Joel Binda, June 2026
In 2025, Canada spent $13 billion on foreign aid. Almost all of this goes to other countries to help with poverty reduction and other well meaning objectives. This may surprise some Canadians, but a small part of foreign aid spending goes to Canadian cities, to help with the costs of refugees.
The failure of foreign aid
Foreign aid was intended as a way for rich countries to help poor countries develop. Whether it has succeeded or not is under intense academic debate. Zambian economist Dambisa Moyo, along with many others, argue that Foreign aid has failed over the past few decades. Moyo states that aid creates corruption, dependency, limits exports and hurts development. Critics of foreign aid claim countries that received most of it have little or no development to show.
Instead poor nations have an incentive to look to Western governments for funds, instead of developing their own economies. Their citizens also look to Western NGOs, instead of demanding services from their own governments.
Who’s rich and who’s poor
Another criticism of foreign aid is that rich and poor countries are no longer rich and poor. Some “developing countries” now have space programs and large military budgets. Others have government finances that make rich countries look poor in comparison.
Many rich countries, like Canada, have unsustainable budget deficits and debt. With residents struggling to pay rent or buy food. The majority of large cities like Mississauga are actually immigrants from the countries foreign aid was meant to help. With uncounted, undocumented migrants struggling to survive in the underground economy.
Why we spend
With many Canadians struggling financially and municipalities facing rising costs, we must answer the question of why we spend $13 billion per year on other countries. Especially when there is much academic and practical evidence that it doesn’t help. Vanity spending is one key reason. It makes us feel rich, generous and privileged. The progressive ego.
Cities in crisis
Canadian cities are facing rising costs with little ability to raise revenue other than already high property taxes. Cities build and manage 63% of core infrastructure in this country, but only collect 10% of tax revenue. Healthcare and social services have been downloaded to the municipal level without new revenues to pay these costs. By some estimates, there is a $4 billion gap in funding for these services in Ontario alone, downloaded from higher levels of government.
Cities’ costs are increasing due to aging infrastructure and high labour costs. Most labour contracts are unionized and negotiated at regional levels outside of the municipality’s control. Municipalities are not allowed to borrow funds for their operating budget. This leaves high property taxes and cuts to services as the only way to fund these higher costs.
Many Canadians are leaving Canada for the US due to high housing costs, including property taxes. Increasing taxes further will also increase the brain drain of Canadians fleeing south. Creating a cycle of reduced economic activity and higher taxes to cover the loss.
Municipalities in Canada have long complained about the lack of funding options and rising costs. Cutting foreign aid spending is no longer a right wing nationalist opinion. With record high deficits and debt at the federal level, we can no longer afford to send $13 billion overseas on aid that most economists doubt achieves anything.
That funding is desperately needed at the municipal level. Seniors on fixed incomes, workers who need reliable transit, empty food banks. The affordability crisis continues as taxes generated in our cities are taken by the Federal government and misspent overseas.
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Written by: Joel Binda, a resident of Mississauga and Candidate for Ward 7 (Cooksville area) Councillor in the Mississauga Council election.
www.JoelBinda.com
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