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.
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.
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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