CIDA funds seen to be subsidizing mining firms – by Daniel LeBlanc (Globe and Mail – January 30, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA— The Harper government weathered a storm when it cut funding to long-standing foreign-aid groups, but is now facing more controversy over its decision to launch development projects in partnership with mining firms.

The Canadian International Development Agency has established three foreign-aid pilot projects in Africa and South America with large mining corporations, as part of a plan to ensure that foreign aid also fuels economic growth and international trade at home.

Critics argue that Canada is needlessly subsidizing the foreign operations of profitable corporations, but the government is encouraging non-governmental organizations to come up with more projects with the private sector. This marks the first time that CIDA and mining firms are jointly funding aid projects abroad, and comes after the Conservatives faced a massive pre-election controversy over funding cuts to traditional partners, such as church-backed Kairos.

The mining industry is welcoming the new trend in Canada’s foreign-aid policy.

“There is a policy shift under way, and it’s one we’re encouraged by,” said Pierre Gratton, the president of the Canadian Mining Association.

In an interview, Mr. Gratton praised International Co-operation Minister Bev Oda for pushing the new initiatives, which will make it easier for mining firms to sell their sometimes controversial projects to local populations.

“These projects help improve the image of the industry … because they are meaningful and have value,” Mr. Gratton said. “This is not just PR.”

Federal officials said the policy shift at CIDA is co-ordinated with efforts by International Trade and Natural Resources to encourage the growth of Canadian firms abroad. Prime Minister Stephen Harper outlined the shift in 2007, his second year in power, when he met with officials from Barrick Gold during a trip to Tanzania and said the government wanted “to assist in building our investments here.”

Ms. Oda has pushed for greater links between NGOs and mining firms, announcing $26-million in projects last fall. These included partnerships with Barrick Gold, IAMGOLD and Rio Tinto Alcan. On Dec. 23, CIDA announced a $4.5-million project in Ghana, Mali and Senegal in partnership with Lundin for Africa, which is the philanthropic arm of mining giant Lundin Group of Companies.

Over all, CIDA has approved at least $50-million in projects that are linked to the mining industry in countries such as Peru and Burkina Faso since the Conservatives came to power in 2006, according to CIDA’s project database.

Officials inside and outside government said more projects are in the pipeline. Ms. Oda travelled last August to Mongolia, the resource-rich country that is in the sights of major Canadian mining operations, but not on CIDA’s list of “countries of focus.” During the visit, Ms. Oda said that Canada was looking to assist Mongolia to “strengthen its democratic governance and economic growth.”

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