The second component, part B of division 17, is new legislation. It's the international financial assistance act, referred to in clauses 659 to 660. This is to implement a budget 2018 commitment to provide $1.5 billion over five years to support innovation in Canada's international assistance through the creation of two new programs. First is the international assistance innovation program, the IAIP, and the second is the sovereign loans program.
To provide a bit more context, there is an international consensus that global development needs overwhelmingly exceed the amount of official development assistance that is available. To help fill this financing gap, the international community needs to invest in mobilizing new sources of financing, particularly private sector resources. Other G7 countries and international development partners have been using a variety of tools including development finance institutions, sovereign loans and guarantees as part of their development tool kit.
That is why in 2015 the government created a new funding and development institution, FinDev Canada, which encourages investments in developing countries.
The creation of FinDev Canada was an important first step to modernize the tools deployed by the Government of Canada. The authorities of Global Affairs were designed at a time when the focus was almost exclusively a grants and contributions approach. Other development aid partners have expanded beyond this mindset, and it is proposed that Canada do so as well. While these tools are tried and true in other countries, their deployment as consolidated programs will be new for the Government of Canada. For this reason, a pilot approach is being taken to enable an assessment of the effectiveness of the programs after five years. The legislation includes high-level authorities being sought, whereas regulations will be developed to provide more precision on the boundaries of the program, including eligibility criteria and terms and conditions that will be used amongst others.
The Minister of Finance, as per the Financial Administration Act, is tasked with ensuring prudent fiscal management for the Government of Canada. As outlined in the legislation, the regulations that will be developed will provide that certain transactions or classes of transactions will require consultation with or the approval of the Minister of Finance.
I'll turn to my Global Affairs colleagues.