The 2025 Development Assistance Committee (DAC) peer review of Canada, conducted by France and Slovenia with Türkiye as an observer, assesses Canada's development co-operation policies and programmes. The review is structured around four main areas: development effectiveness, policy integration, the feminist policy implications, and innovative finance.
Improved communication on the added value of Canada’s international assistance in relevant contexts would support the government commitment to increase the budget for official development assistance (ODA). The ODA Accountability Act and the Feminist International Assistance Policy (FIAP) give a clear identity to Canada’s development co-operation positioning poverty reduction and gender equality at its core. While Canada’s ODA has increased since 2018, in line with government’s commitment, the ODA to gross national income (GNI) ratio was still at 0.38% in 2023. Building on a culture of accountability to Canada’s Parliament and citizens, strengthening the results approach at a portfolio level and investing in developing a convincing narrative could help defend the budget in a difficult geopolitical context.
Strengthening the flexibility of Canada’s development assistance could help Global Affairs Canada (GAC) fully implement its commitment to development effectiveness. GAC advocates for development effectiveness globally, and partners value how GAC both values their expertise and debates development objectives. However, most of Canada's development assistance is programmed from headquarters to meet thematic funding commitments which limits the scope for locally responsive strategies when priorities do not fully align. Thanks to recent reforms to increase financial authority and decentralisation, and to improve budget predictability to geographic branches, GAC is in a better place to give more space to local perspectives in decision-making.
Ownership can be further strengthened, building on lessons from locally led programmes. Canada's direct engagement with national governments and local civil society is limited because internal incentives lead Canada to partner with established organisations. In 2023, only 3.1% of its bilateral ODA was delivered through national and local channels and direct support to governments has decreased over time. Multilateral organisations are Canada's preferred partners, but the high level of tight earmarking (36.5% of project earmarking in 2023) may undermine their effectiveness. Nonetheless, Canada has made specific attempts to diversify its partnerships and engage with small and local organisations through programmes such the Canada Fund for Local Initiatives and Women’s Voice and Leadership (WVL). Beyond these specific programmes, favouring programmes and projects that include recipients transferring quality funding (multi-year, flexible, core, etc.) could help accelerate progress towards locally led development. In addition, maintaining and deepening dialogue with public authorities can support ownership and effectiveness.
The Grants and Contributions Transformation Initiative (GCTI) will speed up processes – which is identified as a challenge both internally and by partners. Notable approaches include the FailSmart Lab, automatised and streamlined business processes, as well as the management of risks at portfolio level, a cultural change that goes beyond technical fixes. The GCTI also aims to facilitate access to diverse organisations, including small and medium organisations, and to support locally led development.
Maintaining relevant development expertise in an integrated department requires constant attention. GAC has embarked on a transformation journey addressing the organisation's culture, human resources, policies, set-up, processes, and tools to leverage the strengths of an integrated department. The existence of a dedicated rotational international assistance stream, updates to the Canadian Foreign Service Institute’s professional learning programme and extension of talent management seem promising. Challenges remain in building and rewarding new technical and niche expertise, such as in innovative finance, career advancement opportunities for local staff, and facilitating greater access to country experience for non-rotational staff.
GAC can be more intentional in co-ordinating trade, development and foreign policies. The deeper integration of the trade, foreign affairs and development business lines within geographic and functional branches holds promise for pursuing shared objectives and strengthening internal collaboration. Canada's trade policies are inclusive, considering gender equality, Indigenous rights, workers’ rights and environmental protection. Continuing to implement commitments towards responsible business conduct and addressing the transboundary impacts of trade policies, could help further integrate the trade and policy agendas while maintaining development objectives as a pillar of foreign policy.
Canada's FIAP positions gender equality at the core of its development agenda, enhancing its global leadership on the topic. Canada's comprehensive approach is supported by tools such as Gender-based Analysis Plus, which ensures that projects address the realities of all individuals. Programming is consistent with the FIAP, and significant support is channelled through multilateral organisations and civil society. Achieving the ambitious targets set out in the FIAP requires sustained efforts, especially in emergency contexts, as illustrated by the drop in the share of bilateral ODA with gender equality objectives to 59% in 2022-23, due to the low focus on gender equality in loans provided to Ukraine. Developing mechanisms, such as high-level champions, could help protect and enhance the gender focus within and beyond GAC's development portfolio.
Canada champions and finances local women's rights organisations (WROs) and feminist movements. Such support is valued by partners in a difficult geopolitical context. The WVL programme embodies Canada's feminist approach and is a model for feminist and locally led programming, providing substantial, long-term support to WROs. While the programme has proved successful in strengthening the capacity of WRO, it could become even more inclusive by reaching smaller, marginalised groups.
Canada is scaling up innovative finance. Canada leverages its participation in multilateral fora to advocate for innovative financing solutions to bridge development funding gaps. Canada is also leveraging initiatives such as International Assistance Innovation Program managed by GAC and the recapitalisation of Canada’s development finance institution, FinDev Canada. Expanding training and guidance on innovative finance across GAC, beyond the dedicated team, would help sensitise and integrate innovative mechanisms into GAC’s broader portfolio and use them where most needed.
FinDev Canada has made promising strides, focusing on gender lens investing and sustainable investments. FinDev Canada has mainly provided direct debt, 91.6% of its support, followed by fund equity. FinDev Canada aspires to deliver development additionality and advancing market development, climate action and gender equality. Developing a comprehensive additionality framework could help define and measure development outcomes more explicitly. As FinDev Canada continues to grow, clarification of the complementarity and co-ordination mechanisms between GAC and FinDev Canada can ensure a whole of government approach – with space for GAC to focus on the enabling environment for harnessing private sector resources in the most challenging contexts.
