Today, the Government of Canada showed clear intention to support multilateral efforts to end COVID-19 everywhere and address the mounting economic crisis of global proportions.
Canada pledged to direct 20% of its recent special drawing rights (SDRs) allocation of the International Monetary Fund (IMF) towards countries that are unable to access urgently needed funds to meet basic needs of their people. The global situation is dire: the United Nations (UN) warns of a mounting global debt crisis, with at least 35 countries failing to service their sovereign loans and 100 countries (over half of UN Member States) facing cuts to their healthcare and social protection budgets. This deteriorating global situation is a threat to all of the progress made thus far in the fight against COVID-19 everywhere.
With today’s pledge, Canada is helping to address a global economic crisis using the international financial tool designed precisely for this type of scenario. SDRs allow countries to unlock high volumes of cash using their supplementary financial reserves while ensuring a minimal impact on their domestic finance. The value of the SDRs Canada pledged to channel to lower-income countries is of $3.7 billion dollars (with $982 million to be disbursed immediately as concessional loans), which will have a significant impact on the global economy while bearing virtually no burden on Canada’s public budget.
Global economists highlight that SDR measures are particularly effective when accompanied by grants and concessional loans. Minister Chrystia Freeland is acting on these evidence-based recommendations, which is reflected in Canada’s additional allocation of $107 million grant to IMF, which will stimulate further international SDR concessions. In short, Canada is showing global leadership by leveraging existing international mechanisms to prioritize the support for the world’s most marginalized, in line with the values articulated in the Feminist International Assistance (FIAP) and with very minor costs to our domestic economy.
Canada also announced more direct investments in the global fight against COVID-19. The Government committed to immediately sharing 10 million vaccine doses to be allocated through the COVAX facility, standing by its previous commitment of sharing 200 million vaccine doses. Today’s announcement offers greater details on the spending of the previously announced $350 million, as Canada committed to disbursing funding for auxiliary costs of said vaccination efforts, resulting in $70 million for COVID-19 vaccine distribution, diagnosis and therapeutics, including through the ACT-Accelerator partnership.
To support more long-term and equitable solutions to the COVID-19 pandemic, Canada is joining global efforts to boost global capacity for vaccine production. This is in the form of a new budgetary commitment of 15 million dollars, which will fund a technology transfer hub in South Africa to scale up local COVID-19 vaccine production.
Today’s announcement shows the Government of Canada agrees with almost 90% of Canadians who understand that our public health and wellbeing depend on the rest of the world. We welcome this display of political leadership and call on Canada to continue on a path towards increasing its official development assistance, which is currently less than half of the country’s fair share. We look forward to working with the newly announced Cabinet to further strengthen Canada’s global engagement and applaud today’s step in that direction.