Canada and EU collaborate on foreign aid amid U.S. funding cuts

Canada is deepening ties with the European Union to address significant gaps in international development caused by the United States' withdrawal from foreign aid. Randeep Sarai, the Secretary of State for International Development, stated that the collaboration aims to leverage private philanthropy and private sector investment to support the world’s most vulnerable populations.

The shift follows the Trump administration's decision to shut down the United States Agency for International Development (USAID). According to the Organization for Economic Co-operation and Development, U.S. foreign aid spending dropped by 57 per cent in 2025, accounting for only 17 per cent of spending by wealthy nations, down from 30 per cent the previous year. Harvard University researchers estimate the reduction in USAID funding could lead to hundreds of thousands of preventable deaths.

Under Prime Minister Mark Carney, the Canadian government is implementing a new approach to aid that emphasizes blended finance—using taxpayer dollars to entice private sector investment. This strategy comes as Ottawa manages broader budget cuts and seeks new trade partners to mitigate economic vulnerabilities related to U.S. tariffs.