This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS E F T O SECTION 01 OF 02 OTTAWA 000324 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR AF, EB/IFD, AND WHA/CAN 
 
E.O. 12958: N/A 
TAGS: EFIN EAID PREL ECON EINV CA UNGA
SUBJECT: CANADA, DEBT, AND THE COMMISSION FOR AFRICA 
 
REF: A. PRETORIA 453 
     ¶B. OTTAWA 35 
 
¶1.  (SBU/noforn) Summary:  Canada strongly supports 
increasing aid to Africa but does not endorse financing 
proposals such as the International Finance Facility (IFF) 
advocated by the UK and others or the 0.7% of GDP resource 
volume target for ODA.  Their position is especially delicate 
as Finance Minister Ralph Goodale is a member of the 
Commission for Africa (ref B); Africa was a focus of Canada's 
2002 G-8 presidency; and half of the annual 8% increase in 
Canada's aid budget in coming years is dedicated to Africa. 
Publicity associated with the January 17, 2005 release of the 
Millennium Project Report to the UN has also contributed to 
what one official at Finance Canada called "the pinnacle of 
0.7% pressure." 
 
¶2.  (U) On February 2, Canada staked out a strong position in 
funding development by proposing 100% debt service relief for 
the world's poorest countries, including most of Africa. 
Canada has taken generous positions on debt relief for a 
range of beneficiaries from Iraq to the tsunami-affected 
region.  Today's proposal is a way to focus on concrete ways 
in which the GOC can address the Millennium Development goals 
and support its leadership aspirations in African development 
without endorsing IFF-type financing proposals or ODA volume 
targets that the USG also opposes.  End summary. 
 
Africans Focus on Debt Relief 
----------------------------- 
 
¶3.  (SBU/noforn)  A Finance Canada official who attended the 
ref A Commission for Africa meetings in Cape Town last month 
reports that the meetings went well from the perspective of 
the UK and the African leaders, and that the CFA process 
seems to have momentum.  The Commission succeeded in showing 
that it was consulting with Africans and that it has buy-in 
("glowing with support") from the continent. (Note:  He added 
that it is not clear how the support for the CFA will affect 
support for the APR (Africa Personal Representative) process. 
 End note.)  On the supply-side, he said it is not so clear 
what developed countries will do.  Officials at Finance and 
at the Canadian International Development Agency have 
described the CFA's draft report as a "400  page mess," with 
one person speculating that perhaps it was an attempt to 
confuse readers. 
 
Commission for Africa Juggling Act 
---------------------------------- 
 
¶4.  (SBU/noforn) Officials at Finance, who have the lead on 
Canada's participation in the CFA process (ref B) are trying 
to sanitize the final text and ensure that they can agree to 
the report's points.  The biggest problem will be the 
language calling for donors to commit to the 0.7% of ODA 
standard.  Canada finessed this issue in Cape Town by making 
sure the communique was on behalf of African finance 
ministers and not the CFA.  From Canada's perspective, most 
of the focus in Cape Town was on the multilateral debt 
problem, rather than IFF, and "there was not much talk about 
0.7%." 
 
Call for 100% Debt Service Relief 
--------------------------------- 
 
¶5.  (U) On February 2, Minister of Finance Ralph Goodale 
announced a "beyond HIPC" call for donor countries to pay for 
100% debt service relief on IMF claims directly.  Canada 
would contribute about C$172 million (US$138 million) over 
five years to the World Bank's International Development 
Association and to the African Development Fund.  This would 
reflect Canada's traditional 4% share of global multilateral 
assistance.  The GOC is also looking for ways to bring about 
greater IMF involvement in debt relief and the best way to 
finance the associated costs.  We understand that Canada's 
G-7 Deputy has discussed the proposal with his Treasury 
counterpart in advance of this weekend's meetings in London, 
and more details of the plan are available on the Department 
of Finance web page (www.fin.gc.ca/news05/05-008e.html). 
 
¶6.  (SBU/noforn)  Comment:  Canada is strongly committed to 
supporting development in the world's poorest countries, 
especially in Africa. The Commission for Africa embodies the 
tightrope GOC policy makers confront.  They are unequivocally 
behind the Commission's goals, but differ with some of the 
specific methods being advocated by the UK sponsors. At the 
same time, there is quiet concern that past initiatives such 
as the Africa Action Plan launched during Canada's 2002 G-8 
presidency, or even NEPAD, will be marginalized instead of 
being reinforced.  In addition, there may be fear that 
Canada's quiet ongoing commitment in areas such as the policy 
of 100% debt forgiveness for countries that meet HIPC 
requirements, or the 8% annual increase in aid budgets, with 
half of any increase dedicated to Africa, will be buried by 
the recent crop of high-profile initiatives.  (In 2005-06, 
Canada's 8% aid increase will come to C$248 million, or 
almost US$200 million.)  The GOC is also planning to focus 
its development assistance on fewer, more responsive, 
recipients so this proposal on debt service relief could be a 
precurser to a policy of aiming for greater impact for 
development assistance.  End comment. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
CELLUCCI