World · North America · 13 hrs ago
Canada and EU seek private funding to help fill foreign aid gaps
Canada is working more closely with the European Union to address gaps in foreign aid as the United States pulls back.
International Development Secretary Randeep Sarai said recent talks focused on combining private investment and philanthropy with government funding.
The U.S. shut down its aid agency, USAID, and its foreign aid spending fell by 57 per cent in 2025.
Canada and other major donors have also reduced aid, while Canada’s government is encouraging more private funding for development projects.
Sarai says public money could initially encourage businesses to invest in aid, with the aim that they eventually contribute without that support.
Aid groups say safeguards are needed so public money does not subsidize projects companies would have funded anyway.
Canada and European countries are also working with Japan, South Korea and Gulf nations, while Sarai says support for the world’s poorest will continue.
Canada and the European Union are discussing ways to use private investment and philanthropy to help address gaps in foreign aid as the United States pulls back.
Secretary of State for International Development Randeep Sarai said public funding would initially be used to encourage private investment while aid continues to support vulnerable people.
The Canadian government is cutting back on global health spending and encouraging more private funding for development projects.
Sarai said Canada and European countries are also working with Japan, Korea and Gulf nations on aid.
Co-operation Canada supports innovative funding with safeguards, and says aid should not subsidize projects the private sector would have funded anyway.
- Who
- Canada and the European Union, represented by Canadian Secretary of State for International Development Randeep Sarai.
- What
- They are discussing how to use private funding and philanthropy for foreign aid while retaining government support.
- When
- The reports were published on October 23, 2026; the talks with the EU were described as recent.
- Where
- The talks include a meeting of EU development ministers in Dublin, Ireland.
- Why
- To help address gaps in foreign aid as the United States pulls back, while continuing support for vulnerable people.
Canadian government
Co-operation Canada
Use of private funding
Canadian government
The government plans to use public investment to encourage private funding for aid.
Co-operation Canada
Public funds need safeguards and should not subsidize efforts the private sector would have funded anyway.
Aid priorities
Canadian government
Sarai said Canada will not surrender support for the world’s poorest to market forces.
Co-operation Canada
Co-operation Canada says international assistance should first and foremost alleviate poverty and inequalities.
U.S. spending on foreign aid dropped by 57 per cent, according to the articles.
The Organization for Economic Co-operation and Development reported that the U.S. accounted for 17 per cent of rich countries’ foreign aid spending in 2025, down from 30 per cent a year earlier.
Ireland hosted EU development ministers in Dublin and invited Canada to attend; Sarai said discussions included leveraging private capital for aid.
Sarai described recent Canada-EU discussions on private funding for aid in interviews reported by the outlets.
- Canadian foreign aid spending
- About 1.6 per cent of Ottawa’s budget
- U.S. foreign aid spending
- Dropped by 57 per cent in 2025
- U.S. share of rich-country aid spending
- 17 per cent in 2025, down from 30 per cent a year earlier
- Countries involved in wider aid discussions
- Japan, Korea and Gulf nations
- EU development ministers’ meeting
- Dublin, Ireland
3 sources
What people are saying
When we put all our heads together, I think the opportunities are endless,
Taxpayer dollars are very valuable. So if we can bring in the private sector along with them, the goal is (that) eventually the private sector will invest on their own. But initially, we’ll use the taxpayer dollars to entice them,
If we are to use public funds to incentivize private capital, then there need to be some guardrails around … that we’re we’re using our public funds in the most efficient way possible,
Our international assistance should first and foremost be used to alleviate poverty and inequalities,