OTTAWA – Finance Minister Bill Morneau says Canada can do more with less foreign aid spending, and that includes relying on a new profit-driven financial lending institution to help fight poverty in poor countries.
Morneau’s recent federal budget drew widespread criticism from international development and anti-poverty organizations because it did not contain an increase in foreign aid.
READ MORE: Trump to propose ‘dramatic’ slash in U.S. foreign aid budget
But in a post-budget interview with The Canadian Press, Morneau is making no apologies for the lack of new spending.
Instead, Morneau is a touting a new anti-poverty tool — a so-called development finance institution, which will lend money to private companies to help them pay for projects to reduce poverty in the developing world.
While DFIs are seen as a potentially good way to attract private companies, some analysts say more needs to be done to make sure companies are in fact investing the money properly and not just grabbing a government handout.
READ MORE: Did last year’s budget create 100,000 jobs? Bill Morneau can’t really say
The previous Conservative government proposed the idea in its final 2015 budget, and Morneau brought it to life with a $300-million investment that will get it up and running under Export Development Canada.
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