since February 2020, the Government of Canada has announced that it will commit $2.6 billion in international assistance to the global response to COVID-19, of which 76% has been disbursed to date. This includes more than $1.315 billion in funding for the Access to COVID-19 Tools (ACT) Accelerator to support equitable access to COVID-19 tests, treatments and vaccines.

A significant portion of Canada’s COVID-19 response to date has also involved pivoting planned and operational international assistance programming, where possible, to support the pandemic response. As of August 2021, ¶¶ÒùÊÓƵ has been able to direct approximately $541 million in existing resources for COVID-19 initiatives.

Triple nexus

Context

Extreme poverty is rising. The World Bank projects that by 2030, up to two thirds of people living in extreme poverty will be in fragile states. Conflict and related humanitarian crises are more complex and protracted, and are further compounded by climate change, the COVID-19 pandemic and embedded structural and societal inequalities. The rise in conflict and insecurity in the world is creating greater humanitarian needs and risks undermining global efforts to achieve the 2030 Agenda for Sustainable Development.

Global experience and the department’s own evaluations have shown that traditional approaches to integrated peace, humanitarian and development assistance have still been too siloed, leading to missed opportunities to

enhance development results and reinforce political progress. For example, with traditional approaches, humanitarian assistance can help displaced persons in developing countries meet basic needs but is not meant to support them with income-generating opportunities, which displaced persons need when they live in protracted displacement situations. Moreover, providing development aid without also supporting peacebuilding and reconciliation risks continuing a cycle of violence and instability. A shift and adaption is therefore needed to more deliberately and effectively address the interface between humanitarian, development and peace and security interventions.

The humanitarian-development-peace or ‘’triple nexus’’ is a concept that builds on efforts aimed at improving coordination and cooperation between the 3 areas or pillars of work, with the end goal of improving results and generating greater impacts. This concept has evolved significantly over the last decades as policy-makers and practitioners have learned lessons from large-scale, complex engagements: linking relief, rehabilitation and development (1980s); defence, diplomacy and development (1990s); and whole-of-government approaches and initiatives (early 2000s).

In 2016, the triple nexus approach became an explicit objective of the United Nations’ New Way of Working, and was underscored during the 2016 World Humanitarian Summit as an approach to improve humanitarian response. It has been emphasised in UN Security Council and General Assembly resolutions in 2016, 2018, and 2020.

In 2019, in response to a call for strengthened policy and operational coherence, the OECD-DAC developed a Recommendation on the Triple Nexus. The recommendation is centred around better coordination, programming and financing, and provides a basis for convening actors on better alignment of practice and evidence. Presently, Canada is one of 36 adherents to the recommendation, including 29 OECD member countries, the European Union and 6 UN entities.

The triple nexus in practice

In practice, applying a triple nexus approach is context-specific and involves a "best fit".  This requires joint analysis and planning among humanitarian, development and peace actors intervening in a given geographic context. It also requires the engagement of local populations at all stages of analysis, planning, implementation and evaluation.

When done effectively, efforts are combined through applying the comparative advantage of different actors. For example, this can allow actors in the same geographic location to deploy resources in a coordinated and coherent manner, tying together humanitarian assistance to save lives, development support to strengthen systems and livelihoods as well as activities that promote peace and address the root causes of conflict and fragility, through joint planning and analysis.

Working together helps protect development gains when a crisis erupts. In addition to consolidating needs and being more cost effective, a nexus approach is ultimately about generating sustainable results and development impact at the local level, and being more accountable to affected populations.

Canada’s approach

Canada’s application of triple nexus principles pre-dates the OECD-DAC recommendation. For example, in Kandahar, Afghanistan and in Iraq, Canada adopted whole-of-government approaches that integrated humanitarian, development and peace and security programming. Similar approaches have also been applied through Canada’s engagement in South Sudan, Ukraine and in response to the Syria crisis.

In October 2020, ¶¶ÒùÊÓƵ adopted a comprehensive work plan to implement a triple nexus approach, which follows 3 sequential phases: (1) breaking down silos; (2) partial integration; (3) and full integration. Its desired outcome is enhanced strategic, operational and functional capabilities that allow the department to integrate a comprehensive triple nexus approach and improve the effectiveness of Canada’s international assistance.

As the department works towards full integration of a nexus approach, a key challenge will include the need for effective change management both within the department as well as across global systems to address long-held behavioural practices that can lead to siloed programmatic efforts. 

Text version

Image contains the 11 Principles found in the OECD DAC Recommendation on the Triple Nexus. These Principles include the following:

1. Joint gender-sensitive and risk informed analysis of causes and drivers of conflict
2. Empowered leadership
3. Political Engagement
4. Prioritizing prevention, mediation and peacebuilding
5. People at the centre
6. Do no harm
7. Aligning programming with the risk
8. Strengthening national and local capacities
9. Investing in learning and evidence
10. Developing evidence-based humanitarian, development and peace financing strategies
11. Predictable, flexible, multi-year financing

Climate and environment

Issue

• Climate change and biodiversity loss pose a fundamental global threat, with poor, marginalized countries and vulnerable communities most impacted.
• Canada has significantly increased its international climate finance commitments over the last decade.
• Canada will be under pressure to demonstrate international leadership on the themes of the upcoming November 2021 “Conference of Parties of Ambition” in Glasgow, including clean energy and transport transition, biodiversity, adaptation and resilience, sustainable food systems and a greener financial system.

Context

Climate change and biodiversity loss pose a fundamental, indivisible and growing threat to the planet and all peoples. The earth’s surface warming is projected to reach 1.5C or 1.6C in the next 2 decades, and the Arctic is warming 2 to 3 times faster than global average^{Footnote 4}. Extreme weather events such as wildfires have doubled over the last 20-year period when compared with the previous twenty years. Since the early 1990s, the stock of natural capital per person has declined by nearly 40%^{Footnote 5}.

The health of societies and economies and the achievement of the Sustainable Development Goals (SDGs) depend on global efforts to protect, conserve and restore nature. Developing countries are the hardest hit and the least equipped to prevent and cope with the consequences of these developments.

Poor and marginalized people are most vulnerable to climate change and biodiversity loss. Smallholder farmers, women and Indigenous peoples, often the most effective guardians of nature, are also the most affected by natural disasters and changing weather patterns.

Climate change is exacerbating pre-existing vulnerabilities and contributing to insecurity, including in the Arctic. Climate-related geopolitical challenges will continue to grow, including conflicts over arable land, water or food resources and climate-induced human displacement.

2021-2022 – The Year of Convergence of Climate and Biodiversity Action

2021-2022 is an important year for building momentum on international climate and nature issues given a series of high-level multilateral meetings.

In June 2021, G7 leaders adopted the G7 2030 Nature Compact, committing to work towards net-zero by 2050 and nature positive by 2030 for the benefit of both people and the planet. They also committed to ensuring their development assistance does no harm to nature and delivers positive outcomes overall for people, climate and nature.

The 26th Conference of the Parties of the United Nations Framework Convention on Climate Change (COP26) – billed as the “COP of Ambition” – will be in Glasgow, Scotland, from November 1 to 12, 2021. The United Kingdom COP Presidency is spearheading 5 campaigns on topics most in need of international coordination: energy transition, clean transportation, nature, sustainable finance and adaptation and resilience.

The 15th Conference of the Parties of the Convention on Biological Diversity(COP15) willbe held in 2 parts, the first of which will be virtual from October 11 to 15, 2021. The second part will be an in person meeting in Kunming, China, from April 25 to May 8, 2022. Parties are expected to adopt a new Post‑2020 Global Biodiversity Frameworkto guide global efforts for the next decade. Developing countries expect a financial commitment by developed countries commensurate with the level of ambition of the framework.

The 15th Conference of the Parties of the UN Convention to Combat Desertificationwill be held in Abidjan, Ivory Coast in May 2022. Parties will discuss global responses to droughts.

Canada’s international action on climate and environment

In addition to its domestic efforts, Canada supports low-carbon, climate-resilient economies and societies across the world.

Canada’s international climate priorities are clean energy transition and coal phase-out, nature-based solutions and biodiversity, climate-smart agriculture and food systems, and climate governance. Canada has also made significant commitments to oceans and disaster-risk reduction.

Climate finance: The world’s transition to nature positive by 2030 and to net-zero emissions by 2050 will require substantial increases of public and private investments. One of Canada’s tools to support this goal is via its international climate finance program, which help developing countries mitigate their greenhouse gas emissions and adapt to the negative effects of climate change through, among others, mangrove restoration and disaster risk finance. Canada has already fully delivered on 2 international climate finance commitments, providing $1.2 billion in ‘Fast-Start’ climate financing from 2010 to 2013, followed by $2.65 billion from 2015 to 2021. Canada's investments are expected to reduce or prevent 222 million tons of greenhouse gas emissions per year, help 5.9 million people adapt to the effects of climate change in their communities, and contribute to the mobilization of climate finance contributions from the private sector. 

On June 13, 2021, at the G7 Leaders’ Summit, Canada announced that it would double its international climate finance commitment to $5.3 billion over the next 5 years, from $2.65 billion in 2015-2021, with planned programming in climate change adaptation, biodiversity and nature-based solutions.

At the United Kingdom’s request, Canada and Germany will lead the development of an international climate finance action plan to mobilize US$100 billion per year through 2025 in the lead-up to COP26. In 2019, international climate finance totaled US$79.6 billion, up from US$78.3 billion in 2018 and US$58.5 billion in 2016.

At COP26, Canada will be under pressure to demonstrate international leadership on key commitments. For example, there will be pressure on Canada to announce a commitment that 40% of its international climate finance going forwards will support adaptation and resilience and a minimum of 20% will support nature and nature-based solutions.

Decarbonizing the global economy: Canada works with the G7 and other partners are working to eliminate financial flows harmful to nature, especially in the energy sector and to advance ambitious new commitments including phasing out support for coal and limiting other fossil fuels and carbon-intensive activities.

In addition, Canada and like-minded shareholders continue to encourage international financial institutions to phase out support for coal and limit support to other fossil fuels and carbon-intensive activities.

Canada also supports the work of the UN and the Secretary-General's Special Envoy for Climate Action and Finance, to ensure that private finance accounts for the risks and opportunities of climate change.

Ocean plastics: Canada committed $100 million during its 2018 G7 presidency. To help address marine litter and plastic waste in developing countries, sparking innovation to beat plastic pollution, and supporting innovative private-public partnerships.

Trade and development

Context

The pandemic has severely impacted the global economy and developing countries, turning back progress on decades of poverty reduction gains. The pandemic has also accelerated some pre-existing trends, and provided an opportunity to address others as we consider how best to support a sustainable economic recovery. The impact of climate change, particularly on least developed countries and small island developing states, protracted political crises, continued rapid urbanization and the growth and diffusion of ground shifting technologies will all affect future economic trajectories.

Developing countries want partnerships to support economic growth and want to fully participate in global trade. In a world of great power rivalry, with a resurgence of nationalism, authoritarianism and protectionism, and the impact of growing inequality and social exclusion, developing countries are being presented with alternative models for development. This may increase risks contrary to Canadian interests, notably related to the future of a rules-based international system, the protection of human rights and the promotion of good governance.

International approaches

The need to better address the inter‑linkages between trade and development has been a growing feature of international discussions, including at the G7, G20, Organisation for Economic Co-operation and Development (OECD), World Bank and UN. Emphasis has been on positioning international trade as an engine for inclusive economic growth and poverty reduction that can support the 2030 Agenda for Sustainable Development.

The Sustainable Development Goals highlight the intersection between trade and development in various ways, particularly its commitments to: no poverty; gender equality; decent work and economic growth; industry, innovation and infrastructure; reduced inequalities; responsible consumption and production; and partnerships for the goals.

How they intersect

Inclusive trade (which the UN system often defines in terms of all people having equality of opportunity to contribute to and benefit from trade) helps create good jobs in the formal economy, supports the development of quality infrastructure, provides opportunities to advance women’s economic empowerment and gender equality and increases economic resilience. Increasing trade can further expand economic opportunities for developing countries by improving productivity and economic growth, and thereby contributing to poverty reduction. Trade also connects local economies to regional and global value chains, improving access for developing countries to the global trading system. Connecting companies in developing countries to global markets is a dual win for global markets and for trade diversification (which leads to economic growth and reduced volatility).

Development efforts can similarly align with broad trade objectives. Development interventions can help share the benefits of trade more widely by strengthening trade capacity and fostering enabling environments for investment and participation by under-represented groups. Technical assistance, knowledge sharing, facilitating predictability and transparency, good governance, rule of law, regulatory environments and standards regimes help to promote trade that is more inclusive. Such an approach contributes to greater access for marginalized populations to improved health and education services, and overall greater skills development.

An integrated approach to trade and development focuses on supporting institutions and activities that enable improvements in governance and establish innovative partnerships. This provides a foundation to build upon growing public and private sector patnerships, efforts to foster open markets, and technical assistance that enables trade in ways that improve development outcomes and relationships with developing countries. Meaningful engagement with developing countries can result in mutual economic benefits and encourage a robust multilateral trading system.

Modern and green infrastructure is also frequently associated with trade and development, helping developing countries integrate into the global economy and benefit from international trade and investment flows while meeting domestic needs for critical public goods such as energy, transport and water supply. Digital infrastructure has become a key theme, which supports transition toward a rules‑based, inclusive and green digital economy that can serve as a potential nexus for Canada’s engagement with developing countries.

Canada’s approach to trade and development

Canada has a number of existing initiatives that advance a trade and development approach. These include:

• Trade policy support through internal and external initiatives: Global Alliance for Trade Facilitation, Expert Deployment Mechanism for Trade and Development, African Trade Policy Centre;
• Trade-related infrastructure: Integrated border management, ASEAN Infrastructure Centre of Excellence, public-private investment support;
• Trade-related adjustments: business enabling environment support, capacity development for agricultural growth, New Partnership for Sustainable Impacting Investing in Frontier Markets;
• Productive capacity building: Trade Facilitation Office Canada, Canadian Trade and Investment Facility for Development, strengthening small business value chains, International Trade Centre support, financing for development; and
• Other trade-related initiatives: FinDev Canada, skills for employment and productivity, Digital Livelihoods: Youth and the Future of Work at Scale, Global Partnership for Education, building responsible mineral supply chains.

There will be opportunities for Canada to maximize its impact and scale up its trade and development efforts as is part of the economic recovery of developing countries from the pandemic. This may include how they can support equality and inclusion, and also position themselves to meet the challenges of climate change and the digital economy.

Afghanistan

Issue

• The Taliban’s seizure of power on August 15, coinciding with the withdrawal of international forces, presents numerous challenges for Canada and the international community, with important implications for the people of Afghanistan and for regional and international security.
• While the situation continues to evolve, Canada and its international partners are defining a way forward. Current priorities are: (1) safe passage for Canadians, foreign nationals and Afghans; (2) counter-terrorism cooperation; (3) mitigating a humanitarian and refugee crisis; and (4) continuing to advocate for inclusive governance and human rights, including those of women, girls and other vulnerable groups.

Context

The military victory by the Taliban in mid‑August and overthrow of the Government of Afghanistan came at a time when the final NATO forces were on track to depart the country by early September (further to U.S. negotiations with the Taliban and the May 1 agreement among NATO members). This seizure of power occurred despite nascent negotiations between the Taliban and the Government of Afghanistan which were intended to achieve a political settlement that would define the country’s future governance.

On September 7, the Taliban declared an interim government comprised largely of sanctioned hardline religious and military figures. The new government excludes women and includes a token presence of ethnic minorities, signaling the Taliban’s unwillingness to compromise and their intention to establish a theocratic state.

As with any reversal in power dynamics in a fragile state, it is unlikely the situation will revert to pre-2001 status quo. However, continued active international engagement will be necessary to mitigate the impact of Afghanistan becoming a source of regional or global insecurity. Broad international efforts will be required to enable the rights of Afghan women and minorities to be respected, and to foster more inclusive governance in the medium-term. Achieving an international consensus on next steps will be a challenge, however, not least due to varied policy drivers among Western states, the tense dynamics between Western states and Russia and China; and differing neighbouring country interests.

Background

The international community, including Canada and its allies, expended considerable diplomatic, military and international assistance to support the development of the Afghan Republic following the overthrow of the Taliban’s first tenure in power in late 2001.

Canada’s investments – in total some $3.7 billion to support basic health, education, human rights and security (to say nothing of the very significant military investment and tragic loss of lives between 2001 and 2014) – were targeted toward reducing poverty and building a more stable and secure nation.

While important progress had been made on a number of social, development and economic indicators, prior to the Taliban victory, Afghanistan remains one of the world’s poorest and most fragile states, characterized by pervasive human rights abuses, conflict and violence. Areas where Canada had made a positive contribution included the rates of girls’ enrolment in primary school, which increased from a negligible amount in 2001 to over 3.5 million in 2019, and on health indicators, particularly for women and children, with the under-5 mortality rate decreasing from 121.7 per 1,000 live births in 2002 to 60.3 in 2019.

The humanitarian situation in Afghanistan also is one of the worst in the world. Nearly half of the population – some 18.4 million people –are in need of humanitarian assistance, with ongoing assessments expected to reveal increasing needs. One in three Afghans are facing emergency levels of food insecurity and more than half of all children under 5 are facing acute malnutrition. Protection and safety risks to civilians, particularly women, children and persons with disabilities, are also reaching record highs. In response to these needs, Canada provided $27.3 million in humanitarian assistance to Afghanistan in 2021 – a 47% increase from the $18.6 million provided in 2020. In response to the deterioration of the situation in Afghanistan and its humanitarian impact on neighbouring countries, Canada announced $50 million in additional humanitarian assistance on August 26, 2021.

Looking ahead

While the Government of the Islamic Republic of Afghanistan was expected to capitulate to the Taliban following the withdrawal of international forces, its collapse occurred much faster than anticipated. As a result, like-minded states and regional partners are engaged in intense efforts focused on 2 fronts:

1. the extraction of foreign nationals and Afghans at risk due to their association with allied powers, or because of who they are, most notably women leaders, and,
2. the development of an international response to the radically altered circumstances in Afghanistan.

Four principal areas of engagement Canada is currently prioritizing:

1. Safe passage: While Canada has been able to evacuate close to 4,000 people from Afghanistan, many Canadian nationals and individuals accepted into our Special Immigration Measures (SIMs) program remain in Afghanistan. Following the end of the U.S. air bridge and military evacuations from Kabul on August 31, 2021, obtaining safe passage has been Canada’s most pressing priority. This includes support to international efforts to engage the Taliban on this issue, ensuring the re-establishment of a secure, functioning airport in Kabul; and engaging key regional countries, notably Qatar and Pakistan, to facilitate departures via land routes and civilian flights.
2. Counter-terrorism: There is considerable concern that Afghanistan may again become a safe haven for transnational terrorists, as it is expected that the presence of insurgent groups will increase under the Taliban.
   
   The Taliban have maintained close ties with al Qaeda, while Daesh-Khorasan, a sworn enemy of the Taliban, has a growing presence and capacity in Afghanistan. The international community is unanimously seized of the threat this poses to our security and to the stability of the region.
   
   The threat from active terrorist groups is further compounded by the degradation of intelligence networks in Afghanistan, making international cooperation crucial to monitoring and countering the evolving threats. Efforts to combat terrorism will require operational and political collaboration with like-minded nations, as well as engagement with neighbouring countries. As a G7 and Five Eyes partner, Canada will need to be part of those conversations, [REDACTED].
3. Humanitarian and refugee crisis: An increasingly severe humanitarian crisis risks quickly becoming a regionally destabilising refugee crisis. As approximately 80% of Afghanistan’s $11 billion public expenditure program was reliant on international assistance the rapid withdrawal of international development and security assistance, coupled with the loss of access to overseas assets, and isolation from the global financial system is having a huge impact on the country’s economy, services and infrastructure. This risks exacerbating the already severe humanitarian crisis with expected increases in the numbers of internally displaced people and refugees.
4. Governance and human rights: Despite the Taliban’s historically poor record on human rights, Canada and like-minded partners continue to seek opportunities to advance the fundamental values that shaped our development assistance and reconstruction efforts. First among these is human rights, especially the rights of women and girls and minorities, for which Canada was an acknowledged leader on inclusive governance and advocacy for human rights. Maintaining a values-driven agenda in the current environment will require pragmatism, diplomacy and patience.
   
   Canada is deploying its full diplomatic weight through a variety of channels to advance the aforementioned priorities. This includes multiple lines of effort within the G7 and the Five Country Forums; the United Nations (UN); and bilateral discussions with influential and impacted capitals.  

Engagement with the Afghan state

The Taliban’s interim government is dominated by Pashtun religious and military figures; the Haqqani Network, with its close ties to al Qaeda [REDACTED] occupies a disproportionate number of key positions. More than half of the senior leadership is under UN sanctions.

Canada and other partners, suspended diplomatic operations on August 15, 2021. Canada appointed a Senior Official for Afghanistan who is based in Doha, Qatar, the diplomatic hub to which many like-minded states have relocated their diplomatic presence. Allies are exploring how to engage with the Taliban to secure safe passage and advance other objectives.

Much of the international community, including Canada, has currently paused most international assistance programs, with the exception of humanitarian assistance.

International assistance partners, including the UN, are seized with the delivery of humanitarian aid, the establishment of a strong accounting mechanism, and identification of longer-term development requirements and options. While the operating environment for aid workers, especially female aid workers, is challenging, and security threats from terrorist groups remains very significant, some organizations have started scaling up activities in a staged manner, as security permits.

Top of mind for the international community is the restructuring of the World Bank’s Afghanistan Reconstruction Trust Fund (ARTF) which previously provided support directly to the Government of Afghanistan (and to which 50% of Canada’s $90M bilateral development assistance program is allocated). The World Bank is working actively with UN agencies and funding partners (including Canada) to identify solutions.

The UN Security Council-mandated sanctions regime and states’ national anti-terrorism legislation against the Taliban and the Haqqani Network may restrict the flow of international assistance, however. Canada’s Criminal Code is particularly restrictive in this regard and options in how to address that are being developed. At the same time [REDACTED]. Western cohesion on this point will be key given varying degrees of national interests.

Canada’s future engagement

Canada’s current policy on future engagement with the Taliban is undertaken in lockstep with a wide range of partners, and calibrated based on a series of conditions. This includes the Taliban’s willingness to: (1) enable safe passage for our documented nationals and Afghans we wish to resettle; (2) ensure humanitarian access; (3) prevent Afghanistan from becoming a safe haven for terrorism; (4) prevent widespread violation of human rights, in particular the rights of women and girls and other vulnerable groups; and (5) have an inclusive and representative government. Canada will want to be part of consensus‑building and collective efforts with allies on the way forward for development assistance support.

China

Issue

• China’s assertiveness and authoritarianism challenges Canadian interests and values, in domestic, bilateral and global spheres.
• Working closely with partners, Canada must continue to promote and defend its interests, while pursuing pragmatic cooperation with China where this advances Canadian objectives.
• Canada has been actively working with allies on Hong Kong, Xinjiang, and human rights.

Context

China has become more assertive under Xi Jinping’s leadership as both its economic and geopolitical power have grown. This is evidenced through a variety of developments, including the implementation of the National Security Law in Hong Kong, destabilizing actions in the South China Sea, and its apparent imperviousness to continued criticism of human rights abuses in Xinjiang and other regions.

Internationally, China seeks to use its growing military, political and economic might to re‑shape the international environment to be more conducive to the Communist Party of China’s (CCP) interests, as well as its authoritarian model. China also seeks to undermine and/or revise international rules and norms that have underpinned international peace, security and prosperity for decades.

Between 2008-2019, China accounted for one third of global GDP growth, and is expected to overtake the United States as the world’s largest economy by 2028. Canada’s trade has grown comensurately with China’s economic status. China is Canada’s second‑largest trading partner overall and third-largest merchandise export market after the United States and the European Union.

Domestically, structural economic and demographic risks are looming. Recent months have seen an increasingly chaotic regulatory environment for domestic entrepreneurs and foreign investors; its “made in China 2025” policy accelerates “de-coupling”, while inflation puts pressure on a burgeoning middle-class, with greater consumer and lifestyle expectations than any previous generation.

China’s 14th Five-Year Plan (2021-2025) prioritises “quality of growth”, shifting toward a dual circulation economy with a more robust, consumption-focused domestic sector, less susceptible to external shocks. Recent policy adjustments to address perceived imbalances have included a crackdown on high‑technology companies, particularly in fintech (payment processing, consumer lending), the control of digital data for state purposes, and implementation of various untested measures to address social inequity (video gaming hours limitations for kids, clampdown on after-school private education, social welfare contributions by large companies). Growth drivers include innovation, consumption, new rural revitalization and urbanization strategies, and accelerating the drive to a low-carbon economy.

China also faces important economic challenges, including: an aging population, uneven regional development; economic slowdown even pre-COVID-19; the incomplete transition to a market economy (state-owned enterprises consume 80% of available bank credit); a high level of indebtedness in China’s corporate sector, particularly in real-estate and construction (the Bank for International Settlements places Chinese corporate debt at 160% of GDP); and growing environmental concerns.

China is the world’s largest official creditor, with more than $1.5 trillion in loans to more than 150 countries. Some debtor countries owe China more than 20% of their GDP, increasing China’s economic influence and leverage towards over-dependent countries and sectors.

Canada’s relationship with China should also be viewed within the broader context of China-United States geo-strategic rivalry. The United States and many other international partners share Canada’s assessment of a changing China, but also the need to find a viable modus operandi. China, in turn, sees the United States as trying to “contain” China, and Canada as a willing partner in these efforts.

Canada’s evolving approach

Increasingly, it is important to take a comprehensive whole-of-government approach to China, which reflects the full range of implications for Canada of China’s continued economic and geopolitical rise as well as its disruptive international policies. In recent years, as China has expanded its strategic ambitions, Canada has had to continually re-examine and adjust its approach as underlying assumptions guiding its longstanding approach have also changed. Canada’s evolving approach acknowledges the complexity of the relationship and the corresponding need to: challenge the Chinese government’s violation of rules and norms while cooperating on global issues and shared interests (e.g. climate); and, compete with China’s authoritarian model, even as we co‑exist with the world’s most populous country.

This evolving approach has guided Canadian responses to emerging issues (e.g. the National Security Law in Hong Kong, human rights abuses in Xinjiang) while also informing its coordination with partners, for example on coercive diplomacy. In addition, Canada is working with other international partners to safeguard and protect the current rules-based international system and to hold China accountable for its international obligations. [REDACTED].

Bilateral efforts are focused on the following priority issues, with further work on seeking clemency and providing consular services for Canadians detained in China, including [REDACTED].

Human rights

The human rights situation in China continues to deteriorate. Civil society members active in advocating for democracy and human rights in China have raised concerns over harassment and intimidation in Canada. Both internationally and domestically, attention to human rights issues continues to intensify, aggravated by the following issues:

COVID-19 response: New human rights concerns have arisen from the Chinese authorities’ response to the COVID-19 pandemic, including the increased use of digital surveillance, censorship and media control.

Xinjiang: Uyghurs and other ethnic minorities in Xinjiang face gross and systematic human rights violations, including mass arbitrary detention. The Chinese government continues to deny that abuses are taking place. Canada and other countries have repeatedly called for international independent observers to have access, including the UN High Commissioner for Human Rights.

Canada has coordinated closely with international partners on possible actions. On January 12, 2021, in coordination with the United Kingdom, Canada announced measures to address risks of forced labour entering Canadian and global supply chains and to protect Canadian businesses from becoming unknowingly complicit. On March 22, 2021, in coordination with the United Kingdom, the United States, and the European Union, Canada announced sanctions against 4 Chinese officials and 1 entity based on their participation in gross human rights violations in Xinjiang. On June 22, 2021, at the 47th session of the Human Rights Council in Geneva, Canada led a joint statement on behalf of 44 countries on the human rights situations in Xinjiang, Hong Kong and Tibet.

Tibet: The human rights situation in Tibet, including restrictions on cultural and religious freedom, remains troubling. Dominic Barton, Canada’s Ambassador to China, participated in a Chinese government-hosted visit to Lhasa, Tibet in late October 2020, the first by a Canadian official since 2015. He testified about this visit before the Canada-China Parliamentary Committee on December 8, 2020. [REDACTED].

Hong Kong: Human rights and fundamental freedoms continue to deteriorate in Hong Kong, including as a result of the implementation of the National Security Law, which criminalizes secession, subversion, terrorism and collusion with foreign forces. Following the Chinese government’s imposition of the National Security Law in July 2020, Canada announced export control measures, the suspension of the Canada‑Hong Kong extradition treaty, and updated Canada’s travel advice for the Chinese territory. In addition, Canada implemented immigration measures to support Hong Kong students and youth. Canada continues to monitor and adjust policies and statements as the situation evolves.

Security

Foreign interference and cyber: The 2019 annual report of the National Security and Intelligence Committee of Parliamentarians (NSICOP) identified China as a key perpetrator of state-sponsored foreign interference in Canada. Canada’s whole-of-government efforts to address foreign interference includes working closely with like-minded countries, such as via the G7 Rapid Response Mechanism. It also includes stepped-up engagement with, and support to, universities and others in the research and development ecosystem.

Canada works with other countries at the UN, G20 and elsewhere to develop norms of responsible state behavior in cyberspace. On July 19, Canada joined 19 countries, NATO and the EU in identifying the Chinese Ministry of State Security as responsible for the widespread compromise of Microsoft Exchange servers, and called on China to cease this behaviour. The Chinese government denies any involvement.

Taiwan: Since 2016, cross-strait relations between Beijing and Taipei have rapidly deteriorated. Beijing continues to apply political and military pressure to deter what it sees as movement towards Taiwan independence. It has dramatically increased military incursions into Taiwan’s self-declared Air Defence Identification Zone, increasing the risk of conflict.

China’s opposition to Taiwan’s international engagement poses challenges for advancing Canada’s bilateral commercial interests and shared democratic values with the island. Canada supports Taiwan’s meaningful participation in relevant international organizations where statehood is not a requirement for inclusion, while urging restraint over unilateral actions that undermine the status quo, and peace and stability across the Taiwan Strait. Canada, [REDACTED] has sailed through the Taiwan Strait 5 times since 2019.

Regional security: China’s escalatory and destabilizing actions in the South China Sea and East China Sea are eroding the rules‑based international system and have intensified regional tensions. On July 11, Canada released a statement to mark the fifth anniversary of the 2016 judgment by an international tribunal on a case brought by the Philippines that ruled China had violated a number of provisions of the UN Convention on the Law of the Sea (UNCLOS) – a decision China has ignored. Canada believes that China and the Philippines should comply with the decision, using it as a stepping stone to peacefully manage and resolve their disputes.

Economic leverage: China has not shied away from leveraging its economic and political strength in an attempt to reshape the international order to its advantage. One channel used to exert its economic leverage is President Xi’s international signature, the Belt and Road Initiative (BRI), a loosely-banded series of projects covering many aspects of infrastructure. Over 130 countries have signed BRI memorandums of understanding with China, and many have various types of projects underway. As these initiatives have helped make China the world’s largest creditor, much of China’s development assistance is not visible through traditional lenses. The BRI constitutes approximately $1 trillion in investments and loans, and China also holds approximately $5 trillion in debt claims. What makes China’s “value proposition” so attractive is access to fast and easier credit, often with fewer questions than would be the case for a Western donor or international financial institution (IFI). While economic exposure does not necessarily translate into influence, it nonetheless provides China with leverage points to influence the behaviour of countries bilaterally and in multilateral forums.

Influence in multilateral institutions: In multilateral contexts, China is increasingly using its economic and geopolitical influence to advance its objectives. This includes challenging the rules-based international system (RBIS) where it does not align with its objectives, introducing concepts and language in texts and resolutions designed to erode rules and norms, and fostering a global governance environment that legitimises authoritarian interests. China also employs a range of strategies in pursuit of its multilateral objectives, including exclusion, obstruction and intimidation tactics. Examples of these tactics include: China’s handling of the WHO joint study into the origins of SARS‑CoV-2, where China controlled access, refused to share raw data, and pressured investigators; excluding Taiwan in early 2020 from receiving time-sensitive information on the COVID-19 outbreak; and, in the Asia-Pacific Economic Cooperation (APEC) context, overt attempts to impede Chinese Taipei by blocking proposals and Chinese Taipei candidates for leadership positions in working groups. Most recently, China refused to endorse the United States as APEC host for 2023 [REDACTED] inside and outside of APEC.

Trade and investment

Despite bilateral tensions with China, merchandise trade increased by 19.9% over the first 6 months of 2021 to $53.7 billion ($14.8 billion in exports to China, $39.0 billion in imports from China), up from $44.8 billion in the same period in 2020. It should be noted, however, that the increase in imports also resulted in an increased trade deficit of 23.1% over the same period year-on-year.

The stock of Canadian direct investment in China stood at $13 billion in 2020, making China the 16th largest recipient of Canadian direct investment abroad. In terms of Chinese foreign direct investment (FDI) in Canada, the stock of investments that originated in China stood at $32 billion, making it the sixth largest foreign investor in Canada. Nonetheless, despite opportunities, Canadian exporters and investors continue to experience formal and informal barriers to access and participate in the Chinese market.

China’s frequent use of economic coercion with trade partners, including Canada, has accelerated work to identify vulnerable Canadian sectors, to mitigate, and to diversify. Canada’s evolving approach to China has seen greater scrutiny of investment and procurement where Chinese interests are at play, and has led to tighter export controls, including to Hong Kong.

Environment

Canada continues to cooperate with China on issues of global concern where it makes sense to do so. The Chinese government has restricted high-level contact with Canadian officials since December 2018; however, there continues to be some high-level ministerial contact on the environment. Canada co-chairs with China the plurilateral China Council for International Cooperation on Environment and Development. Canada, China and the European Union also co-host the Ministerial on Climate Action, an annual meeting that brings together 40 climate leaders to push for increased global climate ambition.

North Korea

Issue

• North Korea continues to develop its weapons of mass destruction and ballistic missile programs, threatening peace and stability in the region and beyond.
• Canada has devoted significant diplomatic, financial and military resources to supporting peace and security on the Korean Peninsula.

Context

Weapons of mass destruction

North Korea has continued to improve its nuclear weapons and ballistic missile capabilities, despite extensive international efforts to the contrary. North Korea is believed to possess up to 65 nuclear weapons, with a variety of delivery systems, and is likely capable of adding several per year to its arsenal. North Korea also continues to demonstrate its efforts to expand the diversity and overall capabilities of its ballistic missile program.

In March 2021, North Korea test-launched 2 cruise missiles and short-range ballistic missiles, and claims to have the ability to deliver a nuclear-armed ballistic missile to North America. Since May 2019, North Korea has conducted test-launches of short‑range ballistic missiles on more than a dozen occasions and at least one test of a submarine-launched ballistic missile.

North Korea also possesses chemical and biological weapons capability, although it has never declared possession or development of either. In 2017, suspected North Korean agents used the chemical weapon VX in Malaysia to assassinate the half-brother of Supreme Leader Kim Jong Un.

Diplomacy

Despite several U.S.-North Korea and inter‑Korean summits in 2018-19, no concrete measures were secured to limit North Korea’s weapons of mass destruction programs. The situation on the Korean Peninsula remains tense and North Korean provocations, such as missile test launches, can raise tensions with little warning. U.S. and South Korean officials remain hopeful that dialogue can resume, although North Korea has conditioned future talks on the reversal of what it describes as hostile U.S. policy, likely a reference to a number of actions, including sanctions. Despite offers from South Korea and Japan to meet unconditionally, there is currently no indication that Pyongyang will reciprocate.

Following a policy review, the Biden Administration has emphasized a calibrated approach to North Korea and remains open to diplomacy while maintaining sanctions pressure. There is also a renewed focus on humanitarian and human rights issues, and indications of receptiveness to a step-by-step process which may see limited sanctions relief in exchange for positive steps from North Korea.

Sanctions

North Korea remains subject to strict UN Security Council sanctions, but has developed a sophisticated evasion system. Since 2011, Canada has also imposed robust autonomous sanctions on North Korea under the Special Economic Measures Act.

China and Russia have advocated for some “good faith” sanctions relief to advance a diplomatic solution. Canada, the United States and other like-minded countries continue to push for North Korea’s complete denuclearization before any scaling back. The impact of sanctions depends largely on the extent of China’s implementation, as it accounts for the vast majority of North Korea’s foreign trade. North Korea is also increasingly adept at using cyberspace to gain sensitive information, evade sanctions and raise revenue for the regime.

Canadian engagement

Canada supports the United States and South Korea in their efforts to strengthen diplomatic engagement with North Korea in order to pursue denuclearization and reduce the risk of conflict. Alongside key partners, Canada is participating in a multinational initiative aimed at countering North Korea’s maritime sanctions evasion, particularly its illicit imports of refined petroleum products. Canadian military assets aim to detect and deter illegal ship-to-ship transfers, and gather intelligence on the vessels and entities involved. In support of this effort, Canada periodically deploys ships, aircraft and personnel under Operation NEON, which is ongoing until spring 2023.

Additionally, since 2017, ¶¶ÒùÊÓƵ has committed $19 million to investigate North Korea’s sanctions evasion efforts and to build sanctions implementation capacity in key regions.

Canada is the second largest contributor of military personnel to the UN Command (currently 8 Canadian Armed Forces personnel are deployed), which has supervised the armistice between the 2 Koreas since the end of the Korean War.

COVID-19

North Korea officially claims to be COVID‑free but experts remain skeptical. It implemented drastic COVID prevention measures early on in the outbreak, including closing its borders to all goods and travel, and requiring foreigners to be quarantined.

Almost all foreign staff of embassies and international organizations have now left the country, including Sweden, Canada’s protecting power.

Human rights

Canada works with allies and partners in multilateral organizations to address human rights violations in North Korea. Canada regularly calls on North Korea to address issues of human rights, urging it to abide by international human rights standards.

Humanitarian situation

North Korea continues to be in a state of protracted and dire humanitarian need. According to the Food and Agriculture Organization, 40% of the North Korean population is food insecure. The United States Department of Agriculture assessed this figure to be 60%. This situation has likely worsened with a series of typhoons and flooding in 2020 affecting food production. COVID-19-related border closures have blocked most humanitarian access and monitoring since early 2020.

Since 2005, Canada has provided $40.4 million in humanitarian assistance through experienced multilateral partners to address urgent needs. A small number of privately-funded Canadian non-governmental organizations (NGOs) provide humanitarian aid (food, equipment, medical supplies) within the framework of international and Canadian sanctions. Canada’s last humanitarian assistance monitoring visit was in 2019.

Bilateral relations

Canada has imposed a Controlled Engagement Policy which limits official bilateral discussions with North Korea to 4 topics: regional security concerns; the human rights and humanitarian situation; inter-Korean relations; and consular issues. Ambassadors are not accredited, and relations are maintained through Canada’s embassy in Seoul and North Korea’s Permanent Mission to the United Nations in New York.

Lebanon

Context

Lebanon is trapped in a dire political‑economic crisis resulting from decades of poor governance and widespread corruption that date back to the aftermath of the Civil War (1975-1990). The confessional power-sharing arrangement that defines its political system has enabled clientelism, contributing to the weakening of state institutions.

Hizballah, a Shia political party and militant group backed by Iran, continues to operate a state within the state. Many Western governments, including Canada, the European Union, the United Kingdom and the United States, have declared Hizballah to be a terrorist organization and maintain no-contact policies. While several Lebanese parties oppose Hizballah, the group continues to play an influential role, and many see it as integral to Lebanon’s defence against Israel.

Economic crisis

Years in the making, Lebanon’s economy is collapsing. High levels of state borrowing, mismanagement and policies that turned Lebanon into a service-based economy dependent on imports with little production and weak job creation have created an unsustainable and unequal economic system. This was worsened in recent years by a decline in remittances and the economic impacts of the Syrian Civil War. The Lebanese lira is pegged to the U.S. dollar, but in recent years, U.S. dollar reserves have become increasingly scarce, triggering a crisis in late 2019, as black market currency trading took off and the central bank was unable to maintain investor confidence.

A 2021 World Bank report stressed that Lebanon would likely reach the top 10, if not 3, most severe global financial and economic crises since the mid-19th century. Half of the population now lives in poverty, unemployment has reached well over 30%, and the currency has lost more than 90% of its value. Lebanon’s GDP plummeted from US$55 billion in 2018 to an estimated US$33 billion in 2020, with GDP per capita falling by 40% in that timeframe. Foreign currency reserves are dwindling.

In May 2020, for the first time in its history, Lebanon formally requested International Monetary Fund (IMF) assistance, following a first-ever default on its Eurobonds payments. No progress has been made in negotiating a much-needed structural reform program. As with all other IMF member states, in the coming months, Lebanon will receive access to its share of special drawing rights (SDRs) that will amount to US$860 million.

Conditions for ordinary Lebanese citizens are dire and deteriorating further, as purchasing power has diminished, alongside difficulties in accessing food, gasoline, medicine, electricity, and other basic necessities. Conditions have worsened even more for vulnerable Lebanese (for example widows and the elderly), and Syrian refugees. Public outrage continues to spark sporadic protests and criminality is on the rise. The loss of purchasing power has also eroded the capacity of the army and other security agencies, whose personnel are paid in local currency.

The COVID-19 pandemic has severely strained Lebanon’s healthcare system and economy. Out of a population of 6.8 million people, Lebanon had 602,266 cases and 8,053 deaths as of August 31, 2021; 19.8% of the population has received one dose of the COVID-19 vaccine and 15.8% has been fully vaccinated. Vaccine rollout has been slow, with concerns over refugees having lower vaccination rates and politicians jumping the queue. Lebanon has received vaccines through the COVID-19 Vaccines Global Access (COVAX) Facility.

Beirut port explosion

On August 4, 2020, a massive explosion of improperly stored chemicals at the Port of Beirut devastated the city. The explosion killed more than 200 people, injured some 6,000, left an estimated 300,000 people homeless, and destroyed or damaged 90,000 buildings. The investigation into the cause has been slow moving, beset by political interference.

On October 14, 2021, clashes with heavily armed demonstrators in Beirut killed 7 and injured more than 30. The demonstrators, mostly members of Hizballah and the Amal Movement, had been asking for the removal of the judge in charge of the Beirut port explosion investigation.

Government formation stalemate

Lebanon went without a government for 13 months after the resignation of Prime Minister Hassan Diab on August 10, 2020. The political vacuum prevented the enactment of urgently needed reforms and measures to stem the impending economic collapse, thus exacerbating poverty and vulnerability.

Prime Minister Najib Mikati formed a government on September 10, 2021, after previous efforts by PM-designates Mustapha Adib and Saad Hariri failed in the face of vested sectarian interests. On September 20, his government passed its first test when it was confirmed by 85 of 100 votes in the Lebanese parliament. The prospects for action and reform with the new government in place remain unclear.

International response

France, given its historical colonial ties, has traditionally played a leadership role in mobilizing international support for Lebanon. Following the port explosion, France hosted a humanitarian donors’ conference on August 9, 2020, and later co-hosted, with the UN, 2 international conferences in support of the Lebanese people (December 2, 2020, and August 4, 2021). The international community has maintained that no direct assistance will be provided to the Government of Lebanon until much-needed reforms are implemented. Funds raised from the conference went to the provision of immediate lifesaving and early recovery assistance to vulnerable populations affected by the blast through trusted humanitarian and development partners such as UN agencies and the Red Cross Movement.

Efforts by the international community to encourage the implementation of reforms have so far yielded no result. Punitive or coercive measures, such as targeted economic sanctions or travel bans to pressure action by Lebanon’s leaders have been proposed by France and the EU. On July 30, 2021, the EU adopted a framework for targeted restricted measures to address the situation in Lebanon. At this time, no Lebanese individuals or entities have been subject to these new measures.

Regional issues

Lebanon is geographically situated in a complex region, with war-torn Syria to its north and east, and Israel to its south. Regional powers have regularly interceded in Lebanon, politically and militarily, throughout its history.

Lebanon and Israel remain formally at war. Israel invaded Lebanon twice during its Civil War, and Israeli forces occupied southern Lebanon until 2000. In July 2006, Hizballah and Israel fought a bloody and inconclusive 34-day war. There are a number of pressure points that remain between the 2 countries, including disputes over the maritime and land borders, and Hizballah’s activities. The risk of renewed conflict remains, and a UN observer force (UNIFIL) remains in place.

Syria looms large over Lebanon. Syrian forces maintained a presence in Lebanon from the early days of the Civil War until 2005, and Syria’s role in Lebanon remains controversial, with Hizballah and several other parties maintaining close ties with the Assad regime. Spillover of the Syrian conflict remains a threat to Lebanon’s security and stability.

Lebanon has also been impacted by tensions between Iran and Saudi Arabia, and Iran and the United States, with Hizballah notably serving as an Iran-backed proxy.

The refugee challenge

Lebanon hosts the highest number of refugees per capita in the world; an estimated 1 refugee per 4 nationals. While 865,530 Syrian refugees are registered, United Nations High Commissioner for Refugees (UNHCR) estimates that there are 1.5 million Syrians in Lebanon. Some 90% of Syrian refugee households live in extreme poverty. Lebanon is not a signatory to the 1951 Refugee Convention or the 1967 Protocol but has a memorandum of understanding with UNHCR permitting the temporary residence of Syrian refugees. Lebanon has also hosted an estimated 207,000 Palestinian refugees since 1948. Palestinian refugees are not permitted to settle in Lebanon and are restricted in their ability to work; basic services are provided for them by The United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) and the majority are assessed to live in abject poverty. Hosting such numbers of refugees strains national and local systems and service delivery, and contributes to social tensions at the community level, including competition for jobs.

Canada’s support for Lebanon

Canada is one of the top 5 bilateral donors in Lebanon and has committed $427 million for Lebanon since 2016 as part of its Middle East Strategy. This includes $314 million in humanitarian assistance, $71 million in development assistance, and $42 million in security and stabilization assistance. Canada’s assistance in Lebanon covers a wide-range of services, geographies and vulnerable groups, including Syrian refugees and Lebanese host communities. This includes the provision of emergency food, safe drinking water, skills training, agricultural supports and health services, such as sexual and reproductive health and rights services and mental health and psychosocial support. The Canadian Armed Forces also provide training and capacity-building to the Lebanese Armed Forces.

Following the Beirut port explosion in August 2020, the Government of Canada announced $30 million in assistance, including $20 million in humanitarian funding to support needs on the ground in the immediate aftermath, and $10 million for early recovery in support of vulnerable populations. No direct support is provided to the Lebanese government. Instead, Canada provides assistance to experienced international and local partners based on credible needs assessments.

Canada is considering hosting a multilateral meeting to raise additional humanitarian funds and work to support democracy in Lebanon.

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Middle East

Issue

• Through the Middle East Strategy, Canada is investing more than $4 billion over 6 years (2016-2022) in a whole-of-government effort to respond to crises in Iraq and Syria, and their impact on the region, in particular on Jordan and Lebanon.  
• Although there have been significant changes to the region in recent years, notably the territorial defeat of Daesh, serious political and economic crises persist in Lebanon, Iraq, Syria and Jordan.

Context

The 6-year, $4 billion Middle East Strategy was launched in 2016 as a comprehensive, whole-of-government plan to respond to crises in Iraq and Syria, and their impact on the region. Investments aim to set the conditions for security and stability, alleviate human suffering, enable civilian-led stabilization programs, and support governance and longer-term resilience. The strategy is set to expire on March 31, 2022. The department is preparing options for post-2022 support.

The strategy targets areas where Canada’s involvement can make a positive difference, leverage Canadian expertise, and complement the efforts of other partners. Funding allocations across the pillars are as follows: over $1.5 billion in humanitarian assistance, $570 million in development assistance, $325 million in security and stabilization programming, $111 million to support diplomatic engagement, $1.47 billion in military assistance and $65 million for intelligence support.

Today, Daesh (also known as ISIL) has been defeated militarily and refugee flows have stabilised. Despite these successes, the region remains unstable and there are growing signs of renewed conflict, exacerbated by the impacts of COVID-19. The increased prevalence of mass popular protests signals growing discontent with governments, lack of services, accountability, transparency, corruption and high unemployment.

Lebanon and Iraq are in the throes of significant political and economic turmoil, and Jordan is economically vulnerable. Daesh remains a potent terrorist threat and the factors that supported its rise still persist. Instability is furthered by the Government of Iraq’s limited control over powerful militias (which often have ties to Iran), and tensions between the United States and Iran remain high. The presence of thousands of Daesh fighters and their families (including Canadian extremist travellers) in northeastern Syria is a real threat that could undermine local recovery efforts and the gains of the Global Coalition against Daesh, of which Canada is a member.

Crisis in Lebanon

Lebanon is facing skyrocketing rates of poverty, corruption, inflation, unemployment and public debt, in addition to the severe impacts of COVID-19 and the devastation caused by the Beirut port explosions in August 2020. There are shortages of fuel, food, medicine and other necessities. The currency has lost more than 90% of its value since fall 2019, and approximately half of the population now lives in poverty. A 2021 World Bank report states that Lebanon’s economic crisis is likely to reach the top 10 most severe global crises since the mid-19th century. Lebanon is also suffering from political dysfunction and went without a government for over a year, which has prevented the introduction of much‑needed reforms to address the crisis in the country. The international community has maintained that no direct assistance will be provided to the government of Lebanon until reforms are implemented.

COVID-19

The COVID-19 pandemic has hit hard in Lebanon, Iraq, Syria [REDACTED], exacerbating pre-existing contributors to protracted conflict and instability, including: poor governance and corruption, economic challenges, weak health infrastructure, and civil unrest due to the lack of desired substantial political, economic, fiscal and social reforms.

The pandemic has put at greater risk vulnerable and marginalized people, including women and girls. Sexual and gender-based violence rates have soared following COVID-19 confinement measures (particularly for refugees in camps, people with disabilities, ethnic and religious minorities). According to a 2020 CARE survey, in Lebanon, 54% of respondents (most of them refugees), reported an increase in violence and harassment against women and girls, and 44% felt less safe at home.

Canada has undertaken various development, humanitarian, and peace and security-based initiatives to respond to the immediate and longer-term impacts of COVID-19 on the region. For example, Canada contributed an additional $5 million to a multi-donor fund for Jordan’s Ministry of Health to address COVID-19 and support refugee access to health services. In Syria, funding included an $8 million contribution to the UN Office for the Coordination of Humanitarian Affairs to support humanitarian efforts in combatting COVID‑19.

Humanitarian assistance

Canada ranks amongst the top 6 humanitarian donors in the region. Assistance for the immediate impacts of the 2020 Beirut port explosion, and response to COVID-19 in the region, have been timely and prioritized vulnerable and marginalized people. For instance, more than 9 million people have benefited from Canadian food and cash assistance through the World Food Programme and the Red Cross.

Building resilience

Canada also ranks amongst the top 6 donors in the region for long-term development. Development assistance includes helping build local capacity to provide basic social services, maintain and rehabilitate public infrastructure, advance inclusive and accountable governance, and support women’s role in decision-making processes and the economy.

For instance, assistance in Iraq has helped provide more than 450,000 people in Iraq with safe water infrastructure, and over 300,000 women and girls benefited from services and support to prevent gender-based violence in Lebanon, Jordan and Iraq. A priority focus is on improving access to quality public education for all children, including refugees, as well as skills development for women and youth. With Canadian support, nearly 2 million children in Jordan and Lebanon have access to quality public education.

Security and stabilization

Under Operation IMPACT, up to 850 Canadian Armed Forces personnel are authorized to be deployed. Roughly 500 personnel are currently deployed to conduct air and cyber operations, provide training and assistance to Iraqi security forces, provide capacity-building to the Jordanian and Lebanese armed forces, and support the coalition with highly-skilled personnel.

From 2018 to 2020, Canada commanded the NATO Mission in Iraq, contributing up to 250 personnel and a helicopter detachment, among other assets.

Canada has a number of different programs to improve peace and security in the region. Through itsPeace and Stabilization Operations Program, Canada aims to enhance stability, address drivers of conflict, and promote accountability for international crimes. This includes supporting the coalition’s efforts in Iraq and Syria, and preventing any spillover into Lebanon and Jordan.

Moreover, through its Counter-Terrorism Capacity Building Program, Canada supports training, equipment, and the improvement of critical infrastructure through Operation IMPACT for security forces in Lebanon, Iraq and Jordan to safeguard national borders and better respond to regional terrorist threats. Capacity-building efforts have also included human rights and gender-sensitive training to address extremist content online, technical assistance to help combat terrorist financing, and support for the integration of women in law enforcement, military and intelligence roles.

Finally, through its Weapons Threat Reduction Program, Canada supports partners’ efforts to prevent terrorists (or those that harbour them) from acquiring/using weapons of mass destruction. This includes supporting the Organisation for the Prohibition of Chemical Weapons in its efforts to investigate the illicit use of chemical weapons globally, including in Syria.

Diplomatic engagement

Canada actively pursues its priorities and interest in the region, including relating to human rights, diversity, gender equality and accountability. Through bilateral and multilateral diplomacy, Canada aims to reinforce the rules-based international system, advocate for economic, social and political reforms, and support peaceful political solutions to conflicts in the region – which must include women as part of the processes. Canada is working closely with partner governments and co-founded the Mashreq Gender Facility to support the implementation of the National Action Plans for Women’s Economic Empowerment in Lebanon, Jordan and Iraq.

Myanmar and Rohingya crisis

Issue

• The Myanmar military’s ongoing efforts to consolidate power following its overthrow of the civilian government is plunging Myanmar further into a protracted political, economic, humanitarian, and security crisis.
• In the wake of the coup, the safe, sustainable, voluntary and dignified repatriation of Rohingya in Bangladesh [REDACTED].

Context

On February 1, 2021, the Myanmar military (Tatmadaw) overthrew the democratically-elected government, returning the country to full military rule after a short span of quasi-democracy that began in 2011.

A nationwide civil disobedience movement, including most of the country’s public service and health personnel, has been brutally suppressed by the regime, killing hundreds and arbitrarily detaining thousands.

Local armed opposition groups have formed across the country and continue to launch attacks against the regime and associated officials through bombings and targeted assassinations. Low-intensity conflict is simmering in multiple states between the Tatmadaw and ethnic armed organizations who have been in conflict with the government for decades.  

On September 7, the main opposition group, the National Unity Government (NUG), announced a “people’s defensive war”, calling for a revolt against the regime. This represented a marked divergence from peaceful political opposition to date, though it has had minimal impact on the ground.

ASEAN has tried to take up a leadership role in resolving the crisis and managed to convene a Leaders’ Conference in April where a 5-Point Consensus was reached to guide ASEAN’s efforts, including appointment of a special envoy tasked with leading inclusive dialogue as a key first step toward political resolution. Progress has been slow; the special envoy was appointed only on August 3 (over 4 months later), and no other concrete progress has been logged to date.

Despite ASEAN efforts, ongoing violence, human rights violations and COVID-19 outbreaks have plunged the country into a deep socio-economic crisis, exacerbating what was already a dire humanitarian situation, and increasingly leading to more forced displacement of vulnerable populations, both within Myanmar and internationally.

Canada is pursuing a 4-pillar policy response to the crisis, with a focus on the restoration of democratic rule and release of political detainees, support for ongoing humanitarian and development needs of conflict-affected populations, continued support for Rohingya refugees and host communities in Bangladesh, and pursuing accountability for serious human rights violations.

As part of this response, Canada issued sanctions against leaders of the coup on February 18, 2021, and subsequently on May 17, 2021. Canada also conducted a review of international assistance to Myanmar to ensure no funding is provided to the regime. Canada’s position, in line with the broader approach of the international community, is that assistance to provide life‑saving care and treatment to vulnerable populations in Myanmar, especially urgent needs in response to COVID-19, needs to be sustained and channeled through civil society organizations.

Rohingya crisis

Following the Myanmar military’s large scale and targeted attacks against the largely Muslim Rohingya minority, in August 2017, some 884,000 fled to Bangladesh, joining hundreds of thousands of Rohingya people who fled previous targeted violence over decades. Now more than 1 million Rohingya live in extremely difficult conditions in Cox’s Bazar, the world’s largest and most congested refugee camp. Refugees are reliant on international assistance for their basic needs, including shelter, water and sanitation, healthcare and food. The influx of refugees has also impacted host communities, depressing wages and increasing competition for resources and services including access to health care.

The root causes of the conflict, which sparked this genocide, remain unaddressed. Roughly, 600,000 Rohingya remain in Rakhine State, where they face systematic discrimination limiting their access to essential health services, freedom of movement, pathways to citizenship and livelihood opportunities.

The coup and its aftermath have eliminated any progress and the prospect for the return of Rohingya. Bangladesh is concerned and frustrated that the coup in Myanmar has undermined repatriation efforts and exacerbated impunity for the Myanmar military. As a result, Bangladesh is increasing pressure on the international community to accept a greater share of the humanitarian burden, to accelerate repatriation, and to pursue accountability for a lasting solution.

[REDACTED] 

Efforts to advance accountability, including through a joint intervention (to which Canada is party) with the Netherlands at the International Court of Justice (ICJ) in the case against Myanmar, are ongoing.

Through its $300 million Strategy to Respond to the Rohingya Crisis (2018-2021), Canada worked to alleviate the humanitarian crisis; encourage positive political developments in Myanmar; pursue accountability for the crimes committed; and enhance international cooperation. The funding is allocated as follows: 25% to Myanmar, 27% to Bangladesh, 7% to peace and security programming, and 41% to humanitarian assistance. As of March 31, 2021, Canada has disbursed the full amount dedicated towards the Rohingya strategy.

In Budget 2021, it was announced that Canada will dedicate $288 million over the 2021-2024 period to support the next phase of Canada’s strategy.

In addition, Canada continues to deliver life‑saving, gender-responsive humanitarian assistance to Rohingya refugees in Bangladesh and vulnerable and crisis-affected populations in Myanmar, in accordance with needs and in line with humanitarian appeals.

Sahel and Horn of Africa

Issue

• Canada is concerned about the security and humanitarian crises in the Sahel and the Horn of Africa, and their regional security implications.
• These situations are threatening not only the countries affected by the crises and their populations, [REDACTED].
• [REDACTED] 

Background – Sahel

One of the poorest regions in the world, the Sahel (Burkina Faso-Mali-Mauritania-Niger-Chad) is being affected by an increased presence of armed groups, criminal organizations, and terrorists affiliated with al Qaeda and Daesh. This terrorist threat is expanding toward West Africa’s coastal countries. The security situation has worsened in Burkina Faso, Mali and Niger, with more than 6,000 deaths in 2020, compared with 4,800 deaths in 2019, as well as more than 2,600 deaths in the first half of 2021. The security and humanitarian crisis is being exacerbated by the socio-economic impacts of the COVID‑19 pandemic and climate change.

Canadian interests and engagement: Canada is a long‑standing key development partner in the region and one of the main donors in Mali and Burkina Faso. In October 2020, Canada announced it was establishing bilateral development programs in Niger and Chad. As of 2019, Canadian mining assets exceeded $14 billion, nearly double what they were in 2018, and were a significant source of employment and government revenue in Burkina Faso and Mali.

Transition in Mali: In the wake of the August 2020 coup d’état, Canada is supporting the holding of general elections and the return to democracy by the end of the transition period, which was slated for March 2022 [REDACTED].

Transition in Chad: Following the assassination of President Idriss Déby Itno in April 2021 and the creation of a Transitional Military Council led by his son Mahamat Idriss Déby, Canada is encouraging a transition to an elected government by October 2022.

Canada’s contributions

• $265.34 million in international assistance to the 5 Sahelian countries in 2019/20 in the peace and security, development, and humanitarian assistance sectors
• Military and police deployments through the United Nations stabilization mission in Mali (MINUSMA) and the EU civilian training mission (EUCAP Sahel-Mali)
• Peace and Stabilization Operations Program ($58.5 million in the Sahel, 2016 to 2022)
• Counterterrorism training to Niger’s Special Forces (Operation NABERIUS)
• Air logistic support to France’s operations in the Sahel (Operation FREQUENCE)
• Counter-Terrorism Capacity Building Program ($10 million per year for the Sahel and the Horn of Africa)

International engagement

International Coalition for the Sahel: Canada has been a member of the coalition since June 2020 and supported the adoption of a road map that prioritizes civilian initiatives to complement military action in the Sahel. [REDACTED] 

France announced in June 2021 that it would restructure and reduce its military presence in the region, [REDACTED].

Background – Horn of Africa

With 3 countries in the top 10 of the Fragile States Index, the Horn of Africa (Djibouti-Eritrea-Ethiopia-Somalia-Sudan-South Sudan) is grappling with issues such as governance, terrorism (al‑Shabaab in Somalia), poverty and a highly worrisome human rights situation due to, among other things, gender inequality and gender‑based sexual violence. The impacts of the COVID‑19 pandemic and climate change are jeopardizing hard‑won progress in the region, particularly in Sudan.

The armed conflict in Ethiopia, which erupted in November 2020 following an attack by forces in the Tigray region against a federal military base, is further destabilizing the region. Not only has the conflict resulted in thousands of deaths, tens of thousands of refugees and displaced persons, human rights violations and abuses, and worsened famine conditions in Ethiopia, it has also heightened border tensions with Sudan over the disputed Al‑Fashqa region. Tensions have also emerged with Sudan and Egypt over the Ethiopian Renaissance Dam. This has undermined the country’s previously positive trajectory, reflected in the Nobel Prize awarded to Prime Minister Abiy Ahmed in 2019. [REDACTED].

Eritrea is playing a destabilizing role in the region, having been accused of supporting armed groups in Ethiopia and Somalia. Somalia is preparing to hold delayed elections against a backdrop of terrorism in 2021-2022. [REDACTED]. Canada is following these elections closely, given their impact on the country’s stability. Several of Somalia’s ministers have Canadian citizenship.

The ouster of President Omar al Bashir in 2019 allowed Canada’s relationship with Sudan to grow stronger, thanks to the installation of a government with shared values, leading to the appointment of an ambassador and the creation of a cooperation program in June 2020. The failed coup attempt on September 21 is a reminder of that government’s fragility. In South Sudan, Canada is continuing its long‑standing engagement centred on the peace process that led to independence, its position as one of the leading providers of development assistance and its reputation as a committed, constructive donor.

Canadian interests and engagement: Canada is continuing its engagement with partners and the Ethiopian authorities to improve the humanitarian situation, protect civilians and find a political solution to the conflict, [REDACTED]. Given the security situation in Somalia, Canada is managing its relations with Somalia from the high commission in Kenya, [REDACTED].

Canada’s contributions

• In 2019/20, Canada provided a total of $364 million in international assistance to Horn of Africa countries, including in support of peace and security, food security, environmental protection and gender equality.
• Since 2008, Canada has provided over $2 billion in international assistance to Ethiopia (one of the largest recipients), including $41 million for humanitarian needs in Ethiopia since November 2020, in addition to $18 million through the World Bank.
• Canada contributes nearly $100 million annually to South Sudan.
• Canada provided $600,000 to the joint investigation by the Office of the United Nations High Commissioner for Human Rights and the Ethiopian Human Rights Commission into human rights violations and abuses. The report is expected in November 2021.

International engagement: The Horn of Africa holds geopolitical importance for the international community. The United States and the African Union have special envoys for the Horn, and the European Union has a special envoy for Ethiopia and the Horn, all of them appointed to find a solution to the conflict in Ethiopia. In connection with recent reports of serious human rights violations committed in Tigray by all parties to the conflict, the United States recently announced sanctions against the chief of staff of Eritrea’s armed forces and created a new sanctions regime that could target entities impeding the political resolution process and humanitarian assistance shipments in Ethiopia. International efforts to encourage mediation to find a political solution to the conflict have so far been unsuccessful.  

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Ukraine

Issue

• Located on the periphery of NATO, and at war with Russia for 8 years, a secure and resilient Ukraine would contribute to regional and transatlantic security.
• Ukraine’s democratic and economic reform efforts, critical to its greater Euro-Atlantic integration, require further work.
• Together with NATO allies, Canada provides economic, diplomatic and security sector support for Ukraine.

Context

A democratic and prosperous Ukraine with institutions strongly aligned with western values would be an important regional counterweight to authoritarianism and an indicator of the benefits of democracy. President Volodymyr Zelenskyy was elected by a landslide victory in April 2019 on a reformist platform. His government has passed some important reforms, such as ending immunity for members of Parliament and an election law, but further work is required to address corruption and advance corporate governance reforms.

Progress in ending the war in the Donbas region of eastern Ukraine remains at an impasse due to Russia’s obstructionism. Through a range of economic, energy, military and hybrid measures, Russia continues to exert pressure on Ukraine and to test U.S. and western resolve to support Ukraine. Following Russia’s military mobilization in Crimea and along the Ukrainian border, most recently in early 2021, Russia withdrew some troops after strong statements from Canada and like-minded countries, but a major Russian military presence remains. Russia’s ZAPAD military exercises in September 2021 did not provoke a crisis but the large size (up to 200,000 troops) signaled their capacity.

Ukraine has faced challenges responding to COVID-19. Its ability to secure personal protective equipment and vaccines has been limited, and its health care system has been challenged by the crisis. For political reasons, Ukraine has refused to purchase the Russian Sputnik V vaccine.

Conflict in Eastern Ukraine

Seven years after its illegal annexation of Crimea, Russia continues to consolidate its control over the Ukrainian territory, including through the seizure of non-government controlled areas. In the eastern Donbas region of Ukraine, Russia operates through proxies, including private military companies and armed militants. Some 13,000 people have been killed and 1.5 million internally displaced.

Negotiations for resolving the conflict are carried out in the Trilateral Contact Group (involving Ukraine and Russia, mediated by the Organization for Security and Co‑operation in Europe), which meets along with Russia-backed militants to discuss practical issues, and the Normandy Four diplomatic format (Russia, Ukraine, Germany and France). Discussions are deadlocked, with Russia and representatives of the breakaway regions, the so-called Donetsk and Luhansk “People’s Republics”, demonstrating the greatest intransigence. Russia has become increasingly disengaged, continuing to disingenuously claim they are not a party to the conflict.  The September 14 and 15 Trilateral Contact Group meeting failed to achieve any significant progress. 

NATO

After Ukraine received Enhanced Opportunities Partner status from NATO in 2020, President Zelenskyy quickly requested a Membership Action Plan and a timeline for accession, [REDACTED].

Flight PS752

Canada and Ukraine work closely within the International Coordination and Response Group to ensure full accountability, transparency, and justice for the families of the 176 victims of flight PS752. Ukraine is the spokesperson for the group (which includes Afghanistan, Sweden and the United Kingdom) in the forthcoming negotiations with Iran, expected to begin in fall 2021.

Commercial relations

Canada’s commercial relations with Ukraine have yet to reach their potential because access to capital is limited and doing business in Ukraine remains challenging. In July 2020, the Governor of the National Bank of Ukraine was [REDACTED] and compromising Ukraine’s US$5 billion, 18-month stand by arrangement (SBA) with the International Monetary Fund. Most recently, in April 2021, Ukraine’s prime minister and cabinet suspended the supervisory board of the state-owned energy company Naftogaz, then fired its CEO and installed the acting Energy Minister as the new CEO.

Canada’s 2020 merchandise exports to Ukraine totaled $160.5 million, while merchandise imports totaled $144 million. Canada is the 40 largest supplier to Ukraine, representing 0.4% of Ukraine’s total imports. Canadian exports to Ukraine remain largely unchanged following the entry into force of the Canada-Ukraine Free Trade Agreement in August 2017.

Canada’s current engagement

Since Russia’s illegal annexation of Crimea in 2014, Canada has provided over $480 million to support reform efforts, meet humanitarian needs, and promote Ukraine’s sovereignty and territorial integrity. In 2015, Canada also provided $400 million in concessional loans, which Ukraine has since repaid. Canada has also sanctioned over 440 Russian and Ukrainian entities and individuals involved in violating Ukraine’s sovereignty and territorial integrity.

Support to Ukraine’s security sector and defence reform is the flagship area of Canada’s cooperation. Through Operation UNIFIER (the Canadian Armed Forces military training mission to Ukraine), Canada has invested over $100 million and trained more than 27,000 Ukrainian security forces personnel. The current mission mandate expires in March 2022.

Canada hosted the Ukraine Reform Conference in 2019, and the Minister of Foreign Affairs attended the most recent conference in July 2021 in Lithuania.

Canada supports ongoing diplomatic efforts, including the ‘Normandy Four’ and the Trilateral Contact Group, to find a peaceful solution to the conflict in the east. Canada also supports Ukraine’s new international initiative, the Crimea Platform, aimed at bringing greater international engagement to the reintegration of occupied territories. The inaugural Crimea Platform event was held in August 2021, in conjunction with a celebration of the country’s 30 years of independence.

To assist with Ukraine’s response to COVID-19, Canada provided increased contributions to the UN-coordinated Ukraine Humanitarian Fund ($2.5 million); $7 million in new programming; and, over $3 million in adjustments to existing programming. Canada also supports Ukraine to deliver stronger and more resilient primary health care and essential health services in their pandemic response and recovery, including identifying and addressing bottlenecks hindering vaccine and therapeutics rollout at the country level through initiatives implemented by the World Health Organization. Ukraine participates in COVAX and also continues to request vaccines from Canada.

United States

Issue

• The Canadian government and the Biden Administration collaborate on issues of mutual interest, including the pandemic response, economic recovery and growth, climate change, diversity and inclusion, and international security.
• U.S. positions on cross-border energy infrastructure and protectionist trade policies are not always aligned with Canadian interests and can give rise to bilateral irritants.

Context

Political and social context

Since taking office on January 20, 2021, theBiden Administration has been largely focused on addressing a range of domestic issues, including tense partisan and racial relations, the impact of the COVID-19 pandemic, immigration pressures and a fragile economic recovery. More than a year after nationwide protests erupted following the murder of George Floyd at the hands of the Minneapolis police, and more than 8 months after the insurrection at the Capitol, the American public remains deeply polarized. Republicans and Democrats are increasingly divided on many issues, including racial and economic inequality, public health measures, and immigration.

Within this context, President Biden has proposed 3 ambitious legislative plans (rescue, infrastructure and family) as part of his budget for fiscal year 2022 and in support of his progressive Build Back Better agenda. Taken together, the plans seek to invest in employment creation, infrastructure, climate action, child care and education, public health and other social services, while reforming the tax code.

COVID-19 has taken a heavy toll in the United States, especially in areas with lower vaccination levels. The pace of vaccination continues to increase as more workplaces require employees to get the shots.

Canada-U.S. roadmap

In February 2021, Canada and the United States committed to a , which served as the blueprint for a whole-of-government approach to Canada‑U.S. relations. In particular, the Roadmap prioritizes.

• Combating COVID-19, including support for relevant multilateral organizations such as the World Health Organization (WHO) and the United Nations (UN).  
• Building back better with our shared vision for a sustainable economic recovery. 
• Accelerating our climate ambitions, including through a new High-Level Ministerial Dialogue on Climate. 
• Advancing diversity and inclusion through combatting systemic racism and gender-based discrimination. 
• Bolstering security and defense by modernizing North American Aerospace Defence Command (NORAD), expanding the U.S.-Canada Arctic Dialogue, and supporting our shared commitment to transatlantic security.
• Building global alliances by reviving the North American Leaders’ Summit (NALS) and working through multilateral organizations, including the UN, the G7, G20, the World Trade Organization (WTO), NATO, and the Five Eyes. 

Trade

Canada and the United States share one of the largest and mutually beneficial trading relationships in the world, with nearly US$2 billion worth of goods and services crossing the border each day. Canada is among the 4 largest U.S. trading partners (with the European Union, Mexico, and China), while the United States is by far Canada’s foremost trading partner, representing 72% of Canada’s exports.

In the trade relationship, Canada’s efforts are focused on ensuring the effective implementation of the Canada-United States-Mexico Agreement, strengthening supply chain resiliency, and resolving bilateral irritants. Canada is also seeking to establish enhanced collaboration with the United States to address global trade challenges, including with respect to China and the WTO. The Biden Administration’s ‘worker-centric’ trade policy remains closely linked to domestic priorities and tendencies toward protectionism persist. 

International security and foreign policy

Canada and the United States have a long history of cooperating to confront the security challenges that threaten North America. Canada and the United States are steadfast allies in promoting global peace and security. Canadian and U.S. law enforcement cooperation is extensive, and our militaries work alongside each other as partners in the NORAD and as allies within the North Atlantic Treaty Organization (NATO).

Continental defence must meet emerging and diverse threats, including those associated with an increasingly accessible and active Arctic region. Our mutual objectives of continental defence and of global peace and security have led to close cooperation and integration of defence and national security agencies. NORAD modernization is a key file for the Biden Administration.

President Biden believes the United States will have a more lasting and consequential impact on regional and global challenges when it works in concert with partners. The foreign policy challenges identified by the United States include building back from COVID-19, global migration, democracy vs. authoritarianism, China, Russia and Iran. With respect to NATO, President Biden is committed to modernizing the alliance.

The United States completed its evacuation and relocation operations in Afghanistan on August 30, 2021, ending what President Biden called “20 years of war in Afghanistan – the longest war in American history.”

Climate and energy

Canada and the United States have pledged to explore opportunities to align policies and approaches to create jobs, while tackling climate change and enhancing adaptation and resilience to climate impacts. The 2 countries are committed to working together to advance shared goals on clean energy, emission reductions and net zero targets. They also agreed to protect businesses, workers and communities in both countries from unfair trade by countries failing to take strong climate action. Canada’s priorities also include supporting its energy sector and defending key cross-border energy infrastructure projects (e.g. Line 5, electricity transmission lines).

In January 2020, Canada and the United States agreed on a Joint Action Plan on Critical Minerals Collaboration to advance work to secure supply chains for critical minerals in key manufacturing sectors. The Biden Administration continues to prioritize the development of secure critical mineral supply chains, for which Canada remains a key bilateral partner.

Renegotiation of the 1964 Columbia River Treaty, a bilateral flood control and hydropower agreement, is underway.

Border management

As of August 9, Canada is allowing entry of fully vaccinated U.S. citizens and permanent residents currently residing in the United States for discretionary (non‑essential) travel to Canada. On October 15, the U.S. announced new measures that will allow fully vaccinated travelers to enter the United States from Canada and Mexico at land borders and ferry Ports of Entry for non-essential purposes starting November 8. While the vaccination requirement will also apply to air travellers arriving in the U.S. effective November 8, there will be no requirement for a negative PCR result as is required for entry into Canada (for Canadians and any foreign nationals).

Canada and the United States have 2 well managed boundary disputes in the Beaufort Sea and over the legal status of Canada’s Northwest Passage.

Representation

On July 20, President Biden formally announced the nomination of David Cohen as the U.S. Ambassador to Canada, pending confirmation by the Senate.

Supporting facts and figures

According to a pre-COVID estimate from the Migration Policy Institute, there are about 800,000 Canadians citizens living in the United States.

The Canada-U.S. border is the longest international border in the world. The terrestrial boundary is 8,891 kilometers long. It is also the longest non-militarized terrestrial border in the world.

Canada-U.S. defence collaboration includes a high degree of inter-operability and military cooperation. At any given time, there are approximately 700 Canadian Armed Forces members serving in the United States, including some in command positions.

In the first quarter of 2021, bilateral trade in goods and services was $237.8 billion.

In 2020, Canada was the United States’ largest destination for goods and services exports (14.5%), third largest source of imports (11%), third largest source of inward foreign direct investment (FDI) (11%) and fourth largest destination for outward U.S. FDI (7%). 

Canada is the largest, most secure, foreign source of energy for the United States, in 2020 supplying 60% of its crude oil imports, 98% of natural gas imports, 93% of electricity imports, and 28% of uranium imports. In 2020, the Canada-U.S. bilateral energy trade totaled $109.8 billion, including a $62.1 billion surplus for Canada. Canada exported 91% (by value) of its global energy exports to the United States.

According to a 2020 study commissioned by the Business Roundtable, an association of U.S. CEOs, trade with Canada supported 7.8 million U.S. jobs, which works out to 3.9% of U.S. employment or roughly one in 25 jobs – more than from any other single trading partner. 

Canada’s diplomatic and commercial network in the United States includes the Embassy in Washington D.C., 12 consulates general, 3 trade offices, and 14 honorary consuls. Alberta, Quebec and Ontario also have representatives posted in the United States.

Venezuela

Issue

• The dire political, economic, human rights, and humanitarian situation in Venezuela continues to have destabilizing impacts for democracy, security and prosperity in the region.
• Canada has been active internationally to find a political solution, notably by coordinating with like-minded governments and responding to the humanitarian crisis. The Norway-led negotiations between the regime and the democratic opposition began in September.

Context

Political situation

Nicolás Maduro claimed victory in the fraudulent 2018 presidential elections, held without the full participation of main political opposition parties, and broadly rejected by the international community. Canada subsequently downgraded its diplomatic relations with the Maduro regime.

In 2019, pursuant to the Venezuelan Constitution, an interim government was established, led by the President of the 2015 National Assembly, Juan Guaidó. The interim government does not control public offices, territory or security forces. In January 2021, the Maduro regime inaugurated a new National Assembly, illegitimately elected in December 2020 and aimed at replacing the 2015 National Assembly. Canada, the United States, the United Kingdom, Colombia and Brazil continue to recognize interim President Guaidó.

The Maduro regime retains control of all of the country’s governance institutions and has withstood international pressure and sanctions to date. The support of security forces has been crucial, and reflects their involvement in the political process and ability to profit from criminal activities, including drug trafficking. The regime also receives political and economic support from Russia, China, Cuba and Iran.

The regime’s apparent position of strength masks vulnerabilities, including increasing loss of control over Venezuela’s territory to armed groups, an economic crisis, decreased domestic support, and a lack of broad international recognition.

Economic crisis and human rights

After years of mismanagement and corruption, the economic and humanitarian situation has been further aggravated by the COVID-19 pandemic. Ninety percent of the population now live below the poverty line. According to the International Monetary Fund (IMF), Venezuela’s economy will shrink by another 10% in 2021 after falling by more than 30% in each of the past 2 years. However, inflation, which had been running at more than 5,000% annually, has moderated somewhat, and dollarization trends and the Maduro regime’s limited economic reforms are expected to support economic growth in some sectors for the first time in years.

Repression and coercion are key means of control used by the Maduro regime. It has criminalized and silenced opposing political views, arresting and harassing opposition political figures, social leaders and journalists.

In July 2019, the UN High Commissioner for Human Rights published a damning report documenting the regime’s gross human rights violations, and a September 2020 report by the UN Fact Finding Mission found that high-level state authorities were directly implicated in “crimes against humanity”, including systematic extrajudicial killings, forced disappearances, arbitrary detentions and torture, including sexual violence. The International Criminal Court has also been examining alleged crimes against humanity.

Since 2015, over 6 million Venezuelans have left the country. This represents the second‑largest displacement crisis in the world, after Syria. This movement is stretching already strained public services in host countries, especially Colombia and Peru with 1.7 and 1 million refugees and migrants, respectively.

Venezuela has become a permissive environment for transnational organized crime and violent non-state actors, including Colombian armed groups that pose a threat to regional security and stability. These non‑state actors, which in some cases operate in association with official Venezuelan security forces, exercise control over parts of Venezuela’s territory.

Negotiation

The first round of Norway-led talks were held in Mexico City in September 2021. The first round resulted in 2 modest agreements, one on Venezuela’s claim against Guyana to the Essequibo region, and the second on the importance of social and humanitarian issues. The second round of negotiations, scheduled from September 24 to 27, is expected to address more complex issues, including judicial reforms and access to assets abroad. This is the sixth dialogue attempt since 2013.

[REDACTED]

Canadian engagement

Canada is active internationally in promoting a peaceful political solution to the crisis in Venezuela, and has also supported humanitarian needs in the country and neighbouring countries hosting Venezuelan refugees. Canada could also support negotiations as a member of the “Group of Friends”, should the group be created. Canada was actively involved with the Lima Group, which had been one of many groupings supporting a resolution to the crisis. The June and August 2021 U.S.-EU-Canada joint statements on Venezuela were welcomed by the Norwegians as a demonstration of cohesive international support for comprehensive negotiations leading to free and fair elections.

Since 2019, Canada has committed over $125 million in international assistance through multilateral partners, non‑governmental organizations (NGOs) and local organizations to help respond to the impacts of the Venezuela crisis, both inside Venezuela and in host countries of the Latin America and Caribbean region. Canada’s development assistance programming in Venezuela provides support in health, nutrition and food security, and education, aiming to strengthen longer-term resilience for the most vulnerable populations.

To address the regional impact of the displacement crisis, Canada hosted the high‑level International Donors’ Conference in Solidarity with Venezuelan Refugees and Migrants in June 2021. The conference raised US$957 million in grants and US$1.4 billion in loans. The conference increased visibility of the refugee and migrant situation and brought in new donors to support the response. Canada pledged $115.4 million, including $59.8 million from Budget 2021, the third-largest grant contribution.

Canada has implemented targeted sanctions on key members of the Maduro regime and its associates implicated in attacks on democratic institutions, human rights violations, and major acts of corruption. Canada has not applied sectoral sanctions.

Canada was forced to temporarily close its mission in Caracas in June 2019 due to the inability to obtain visas from the regime. Canada has recognized interim President Guaidó’s representative in Canada, Orlando Viera Blanco, who presented his ambassadorial credentials on November 1, 2020.

Yemen

Context

Yemen is mired in overlapping conflicts in the form of a civil war between the government and the Houthis [REDACTED], also known as Ansar Allah), as well as a proxy conflict between Saudi Arabia and Iran. The Government of Yemen is backed primarily by Saudi Arabia and a waning regional coalition, while the Houthis are backed by Iran. The presence of al Qaeda in the Arabian Peninsula, Daesh and the prospect of southern secession pose additional challenges.

The current conflict escalated in 2015 when the Houthis staged a coup against the Government of Yemen and took control of the capital. Today the Houthis control vast areas, mostly in the country’s north, where they exert almost complete control, using force to subdue opponents. The Houthis receive diplomatic, technical and material support from Iran and their cooperation continues to deepen.

Frequent attacks persist on both sides of the conflict, including airstrikes and use of rockets, ballistic missiles and explosive-laden drones. These attacks have disproportionately affected civilians, in violation of international humanitarian and human rights laws.

[REDACTED]. There are several ongoing political processes working to achieve peace in Yemen, though these have largely stalled. Hans Grundberg was appointed as the new UN Special Envoy for Yemen in August 2021. He concluded a trip to Riyadh on September 17, meeting the President of Yemen’s internationally- recognized government, the Secretary‑General of the Gulf Cooperation Council, several Saudi officials and the ambassadors to Yemen of the permanent members of the UN Security Council

Humanitarian situation

Yemen is the Middle East's poorest country and remains the world’s worst humanitarian crisis, with over 20.7 million people in need of assistance. It has been food insecure for decades, due to a combination of drought, conflict, poverty, and corruption. Pockets of famine-like conditions have returned for the first time since 2018, with severe acute malnutrition, disease outbreaks, conflict casualties, forced displacement and the reversal of development gains. Yemen is also one of the world’s most water-scarce countries. The availability of arable land and access to safe drinking water are threatened by desertification brought on by agricultural pressures, recurrent drought, and climate change.

According to the UN 2021 Yemen Humanitarian Response Plan, an estimated US$3.85 billion in humanitarian assistance is required to address the crisis. However, significant domestic and international funding shortfalls, compounded by a fuel crisis caused by a dispute between the internationally recognized Government of Yemen and the Houthis over the use of fuel import revenue, continue to affect the humanitarian response. Extensive access challenges continue to hinder timely and effective delivery of assistance. Attacks on civilians and civilian infrastructure by all sides remain frequent, in clear violation of international humanitarian law.

The COVID-19 pandemic has posed additional challenges. As of September 30, the number of reported COVID-19 cases in Yemen had reached over 9,000 with over 1,700 associated deaths since January 2020. However, this number is unreliable as testing capacity in-country is very low and a social stigma exists against reporting positive cases. As of July 27, 2021, a total of 311,483 vaccine doses have been administered (approximately 1% of the population), mostly for health professionals in the south. Vaccine hesitancy, a shortage of doses and operational obstacles in the north are contributing factors for low rates of inoculation.

Canadian position and activities

Canadian diplomats have not travelled to Yemen since the start of the conflict in 2014. Canada’s activities focus on diplomatic engagement, humanitarian assistance and peace and stabilization programming. Canada actively supports the efforts of the UN Special Envoy for Yemen, providing $3 million in funding to support the office and regularly engaging to offer Canadian support. [REDACTED]. Since December 2018, Canada has also provided over $22 million in peace and security assistance in Yemen to support the UN-led peace process. Canada participated in the last UN-led international peace talks in 2018.

On March 1, 2021, Canada announced that it would provide $69.9 million to respond to humanitarian needs in Yemen in 2021, building on the over $225 million in humanitarian assistance that Canada has provided since 2015. Canada is currently the sixth largest single-country donor to Yemen; the top 5 donors are the United States, Saudi Arabia, United Arab Emirates, Germany and the United Kingdom. This funding supports the efforts of UN agencies, the Red Cross and non-governmental organizations in providing urgent assistance, such as food, medicine and clean water for the most vulnerable communities in Yemen. On September 22, 2021, at the UN General Assembly side event on the humanitarian crisis in Yemen, an additional $12 million was announced for food security and nutrition programming in Yemen as part of Canada’s broader $155 million response to the global food crisis.

F. Multilateral

United Nations

Issue

• The United Nations (UN) and its system of funds and programs, technical bodies and specialized agencies is a vital component of the global governance architecture. However, the system now faces 21st century challenges that it was not designed to address, mainly shifting global power dynamics, perennial funding problems, and governance issues.
• As the ninth-largest contributor to the UN, Canada has a prominent role to play in reinforcing the UN system by supporting reforms to make it more efficient and relevant, as an effective platform for protecting Canadian interests and advancing foreign policy objectives.

Context

Canada’s UN engagement is an impactful and necessary means to work with partners to strengthen the institutions, treaties, arrangements and norms that are central to a rules-based international system. It supports Canada’s democratic values, underpins its security and prosperity, and enables it to contribute to governance and agenda setting that advance domestic and foreign policy objectives that touch on every facet of Canadian society.

The COVID-19 pandemic has demonstrated the central role of the UN system in shaping and implementing collective responses to complex global challenges. UN Secretary-General António Guterres’ leadership, through his plan to address the health emergency, quickly and effectively mobilized a large-scale comprehensive response to the socio‑economic impact of the pandemic. The reappointment of Guterres for a second term (2022-2027) will maintain leadership continuity at a critical juncture.

Overview of UN bodies and mandates

The UN is the only international organization with universal membership (193 member states). It was designed to address global security, economic development, and humanitarian issues.

The key political organs include: the General Assembly (GA), the Economic and Social Council (ECOSOC), the Security Council and the International Court of Justice (ICJ), and a system of technical agencies, funds and programs. The GA and ECOSOC host negotiations and enable dialogue among member states on issues of shared concern such as the 2030 Agenda and its Sustainable Development Goals (SDGs). The UN Security Council (UNSC) has the power to declare threats to international peace and security, authorize the use of force, impose sanctions and mandate UN peacekeeping missions. The ICJ codifies and develops international law on a wide-variety of subjects.

UN Development System (UNDS) entities and UN specialized agencies are part of the UN that most directly impact citizens. The UNDS, includes the UN High Commissioner for Refugees (UNHCR), the World Food Program (WFP), and the UN Development Program (UNDP), provides critical support to assist the poorest and most vulnerable countries and implements the SDGs. Specialized agencies and other UN affiliated bodies, including the International Atomic and Energy Agency, International Telecommunications Union, World Health Organization, Food and Agriculture Organization, and the International Civil Aviation Organization and Secretariat of the Convention on Biological Diversity (both headquartered in Montréal), are sources of technical knowledge and develop international standards in their respective areas of expertise.

The UN also addresses climate change by assessing climate science, facilitating negotiations for an agreement under the UN Framework Convention, and providing assistance to countries to reduce emissions and to build climate resilience.

Key challenges for the UN system

The UN faces several pressing challenges, including the resurgence of great power dynamics, significant financial challenges due to arrears and commitments to provide long‑term, flexible and predictable voluntary funding, expanding mandates and zero nominal growth policies supported by major donors including Canada, and the need to modernize outdated structures and practices.

The UNSC is confronted with an increasing volume of complex crises, but its reputation and effectiveness are frequently hampered by the national interests of the five permanent members (P5) and the use or threat of the veto. More broadly, polarization outside the UN among states is hindering the ability within it to agree on specific actions on pressing global public policy challenges.

The Biden Administration is taking significant steps toward U.S. re-engagement with the UN. However, the legacy of the previous administration and domestic American antagonism toward the UN have not been entirely overcome. At the same time, China is taking an increasingly assertive posture, including in UN negotiations, where it, supported by other authoritarian states, attempts to shift the discourse away from internationally-agreed norms on human rights, international development cooperation, and economic regulations. It has also deliberately attempted to undermine and re-shape some standard-setting bodies. This is increasingly a terrain where our adversaries are fully engaged and requires vigilance by Canada and partner countries.

The UN’s protracted financial crisis also has an impact on its effectiveness. Paying a share of the UN’s costs is a core obligation of membership. Assessed contributions cover the UN regular budget (US$ 3.2 billion for 2021), the peacekeeping budget (US$6.37 billion covering 12 active peacekeeping missions) and the international criminal tribunals (US$87.4 million for 2021). However, as of August 18, 2021, member states owed approximately US$5.6 billion in unpaid assessed contributions. The United States continues to be the largest debtor, with arrears of approximately US$3.14 billion.

Canada is the ninth-largest contributor to the UN regular budget and has an assessed share of 2.734%. The top 3 contributors are the United States (22%), China (12.005%), and Japan (8.564%). Canada also pays assessed and voluntary contributions to key UN specialized agencies, funds and programs. Canada has always paid its assessed contributions to the UN system on time, in full, and without conditions.

During his first term, Secretary-General Guterres advanced a substantial package of reforms aimed at making the UN a more agile, effective, efficient, transparent and accountable organization. Significant progress has been made on these despite challenges, notably the COVID-19 pandemic and resistance from within the system and by certain member states. A strengthened Resident Coordinator System at the country level facilitates a coherent and coordinated UN response to development and humanitarian challenges. Improved system-wide functions and mechanisms have enhanced transparency and accountability. Significant reforms to the UN’s peace and security architecture have helped pivot the UN from crisis-response to prevention. There is also stronger management oversight, an emphasis on gender parity and a focus on innovation.

Key areas of focus for Canada at the UN

UN reform and re-design are a priority for Canada, as a strong, well-functioning UN system helps protect Canada’s national interests.

Key areas of focus have included governance reform at the board level of UN funds, programs and agencies; representation of Canada at key elected bodies; COVID-19 recovery efforts; financing for development; climate change; promoting national and local ownership for inclusive conflict prevention and peacebuilding; and humanitarian action. Advancing gender equality and protecting and promoting human rights are cross-cutting priorities.

North Atlantic Treaty Organization

Issue

• North Atlantic Treaty Organization (NATO) is central to Euro-Atlantic security, and essential to international stability. The alliance is a cornerstone of Canada’s international defence and security policy. Canada is an active NATO member, contributing substantially to the alliance’s core tasks and missions.

Context

NATO has 3 main tasks: (1) collective defence among the 30 allies; (2) crisis management within and beyond NATO’s borders; and, (3) cooperative security through partnerships. NATO serves as the primary forum for transatlantic consultation and cooperation on major national and regional security challenges. The principle of collective defence among NATO allies, enshrined in Article 5 of the North Atlantic Treaty, ensures that Canadian sovereignty and security will be defended by allies should Canada face a military threat. In turn, Canada is committed to the defence of NATO allies. As alliance decisions are made by consensus, NATO membership gives Canada a voice [REDACTED] on issues related to Euro-Atlantic security.

Key issues facing the alliance

[REDACTED]

Burden sharing: Fair NATO burden sharing, in particular the progress of each ally in reaching the aspirational guideline of spending 2% of GDP on defence, continues to be an issue of importance for the United States. Canada’s defence spending was reported as 1.45% of GDP in 2020‑2021. Canada engages in advocacy to ensure its significant operational contributions to NATO and defence spending increases are recognized as critical elements of burden sharing.

[REDACTED]

Afghanistan: On April 14, in parallel to the U.S. announcement that it would withdraw its troops from Afghanistan by September 11, NATO announced the end of its Resolute Support Mission in Afghanistan. [REDACTED]

Climate and security: NATO is seeking to better address the security implications of climate change, and facilitate the “greening” of allied military activities. At the 2021 NATO Leaders’ Summit, Canada proposed to establish and host a NATO Centre of Excellence on Climate and Security. ¶¶ÒùÊÓƵ and the Department of National Defence are working toward the establishment of a centre by 2023, at the earliest.

[REDACTED]

Canada and NATO

A founding NATO member, Canada has a strong voice within the alliance and is well positioned to influence important NATO policy areas and promote action on Canadian priority issues (e.g. women, peace and security). Canada continues to make significant contributions to NATO missions, operations and activities, including:

• Leading the enhanced Forward Presence battlegroup in Latvia.
• Commanding the Standing NATO Maritime Group One, and deploying a frigate on a continual basis to patrol allied waters.
• Deploying personnel to Kosovo Force and NATO Mission Iraq.
• Deploying 6 fighter jets each autumn to conduct air policing of the Black Sea.
• The sixth-largest financial contributor to NATO common budgets; Canada contributed $230 million in FY 2020/21.

G7

Context

History and Key Issues

The Group of Seven (G7) was established in 1975 to increase international cooperation on pressing global economic and financial matters. The scope of the agenda has grown and members now address a range of matters, including security, development, environment, health, and gender equality issues.

The G7 is comprised of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. Since 1977, the EU has been invited to attend. Russia was a member (G8) from 1997 to 2014 until its expulsion due to the illegal annexation of Crimea.

G7 and the International Context

G7 members have historically been bound together by respect for human rights, democracy and the rule of law, and commitment to a rules-based international system. [REDACTED].

The real value of the G7 lies not just in the members’ ability to reach consensus on pressing global, peace, security and economic issues, but to have open and frank discussions on common challenges and points of division, in order to influence global decision-making.

G7 Foreign and Development Ministers' Meeting

Participation in the G7 Foreign Ministers’ process (FMM) provides Canada with a unique vehicle to align positions with a small group of our closest partners on pressing international political and security challenges.

In 2021, the United Kingdom held its first joint Foreign and Development Ministers’ Meeting (FDMM) May 3-5 in London. Foreign Ministers attended in person, while development ministers joined part of the meeting virtually. The meeting also involved ministers from Australia, India, South Africa and South Korea, as well as Brunei as ASEAN chair, as invited guests. Ministers addressed threats to human rights and democracy, along with specific regional issues (Russia, Myanmar, Libya, Syria, North Korea and Iran). A frank discussion on China led to strong G7 communiqué language covering human rights abuses in Xinjiang and Tibet, democracy in Hong Kong, unfair trade practice, coercive diplomacy including arbitrary detention, cyberspace and Taiwan. Ministers also engaged in discussions on the importance of open and democratic societies, the Indo-Pacific, equitable access to vaccines, girls’ education, climate change, and food security.

A second FDMM is planned for December 10 to 12. The agenda is yet to be confirmed, but expected to focus on geopolitical hotspots, with an emphasis on the Indo-Pacific.

G7 Foreign Ministers frequently cooperate throughout the year on issues of shared interest or concern. In 2021, G7 FMs have issued ten standalone statements, including on Hong Kong, Myanmar, Alexei Navalny, Ukraine, and Ethiopia (Tigray).

Canada and the G7

Canada has hosted six G7 summits, most recently in 2018 in Charlevoix, Québec. Canada is next due to host the G7 in 2025.

A seat at the table offers Canada an opportunity to leverage the significant political and economic influence of the group to address global issues of priority concern to Canada. The G7 has been instrumental in orienting and stabilizing global financial markets, bringing much needed financing in support of global initiatives, and harnessing broader partnerships with influential non-G7 countries. The G7 also offers Canada a privileged opportunity to engage and cooperate when confronting common geopolitical challenges with a relatively likeminded group. For example, Canadian advocacy led to strong support for the Declaration Against Arbitrary Detention in State-to-State Relations in the G7 Foreign and Development Ministers Communiqué.

Canada has used the G7 to effectively advance its vision for COVID-19 response and recovery, tackling climate change, and addressing the disproportionate impact on women and marginalized groups (including through the continuation of the Gender Equality Advisory Council, a Canadian innovation from 2018), including Indigenous peoples.

The 2021 UK G7 Presidency

Consistent with the United Kingdom’s overall approach to showcase “Global Britain” in this post-Brexit year, the United Kingdom has sought to [REDACTED] the G7 by promoting its shared democratic values. Response to COVID-19 pandemic has remained central to all discussions.

The June 11 to 13 G7 Summit allowed G7 countries, along with guest partners (Australia, India, South Korea and South Africa) to project unity and leadership in addressing key global issues from response to COVID-19, climate change, and global economic recovery. The G7 agreed to a range of key commitments, including: a collective commitment to share more than 2 billion vaccine doses with low- and middle‑ income countries; to launch a Pandemic Preparedness Partnership to reduce the vaccine development cycle from 300 to 100 days; new financial and sectoral commitments to address climate change, including a commitment to mobilize US$100 billion per year in climate finance support (Canada announced a doubling of its past commitment, to $5.3 billion over five years); and a $2.5 billion pledge to the Global Partnership for Education(including a new Canadian investment of $300 million over five years). Leaders also reaffirmed a willingness to advance core issues including media freedom, an end to arbitrary detention, ending forced labour, countering disinformation, and strengthening the Rapid Response Mechanism (a legacy of Charlevoix and which Canada continues to host/lead.

The United Kingdom has convened virtual or in-person G7 ministerial meetings, including: Foreign and Development; Digital and Technology; Trade; Climate, Energy, and Environment Ministers; Interior; Transport; and Science. G7 Health and Finance ministers have each convened on a monthly basis since the onset of the pandemic. In addition to communiques issued after ministerial meetings, G7 Foreign Ministers have also issued 9 statements on emergent issues.

The 2022 German G7 Presidency

Germany will hold the G7 Presidency in 2022 and notionally plans to host the Summit June 26-28. Germany has yet to announce planned priorities due to its upcoming September 2021 elections. However, Germany has indicated that pandemic response and preparedness, equitable access to vaccines, climate action and economic recovery will likely remain central to the G7 agenda in 2022

G20

Context

History and key issues

The Group of 20 (G20)^{Footnote 6} was established in 1999 in large part as a result of efforts by Canada in response to the Asian financial crisis. It met initially at the level of finance ministers and central bank governors from advanced and emerging economies to discuss the stability of financial markets, and how to promote economic cooperation. Its diverse membership represents 80% of global GDP. In response to the 2008 global financial crisis, the G20 was elevated leader level.

At its core, G20 members are expected to promote economic stability and sustainable growth. Responsible and better coordinated monetary and fiscal policies are preconditions for such growth. The G20 continues to provide an important forum to discuss common approaches to global imbalances, capital market regulation, international trade and investment, and sustainable job creation in an increasingly digitalized world.

In recent years, the G20 has expanded its focus, including to health, environment/climate change, food security, gender and women’s entrepreneurship, education and training, migration/displacement, culture and tourism. Though cautious to avoid mission creep, Canada has argued that such issues are appropriate for G20 consideration as there are significant economic implications associated with each of these issues if left unaddressed, and G20 action can offer an important demonstration effect.

In addition to an annual Leaders’ Summit, the G20 traditionally hosts a range of annual ministerial meetings coinciding with the priorities of the presidency.

2021 Italian G20 Presidency

Under a 3-pronged framework of people, planet and prosperity, Italy is aiming to make meaningful progress on international climate action and promote clean energy (including in their role as COP26 partner country with the United Kingdom); strengthen the rules-based trade order; further backstop global financial systems and address the financial needs of developing countries; and promote gender equality and women’s economic empowerment.

G20 Development Ministers’ Meeting

Italy convened the first ever G20 Development Ministers’ Meeting on June 29, which occurred in tandem with a G20 Foreign and Development Ministerial Meeting. Development ministers and invited guests (including Algeria, the International Committee of the Red Cross, UNICEF, the World Health Organization and the Food and Agriculture Organization) discussed issues surrounding financing for sustainable development and the localization of Sustainable Development Goal implementation with a focus on intermediate cities, based on ongoing work within the G20 Development Working Group. The meeting provided development ministers the opportunity to discuss the impact of the COVID-19 pandemic on developing countries and the challenges the international community faces in supporting a sustainable, inclusive and resilient recovery. The Ministerial, and the Joint Ministerial that preceded it, demonstrated the importance of addressing international development dimensions of the pandemic response and recovery within broader G20 discussions, and the need for greater alignment with the Climate and Environment, and Finance tracks.

Canada and the G20

Given its make-up, the G20 remains an important platform for Canada to influence global economic, financial and trade policy issues. The group is most effective when focussed on matters affecting stability and growth, and international economic governance. In this respect, the real value of the G20 continues to be the opportunity to build consensus among the major countries represented to pursue strong fundamentals crucial for economic stability and growth. This includes pursuing a collective international approach in support of the international financial architecture, open, rules-based trade and investment as a means of enhancing prospects for sustainable growth. However, consensus can be difficult to achieve with many diverse interests and perspectives at the table.

Canada, through its own leadership efforts within the G20 and in other forums, can continue to bring a practical and results-focused voice to the table. In this respect, there will be important opportunities to use the G20 platform to promote support for developing countries, including through linkages with the Canada-led Financing for Development in the Era of COVID-19 and Beyond Initiative at the United Nations. At the G20, Canada promotes the importance of economic opportunity for all citizens, including women and youth; reinforces a commitment to rules-based trade; and supports action on climate. Canada has also supported discussions on equitable access to vaccines, therapeutics and diagnostics in response to the COVID-19 pandemic.

World Trade Organization

Issue

• Since its founding in 1995, the World Trade Organization (WTO) has played a critical role in improving the stability, predictability and openness of the international trading system. WTO rules have led to the lowering of tariffs with key trading partners and the creation of disciplines pertaining to other aspects of international trade.
• However, the WTO currently faces a number of challenges and is in need of reform in order to strengthen and modernize the organization.

Context

The WTO is at the core of the rules-based multilateral trading system. It provides its 164 members with a forum for administering the global system of trade rules; negotiating new or updated rules; settling trade disputes between members through binding dispute settlement; and reviewing members’ trade polices. Amidst growing global trade protectionism and the erosion of respect for international cooperation, the WTO remains the main global institution to uphold the rules‑based multilateral trading system. Its 60+ agreements, which are binding on all WTO members, provide a baseline for other international trade rules, including bilateral and regional free trade agreements.

The WTO is of strategic importance for Canadian trade objectives and has been a critical forum for Canada to secure market access for Canadian goods and services, and advance other trade interests on the broadest possible basis. The WTO has also been a vehicle for Canada to build alliances, influence multilateral trade rules, and secure concessions or results on issues where we would otherwise have limited leverage as a medium-sized economy.

WTO negotiations

The last comprehensive round of WTO negotiations, the Doha Development Agenda, was launched in 2001, covering a broad range of issues and has been stalled since 2008. Many members, including Canada, consider it to have failed. WTO members have achieved some successes over the past 2 decades, including conclusion of a multilateral agreement on trade facilitation in 2013.

Multilateral negotiations involving all members have continued on certain issues, such as agriculture and fisheries subsidies, albeit without results to date. Plurilateral negotiations, which involve subsets of WTO members, have become an attractive alternative. Plurilateral negotiations (also known as joint statement initiatives) are ongoing in the areas of e-commerce, services domestic regulation and investment facilitation.

The Ottawa Group on WTO reform

The multilateral trading system is facing unprecedented challenges that point to an urgent need for WTO reform. Since 2016, the United States has blocked new appointments to the Appellate Body to fill vacancies, which means that the WTO’s dispute settlement system is unable to hear appeals, rendering panel decisions unenforceable. In addition, the stalemate in multilateral negotiations has resulted in WTO rules not keeping pace with global economic developments, such as digital trade, the role of non-market economies, and shifts in agricultural production. [REDACTED].

Against this backdrop, and given the importance it places on rules-based trade, Canada has taken a leadership role in WTO reform. This includes chairing the Ottawa Group (established in October 2018), as a forum for 14 like-minded WTO members^{Footnote 7} to discuss ideas and proposals to reform the WTO. Trade ministers and vice ministers of the Ottawa Group meet regularly.

By virtue of its diverse and representative membership, the Ottawa Group is in a unique position to help deliver the pragmatic and creative leadership that the WTO requires. Throughout the pandemic, the group’s efforts to carve out a role for the WTO in adapting to emerging issues demonstrate that it can be a useful forum. In June 2020, Ottawa Group members endorsed a joint statement outlining a 6-point action plan to respond to the COVID-19 pandemic, including actions on transparency, predictability, trade facilitation, and e-commerce. In this context, Canada and the EU are working on a WTO Ministerial Declaration on Trade and Health to facilitate trade in essential medical goods and enhance the capacity of the trading system to deal with public health crises.

The WTO Appellate Body impasse

Due to ongoing U.S. blockage of new appointments to the Appellate Body (AB), in December 2019, the AB lost quorum to hear appeals, which effectively enables a member to appeal a panel report “into the void” and prevent the adoption of a binding decision. This situation is detrimental to many WTO members, including Canada. Binding dispute settlement has facilitated the resolution of key Canadian trade disputes with partners, especially the United States (e.g. country of origin labelling for beef and pork, softwood lumber).

Multilateral discussions to find a permanent solution to the AB impasse have not made progress. [REDACTED].The United States has long argued that the AB has failed to function as originally intended, noting “judicial over‑reach” concerns about interpretations of particular provisions in the WTO agreements by dispute settlement panels and the AB.

Canada’s objective is to find a long-lasting multilateral solution that includes the United States. In the interim, Canada and 24 other WTO members have established the Multi‑Party Interim Appeal-Arbitration Arrangement, which operates within the framework of existing WTO rules and provides for binding dispute settlement and access to appellate review in disputes amongst its participants, as long as the AB is unable to hear appeals.

12th WTO Ministerial Conference (MC12)

The ministerial conference, which normally meets every 2 years, is the highest WTO decision-making body. Canada is represented by the Minister of International Trade at these conferences. MC12 was originally scheduled to take place in June 2020 but was postponed to November 30 to December 3, 2021, due to COVID-19. Delivering meaningful outcomes by MC12 will be very challenging; however, members are working toward conclusion of plurilateral negotations on domestic regulation for services. MC12 also represents an opportunity to lay the groundwork for future negotiations and institutional improvements.

In the meantime, deep divides remain on how the WTO can best respond to the pandemic. Some members are adamant that a broad waiver of intellectual property rules is essential to facilitate vaccine production and distribution, while others are deeply opposed.

International financial institutions

Issue

• International financial institutions (IFIs) play a critical role in financing and enabling social and economic development in middle-income, poor and fragile states. They also reinforce global economic stability through policy actions, loans and grants to governments and investments in the private sector.
• Canada is a major shareholder in IFIs, supporting the fundamental role they play in upholding the rules-based system and in reinforcing developing partner countries capacities. IFIs also provide a platform to advance foreign, development and trade objectives including on issues such as women’s economic empowerment, climate change and good governance.

Context

IFIs include both multilateral development banks (MDBs) and the International Monetary Fund (IMF). MDBs aim to reduce poverty; advance sustainable economic and social development; and promote regional cooperation and integration, exercising their comparative advantage via supporting social spending, financing growth related investments (e.g. infrastructure) and facilitating private sector engagement. For its part, the IMF is responsible for fostering global monetary cooperation, securing financial stability and facilitating international trade.

IFIs are an integral part of the international financial architecture, providing needed financial resources to middle-income countries (through loans) and the poorest countries, including fragile states (through concessional loans and grants). Most IFI capital is guaranteed by donor member states so they can provide preferred interest rates to borrowing members.

IFIs are providing critical support to the global COVID-19 response, with the MDBs collectively having allocated nearly US$300 billion. In total, since the beginning of the COVID-19 crisis, the IMF has supported 86 countries with almost US$140 billion, including through emergency assistance and precautionary lines of credit, while MDBs have approved a combined US$152 billion.

Canada and the IFIs

IFIs are among Canada’s largest and most strategic partner institutions for supporting development interventions at scale given the size of their operations, track record, technical and financial expertise, convening role, and thought leadership. Canada’s relationship with all the IFIs is co-managed by ¶¶ÒùÊÓƵ and Department of Finance Canada. The Minister of Finance is Canada’s Governor to the Board of Governors of the World Bank, the International Monetary Fund, the European Bank for Reconstruction and Development and the Asian Infrastructure Investment Bank. The Minister of International Development is Canada’s Governor to the African Development Bank, the Asian Development Bank, the Caribbean Development Bank and the Inter-American Development Bank. Governors are responsible for Canada’s of these institutions including their strategic policy direction, accountability, institutional effectiveness, financial and programming decisions. These powers are generally delegated to ¶¶ÒùÊÓƵ or Finance Canada’s senior management. Executive directors represent Canada on the boards of directors of these institutions, and oversee their general operations. 

International Monetary Fund

Canada is the 11th largest shareholder of the IMF. The IMF’s primary objective is to enable the stability of the international monetary system through economic s and policy advice; l to address balance-of-payments problems; and t and training. Canada has actively advocated for the provision of substantial and rapid financial assistance for vulnerable countries at the IMF in response to COVID‑19, including small island developing states. In August 2021, the IMF approved a US$650 billion allocation of special drawing rights (SDR), a special reserve currency that IMF members can exchange for other currencies. The G7 has committed to channelling US$100 billion of the SDRs that they received to vulnerable countries.

World Bank Group

The World Bank Group (WBG) is Canada’s largest development partner institution. The scale and scope of its operations provides a cost effective way to advance Canadian development priorities. It consists of the International Bank for Reconstruction and Development (IBRD) that lends to middle-income countries, the International Development Association (IDA), which provides finance to the world’s poorest countries; the International Financial Corporation, its private sector arm; and the Multilateral Investment Guarantee Agency, which provides political risk insurance. insurance. In December 2019, Canada pledged a grant of $1.271 billion over 3 years plus a 25-year US$575 million low-interest loan.

African Development Bank

Canada is the fourth largest non-regional shareholder of the African Development Bank (AfDB). The AfDB group is majority owned by African countries. In October 2019, Canada agreed to contribute US$253.4 million; in 2021, Canada committed to accelerate its payments over 3 years rather than 8 to help the bank better respond to the pandemic. The African Development Fund (ADF) within the AfDB provides loans or grants to the lowest income countries. In 2019, Canada committed $355.2 million over 3 years to replenish the ADF.

Inter-American Development Bank

The Inter-American Development Bank (IDB) is the largest source of multilateral development financing for Latin America and the Caribbean. Canada is its 3rd largest
non-borrowing member, and 6th largest shareholder overall. Negotiations for a general capital increase for the IDB are expected to begin over the coming twelve months.

Asian Development Bank

Canada is the seventh largest and second non‑regional shareholder of the Asian Development Bank (ADB) currently. The Asian Development Fund (ADF) provides grants to the ADB’s lower-income developing member countries. In 2020, Canada committed a contribution of $120.5 million over 4 years to the ADF.

Caribbean Development Bank

Canada is a founding member of the Caribbean Development Bank (CDB) and its largest non-regional shareholder. Canada committed to contribute $80.41 million to the CDB Special Development Fund between 2021 and 2024, the largest among all members.

European Bank for Reconstruction and Development

Canada has been a major donor to the European Bank for Reconstruction and Development (EBRD) from its inception. Its mandate has evolved from supporting post‑Cold War recovery and economic development in Central and Eastern Europe to supporting its countries of operation in their transition to sustainable market economies by promoting private sector development and entrepreneurship.

Asian Infrastructure Investment Bank

Established in January 2016 and based in Beijing, the Asian Infrastructure Investment Bank (AIIB) is focused on infrastructure financing in Asia. China holds 30% of the AIIB’s shares. Its creation reflects in part a frustration by China with the United States’ slowness in providing it a wider seat at the table in the IMF and WBG, but also the real needs that exist in the region. In March 2018, Canada joined the AIIB with a 0.995% shareholding.

African Union

Issue

• The African Union (AU) is the most important multilateral forum on the continent. Robust engagement with the AU is key to advancing Canada’s multilateral and bilateral interests in the region, including trade.
• Canada is accredited as a permanent observer to the AU and provides funding for AU development assistance and peace and security initiatives.

Context

With 55 member states, the African Union (AU) leads Pan-African efforts to advance peace and security, governance, climate change, trade and integration on the continent. The AU is key to understanding how Africa’s political leadership is responding to regional challenges (including the COVID‑19 pandemic) and where Canada can play a constructive role. The AU has been a lead partner in the negotiations for the African Continental Free Trade Area (AfCFTA) which Canada hopes to eventually benefit from, and for which it provides technical support.

The AU is led by a rotating chair selected annually from the heads of its member states. President Tshisekedi of the Democratic Republic of Congo is the current chair, while President Macky Sall of Senegal will take on the chair role in 2022. This will provide an opportunity for Canada to further deepen its engagement with the AU, given its close relationship with Senegal. The administrative arm of the AU is the AU Commission and it is headed by an elected chair (currently the former Prime Minister of Chad, Moussa Faki Mahamat).

In addition to the AU, 8 regional economic communities, recognized by the AU, play an important role in advancing regional integration and cooperation. Canada engages directly with 4 of these: Economic Community of West African States (ECOWAS); Intergovernmental Authority for Development (IGAD); East African Community (EAC); and Southern African Development Community (SADC).

Africa is an area of geo-strategic competition between global powers including China, Russia, Gulf States, the United States, the United Kingdom, Turkey, France and the European Union. Canada’s direct engagement with the AU strengthens its relationships with African leaders, and provides an opportunity to position itself strategically as a valuable political, trade and development partner.

Canadian diplomatic representation

Canada is accredited as a permanent observer to the AU. Currently represented by its ambassador to Ethiopia and Djibouti, [REDACTED] and preparing to hold regular high-level consultations with the AU, both of which have been delayed by the COVID-19 pandemic and current events in Ethiopia. The consultations will provide a platform for advancing Canada’s interests such as COVID-19 response and recovery, trade and investment opportunities, peace and security, development, climate change, governance and digital innovation. In July 2021, Minister Garneau held a call with Chairperson Faki, during which they reaffirmed their mutual interest in the high-level consultations.

African Continental Free Trade Area

One of the most prominent flagship projects of the AU is the establishment of the African Continental Free Trade Area (AfCFTA); with trading commencing on January 1, 2021. Canada is supporting the negotiation, establishment and implementation of the AfCFTA via funding to the African Trade Policy Centre (ATPC) ($15.2 million; 2021-2025). This also provides Canada with the ability to engage early in trade policy discussions to identify downstream trade and investment opportunities. The creation of this integrated market for the free movement of goods and services will help African nations accelerate economic growth.

Peace and security

The AU leads regional peacekeeping and conflict prevention efforts on the continent. Its current peacekeeping missions include: the AU Mission to Somalia (AMISOM), the AU Mission for Mali and the Sahel (MISAHEL), the (AU-authorized) Regional Coordination Initiative against the Lord’s Resistance Army (RCI-LRA) and the Multinational Joint Taskforce against Boko Haram (MNJTF). AMISOM is the largest peace operation in the world. There is a dynamic interface between AU and UN peacekeeping efforts.

The AU is also active in advancing the women, peace and Security agenda.

The AU adopted the theme of “Silencing the Guns: Creating Conducive Conditions for Africa's Development” in 2020. It underscores the nexus between good governance, stability and development. It also calls attention to economic security and the vital links between sustainable and inclusive economic growth, job creation, conflict prevention, and peace and security.

AU pandemic response

The AU coordinates the continental response to the COVID-19 pandemic. Cyril Ramaphosa, President of the Republic of South Africa, serves as the AU Champion on COVID-19 and has established a Commission on African COVID-19 Response. The AU’s Africa Centres for Disease Control and Prevention have a Joint Continental Strategy for COVID‑19.

Funding for AU initiatives

Canada supports the African Union Commission (AUC) through a $5 million grant (2017-2021) and $10 million general grant (2020-2024) to support AU priorities of capacity building, gender equality and women’s empowerment, and women, peace and security. Canada is providing more than $13.5 million to also support the Africa CDC’s response to COVID-19, including supplying N95 masks, equipment and strengthening capacities of local laboratories across the region for quality COVID-19 testing.

Since 2016, the AU has undertaken a reform process to address a number of issues, including its financing, governance and structure, as well as coordination issues with African regional organizations and improving connections with the United Nations. Canada is supportive of these measures, but recognizes that the capacity to fully implement this ambitious reform agenda remains a challenge. 

Asia-Pacific Economic Cooperation

Issue

• Canada is a founding member of the Asia-Pacific Economic Cooperation (APEC) forum. Its 21 members account for approximately 61% of global GDP.
• Increased and sustained engagement allows Canada to play an agenda-setting role at APEC. Canada last hosted APEC in 1997.

Context

APEC is Asia’s preeminent forum on matters of trade and the economy. It operates as a nonbinding, consensus‑driven, multilateral institution with a focus on promoting sustainable growth and prosperity among its 21 member economies.^{Footnote 8} APEC seeks to enhance regional integration by removing barriers to trade and investment “at the border,” enhancing supply chain connectivity “across the border”, and improving the regulatory environment “behind the border.” Its work is advanced through a variety of forums, working groups and initiatives aimed at expanding free and open trade and investment, and cultivating favourable business environments in the APEC region. APEC’s agenda is broad, ranging from customs procedures and regulatory reform, to women’s economic empowerment and the digital economy.

APEC initiatives and priorities often complement the work of multilateral forums such as the G7, G20, Organisation for Economic Co-operation and Development (OECD), Association of Southeast Asian Nations (ASEAN) and the World Trade Organization (WTO).

Canada in APEC

APEC provides Canada an opportunity to further strengthen trade and economic ties with the Asia-Pacific’s most dynamic economies. APEC is also the only trans-Pacific regional organization of which Canada is a member that hosts an annual leader-level summit. It provides a critical platform to pursue regional objectives, including trade liberalization and market reforms, broader foreign policy goals, such as fostering regional commitment to the rule of law and upholding human rights standards. Canada also leverages APEC to advance its membership bids for regional forums such as the leader-level East Asia Summit and ASEAN Defence Ministers Meeting-Plus (ADMM+).

¶¶ÒùÊÓƵ coordinates the activities of over a dozen partner departments involved in a broad agenda ranging from customs procedures and regulatory reform, to women’s economic empowerment and the digital economy.

In recent years, Canada has played an instrumental role in pressing for governance reforms, focusing on streamlining APEC’s complex and expansive organizational structure.

Four out of five of Canada’s top trade partners are members of APEC: the United States, China, Mexico and Japan. In 2019, prior to the global pandemic, APEC accounted for 83.3% of Canada’s merchandise trade, 55% from economies other than the United States.

2020 was a challenging year for APEC economies due to the global pandemic. Canada’s merchandise trade with APEC economies fell 11.7% between 2019 and 2020. However, merchandise trade has since rebounded strongly. As of March, Canada’s trade with APEC economies was 14% above pre-pandemic levels.

Hosting APEC

Hosting APEC is a significant commitment and the responsibility is rotated amongst members each year, but not in any prescribed order. In addition to the Annual Economic Leaders’ Meeting (or “Summit”), host countries organize meetings of APEC ministers responsible for foreign affairs, trade and finance, as well as “sectoral ministerials” in areas such as transportation, tourism, health and SMEs.

New Zealand is hosting APEC virtually in 2021 with Thailand due to host in 2022. In August 2021, U.S. Vice-President Kamala Harris offered the U.S. as APEC host for 2023 and Peru recently received approval for 2024. South Korea is confirmed as APEC host for 2025. There is considerable interest for Canada to announce it will host APEC as it last did so in 1997. By 2023, 14 of 19 APEC economies that are able to host (Hong Kong and Chinese Taipei are excluded) will have hosted twice; some 3 times. Only Canada, Brunei, Mexico, Papua New Guinea and Russia have hosted once.

APEC Business Advisory Council (ABAC)

Private sector engagement, a key APEC pillar, is advanced through ABAC, which represents the interests of the APEC business community. The annual APEC CEO Summit and regular industry dialogues provide opportunities for business leaders to interact with APEC leaders. Each APEC leader can appoint up to 3 ABAC members. Canada’s current ABAC representatives include: Janet De Silva (CEO, Toronto Region Board of Trade); Tim Dattels (Co-Managing Partner, Senior Partner and Co-Head of Asian Business, TPG Capital in Hong Kong); and Joseph S. Fung (Venture Capitalist in Hong Kong). 

Outlook

APEC has faced headwinds in its 32-year history, but none as significant as those it has confronted in 2020-21 which included an unprecedented global pandemic, escalating geopolitical tensions between China and the United States, trade disputes between Korea and Japan, and a hardening of China’s position on Hong Kong and Chinese Taipei (Note: APEC nomenclature guidelines dictate the use of Chinese Taipei when referring to Taiwan). Despite these challenges, APEC is advancing work on an implementation plan for its twenty-year vision document that outlines APEC’s core long-term goals: The APEC Putrajaya Vision 2040. The Implementation Plan is expected to be presented to APEC leaders for endorsement in November 2021.

New Zealand’s established priorities for its 2021 APEC Presidency have included a strong emphasis on inclusive, digitally enabled and sustainable post-pandemic recovery. Canada works with New Zealand to advance issues of common interest such as women’s economic empowerment, trade related intiatives targeting indigenous communities, climate change issues, and support for the multilateral trading system.

The APEC Economic Leaders’ Meeting (AELM) is scheduled to take place during the week of November 8, 2021. Canada’s Prime Minister and ministers of foreign affairs and international trade normally attend.

Association of Southeast Asian Nations

Issue

• Southeast Asia’s growing strategic importance in the Indo-Pacific calls for Canada to deepen regional engagement with the Association of Southeast Asian Nations (ASEAN).
• Canada seeks to elevate its relationship with ASEAN from dialogue partner to strategic partner, and join the East Asia Summit and the ASEAN Defence Ministers Meeting Plus.
• ASEAN-Canada free trade agreement (FTA) negotiations are expected to be launched at the ASEAN Economic Ministers-Canada Consultations in October.

Context

ASEAN is a regional organization comprising 10 member states^{Footnote 9}. Despite widely different governance models among its members, member countries cooperate to advance regional goals related to security, economic and social issues. ASEAN countries continue to face development challenges, ongoing human rights and rules-based governance concerns, and growing inequality, all of which have been exacerbated by the COVID-19 pandemic.

ASEAN and the Indo-Pacific

Intense strategic competition between the United States and China directly affects ASEAN countries, who are under increasing pressure to take sides and align on key issues. As such, ASEAN has begun to nurture a multi-polar power dynamic in the Indo‑Pacific, with ASEAN at the core of the regional security, political and economic architecture. This includes:

• the ASEAN Regional Forum (security dialogue for ASEAN and 17 other countries, including Canada);
• the East Asia Summit (a forum for strategic dialogue among the leaders of ASEAN and 18 other countries);
• the ASEAN Defence Ministers Meeting Plus (a forum for defence and security cooperation for ASEAN and eight other countries); and
• the Regional Comprehensive Economic Partnership (a free trade agreement between ASEAN and 5 other countries expected to come into force in 2022).

Myanmar

The February 2021 military coup, the ongoing civil conflict, and the resulting humanitarian and security crisis in Myanmar continue to pose a major challenge to ASEAN’s unity. ASEAN’s consensus-based approach and principle of non-intervention are being severely tested. Nevertheless, ASEAN is attempting to play a central role in the international response to the Myanmar crisis and agreed to a “Five-Point Consensus” in April 2021. The plan calls for an end to violence and the release of detainees, the appointment of a special envoy to broker inclusive dialogue, and ASEAN coordination of international humanitarian assistance.

From 2018-2021, Myanmar served as Canada’s country coordinator in ASEAN. Canada has so far been successful in balancing its policy response toward Myanmar with its commitment to strengthening Canada‑ASEAN relations; there has been no discernable impact on Canada’s relations with ASEAN.

Canadian engagement with ASEAN

Canada is one of ASEAN’s 11 Dialogue partners, with access to dedicated ASEAN processes and meetings such as the annual Post-Ministerial Conference (to which the Minister of Foreign Affairs is invited), the ASEAN Regional Forum, and annual consultations between Canada and ASEAN economic ministers. Canada’s prime minister was also invited, as a guest of the chair, to 3 consecutive ASEAN leaders’ summits.

To advance its economic, security and development interests in the region, Canada seeks to:

• elevate the ASEAN-Canada dialogue partnership to a strategic partnership;
• join the East Asia Summit; and
• join the ASEAN Defence Ministers Meeting Plus.

While there is currently a moratorium on membership expansion of the East Asia Summit, making it difficult for Canada to join, Canada has been granted observer status to expert working groups of the ASEAN Defence Ministers Meeting Plus and continues to work toward eventual accession. The Prime Minister has been invited to participate virtually in an ASEAN Business and Investment Summit on October 25 related to the annual summit meetings.

The 2021-2025 ASEAN-Canada Plan of Action includes a commitment to explore cooperation in maritime capacity building, connectivity, meeting the United Nations 2030 Sustainable Development Goals, and on economic issues.

Given ASEAN’s significant economic potential – with its growing middle class, rapid industrialization and emergent role in global supply chains – Canada is exploring opportunities to enhance commercial engagement, including the possibility of a Canada-ASEAN free trade agreement (FTA). ASEAN has identified the launch of negotiations with Canada as a priority for 2021. The development of a reference paper to outline the scope of a possible FTA was completed in September and will be presented to trade ministers at the Canada‑ASEAN Economic Ministerial meeting in October.

Development programming in ASEAN

In addition to multilateral and global programs operating in ASEAN with Canadian funding support, Canada maintains 4 direct bilateral development programs in Indonesia ($13.5 million), Myanmar ($27.6 million), the Philippines ($9 million) and Vietnam ($9 million). These efforts are complemented by an ASEAN regional development program ($5 million) that provides opportunities to all ten member states. In particular, the ASEAN Regional Development Program contributes to:

• developing ASEAN human capital (e.g. life-long learning, the protection and rights of vulnerable populations such as migrant workers); and
• strengthening ASEAN regional stability (e.g. peace and security initiatives, gender equality, disaster management).

Key initiatives include a $10 million fund for scholarships and educational exchanges, Canada’s contribution of $3.5 million to the COVID-19 ASEAN Response Fund, and $8.5 million to support the women, peace and security agenda in the region.

Inter-American multilateralism

Issue

• The complex and increasingly polarized multilateral environment of the Americas requires Canada to engage strategically in those organizations that offer the best opportunities to advance its foreign policy priorities, including the leader level Summit of the Americas.

Context

Canada is a respected and influential multilateral player in the Americas, and engages in the region’s multilateral bodies to advance democracy, security, human rights, responsible trade and investment, and to combat global challenges such as COVID-19 and climate change.

The region features multiple multilateral organizations, many with overlapping mandates and activities. A recent survey identified 180 multilateral groupings in the Americas. Canada strategically engages with relevant institutions to best advance its core interests and values.

Summits of the Americas and the Organization of American States

Organizations centred around the Summit of the Americas process and the Organization of American States (OAS) make up the inter-American system.

The OAS is the primary political forum in the Americas, with 34 active member states and a mandate consisting of 4 pillars aligned with Canada’s long-standing interests in the region: democracy, human rights, development and security. Many member states place a high degree of importance on this institution. OAS meetings and annual general assemblies, the next of which will take place virtually from November 10 to 12, offering opportunities for Canada to shape and advance a shared agenda with regional partners, as well as deepen bilateral relations with key partners in the region. OAS instruments and bodies, such as the Inter-American Democratic Charter, a largely Canada-driven initiative aimed at defending democracy, and the Inter-American Commission on Human Rights (IACHR), are among the most forward-looking of their kind. OAS electoral observation missions are also considered a model globally.

Summits of the Americas bring the highest level of political attention to hemispheric issues and allow leaders to meet, generally every 3 years, to provide guidance on pressing challenges. The United States has announced that it will host the next summit in early summer 2022. It can be expected the summit will address post COVID-19 pandemic recovery and challenges to democratic governance. Canada is engaged with its partners in the region in support of an agenda that serves to unify, rather than divide, its members. Some of the challenges relate to increased political polarization as it poses challenges for multilateral efforts to address authoritarianism, democratic crises (e.g. Nicaragua, Venezuela, Haiti), governance and corruption.

However, the OAS faces the limits and challenges inherent to multilateral organizations. It is weakened by ideological divisions and polarization in the region between left and right-leaning governments or populist leaders, as well as by an inclination to over-extend its mandate, modest budget (US$79 million in 2020), and limited institutional capacity. Canada works to reinforce the OAS’s effectiveness by emphasizing sound management and financial sustainability and by focusing the organization on its core policy roles.

Other regional organizations

Canada engages with, but is not necessarily a member of, other sub-regional organizations, as well as sub-regional bodies and informal groupings that complement formal efforts.

Smaller sub-regional groupings are of increasing importance to Canada’s engagement in the hemisphere. The Caribbean Community (CARICOM) is the oldest of these and has been adept at leveraging its voting bloc in larger organizations like the OAS and the United Nations. Canada is also a regional observer to the Central American Integration System (SICA), which does not function effectively as a bloc but is key to Central America’s economic development and integration.

The Pan American Health Organization (PAHO), the Economic Commission for Latin America and the Caribbean (ECLAC) and the Inter-American Development Bank (IDB) are also policy and programming partners for Canada in the hemisphere, including on efforts to address the COVID-19 pandemic.

Canada monitors other multilateral initiatives that foster political, economic or sometimes ideological cooperation in the region, including the Community of Latin American and Caribbean States (CELAC), the Bolivarian Alliance for the Peoples of our America (ALBA), and the Forum for the Progress and Development of South America (PROSUR). None of these initiatives has yet evolved to threaten the pre-eminence of the OAS in the region.

Canada has been negotiating a free trade agreement (FTA) with Mercosur (Argentina, Brazil, Paraguay, Uruguay) since 2018. Canada is an active observer of the Pacific Alliance (Chile, Colombia, Mexico, Peru) and is seeking to become an associated state through negotiation of an FTA. Both are major trading blocs important for strategic Canadian trade and investment interests in the region.

The emergence of informal groupings, such as the Lima Group (not currently active) or the Group of Friends of the negotiation process on Venezuela, is focused on supporting democracy in Venezuela. Such groupings have influenced multilateral dynamics in the Americas, and have proven useful to adopt temporary measures to complement the work of formal bodies, when warranted.

Canada’s regional focus

The promotion and defence of democracy and human rights have been a hallmark of Canada’s multilateral engagement in the region. Canada helps fund electoral observation missions and recently participated in an OAS Permanent Council Good Offices Mission to address the political crisis in Haiti. Canada’s leadership on Venezuela and Nicaragua has strengthened its voice and credentials among likeminded states.

Canada is active in initiatives and programs to fight corruption and advance hemispheric security, including through its Americas‑focused Anti-Crime Capacity Building Program, which has provided more than $12 million to strengthen anti-corruption policies and regulatory frameworks in the Americas. Over the past year, support provided by the Program through INTERPOL has led to more than 161 arrests and the identification of over 31 criminal organizations engaged in human smuggling operations across the Americas. Canada has also established good economic ties through trade agreements and development programming aimed at inclusive and clean growth.

Through its inter-American regional program, with a budget of $15 million per year, Canada collaborates with multilateral institutions such as the OAS, PAHO, the IACHR and the IDB to deliver international assistance focused on governance, health, gender equality, inclusive growth and climate change. Through PAHO, the program was also instrumental to Canada’s response to the COVID-19 crisis in the Americas and contributed $50 million to support readiness and access to vaccines. There are ongoing calls for Canada to assist with climate change mitigation and adaptation, innovation for development finance, and the equitable distribution of vaccines.

La Francophonie

Issue

• Multilateral space bringing together the largest number of countries after the UN, within which Canada has significant influence.
• Allows for the advancement of Canada’s priorities in terms of democracy, human rights, gender equality and the French language.
• Advocacy required to improve the organization’s performance, efficiency accountability and relevance.
• National-level (Quebec, New Brunswick, Ontario) and bilateral (particularly France) collaboration.

Context

The Organisation internationale de la Francophonie (international organisation of La Francophonie) (OIF) brings together 88 member and observer states and governments from 5 continents. The OIF implements multilateral Francophone cooperation with the Assemblée parlementaire de la Francophonie (parliamentary assembly of La Francophonie), Agence universitaire de la Francophonie (university agency of La Francophonie), TV5MONDE, Association internationale des maires francophones (international association of Francophone mayors) and Université Senghor (Senghor university) in Alexandria.

With an annual budget of approximately $100 million, the OIF’s programming is oriented toward promoting the French language, democracy and human rights; supporting education, higher education and research; and fostering economic cooperation to bolster sustainable development. Most of the funding is for youth, women and people in developing countries, 59% of which for Africa.

While the Francophone world shares a number of common values, it faces challenges in putting them into practice. Crisis situations, breakdowns of democracy and respect for human rights (gender equality and LGBTQ2+) are regularly discussed within the bodies.

Since becoming Secretary General of La Francophonie in 2019, Louise Mushikiwabo, from Rwanda, has undertaken a plan to transform the organization (18 major projects over 2 years / 2020–2022) in order to improve its operations, increase its credibility and enable more ambitious and effective action in the service of Francophone populations. In alignment with Canadian priorities, the 4 major axes of the roadmap are the promotion of French in international organizations and in the digital sphere, youth, gender equality and political activity.

Isabelle Hudon has been the Prime Minister of Canada’s personal representative for La Francophonie (Sherpa) since 2019. [REDACTED].

Canada’s significant influence

Canada is the second-largest donor to La Francophonie after France, with annual contributions totalling nearly $42 million in 2020–2021.

It was also a leader in developing La Francophonie’s political, economic and cooperation mandates.

A number of Canadians have been secretary general or administrator, the second-highest position in the OIF. For example, Geoffroi Montpetit, the current administrator, was appointed in February 2021.

Canada is home to the headquarters of the Institut de la Francophonie pour le développement durable (La Francophonie institute for sustainable development) in the city of Québec and the Agence universitaire de la Francophonie in Montréal. More than 30 Canadian institutions are members of the agency. Montréal, Québec and 3 federations of municipalities are active within the Association internationale des maires francophones. The legislative assemblies of Canada and 9 provinces are members or associates of the Assemblée parlementaire de la Francophonie, and the Canadian branch currently serves as its first vice-president.

Canada’s influence within the OIF is strengthened by the presence of New Brunswick and Quebec as member governments and Ontario as an observer. The OIF is the only international organization with provincial participation of this kind.

Canada has already hosted 3 Francophonie Summits: city of Québec in 1987 and 2008 and Moncton in 1999.

La Francophonie: a space for advancing Canadian priorities

Canada’s active participation in La Francophonie enables it to advance its foreign policy priorities, particularly in terms of democracy, human rights, gender equality and the French language.

The digital transformation, a central theme of the next Francophonie Summit, is a promotional tool that Canada uses strategically to increase its presence and influence, particularly through the TV5MONDEplus digital platform, launched in 2020 thanks to Canada’s $14.6 million investment.

Toward a more transparent, relevant and efficient organization

Canada combines advocacy and concrete actions to improve the performance, efficiency accountability and relevance of the OIF and its institutions. Canada’s interventions are particularly focused on demanding more transparency, better management practices and a strategic reframing of the OIF’s actions. It also supports the organization by sharing expertise, for example on results-based management.

These efforts have led to notable progress in transparency, results management and the modernization of administrative and financial management tools. Canada’s continued active participation is still needed to ensure the OIF fully meets Canadian expectations regarding good governance and relevance for the people of La Francophonie.

A deliberate expansion of the OIF to protect its added value

Over the past 20 years, [REDACTED], the OIF has seen its membership increase by more than 60%. The geographic diversity of applications submitted in recent years demonstrates the appeal of La Francophonie. [REDACTED]. In May 2019, the Secretary General established a focus group to examine directions and governance in order to make determinations on issues fundamental to La Francophonie’s future, including its expansion. A pause in new memberships was instituted until the outcomes of this process are known, anticipated at the next Summit to take place in Djerba, Tunisia, in the fall of 2022.

Canada supports a rigorous membership process in which the French language and the values of democracy, respect for human rights and gender equality are central elements. It is also in favour of maintaining the 3 statuses (member, associate member, observer) to help the organization retain its effectiveness. [REDACTED].

18^th Francophonie Summit

In the context of OIF members’ concerns related to the current political situation in host-country Tunisia and to ensure that the Summit take place in optimal conditions, the Sherpas recommended on October 12 to postpone for the 2^nd time the 18^th Francophonie Summit, which was scheduled to take place in Djerba in November 2021 (after having been postponed from 2020 due to COVID-19). Important elements that will be presented to the heads of state and government at the Summit, now expected to take place in the fall of 2022, include the results of the OIF transformation plan, proposed directions on the organization’s future expansion and renewal or replacement of the SG.

Commonwealth

Issue

• Canada is a long-standing and active member of the Commonwealth, and is the second-largest contributor based on assessed contributions.
• The Commonwealth has the potential to be an increasingly important multilateral forum as its members continue to become economically more powerful, and are united by shared democratic values.
• [REDACTED]

Context

The modern Commonwealth has 54 member states, representing 2.4 billion people on 5 continents, most with historic links to the United Kingdom. The Commonwealth Secretariat’s 2020-2021 budget is £40.2 million (approximately $70 million).

The Commonwealth includes 3 intergovernmental organizations:

• The Commonwealth Secretariat;
• The Commonwealth Foundation, whose role is to empower civil society and support people’s participation in democracy and development; and
• The Commonwealth of Learning (COL) hosted by Canada in Burnaby, B.C., whose remit is open-distance education and learning in the Commonwealth, with a focus on girls. Given the importance of remote learning in the COVID context, the COL is a useful platform for advancing Canadian interests.

The Commonwealth is facing important challenges, including [REDACTED] competing member priorities (e.g. small states members advancing specific agenda and priorities of their own; proliferation of mandates taken on by the Commonwealth Secretariat), and decreasing financial resources. Despite current challenges, Canada values its engagement in the Commonwealth as it strengthens our relations with the other member states, particularly small developing states, while demonstrating our support for multilateralism and the rules-based international system. Canada sees the following areas as being the Commonwealth’s value added:

• Being a forum for deliberation, problem solving, consensus decision-making and collective action on common global challenges (such as climate change);
• Promoting and upholding good governance, democracy, human rights and the rule of law – all core Commonwealth values enshrined in the Commonwealth Charter; and
• Advocating for and supporting small and vulnerable states (the majority of its membership), including to strengthen their financial and climate resilience.

Commonwealth governance

Queen Elizabeth II is the overall Head of the Commonwealth. Dual British-Dominican national Baroness Patricia Scotland is Secretary General. Her first term is due to expire at the next Commonwealth Heads of Government meeting (CHOGM). She is widely expected to seek a second, 4-year term. [REDACTED]. No member state has formally put forward a challenger candidate, but the expectation is that a strong alternate candidate from Africa will soon be declared.

The High-Level Group on Commonwealth Governance was mandated by leaders at the 2015 CHOGM to provide independent recommendations on ways to improve Commonwealth governance.

Recommendations, which include introducing regular performance reviews for secretaries general, were adopted by Commonwealth foreign ministers at their September 2019 meeting and will come into effect immediately after CHOGM, subject to their endorsement by heads of states. Canada’s High Commissioner in London represents Canada at the Commonwealth Governing Board.

Canada’s investments in the Commonwealth

A founding member, Canada is consistently among the top 3 contributors with the United Kingdom and Australia. In 2020/21, Canada provided $10.73 million in core funding, including $8.13 million in assessed contributions to the secretariat and foundation and $2.6 million in long-term institutional support to the Commonwealth of Learning, and $550,000 for the Commonwealth Foundation to support civil society organizations in response to the COVID-19 pandemic. In 2014, Canada suspended voluntary funding to the Commonwealth Fund for Technical Cooperation (managed by the secretariat) to demonstrate its concern with the Commonwealth’s inaction regarding the human rights situation in Sri Lanka, and with ongoing governance issues. Funding has not resumed and this remains an irritant with the organization, even if Canada is still contributing to the core budget of the secretariat through its assessed contribution.

Canada’s active participation in diverse Commonwealth bodies has contributed to a better integration of gender equality and a more sustainable and inclusive approach to development. In recent years, Canada has also consistently called for reforms to ensure that the Commonwealth is “fit for the 21st century”, and has thus played a prominent role in championing the High-Level Group recommendations, and in improving the mechanisms in place to ensure due diligence in terms of financial management.

The 2022 CHOGM (date TBD)

Twice postponed due to COVID-19, the next CHOGM will be held in Rwanda when the conditions allow for heads of state to do so safely and securely. A Commonwealth Foreign Affairs Ministers’ Meeting was held on September 16, 2021. Another is expected prior to CHOGM, which Canada’s foreign minister would be invited to attend.

Host Rwanda has identified “Delivering a Common Future: Connecting, Innovating, Transforming” as its overall theme. Other key issues expected to be discussed are: [REDACTED]; the endorsement by leaders of the High-Level Group recommendations; media freedom; and the implementation of the London 2018 CHOGM commitments, including the Commonwealth Blue Charter (Canada’s Department of Fisheries and Oceans is the Champion for the Ocean Observations Action Group).

Organisation for Economic Co-operation and Development

Issue

• The Organisation for Economic Co‑operation and Development (OECD) provides evidence-based and peer-reviewed policy analysis that informs economic and social policy decisions in Canada and its 37 other member countries.
• Canada contributes actively to the work of the OECD, including on trade and investment, inclusive growth, digitalization, international taxation, climate change and the environment, and international aid.
• Mathias Cormann was appointed the new Secretary-General on June 1, 2021.

Context

Established in 1961, the OECD has 38 member countries (the European Union is a non-voting member) representing approximately 62% of the world economy. Its mandate is to promote “better policies for sustainable economic growth, employment, and a rising standard of living through open and stable markets and mutually supportive economic and social policies.” Over 700 Canadian delegates from all levels of government and civil society participate in OECD committee work.

The OECD has over 300 committees, working groups and other bodies focusing on various OECD work areas (e.g. economics, trade, science, education). The OECD’s work is supported by a secretariat comprising 3,500 staff from its member countries.

The OECD budget is €386 million (2019). Canada is the seventh largest contributor, paying 3.5% of the core budget ($18 million annually in assessed contributions).

Four issues impacting OECD priorities at present include: (1) pandemic recovery; (2) economic fragility and the importance of inclusive and sustainable growth; (3) the interconnectedness of the global trading system; and (4) the digital transition. Over the course of the pandemic the OECD has been focused on providing policy analysis and encouraging international cooperation to address the impacts of the pandemic and encourage a green and equitable recovery.

The OECD’s comparative strengths are its comprehensive and multi-disciplinary approach to data collection and comparative analysis, peer learning, evidence-based policy direction and guidelines, and policy coherence and impact measurement. In the context of the pandemic, OECD discussions and analysis on securing businesses, maintaining jobs and education, and stabilizing financial markets and economies showcase its strong value proposition.

Colombia became the 37th member of the OECD in April 2020 and Costa Rica its 38th member in May 2021. The OECD also reaches out to non-members and has special programs for key partners and regional initiatives. Specific guidance on how it will engage with China was approved in May 2021, co-facilitated by Canada.

Canada and the OECD

The OECD is an important multilateral platform for Canada, particularly in encouraging policies that promote inclusive societies, and foster cooperation in pandemic recovery. It offers a principled forum to share best practices, and gain insights from likeminded economies.

Canada’s current priorities for the OECD include the digital economy; climate change and natural resources management; trade liberalization and inclusive growth; and sustainable development with a focus on development financing.

Canada is working with other member countries to strengthen OECD governance and efficiency, including maintaining budget discipline and ensuring that it remains a member-led organization that delivers on the priorities of member countries. Canada advocates for a representative and diverse Secretariat, and gender equality considerations in all OECD policymaking. It is also a champion for innovation in public policy-making.