In June, Convergence, Deloitte, and Global Affairs Canada (GAC) co-hosted a roundtable in Toronto that brought together 26 organizations from the public, private, and philanthropic sectors. The purpose of the Roundtable was to establish how the Canadian development community and the Canadian financial sector can partner with the new Canadian development finance institution (DFI) and GAC to achieve the objectives laid out in its new international assistance policy.
On June 9th, GAC announced a new Feminist International Assistance Policy to reduce poverty and build a more inclusive, peaceful, and prosperous world. This new policy will enable Canada to maximize the effectiveness of its international assistance by providing more integrated and responsive assistance, investing in innovation and research, delivering better reporting on results, developing more effective partnerships, and concentrating on those regions of the world where we can make the greatest difference in reducing poverty and inequality, particularly for women and girls.
Under this new policy Canada will expand its range of tools to enable joint program assistance with other donors, multi- stakeholder partnerships and innovative financing mechanisms, including blended finance. Blended finance is recognized as an important tool within the development toolbox to mobilize new capital sources to achieve the SDGs.
Key takeaways from the Roundtable:
• DEVELOPMENT FINANCE IN CANADA: Canada has a track record of being innovative and highly impactful and should continue to build this reputation. While most GAC funding will continue to be traditional grants, there is appetite for continued innovation and expanding the “toolkit”. As an example, there is high potential for GAC to work with the DFI to invest in low-income and fragile states by underwriting risk and providing technical assistance. There is also a complementary role to be played by the broader Canadian development community.
• DESIGN PRINCIPLES FOR THE DFI: Participants encouraged the DFI to be a principled investor, establish transparent timelines for decision-making, and create a corporate culture of partnership and learning. There is high demand for patient capital, especially during the early-stage development of businesses and projects. A transparent timeline can contribute to attracting better partners that can work and deliver on the developmental and financial results. Participants emphasized the need to establish staff key performance indicators that incentivize risk-taking and crowding in additional capital.
• TECHNICAL ASSISTANCE AND PARTNERING FOR SUCCESS: Participants recommend that the DFI take an integrated approach to investment and technical assistance, leveraging partnerships with GAC and the Canadian development community. The DFI and GAC should provide a continuum of solutions and derive a go-to-market strategy together. A matching contribution target or requirement could encourage the DFI and GAC to leverage public resources to crowd in additional sources of development finance.