Recieved July 8, 2005

Mr. John Mihevc
Chair
Halifax Initiative Coalition
104 - 153 Chapel Street
Ottawa, Ontario KIN 1H5

Dear Mr. Mihevc:

As Minister of International Cooperation, I am pleased to respond to your letter to the Prime Minister, concerning Canada's international assistance efforts.

Financial taxes are complex matters, especially when they are meant to generate additional revenues for development and not, like past proposals such as the Tobin tax, to reduce market volatility. This is why my colleague, the Honourable Ralph E. Goodale, Minister of Finance, and I requested, at the World Bank and International Monetary Fund meetings last October, that their staff conduct technical studies on the potential impact of various innovative financing proposals.

Canada is committed to making progress toward the 0.7 per cent target, and to achieving the Millennium Development Goals. Since 2002-2003, the Government of Canada has committed to double its international assistance budget by 2010, starting from a level of $2,461 million in 2001-2002.

We are equally committed to making sure that our existing aid is making a difference. As such, while we are working with developing countries and international organizations to ramp up effective poverty reduction programming, we recognize that we must increase development assistance at a rate and manner which ensures its continued effectiveness.

Budget 2005 provides substantial progress in delivering our 2002 commitment by adding an additional $3.4 billion for international assistance over five years. It also commits the Government to doubling 2003-2004 aid to Africa by 2008 - 2009. In addition to the annual eight per cent increases, this funding includes an additional $265 million for tsunami relief efforts in Asia, an additional $160 million for long-term reconstruction in tsunami-affected regions, $42 million for the Global Polio Eradication Initiative, $140 million for the Global Fund to Fight Tuberculosis, AIDS and Malaria and $160 million to the Global Alliance on Vaccines and Immunizations to protect children of all nations against vaccine-preventable diseases. As a result, the International Assistance Envelope grew by 21 per cent even without taking into account the unprecedented additional relief for the Indian Ocean tsunami disaster. The IPS further commits to ongoing increases beyond 2010 and to accelerating the projected rate of growth in international assistance as our fiscal position continues to improve.

Generally speaking, this funding has allowed Canada to do the following: increase funding for health and nutrition. basic education. HIV/AIDS prevention, care and treatment; increase funding significantly to our 25 development partners as identified in the International Policy Statement (IPS), 14 of which are in Africa; increase funding to key multilateral institutions working in areas of priority for Canada, including the United Nations Development Programme, the World Food Programme and the World Health Organization.

To continue Canada's long-standing support of international debt relief for the world's poorest nations. Budget 2005 allocates $172 million from the International Assistance Envelope over the next five years to cover Canada's share of debt-service costs to the International Development Association of the World Bank and the African Development Fund.

Budget 2005 also provides an additional $34 million in support of the Heavily Indebted Poor Countries Initiative, an international debt relief program that has provided significant benefits to poor, mostly African, nations.

Thank you for writing and for your interest in international cooperation.

Yours truly,

[original signed]

The Honourable M. Aileen Carroll, P.C., M.P.