Under existing arrangements responsibility for Canada’s economic assistance programmes has been divided between the Department of External Affairs and the Department of Trade and Commerce, with the Department of Finance playing an important role, particularly with respect to questions of policy and financial administration.

2. While there were good reasons for this system at the time it was set up, it has become evident that the administrative arrangements in Ottawa no longer are entirely adequate to the need.

3. In recent years the idea of economic assistance to under-developed countries has acquired a new significance and attraction for a lengthy list of prospective recipients and potential donors. Canada’s aid programmes have grown substantially in terms of total money expended, in terms of geographic area covered and in terms of their importance as a manifestation of this country’s foreign policy. In view of their growth, these Canadian programmes seem bound to come more and more under public surveillance not only at home but also in foreign countries where they are likely to be subject to comparison with similar efforts by other donors, old and new, friendly and unfriendly. Present trends indicate that there may be strong pressures on donors to increase their existing programmes or to develop new ones and to co-ordinate their efforts with each other and with international organizations active in the field. In these circumstances, it is highly desirable that the Government be in a position to determine quickly whether requests received under programmes in existence or contemplated represent a sound and productive use of Canadian resources. Experience has shown that the way aid is given is vital to the success of aid programmes. To put it another way, the effectiveness of any aid programme is substantially reduced if the programme is not expeditiously and efficiently administered.

4. In the present three-way sharing of responsibility powers are not clearly defined. Con­sequently there have been delays in reaching inter-departmental agreement and this, in turn, has impeded the eventual policy decisions on issues both large and small. There is, therefore, an urgent need for improved administrative arrangements if Canada’s aid programmes are to achieve their maximum effect.

5. The new approach now contemplated is aimed at bringing responsibility for the administration and operation of aid programmes under one head. It recognizes that these programmes are an integral part of Canada’s foreign policy and that they reflect and to an important degree are moulded by the nature of the relationships between Canada and the recipient countries. Accordingly this approach envisages an arrangement which will bring the administration and operation of these programmes under the supervision and control of the Secretary of State for External Affairs as the Minister responsible for economic aid votes in Parliament and for Canadian external relations. This approach envisages also the establishment of an external aid office to be administered by a competent senior Civil Servant who would be responsible to the Secretary of State for External Affairs. This officer might be known as Director-General of External Aid Programmes.

Responsibility of the Director-General and the External Aid Office

6. Under the supervision of the Secretary of State for External Affairs the main responsi­bilities of the head of the external aid office, acting in consultation with the Board referred to below, would be:

(a) the operation and administration of Canada’s assistance programmes covered by the general aid votes of the Department of External Affairs;

(b) to keep these programmes under constant review and, as appropriate, to prepare rec­ommendations on them and related matters to Cabinet; to prepare submissions to Treasury Board on financial questions relating to economic assistance;

(c) to ensure co-ordination in the operations of other Departments and agencies of gov­ernment concerned with various aspects of economic assistance programmes;

(d) to consult and cooperate as appropriate with international organizations and agencies;

(e) to consult and cooperate as appropriate with Canadian voluntary agencies active in under-developed countries;

(f) to co-ordinate Canadian efforts to provide emergency assistance in the case of disasters abroad; for this purpose to achieve the necessary liaison with the Canadian Red Cross Society and other appropriate Canadian organizations;

(g) to be responsible for the internal administration of the External Aid office; and

(h) to perform such other duties as may be required in relation to Canada’s external assistance programmes.

External Aid Board

7. The External Aid Board would correspond broadly to the present Interdepartmental Committee on External Aid Policy, but would be smaller and more effective. Its membership would comprise the Director General, the Deputy Ministers (or their alternates) of the Departments of Finance, Trade and Commerce, External Affairs and the Canadian Executive Director of the International Bank, one of whom would be named chairman by the Secretary of State for External Affairs. Representatives from other departments which have a less direct interest in economic assistance would attend as appropriate.

8. The responsibilities of this Board would be to advise the Secretary of State for External Affairs on the matters enumerated in paragraph 6 above. It would meet at regular intervals and at the call of the chairman.

Staff of the Office

9. The staff of the Office would be found by means of the transfer of the Economic and Technical Assistance Branch of the Department of Trade and Commerce with the addition of qualified officers drawn mainly but not exclusively from the three departments principally concerned. This group might include Deputy Directors General and officers with training in engineering, economics or financial administration. Such officers, it is envisaged, would be transferred or seconded to the new organization in such a way as to provide continuity of service and, at the same time, ensure that the Office has the benefit of the experience of officers who have worked in this field at posts abroad.

10. The scheme would not necessarily involve any increase in the total number of people working on economic assistance matters but it would bring them together in one place and under one head where they could deal with business more effectively and expeditiously. The office would continue to rely, as appropriate, on the services of the Canadian Commercial Corporation, Defence Construction Ltd., and various other departments and agencies.

Recommendations

11. It is accordingly recommended that:

(a) The Governor in Council be asked to approve, under the authority of the Public Service Rearrangements and Transfer of Duties Act (Vol. IV — Revised Statures, Chap. 227) the transfer of functions of the Economic and Technical Assistance Branch and its establishment from the jurisdiction of the Minister of Trade and Commerce to that of the Secretary of State for External Affairs, as part of the External Aid Office; it being understood that changes in the initial office establishment will be the subject of recommendations by the Director General and will be dealt with in the regular way.

(b) H.O. Moran, a senior officer of the Department of External Affairs be appointed, with effect from September 1st, Director General of the External Aid Office in the rank of FSO Grade 10.¹

Gordon M. Churchill
Donald M. Fleming
H.C. Green

¹Approuvé par le Cabinet le 24 août 1960./Approved by Cabinet on August 24, 1960.