by Jim Hodgson

Canada’s newest cuts to foreign aid spending follow cuts by other wealthy countries (most notably the elimination earlier this year of the U.S. Agency for International Development). Beyond immediate impacts, these cuts point to a reshaping of sixty years of international cooperation for development.

Over the next four years, Canada will chop $2.7 billion from its aid budget. At the same time, at the behest of the Trump regime next door, it will increase military spending with $81.8 billion over five years.

Few analysts bring together the issues of development assistance, militarism and climate justice the way that the ecumenical coalition KAIROS Canada has in its statement on the budget:

Canada needs to decide what role it wants to play in the world. These issues are inseparable: climate justice, Indigenous sovereignty, migrant justice, gender equality and peacebuilding rise or fall together — and Canada’s future depends on advancing them as one interconnected project of justice. 

KAIROS added that it is concerned by the prospect of a scaled-up military-industrial complex in Canada. “Even today, arms components made in Canada are used against civilians in Gaza and other conflict zones due to loopholes that allow them to flow indirectly through allies, helping to further entrench global insecurity.” (Canadian-built military surveillance and targeting equipment was used in at least two of the U.S. attacks on small ships in the Caribbean Sea, as reported recently by another Canadian ecumenical coalition, Project Ploughshares.)

KAIROS said the government “could have introduced a wealth tax to tackle the historic wealth gap and fund real climate action. It could have ended subsidies for fossil fuel corporations. Instead, it cut public services, forcing job losses that fall hardest on women, Indigenous Peoples and racialized communities,” as the Canadian Centre for Policy Alternatives warns.

While there are no actual projections yet of where the foreign aid cuts will hit, the budget statement cites Canada’s spending on global health programs as an example, saying this has “grown disproportionately” in comparison to other countries.

“Any reductions to Canada’s global health investments will have devastating consequences for women and children around the world, while threatening the health, security and prosperity of Canadians,” said Charmaine Crockett of the Canadian Partnership for Women and Children’s Health (CanWaCH) in a joint statement with Cooperation Canada. “Canada’s decades of leadership in global health have always been about investing in a safer, more equitable world, because we know that when we turn our back on the world’s most marginalized people, we all suffer.”

The cut to Canadian aid, elimination of USAID, and reduced spending announced by Britain, Germany, Netherlands and others means that in total, G7 countries are trimming their aid budgets by nearly one-third, the steepest reduction since 1960, according to the Globe and Mail. 

Where to now with international development?

I want to share links to some articles that delve more deeply into the significance of what may become a shift away from a model in which rich countries of the Global North “donated” funds to impoverished countries of the Global South. The model has always been criticized as it promotes dependence and blocks systemic change. This is “big picture” stuff, very distant from issues of how to support refugees at border posts or funding for cooperative farming in Central America. (I am, as always, grateful to Brian Murphy for sharing these and other articles. You can follow him on Bluesky @murphyslog.bsky.social.)

First, “The end of the global aid industry,” by Zainab Usman. Usman proposes a focus on industrialization – what has worked for China and South Korea and is unfolding now in Vietnam and Thailand. Usman writes:

Part of the problem with the aid industry is that its benefits have been spread too thinly across a multitude of domains and not focused enough on productivity-enhancing sectors. To this end, advocates of global development should focus on enabling poorer countries to access cheap development financing for targeted investments in sectors that connect people, such as electricity, telecommunications, and mass transit. 

Second, “The geopolitics of international development (after foreign aid),” by Ken Opalo in An Africanist Perspective. Opalo examines a series of essays in Foreign Policy magazine’s Fall 2025 issue that all deal with development issues. Opalo sets his description of the decline of the foreign aid model in the context of a rising multipolarity that is matched by the “ongoing general decline of the authority and influence of Western states.”  

There’s no denying that the financial, intellectual, and institutional hegemony of Western countries significantly shaped development practice over the last 60 years. This era had both good and bad elements. The good elements included efforts to incentivize the modernization of economic management and policymaking in low-income countries (work that’s far from finished, and which has yielded some good results); while the bad elements included the fostering of aid dependence, cyclical faddism, reflexive policy extraversion, lack of elite ambition, and implicit support for a hierarchical world order that permanently placed low-income countries at the bottom of the global totem pole.

Third, “Three ways to help the developing world survive the end of aid,” by Winnie Byanyima, Executive Director of UNAIDS, in The Guardian. Byanyima reminds us that developing countries are still drowning in debt and facing interest rates up to 12 times higher than wealthy countries. “Low- and middle-income countries now pay $4 to the richest in the global north for every $1 they receive in aid. Thirty-four of Africa’s 54 countries spend more on debt than on healthcare.” She adds:

• Governments must relieve the “chokehold of sovereign debt.”
• The richest need to pay their fair share: the wealth of billionaires soared by $2 trillion in 2024, but they paid an effective tax rate of just 0.3 per cent.
• Governments need to treat lifesaving medicines not as commodities, but as global public goods. “This has been one of the great successes of the HIV response” (at least over the past 20 years, though not before—and threatened again with loss of U.S. funding this year).