May 2011

What is CIDA doing with your tax dollars?

The Canadian International Development Agency (or CIDA) is Canada’s lead Federal Government agency for development assistance.

According to their web site, www.cida.gc.ca, CIDA is responsible for managing Canada’s support and resources effectively and with accountability to achieve meaningful, sustainable development results nationally and internationally. Their mission is “to lead Canada’s international effort to help people living in poverty”[1].

The website lists CIDA’s priorities: increase food security, secure the future of children and youth, and stimulate sustainable economic growth.  We understand CIDA is responsible to spend about 4.7 billion Canadian tax dollars each year. This is about 0.36 of Canada’s GDP.

We applaud the goals and effort of all involved with CIDA.  However, whether this money is being used optimally towards ending extreme poverty in the world is unclear.

My interest with CIDA began after learning that CIDA gave $81 million to China in 2009 out of a total of $989 million invested in Asia[1]. This is despite the fact that China has $2.85 trillion USD in foreign reserves (as of December 2010), which ranks China as having the largest Federal Reserve in the world[2]. In addition China has the largest military in the world[3] and has resources of such significance allowing the country to host the 2008 Olympic Games. After reviewing these statistics one must ask, “Who is deciding where our tax dollars go?” and “Are our allocated tax dollars working in the best way towards our goals to eliminate poverty?”

When I Googled CIDA the first link that came up was for the CIDA home page, however the links that followed contained an abundance of articles and accounts of discontent and even fraud in CIDA’s work. An article by CBC Canada reports that Bev Oda, CIDA’s International Co-operation Minister, admitted to altering a CIDA document recommending that the agency give $7 million to the Kairos organization. Further still, an article in Embassy Magazine accuses that despite the Harper government’s claim that Canada’s contribution to international assistance has doubled, Minister Oda has closed and defunded so many programs and projects that the Organization for Economic Co-operation and Development (OECD) actually shows a 9.5% reduction in Canadian development assistance between 2008 and 2009.

In fact, on a per capita basis, Canada barely reaches half the average in aid spending by OECD countries; ranking Canada 15^th out of 23 countries. Furthermore, Harper says our spending will now “cap” at current levels; meaning that even as our economy grows our aid program will remain stagnate[4].

Melissa Leonard

[1]www.acdi-cidaa.gc.ca[2]Bank of Korea [3]CNN World [4]Embassy Magazine

For more information on the MDG’s please refer to our December 2010 newsletter.

Investologist Prognostication

Jeremy Leonard

Dear Reader:

I am looking for the recession in my parts of the world, or some indication that the sky is falling.  But I am not finding it:

Employment:
I read this morning (May 21st, 2011) that the Hawaii unemployment rate is 6%. Lowest in two years. In Fort McMurray, Alberta, there are more jobs than people to do them, with truckloads of new people coming to town every day.  In my company, we have gone across the country to find qualified and experienced people and then help them set up in Fort McMurray by arranging travel and accommodations.

Housing:
I understand that housing prices are down in areas of North America where enough people do not have high paying jobs to afford their mortgages. How can this be a bad thing?  We will end up with more people in nice houses at a more reasonable cost.   Also the second home meccas have seen drastic price reductions.  But that is because the programs that were enabling disqualified buyers to purchase homes have unwound.  This is not a bad thing either.  In Fort McMurray, however, housing prices are at an all-time high. Likewise the prices in Vancouver, where many people want to live, are sky high.

The Stock Market:
Mr. Market is always adjusting prices based on supply and demand. That does change the distribution of wealth. But it also leads to changes in the allocation of resources and labor. Productivity is the key long term driver of stock prices. Those companies that are producing things that are in demand are the drivers of the economy.  Everything else is window dressing.  I think for those of us paying attention, the future is bright.