Order Fixing the Day After the Day on which this Order is Made as the Day on which Section 659 of that Act Comes into Force: SI/2019-45
Canada Gazette, Part II, Volume 153, Number 14
Registration
SI/2019-45 July 10, 2019
BUDGET IMPLEMENTATION ACT, 2018, NO. 2
Order Fixing the Day After the Day on which this Order is Made as the Day on which Section 659 of that Act Comes into Force
P.C. 2019-913 June 22, 2019
Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to section 660 of the Budget Implementation Act, 2018, No. 2, chapter 27 of the Statutes of Canada, 2018, fixes the day after the day on which this Order is made as the day on which section 659 of that Act comes into force.
EXPLANATORY NOTE
(This note is not part of the Order.)
Proposal
Pursuant to section 660 of the Budget Implementation Act, 2018, No. 2, chapter 27 of the Statutes of Canada, 2018, to fix the day after the day on which this order is made as the day on which section 659 of the Act comes into force. This section enacts the International Financial Assistance Act.
Objective
The objective of this order in council is to bring into force the International Financial Assistance Act, which received royal assent on December 13, 2018.
Background
According to the United Nations, there is an annual US$2.5 trillion financing gap to deliver on the Sustainable Development Goals (SDGs) in developing countries. In 2015, Canada and the global community agreed to meet an ambitious set of Sustainable Development Goals, to eradicate poverty and build peace around the world by 2030. To tackle this immense challenge, the International Monetary Fund has highlighted the need for concerted efforts that includes individual countries, international organization, official donors, philanthropists, the private sector and civil society. This requires donors, including Canada, to be more innovative in their approaches and partnerships to catalyze the additional financing.
In 2017, the Feminist International Assistance Policy was launched, and it recognized that Canada’s official development assistance must be used more innovatively and strategically to mobilize additional resources to support sustainable development.
The Act provides the legislative authorities to support the delivery of international financial assistance through two new programs — the Sovereign Loans Program and International Assistance Innovation Program — to enable take more innovative approaches to international assistance as part of the Feminist International Assistance Policy.
Related to the Sovereign Loans Program, the Act authorizes the Minister for International Development and the Minister of Foreign Affairs (the ministers) to provide interest-bearing loans to developing countries at the national level. The ministers can also make loans to organizations at the sub-national level and to other persons or entities, provided that the loans are being guaranteed in Canada’s favour by the developing country at the national level.
For the International Assistance Innovation Program, the Act authorizes the ministers to guarantee repayment of any financial debt or obligation to encourage an entity, typically financial institutions, to enter into financial transactions that they otherwise would not enter into to achieve particular SDGs. In addition, the Act authorizes the ministers to charge fees, to acquire/dispose of shares of a corporation and to take a security or security interest against defaults on obligations owed to or guaranteed by Canada.
The Act also supports the delivery of Global Affairs Canada’s climate change programming by providing the necessary flexibility to preserve the value of the Government’s related assets when using repayable contributions. This means that it allows loans made by recipients with such contributions to be converted into equity when the conversion could result in minimizing potential losses or maximizing the amount recoverable as per the terms of the agreement/arrangement.
The potential recipients of the loans, debt to equity conversions, and guarantees include all levels of governments of developing countries, multilateral organizations, international financial institutions and the private sector including local financial institutions in developing countries.
Implications
The Act and its related International Financial Assistance Regulations establish financial parameters for Global Affairs Canada to provide international assistance in order to safeguard the Consolidated Revenue Fund. All financial transactions related to loans, equity investments and guarantees provided under this act will require the approval of the Minister of Finance.
Consultation
The legislative authorities take into account consultations held with private-sector stakeholders in the context of the Feminist International Assistance Policy, which emphasized the need for Global Affairs Canada to deliver international assistance in a new way by adopting an expanded set of innovative programming tools and mechanisms to support innovation and achieve desired outcomes and by positioning Canada as a pioneer in testing and scaling new approaches to international assistance.
To assist in developing the legislation and regulations, Global Affairs Canada also consulted with other donors that have extensive experience in managing a guarantee program such as Swedish International Development Cooperation Agency and United States Agency for International Development as well as with Agriculture Canada that delivers guarantee programs under the Canadian Agricultural Loans Act and the Agricultural Marketing Programs Act.
Contact
Chantal Larocque
Deputy Director
Grants and Contributions Management Bureau
Global Affairs Canada
Telephone: 343‑203‑6737