What Is Carney Going to Do With the Foreign Aid File?

A man pulls a trolley loaded with plastic bottles for recycling near Johannesburg, South Africa, in a file photo. Danish economist Bjor Lomborg notes that many foreign aid programs do little or nothing to improve the lives of poor people. The Canadian Press/AP Photo/Themba Hadebe

Commentary

The federal election is over, and within a few months there should be a budget tabled and debated in the House of Commons. No doubt, Canadians are waiting anxiously to see what the new Liberal government will do with its tax revenues. What files will Prime Minister Carney increase spending on, and on what files will he slow spending down?

Realistically, the budget should answer an important question: What will the government spend on foreign aid? Carney said that he will not cut foreign aid. In fact, his government is likely to increase the spending on programs that flourished under the Trudeau Liberals.

The Canadian Taxpayers Federation reports that the Canadian government spent about $7.6 billion on foreign aid in 2023–24, representing almost $200 per Canadian. In that year alone, the government sent $247.5 million to the Green Climate Fund in South Korea, $128.0 million to the International Fund for Agricultural Development in Italy, and $30.7 million to the International Labour Organization in Switzerland, agencies that the new government are likely to continue funding. The list of projects goes on for 11 pages, and while a few projects sound admirable, most seem questionable at best.

Why are these programs questionable?

Bjorn Lomborg, the Danish economist, has evaluated the empirical research on the most efficient foreign aid programs to help poor people in the poorest nations. Lomborg’s book, “Best Things First: The 12 most efficient solutions for the world’s poorest and our global SDG [Sustainable Development Goals] promises,” outlines the benefit-cost ratios (BCR) for the 12 most efficient programs.

Not surprisingly, Lomborg points out that presently many aid programs do little or nothing to improve the lives of poor people. He argues that an expenditure of about US$35 billion per year distributed to the most efficient programs could save the lives of about 4.2 million people, mostly children, and improve the lives of many more. An expenditure of this amount would be a fraction of what is already spent by countries with foreign aid programs.

Thankfully, Lomborg’s book provides a guide for the federal government to ensure that the projects it supports improve the lives of poor people in the world’s poorest countries. The projects that Lomborg recommends would result in at least $15 benefit for each $1 spent (BCR = $15), and the top five projects are at least four times more efficient than the minimum BCR that Lomborg has set.

The top five programs are:

1. Reducing Corruption (BCR = $125). Bjorn Lomborg shows that reducing corruption in the procurement of goods and services could result in substantial savings for poor countries and their citizens. (Undoubtedly, Canada could reduce its corruption in procurement too.)
2. Childhood Immunization (BCR = $101). COVID controversies notwithstanding, most Canadians realize that immunizing children against communicable diseases is important, and a substantial number of lives could be saved with relatively small expenditures.
3. Free Trade (BCR = $95). Even though there are potential costs in dismantling trade barriers between countries, Lomborg points out that there are substantial benefits too.
4. Maternal and Newborn Health (BCR = $87). Each year, a substantial number of women and/or their babies die from treatable complications during the birthing process.
5. Education (BCR = $65). A highly efficient way of bringing people out of poverty is to ensure children are in schools and learn core material in well-structured lessons.

The remaining seven foreign aid policies are not as efficient, but the new Canadian government could still have considerable impact by investing in them:

6. Treating Malaria (BCR = $48);
7. Treating Tuberculosis (BCR = $46);
8. Reforming Agricultural Practices (BCR = $33);
9. Treating Chronic Diseases (BCR = $23);
10. Improving Land Tenure Practices (BCR = $21);
11. Ensuring that Migrants have Marketable Skills (BCR = $20); and
12. Improving People’s Nutrition (BCR = $18).

In a few months, Canadians will know more about Mark Carney’s budget, outlining what his Liberal government will spend money doing. Most Canadians expect that the foreign aid projects our government supports will improve the lives of the poor people in the world’s poorest countries. Hopefully, the prime minister will use “Best Things First” as a blueprint for the projects his government supports.

Of course, Canadians can use “Best Things First” to judge how effective the federal government’s foreign aid programs are. They may wonder if the $200 each member of their family spends on foreign aid is being spent wisely. Asking and answering this question will be a good exercise for those who want to keep the federal government accountable.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.