IDRC Annual report 2022-2023

Annual Report 2022-2023

Mobilizing alliances for greatest impact

Mobilizing alliances for greatest impact 2022–2023 at 31 March 2023

Canada’s International Development Research Centre (IDRC) invests in high-quality research in developing countries, shares knowledge with researchers and policymakers for greater uptake and use, and mobilizes global alliances to build a more sustainable and inclusive world.

On The COveR near the village of Melea in the Kanem Region of Chad, women irrigate seedlings on the dried bed of Lake Chad. The lake, which had spanned 26,000 square kilometres in 1963, has shrunk by 90% in recent decades. Climate change is to blame, with population growth and unplanned irrigation also contributing to what the Un calls an 'ecological disaster.'

Unless otherwise stated, all monetary amounts in this Annual Report are in Canadian dollars.

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As part of Canada’s foreign affairs and development efforts, IDRC champions and funds research and innovation within and alongside developing regions to drive global change. The Centre invests in research to build evidence, inform decisions and generate opportunities that promote an inclusive and sustainable world.

Contents 2

Our year at a glance

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Message from the chairperson

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Message from the president

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Mobilizing alliances for greatest impact

15 Management’s discussion and analysis • Core business • Corporate governance • IDRC’s commitment to transparency and accountability • Financial resources • Sustainable and inclusive organization • Risk management • Results and outlook 34 Financial statements

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55 how to reach us

Children play football in front of a partly buried church, which moves closer to vanishing with each coastal storm, in Totope Village, Ghana. In this coastal region of the country, climate change is a daily reality and threat. Almost half of the fishing village has been swallowed by the ocean.

Our year at a glance Together with its partners, IDRC is pursuing an ambitious plan to help make the world more sustainable and inclusive.

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Partnerships are fundamental to the Centre’s success in advancing research for development. Strategic alliances increase the resources available for research, mobilize knowledge in and from the Global South and help advance the United Nations’ Sustainable Development Goals.

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Headquartered in Ottawa, IDRC has a presence in the Global South via its five regional offices. In 2022–2023, the total value of new projects approved with IDRC and donor funds was $234.1 million.

Improving diets in Ghana and Kenya

Learn about efforts to place communities at the centre of forest conservation efforts in Madagascar.

Read more on page 8.

Discover how researchers in Ghana and Kenya are working with policymakers and government authorities to help consumers make informed choices. Read more on page 10.

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Amplifying local voices in forest conservation

Producing more with less Learn how a research project in Mozambique introduces innovating farming techniques to help smallholder farmers make smarter decisions with limited resources.

Read more on page 11.

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Combining affordable utilities with capacity-building support See how a social enterprise develops solutions in energy, water and sanitation for rural Colombian communities lacking adequate basic services. Read more on page 12.

TOTAL IDRC INVESTMENTS ACROSS THE GLOBAL SOUTH

Global

Asia

Central and West Africa

value of new projects (in $ millions)

Active projects

value of new projects (in $ millions)

Active projects

value of new projects (in $ millions)

Active projects

45.7

365

25.5

111

22.5

84

19.5% of total

10.9% of total

9.6% of total

Latin America and the Caribbean value of new projects (in $ millions)

Active projects

34.4

93

OTTAWA

14.7% of total

AMMAN NEW DELHI

Middle East and North Africa value of new projects (in $ millions)

Active projects

18.5

52

DAKAR NAIROBI

7.9% of total

Eastern and Southern Africa value of new projects (in $ millions)

Active projects

87.5

205

MONTEVIDEO

IDRC / TOMMy TRenChARD

37.4% of total

By working together, IDRC and its partners are extending the reach and impact of research projects and bringing new knowledge from the Global South to the world.

Catalyzing change through private capital Explore how an IDRC partnership generates knowledge and evidence to increase private investments in businesses working at the intersection of care and climate.

Read more on page 12.

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Message from the chairperson Global challenges call for inclusive, global solutions developed with the full and equal participation of researchers from the Global South. We continue to support local leadership and capacity to drive research that is essential to building the knowledge, tools and capacity for people to live prosperous, healthy and sustainable lives today and for the long term.

This year’s Annual Report is focused on the power of partnerships to build a more sustainable and inclusive world. Partnerships are fundamental to IDRC’s Strategy 2030, which commits the Centre to mobilize alliances for impact. Partnerships expand the resources available for research, mobilize knowledge in and from the Global South and engage a diverse range of actors to make meaningful contributions to global development. IDRC pursues partnerships that generate greater impact and scale, share knowledge and increase the visibility and credibility of collaborative approaches to development.

IDRC’s Strategy 2030 identifies where we can best contribute to the Sustainable Development Goals, and it shapes our contributions to Canada’s foreign affairs and development efforts. Only a couple of years into the strategy’s implementation, we have made progress and the Centre is on track to meet its targets and 10-year goals. This progress is a testament to the strength and dedication of IDRC and our partners in the face of many challenges.

We continue to work on our commitment to diversity, equity and inclusion — in both external programming and internal operations — which is essential to our role as a leader in development and to the success of Strategy 2030.

Our unique model as a research institution, which sees us working across numerous sectors around the world and leverages our invaluable network of five regional offices,

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represents a tremendous contribution by Canada on the world stage. IDRC’s impact in the lives of people worldwide is only possible because of the leadership, agility and commitment of its employees, senior management and Board of Governors.

I am honoured to serve as IDRC’s chairperson and would like to thank IDRC’s Board of Governors, senior management and employees for the warm welcome and support I have received throughout my first year. The conclusion of Jean Lebel’s term as IDRC president — following a decade leading the organization and 26 years with IDRC — provides the opportunity to recognize his leadership and commitment to IDRC’s mandate. The Centre benefitted from Jean’s passion for research for development and his belief that the path to sustainable development is built on high-quality research led by those living and working closest to the issues. On behalf of the Board of Governors, I thank Jean for positioning IDRC for the future.

The world needs more IDRC. The global community is increasingly coming to grips with the extent of the climate crisis, the impact of growing inequalities and other pressing challenges. The solutions we need will come from those experiencing the issues first-hand, who can see the way forward. We are rising to meet the moment, using Strategy 2030 as a roadmap to foster high-quality research, share knowledge and mobilize alliances.

Dr. Dorothy Nyambi Chairperson

Message from the president Throughout IDRC’s history, partnerships with like-minded funders have enhanced our impact and expanded the resources available for research in the Global South.

Working collaboratively towards shared objectives that result in meaningful, positive change for people, communities and societies is an essential part of IDRC’s mission and mandate.

This year’s Annual Report shines a light on IDRC’s partnerships, demonstrating that through working together, we and our partners are achieving greater impact than would ever be possible working on our own.

Partnerships are essential to the Sustainable Development Goals and to IDRC’s Strategy 2030. Partnerships are at the core of Strategy 2030’s objectives to invest in high-quality research and innovation, share knowledge for greater uptake and use, and mobilize alliances for impact.

The results presented in this year’s Annual Report emphasize alliances that are working towards innovative solutions to the climate crisis. For example, IDRC supports research across the Global South that is designed to connect and mobilize groups that face critical threats related to climate change and that seeks to influence local, regional and global development agendas. We are partnering with the International Centre for Climate Change and Development in Bangladesh to increase the capacity of researchers and policymakers to respond to disasters associated with climate change extremes and climate-related slow-onset events. This initiative, launched at

COP27, will support policy development and mechanisms to address irreparable losses and recoverable damages associated with climate change. It has been clear for years that climate change will impact some sectors of society more than others, particularly in the Global South. The initiative will help address the knowledge and capacity gaps among vulnerable countries so they are better equipped to respond to loss and damage using national and international financing opportunities.

Thank you to the Governors who supported me and advised me generously during my mandate. I extend my best wishes to the new leadership at the board table, as well as to the management team, in pursuing the mandate of this great organization.

It feels like yesterday — though the calendar says it was June 1997 — that I joined IDRC. During the intervening years, including the past 10 as president, I have had a front-row seat to watch IDRC grow and innovate. It has been the honour of a lifetime to work alongside the people who bring IDRC’s mandate to life. Whether you are an employee, alumnus, governor, researcher, policymaker, funder or a Government of Canada representative, thank you for enabling the success of this great organization. I have no doubt IDRC is in good hands.

Jean Lebel, PhD President

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Mobilizing alliances for greatest impact This year’s Annual Report highlights the power of partnerships to build a more sustainable and inclusive world. Partnerships play a critical role in maximizing IDRC’s investments in research for development. They are one of the pillars of IDRC’s Strategy 2030, which focuses on mobilizing alliances to achieve the greatest impact.

In the face of intensifying uncertainties resulting from a global poly-crisis characterized by conflict, population displacements, food insecurity, governance instability, climate disasters and other challenges, the importance of collaboration in identifying sustainable and inclusive solutions has never been greater.

The report zeros in on how IDRC and its partners are addressing the growing urgency of climate change.

The impacts of climate change are vast, complex and intensifying, and they intersect with and affect many areas of international development. It is critical that global actors come together to address, adapt and respond to this global challenge. IDRC is working collaboratively across sectors, borders and communities to develop innovative, inclusive and sustainable solutions to a climate crisis that is displacing millions of people, exacerbating inequalities and restricting economic development. As the world adapts to the changing climate and transitions to low-carbon economies, research focused on equality and inclusion helps ensure that everyone will have access to tools and strategies to make their communities more resilient.

As reflected in the examples below, elements of sustainability have been embedded across IDRC’s five programming areas, reflecting the critical need for research that responds to the growing climate crisis.

Investments in IDRC’s programming advance not only Strategy 2030, but also progress on the United Nations’ Sustainable Development Goals.

IDRC programming spans five areas: Climate-Resilient Food Systems builds inclusive resilience among communities severely affected by climate change and addresses emerging health threats that arise from food systems.

Global Health strengthens health systems and policies so they can deliver better maternal and child health, improved sexual and reproductive health and rights for women and girls, and more effective and equitable preparedness and responses to epidemics.

Education and Science supports research to ensure children and youth from vulnerable populations attend school and benefit from high-quality education. It also supports women’s leadership in strong science systems that produce knowledge and innovation and improve lives.

Democratic and Inclusive Governance aims to support tangible improvements for everyone to take their rightful place in civic life and enjoy the benefits that democracy and inclusive governance bring to everyday life.

Sustainable Inclusive Economies builds the evidence base to support sustainable development that reduces greenhouse gas emissions, enhances climate resiliency, fosters shared prosperity and expands economic opportunities for women and youth in developing countries.

Integrating sustainability considerations into the Centre’s broad research program reflects IDRC’s belief that addressing the climate crisis is essential in building a more sustainable and inclusive world.

Inclusion is central to the Centre’s work in climate action and all programming. High-quality development research must be inclusive and consider gender and other forms of inequalities. Collaborative work with partners across the Global South addresses the intersectionality of gender inequality with other types of inequality, including those connected to social class, sexual identity and religion.

The uptake and use of research on climate adaptation is an important tenet of IDRC’s work. In collaboration with research and funding partners, the Centre brings to the world stage climate-related evidence generated by researchers in the Global South. Together with its partners,

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Empowering women is vital to developing and implementing climate change solutions. IDRC-supported research contributes to enabling women to demonstrate leadership in climate action.

IDRC builds and reinforces connections between and among researchers and knowledge users so that research outcomes are accessible, can be put to practical use and are shared widely.

Cutting across IDRC’s research investments and knowledgesharing ambitions is the importance of partnerships — how IDRC grows funding partnerships to expand research opportunities, enhances relationships with the private sector to extend the reach of research, and expands connections through global networks.

As such, IDRC is leveraging financial resources and expertise through co-funding and parallel funding arrangements with a range of like-minded actors, including bilateral aid funders, philanthropic foundations, emerging development research funders in the Global South and private sector actors. These partnerships seek to maximize the impact of development research, take many forms and possess a shared vision and commitment to systemic change, innovation and knowledge sharing. Collaborative investments — both new and longstanding — advance research in the areas of climate adaptation, resilience, equality and justice, and the transition to a low-carbon future. A focus on gender equity and social inclusion is infused across these investments.

Strategy 2030 affirms IDRC’s vision for a more sustainable and inclusive world and commits the Centre to: 1) Invest in high-quality research and innovation in developing countries, enabling research organizations and their stakeholders to address both their own and global development challenges.

2) Share knowledge for greater uptake and use, increasing the reach and impact of IDRC-supported research in driving solutions, and influencing national, regional, and global development agendas, including by synthesizing and communicating results.

3) Mobilize alliances for impact, growing international funding partnerships to expand available resources for research for development, and developing enhanced relationships with the private sector to expand the reach of research.

Together with its partners, the Centre supports research and builds capacity to generate stronger public policies, equip vulnerable populations to adapt to the effects of climate change, expand learning opportunities and improve health and livelihoods. IDRC’s global research

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partnerships also deliver important benefits for Canadians.

The Centre’s strong relationships with strategic partners and the evidence generated from co-developed research initiatives help Canada become more agile in responding to global challenges.

The focus of this year’s Annual Report on partnerships reflects the Centre’s commitment to mobilize alliances that place research and evidence-based solutions at the core of global development.

Mobilizing alliances for climate solutions IDRC’s innovative partnerships bring together global actors to pool resources and abilities in responding to the urgent need for action on climate change across a wide array of programming areas. These examples shine a light on how research is helping communities to address and mitigate climate change impacts, while also building resilience.

Through a combination of established and new collaborations, IDRC and its partners are, together, achieving greater impact in tackling the vast and complex challenges of climate change than would be possible independently.

Partnering for socially inclusive and sustainable climate action IDRC has a long history of working on climate research with the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO). Building on more than 27 years of collaboration on climate adaptation research, IDRC and FCDO launched the Climate Adaptation and Resilience (CLARE) initiative to enable a more climateresilient future. One of the largest climate-action research programs in the world, CLARE has been deliberately designed to allow other research funders to join, given the complexity of the challenges it is tackling.

With climate change increasingly and disproportionately affecting the world’s most vulnerable, especially women, girls and marginalized communities, there is a critical need for research that supports a more climate-resilient future for everyone. This includes scaling up research and innovation efforts to provide better information on risks, better decision-making tools, and better adaptation solutions to enable transformational change.

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Co-funded and co-designed by FCDO and IDRC, CLARE supports socially inclusive and sustainable action to build resilience and reduce susceptibility to risks from climate change and natural hazards for the most vulnerable. FCDO is committed to reducing poverty and tackling global challenges with international partners like IDRC. CLARE’s transdisciplinary design focuses on three research areas: n improving understanding of the risks associated with

climate and natural hazards by addressing gaps in knowledge; n informing action to reduce the humanitarian impacts of

weather, climate variability and related natural hazards; and n informing action for future climate challenges.

Putting local communities at the heart of Madagascar’s forest conservation Madagascar’s forests store substantial amounts of carbon and are home to several species found nowhere else on the planet. They are critical environments to conserve, given their biodiversity and role in mitigating climate change. Yet the voices of local people are often not reflected in discussions on how to protect these forests and tackle climate change.

The Forest4Climate&People project, supported by the CLARE initiative, puts local people at the centre of decisions on forest conservation and restoration. The project shortened the gap between forest-edge communities and policymakers, putting the voices and lived experiences of these communities at the heart of national and international policy discussions.

For example, the team developed a video highlighting the experiences of forest-edge communities that has been widely used to support discussions and engage policymakers. It brought local voices to the UN’s COP26 Framework Convention on Climate Change and reached international audiences on BBC Radio 4.

Ongoing engagements between the research team and the government prompted the Malagasy Minister of Environment and Sustainable Development to invite the research team to help review and update key conservation policies related to their engagement with forest-edge communities.

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Women plant mangrove saplings along a waterway in the western coastal region of Ambakivao, Madagascar. Rising sea levels, human activities and cyclones are leading to the decline of valuable mangrove ecosystems on which communities depend for their livelihood.

“Action-focused research is crucial to effective, inclusive and sustainable climate adaptation, particularly to protect the most vulnerable communities from the impacts of climate change.

We will ensure women’s voices shape these conversations, and women’s leadership and expertise are championed to deliver gender-sensitive adaptation solutions […] The Climate Adaptation and Resilience research program will improve the effectiveness of adaptation, putting people at the heart of climate research to build the resilience of those living on the frontline of the climate crisis.”

— Anne-Marie Trevelyan, Minister of State in the UK’s Foreign, Commonwealth & Development Office

Joining forces for healthy food systems in Africa A partnership co-funded by IDRC and the Rockefeller Foundation, Catalyzing Change for healthy and Sustainable food Systems (CCHeFS) builds on over a decade of experience from both organizations in improving food systems. Combining the unique strengths and capacities of each partner accelerates progress towards common goals in food security and addressing nutrition concerns.

Africa is undergoing a nutrition transition. Traditional diets composed of minimally processed foods are shifting towards low-quality diets laden with sugary and highly processed foods. The production of unhealthy and processed foods creates significant pressure on natural ecosystems because it typically employs exploitative and unsustainable land-use practices. This causes a vicious cycle between climate change and unhealthy foods that exacerbates social and economic inequities. Already vulnerable populations, including women and children, are disproportionately affected by the health and environmental burdens stemming from inadequate and inequitable global food systems.

CCHeFS research strengthens the understanding and implementation of policies and interventions that can enhance the market competitiveness of nutritious and sustainable foods, improving health and quality of life for low-income and vulnerable populations. By promoting interdisciplinary and intersectional research and leveraging in-country expertise across Africa, CCHeFS supports research teams to generate the evidence needed for populations to transition to healthier and more sustainable diets. CCHeFS builds coalitions for change across a range of actors including researchers, policymakers, practitioners, the private sector and civil society.

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Working across sectors to improve diets in Ghana and Kenya Research teams in Ghana and Kenya are working with policymakers and interested parties across sectors such as health, finance and agriculture to develop national nutrient-profiling systems. The goal of a nutrientprofiling system is to provide a standardized and objective way of evaluating the nutritional quality of foods and beverages, so that consumers can make informed choices. Nutrient-profiling systems are then used by policymakers and government authorities to determine how interventions such as food labels, taxes and advertising restrictions will be applied to different foods and beverages. Kenya and Ghana will be among the first countries in Africa to develop their own nutrient-profiling systems.

“Our food systems are failing to protect and promote human health and the health of our planet, and the most vulnerable communities are disproportionately affected. Through this partnership with IDRC, we aim to build and leverage research to build healthy, equitable and sustainable food systems and increase demand and consumption of protective diets in […] Africa.”

— William Asiko, managing director for the Africa Regional Office of The Rockefeller Foundation

Southern research, global benefits The International Centre for Climate Change and Development (ICCCAD) in Bangladesh is an organization committed to mobilizing knowledge from the Global South for benefits around the world. Situated on the front lines of climate change, ICCCAD is a valued partner helping advance the Centre’s work to support and share research from the Global South.

Loss and damage are emerging as an area of urgent concern with many countries around the world experiencing new and intensifying climate impacts, many of which they are ill-equipped to handle. Bangladesh already suffers serious river floods, tropical cyclones, flash floods and water shortages. Strengthening loss and damage response capacity in the global South (STRENGTH), funded by IDRC and implemented by ICCCAD, will increase the capacity of researchers and policymakers to respond to disasters associated with climate change

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extremes and climate-related slow-onset events. The threeyear initiative was launched in 2022 at COP27 in Egypt. It supports the development of national policies and mechanisms in the Global South to address irreparable losses (such as land submerged by rising seas) and recoverable damages (such as damaged buildings or roads). There is also a risk that many important facets of losses and damages will be missed, such as how slowonset events are causing loss of culture and human health, or how the loss of plant and animal species will jeopardize rural women’s livelihoods. This project will make a timely contribution to the loss and damage field and position IDRC as a critical knowledge partner for climate-vulnerable countries in the Global South.

STRENGTH is led by Saleemul Huq, a scientist the journal Nature calls a “climate revolutionary” for his leadership role in forcing wealthy countries to agree to pay for losses and damages from climate change.

That agreement came near the end of COP27, capping off a 10-year campaign to hold the world’s high carbon emitters accountable by compensating low-emitting countries that face devastation from climate change.

Huq is ICCCAD director and an expert on the links between climate change and sustainable development, particularly from the perspective of Global South countries.

“The decision at COP27 in Egypt in November 2022 to establish a funding mechanism to address losses and damages from human-induced climate change means that all countries, especially the most vulnerable developing countries, need to strengthen their capacities to address these climate change impacts. The STRENGTH program […] will be working with partners in Bangladesh, Nepal, Vanuatu and Senegal to help those countries be better prepared to tackle the impacts of human-induced climate change.”

— Saleemul Huq, ICCCAD director

Leveraging resources to improve food and nutrition security The Australian Centre for International Agricultural Research (ACIAR) is modelled after IDRC, so it is no surprise that the two organizations are closely aligned in supporting research for development. IDRC was the model for the organization when Sir John Crawford, one of the architects of ACIAR, submitted his recommendation to Australia’s Prime Minister

geORgInA SMITh

Cultivate Africa's Future (CultiAF) is an IDRC and ACIAR partnership focused on improving food security, resilience and gender equality across Eastern and Southern Africa. Pictured here is Bug's Life co-founder Doreen Mbaya Ariwi with crickets used in animal feed in Machakos, Kenya.

Malcolm Fraser in 1981 to establish a centre for international agricultural development. Since 2013, that alignment has meant success for ACIAR-IDRC partnership projects, including Cultivate Africa’s future fund (CultiAF).

Soon completing a second phase after 10 years, CultiAF leverages the respective strengths and resources of IDRC and ACIAR and emphasizes the commitment of both organizations to fund research aimed at improving gender equality and social inclusion. The strategic alliance focuses on improving food and nutrition security by funding applied research that develops and scales up sustainable, climate-resilient and gender-responsive innovations for smallholder producers.

In addition to financial resources, the initiative draws upon IDRC’s and ACIAR’s respective networks in the region to build relevancy, visibility and adoption of the research.

The IDRC-ACIAR collaboration also supports a new One Health research program that promotes an integrated approach to ensuring the health of humans, animals and the environment across six countries in East and Southeast Asia.

Mozambican farmers produce more with less More than three million smallholder farmers are responsible for 95% of Mozambique’s agricultural production. However, the country is vulnerable to cycles of flooding and droughts, which severely affect food production.

To help address these challenges, the CultiAF program’s Farmer-led smallholder irrigation in Mozambique (FASIMO) project introduces farmers to Chameleon soil water sensors and detectors. The Chameleon sensor is a digital tool that measures soil moisture levels and displays a colour code to the user depending on the level of dryness or moisture in the soil. This code is easily interpreted so that it can be used by people with low literacy. The sensor helps smallholders decide when to irrigate and can also be used to collect samples for nutrient and salinity tests. Deploying this tool has reduced water usage by up to 50%, cut fuel costs by 40% and increased crop yields by 10%.

“It’s very easy to co-invest when you have the same priorities.”

— Andrew Campbell, Chief Executive Officer of ACIAR

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Deploying private capital to drive systemic change in the care economy The Soros Economic Development Fund — the impact investment arm of the Open Society Foundations — harnesses the power of private capital to pursue rightsrespecting, justice-enhancing systemic change. The fund invests debt and equity capital to catalyze change. It prioritizes a range of themes, including access to medicines, climate justice, the care economy, independent media and racial justice.

IDRC is partnering with the Soros Economic Development Fund on a parallel funding initiative to generate knowledge and evidence to increase investments in enterprises that offer care and domestic work solutions. Launched in November 2021, the Transforming the Care Economy through Impact Investing (TCEII) initiative generates knowledge and evidence to direct investment into these social and for-profit enterprises.

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New report examines links between women’s care work and clean energy An IDRC-commissioned publication provides key insights on the relationship between the care economy and global efforts to transition to clean energy.

Mapping the intersection of women’s economic empowerment, care work and clean energy, developed

by Kate Grantham, founder and executive director of FemDev Consulting, identifies the existing research and evidence on the matter. The publication outlines the role of women in clean energy development, barriers to women's employment and entrepreneurship in this sector and the impact of clean energy technologies on care work. It also highlights existing policies and solutions that can turn the transition to clean energy into an opportunity to address gender inequalities, especially in the care economy.

The care economy — including childcare, eldercare and domestic work — is vital to society, yet it remains invisible, undervalued and unevenly distributed. The disproportionate share of care and domestic work that falls on women and girls, especially when it is unpaid, is a key barrier to their empowerment. This initiative supports action research to leverage entrepreneurship to grow sustainable and inclusive economic opportunities in the care economy in emerging markets. Research is conducted through local market analysis and case studies, impact assessments, incubating and accelerating care economy businesses, research on regulatory frameworks and policies, and industry-policy dialogues.

“Becoming part of the [TCEII] program has allowed us to be recognized and identifies Tierra Grata as part of the care economy, which in turn opens up opportunities for us to build alliances and receive investment from stakeholders that are interested in supporting the transformation of the care economy and gender equality.”

Some businesses supported through TCEII operate at the intersection of care and climate, such as Tierra Grata, a forprofit social enterprise that develops and implements energy, water and sanitation solutions for rural villages in Colombia. In addition to providing products like solar panels, portable solar lamps, drip water filters and ecological dry toilets that are fast and easy to install, Tierra Grata also helps customers learn to repair and maintain the installed products. Tierra Grata has served 12,500 customers in 48 rural villages across Colombia, focusing mainly on vulnerable Afro-Colombian and Indigenous populations.

A new and innovative partnership between Canada and the Netherlands, a country that is a green energy global leader, was announced in November 2022 during COP27.

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— Jennifer Colpas, founder, Tierra Grata

Canada-Netherlands partnership supports locally led adaptation

The Step Change initiative will accelerate equitable and inclusive locally led adaptation to climate change in the Global South. This new initiative scales the impact of a previous Canada-Netherlands partnership by increasing support to the Climate and Development Knowledge Network (CDKN).

Co-funded by IDRC and the Ministry of Foreign Affairs of the Netherlands, Step Change rises to the global call for an allof-society response to adaptation that catalyzes locally led action, harnesses the power of nature and ensures adequate and equitable adaptation financing.

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Women harvesting rice in Birban, Guinea-Bissau. Rice cultivation, very important for the local economy, has been affected by the salinization of the soil and ground water due to drought and rising sea levels.

With the urgency of adapting to climate change mounting, this partnership is helping to fill the need to produce a critical mass of Southern organizations that can mobilize locally led adaptation solutions and to better connect those who produce evidence with those who can put it into action.

Funded for five years (2022–2027), Step Change will support the integration of gender and social inclusion in climate policies and practice, strengthen the implementation of eco-system-based adaptation, advance access to equitable adaptation finance, and strengthen capacity for locally led adaptation.

“As a Southern-led network, CDKN is uniquely positioned to provide added value in the knowledge brokering space on the juncture of science, policy, practice and innovation to accelerate equitable and inclusive locally led adaptation. Our renewed partnership with IDRC builds on and scales out the success of previous years and is designed to strengthen the resilience of the most climateaffected people.”

— René van Hell, director of Inclusive Green Growth and Ambassador for Sustainable Development at the Ministry of Foreign Affairs of the Netherlands

Through support from the Step Change initiative, CDKN will build on 12 years of work to advance inclusive climateresilient development by scaling up its work in Africa and continuing its investments in Latin America and South Asia.

Scaling up inclusive, climate-resilience development A new five-year phase of the CDKN initiative was launched during COP27 in Egypt. This phase aims to advance gender-equitable and socially inclusive climateresilient development by mobilizing knowledge-intoaction, capacity and Southern climate leadership from local to global levels.

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Partners in advancing sustainability and inclusivity Beyond these select climate-focused partnership examples, IDRC pursues impact-focused partnerships that address the full spectrum of development challenges that are essential to a more sustainable and inclusive world. The Centre works with a variety of partners — such as Global Affairs Canada, the Global Partnership for Education, the William and Flora Hewlett Foundation, the Canadian Institutes of Health Research, the Social Sciences and Humanities Research Council, the Swedish International Development Cooperation Agency, the United Kingdom’s Foreign, Commonwealth & Development Office, South Africa’s National Research Foundation, the German Research Foundation and the Norwegian Agency for Development Cooperation — on innovative partnerships that enhance inclusive governance, close education gaps, support COVID-19 recovery, improve gender equality and build prosperity that leaves no one behind in support of Strategy 2030 and the United Nations’ Sustainable Development Goals. For more information on these and other initiatives, please visit idrc.ca.

Nurturing partnerships for greater impact across programs Meeting the challenge of climate change calls for a global response that mobilizes research partners everywhere.

Pooling efforts to address the growing climate crisis and other development challenges means multiplying resources, increasing impact and strengthening local capacity.

For more than 50 years, IDRC has actively developed and nurtured partnerships and alliances that help drive innovation and build knowledge in the Global South.

Partnerships are a pillar of Strategy 2030, helping the Centre produce and share evidence to build a more sustainable and inclusive world.

The Centre’s significant experience ensures a strong foundation for partnerships with bilateral aid funders, philanthropic foundations, emerging research-fordevelopment funders in the Global South and private sector actors around common objectives that align with Strategy 2030 and the United Nations’ Sustainable Development Goals.

IDRC can and will do more. The Centre is broadening its growing partnership base and brokering new relationships. The goal is to be a partner of choice, working with organizations from a variety of sectors to improve lives and livelihoods.

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Growing private sector collaboration will continue to be a priority. IDRC will increasingly engage with private sector partners to mobilize research and innovate to address pressing global challenges, including the transition to a lowcarbon economy. IDRC will build the evidence base that supports a private sector ‘triple win’ agenda to reduce greenhouse gas emissions, foster economic growth and promote gender equality and inclusion.

Looking ahead, Strategy 2030’s vision for a more sustainable and inclusive world will continue to drive IDRC’s approach to innovative programming and collaborative partnerships. The Centre’s programming and partnerships will respond to the urgent need for action on climate change and gender equality — fundamental to the Sustainable Development Goals — and work to achieve climate-resilient development that is just and inclusive.

At the three-year point of Strategy 2030, the Centre is deepening its work to address the disastrous impacts of climate change and persistent inequalities. Enhancing the partnerships program is fundamental to IDRC’s success.

Building alliances will leverage past work and extend the reach and impact of IDRC-supported research.

While many of these partnerships will focus on mitigating the impacts of climate change and strengthening prevention, the Centre is actively exploring how other areas of programming can contribute to solutions. This includes leveraging work that promotes sustainable and inclusive economies, recognizing that there is currently insufficient evidence to inform how economies should be changing to address the climate crisis through more sustainable growth.

In the years ahead, IDRC will continue to pursue partnerships that generate greater impact and scale, disseminate new knowledge and increase the visibility and credibility of collaborative approaches to research for development. The Centre will leverage its resources and experience and those of partners to answer the pressing challenges of today and help build a more sustainable and inclusive world.

RObIn hAMMOnD/PAnOS

Management’s discussion and analysis 16

Core business

20

financial resources

17

Corporate governance

20

Sustainable and inclusive organization

19

IDRC’s commitment to transparency and accountability

22

Risk management

23

Results and outlook

A boy stands on the dead stump of a palm tree on Ghoramara Island, Sunderbans, India. Rising sea levels are destroying homes and livelihoods in this region of the Bay of Bengal. f I g h T I n g CO v I D - 1 9 A n D b U I L D I n g b e T T e R f U T U R e S I n T h e g LO b A L S O U T h

15

Core business As a Crown corporation and part of Canada’s global affairs and development efforts, IDRC invests in high-quality research in developing countries, shares knowledge with researchers and policymakers for greater uptake and use, and mobilizes global alliances to build a more sustainable and inclusive world.

IDRC’s work is directed by the International Development Research Centre Act (1970), which aims “to initiate, encourage, support and conduct research into the problems of the developing regions of the world and into the means for applying and adapting scientific, technical, and other knowledge to the economic and social advancement of those regions.”

In carrying out its mandate, the Centre: • provides financial support to researchers in developing countries to address domestic development challenges and contribute to broader global solutions; • facilitates the use and uptake of research, and encourages dialogue and learning between researchers, policymakers and private sector actors; • synthesizes and shares results from across its research investments to inform local, regional and global agendas; and • engages, convenes and collaborates with research organizations and funding partners throughout the innovation process.

IDRC receives funding through a parliamentary appropriation from the Government of Canada to carry out its mandate. These funds, combined with donor contributions, enable the Centre to achieve its mission and objectives.

IDRC’s activities are guided by Strategy 2030 — a bold and ambitious agenda that affirms the Centre’s commitment to support more sustainable and inclusive societies in the developing world. IDRC does this by: • investing in high-quality research and innovation, • sharing knowledge to inform local and global action, and • mobilizing global alliances for impact.

The Centre recognizes that collaboration and networks are key to development impact. IDRC contributes to major Canadian government initiatives and delivers on Canada’s international assistance priorities. The Centre works closely with Global Affairs Canada and regularly collaborates with other Government of Canada organizations, such as Canada’s research granting councils, to help achieve common objectives related to international assistance priorities.

16

IDR C AnnUAL RePOR T 2022–2023

At 31 March 2023, IDRC had 39 active donor contribution agreements with 16 donors.

The value of the donor contributions was $592.1 million.

IDRC’s approach to partnering is focused on collaborating with a wide variety of organizations, including government agencies, granting councils, the private sector and philanthropic foundations. This approach seeks to mobilize alliances that increase contributions in research for development and broaden the reach of research results, increase financial resources for research institutions, and bring innovations to scale to address the needs of developing countries.

for active grant recipients at 31 March 2023, the average grant is $656 817 for an average duration of 36.6 months.

IDRC follows a robust process to select funding recipients.

Proposals are assessed by experts based on scientific merit, development impact and risks. Complex projects often involve multiple grantee institutions, and each recipient institution must sign a grant agreement that provides the terms and conditions of funding. A risk assessment process that looks at the administrative and financial capacity of grantee institutions is followed for all recipients. The release of funds to grantees is based on progress toward research activities and validated through satisfactory technical and financial reports.

IDRC’s Gender Equality and Inclusion Programming Framework (GEIPF), introduced in 2021, seeks to ensure that gender equality and inclusion (GEI) is promoted intentionally and systematically across IDRC. The GEIPF is being operationalized through the consultative development and socialization of technical tools, knowledge-exchange platforms and capacitystrengthening resources. Examples include a multilingual GEI Glossary of Terms, containing concise definitions applicable to IDRC programs and grantees; a GEI Learning Hub consolidating available information, tools and training; and a GEI Community of Practice to support knowledge exchange, networking and learning.

The Centre’s advisory and knowledge-sharing functions are central to its business and overall corporate performance, in accordance with IDRC’s mandate as established in the International Development Research Centre Act. Knowledge-sharing functions also strengthen the research capabilities of research grant recipients.

This component of IDRC’s work forms part of its value to recipients and distinguishes the Centre from other development assistance funders. IDRC believes that, where possible, providing local support to enhance research capabilities is best. As such, the employees in the Centre’s five regional offices collaborate with research institutions in the Global South to advance initiatives.

Corporate governance The Board of Governors The Board of Governors is responsible for the stewardship of the Centre. It provides strategic guidance to management and oversees the activities of the Centre.

The board acts and conducts its business in accordance with the IDRC Act, the IDRC General By-Law and within a governance framework based on other applicable legal rules, policies and governance best practices. The board’s charter details the roles, responsibilities, authorities and governance practices of the Board of Governors and its committees.

In carrying out its responsibilities, the Board of Governors does so in accordance with the highest standards of ethics, integrity, transparency and professionalism. The standards of conduct for governors in carrying out their responsibilities and the exercise of their function are defined in the IDRC Board Code of Conduct, which members acknowledge on an annual basis. In accordance with the IDRC Board Conflict of Interest Guidelines, board members must declare any potential conflict of interest at the beginning of each meeting.

Membership The composition of the Board of Governors is defined within the IDRC Act. The IDRC Act stipulates that a majority of board members must be Canadian. The board’s international composition is important to the Centre. This enables the board to have a viewpoint on the issues and needs of people and communities in the developing world, thereby supporting the continued relevance of the Centre’s programs to the developing world.

The chairperson and the president are appointed by the Governor in Council to hold office for terms of up to five years. All other governors are appointed for terms of up to four years. Governors are appointed by the Governor in Council following an open, transparent and merit-based selection process.

IDRC’s Board of Governors (as at 31 March 2023)

DOROTHY NYAMBI Chairperson Ancaster, Ontario CHANDRA MADRAMOOTOO Vice-Chairperson Montreal, Québec JEAN LEBEL President Ottawa, Ontario AKWASI AIDOO Gastonia, North Carolina, USA ALEX AWITI Nairobi, Kenya SOPHIE D’AMOURS Quebec City, Québec PURNIMA MANE San Mateo, California, USA NURJEHAN MAWANI Vancouver, British Columbia BESSMA MOMANI Kitchener, Ontario GILLES RIVARD Mont-Tremblant, Québec HILARY ROSE Sherwood Park, Alberta STEPHEN TOOPE Toronto, Ontario

Former governors who served during the reporting period: MARGARET BIGGS (term ended 9 June 2022) Ottawa, Ontario MARY ANNE CHAMBERS (term ended 9 June 2022) Thornhill, Ontario JOHN MCARTHUR (term ended 9 June 2022) Vancouver, British Columbia and Washington, DC, USA

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17

Function of the board

Compensation

The board held five meetings in 2022–2023.

Compensation for governors is set according to the Government of Canada Remuneration Guidelines for Part-time Governor in Council Appointees in Crown Corporations as follows:

The board functions through standing committees. Each committee has its own terms of reference and serves to address issues that require specific expertise. This structure allows for detailed advice to be provided to the entire board on decision points concerning respective committees’ areas of competence.

IDRC has four board committees (as at 31 March 2023)

The Executive Committee (convened five times in 2022– 2023) ensures that the business of the board is carried out between meetings as necessary. It is also responsible to ensure that the board has a sound approach to corporate governance and is functioning effectively.

The Finance and Audit Committee (convened five times in 2022–2023) provides oversight responsibilities with respect to financial management and reporting, internal and external audit, risk management and internal controls, and standards for integrity and behaviour.

The Strategy, Program Performance and Learning Committee (convened five times in 2022–2023) supports the board in fulfilling its oversight and foresight responsibilities with respect to strategic and annual planning, and performance monitoring.

The Human Resources Committee (convened three times in 2022–2023) supports the board in fulfilling responsibilities with respect to the application of sound human resource policies and practices that support the Centre’s mission and mandate.

• per diem range for board chairperson and governors is $360–$420 • annual retainer range for committee chairpersons is $4,600–$5,400 • annual retainer range for the chairperson is $9,200–$10,800

Centre Executives (as at 31 March 2023) JEAN LEBEL, President JULIE SHOULDICE, Vice-President, Strategy, Regions and Policy DOMINIQUE CHARRON, Vice-President, Programs and Partnerships GENEVIÈVE LEGUERRIER, Vice-President, Resources, and Chief Financial Officer

Regional Directors (as at 31 March 2023) KAPIL KAPOOR Asia Regional Office JULIE CROWLEY Central and West Africa Regional Office FEDERICO BURONE Latin America and Caribbean Regional Office MARWAN OWAYGEN (Acting) Middle East and North Africa Regional Office KATHRYN TOURE Eastern and Southern Africa Regional Office

18

IDR C AnnUAL RePOR T 2022–20231

IDRC’s commitment to transparency and accountability IDRC is accountable to Parliament and all Canadians for its use of public resources.

IDRC is committed to transparency and, as such, provides information on its website and in its publications, reports to Parliament, and conducts public outreach programs. As a research organization, IDRC also maintains transparency with the research community and the general public by making the results of its projects (studies, papers, articles, etc.) available to all.

Below are some of the measures in place that help the Centre meet the standards set by the Government of Canada for accountability and transparency.

Government • Parliamentary Committee appearances (when requested) • Proactive grant recipient screening to adhere to Canada’s legislative measures on trade and economic sanctions and terrorists and terrorist groups

Public • Strategic Plan • Annual public meeting • Disclosure of travel and hospitality expenses of senior executives and board • IDRC Digital Library, including: • Open access to information on IDRC-funded research projects • IDRC programming evaluations • Free IDRC published/co-published books Government

Policies and Practices • IDRC’s equality statement • Code of conduct • Leadership charter • Diversity, equity, and inclusion • Mental health and workplace well-being

Public

Policies and Practices

Risk Managment and Audit

Risk Management and Audit • Integrated risk management approach • Internal Audit aligned with leading practices • Office of the Auditor General • Annual Attest Audit • Special Examinations

Regulatory Reports

Regulatory Reports • Annual reports pursuant to: • Public Servants Disclosure Protection Act • Canadian Multiculturalism Act • Employment Equity Act • Official Languages Act • Access to Information Act • Privacy Act

Corporate Reports

Corporate Reports • Annual Report • Quarterly Financial Reports • Contributions to: • Statistics Canada reporting on social and natural science expenses • The International Aid Transparency Initiative • Official Development Assistance Accountability Act • Public Accounts of Canada

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19

Financial resources

2022–2023 Total contributions to IDRC-funded projects 350.0

30.8% (71.4)

231.9

68.3% (158.3)

250.0 200.0

Parallel funding

52.9 139.2 86.3

Program allocations funded by donor contributions

147.6

Program allocations funded by parliamentary appropriation

150.0 100.0 50.0 0.0

Financial accountability and sound financial management IDRC has a solid financial management framework that ensures proper stewardship of funds. From the preparation of a rigorous budget to regular monitoring and analysis of financial results and continuous forecasting, the framework ensures that financial resources are used for their intended purpose and contribute to achieving the Centre’s mission and vision.

Contributions arising from co-funding agreements are accounted for as donor contribution revenues. In 2022– 2023, the value of signed multi-year co-funding agreements was $163.2 million.

Management monitors key financial indicators and variables that impact the level of resources available for research in future years, including outstanding commitments, expenditure patterns on new projects and the level of administrative expenses. Tracking these indicators ensures that financial management and planning is exercised with the utmost prudence and diligence of public funds while achieving IDRC’s goal of being a fit for purpose organization.

2022–2023 Co-funding agreements by donor type

Sustainable and inclusive organization

0.9% (2.2) Funded by Parliament

2

300.0

($ millions)

The Centre derives the majority of revenues from a parliamentary appropriation and from donor contributions received pursuant to co-funding agreements. The parliamentary appropriation is the most significant and allows the Centre to deliver its mandate. It includes a recurring portion and a non-recurring portion that fluctuates as parliamentary transfers are agreed upon with other federal government organizations. The total amount of the parliamentary appropriation recognized for 2022–2023 was $158.3 million, which represents 68.3% of IDRC’s revenues.

2 ($ millions) 2022–2023 Revenue by source ($ millions)

($ millions)

Funded by donors

Other

(

Environmental, Social and Governance United Nations agencies

23.5

Foreign bilateral agencies 103.2

23.5

Global Affairs Canada

163.2

Foundations 11.0

Other organizations 2.0

The Centre also combines its efforts with those of other funders who work directly with recipients to increase support to IDRC-funded projects (referred to as parallel funding). In 2022–2023, $52.9 million of parallel funding was generated, bringing total external contributions to IDRC-funded projects to $139.2 million.

As part of Strategy 2030, IDRC made a strong commitment to being a sustainable and inclusive organization. This commitment is at the root of Environmental, Social and Governance (ESG) considerations.

IDRC is releasing its first stand-alone ESG report for the 2022-2023 financial year. The report, published on the Centre’s website, outlines progress towards implementing its ESG framework, as well as a roadmap for how it will further implement ESG considerations in future years.

Diversity, Equity and Inclusion Diversity, equity and inclusion (DEI) are embedded in IDRC’s operations.

In late 2022, the Centre conducted its annual anonymous diversity census to help establish the baseline from which IDRC can assess its diversity as well as future needs.

20

IDR C AnnUAL RePOR T 2022–2023

Workforce diversity

years of service

• 66.1% women • 27.3% members of visible minorities • 1.3% Indigenous • 3.1% person with disabilities (as at 31 December 2022; as per reporting to Labour Program of Employment and Social Development Canada, only Ottawa-hired staff positions are included.)

IDRC’s employees, senior management and the Board of Governors participated in training and seminars that focused on key aspects of DEI such as recognizing unconscious bias and inclusive leadership.

Following the adoption of Strategy 2030 and to ensure the Centre has the culture and values in place to successfully deliver on the strategy, IDRC updated its Culture and Values Statements, which were developed with input from employees. The new Culture and Values Statements affirm IDRC’s ambition to achieve a more sustainable and inclusive world respecting all individuals; to be intentional in its actions and accountable in its work and relationships.

The Accessible Canada Act (ACA) requires organizations, including Crown corporations, to develop a plan using a proactive and systematic approach to ensure that Canadians with disabilities can fully participate in all sectors of life. IDRC’s Accessibility Plan is available on the Centre’s public website and will be implemented over a period of three years.

2022–2023 2021–2022 2020–2021 0%

20%

40%

60%

0–1 year

1–5 years

10–20 years

20+ years

80%

100%

5–10 years

IDRC’s workforce by location Canada 33

Kenya India

262

351

18

Senegal

16 14 8

Uruguay Jordan

Monitoring, evaluation and learning IDRC uses monitoring, evaluation and learning to assess and demonstrate results, to learn how research contributes to development, to inform decisions and to meet accountability requirements.

Focus on people and talent IDRC’s success relies on employing a workforce that is committed, innovative and engaged. The Centre actively nurtures a healthy and effective workplace that provides employees with opportunities to build the expertise, skills and capacities they need to excel.

I

IDRC’s workforce by funding source

351 305

46

Parliamentary-funded Donor-funded

Learning: • for program improvement • to inform decisions • to generate new knowledge

Achieve, assess, and demonstrate RESULTS

Accountability: • transparency • enables feedback and participation

The Centre engaged in several key monitoring, evaluation and learning initiatives in 2022-2023. As a steward for research and innovation, IDRC believes the way research is evaluated is important for ensuring that it is a positive force for change in the world.

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21

Risk management The Centre is committed to implementing a continuous, proactive, systematic and integrated approach to risk management. The ultimate purpose of IDRC’s risk management is the creation and protection of value.

IDRC’s risk-management processes and practices are based on guidelines published by international bodies that foster sound and prudent risk-management practices, the International Standards Organization (ISO 31000:2018) and Committee of Sponsoring Organizations (COSO 2017), but tailored to the Centre’s specific environment. They are designed to identify potential risks, both opportunities and threats, that may enhance or hinder the achievement of established objectives, and to manage these risks within acceptable levels.

IDRC’s broad mandate, international network and the complex environments in which the Centre operates expose it to a wide range of risks. IDRC applies various controls and strategies to manage risk and uses a three-line model for its internal control framework.

22

• First line: Operational management – Management is responsible for establishing and maintaining effective internal controls and executing risk and control procedures on a day-to-day basis.

• Second line: Risk management – Risk management provides leading expertise, complementary support, monitoring and a challenge function related to the management of risks.

• Third line: Internal audit – The internal audit function provides independent assurance on the adequacy and effectiveness of governance, risk management and internal control to management and the board.

To ensure effective management of risks, risk management principles, practices and accountabilities are integrated at all levels and across the Centre.

The table that follows lists key corporate risks that were identified through a comprehensive risk assessment and discussed by the Board of Governors in March 2023. The evolution of IDRC’s risk exposure is monitored throughout the year and, as required, risks are escalated for additional review and action.

KEY CORPORATE RISKS

RISK RESPONSES

RISK 1: CybeRSeCURITy Given the prevailing cybersecurity threat, there is a risk that IDRC data and information may be compromised or lost, which could cause operational and reputational harm.

Cyber-attacks are increasingly directed at government institutions and research-oriented organizations. To protect the Centre, several comprehensive measures have been implemented, resulting in the improvement of IDRC’s overall cybersecurity posture. Due to constant changes in the cybersecurity technological landscape, controls and mitigations are consistently monitored and updated.

RISK 2: fUnDIng Given the uncertainty in the funding landscape, primarily with respect to donor contributions, and considering pressures on federal government spending, there is a risk that decreased funding will reduce IDRC’s ability to deliver on its strategic objectives and achieve impact.

IDRC funding allows the Centre to deliver on its mandate, achieve its strategic objectives and scale impact in developing regions.

Recent changes in the funding landscape have an impact on securing revenue to scale programming. In addition, financial austerity measures can further exacerbate IDRC's funding situation.

A concerted effort is made to minimize the impact of changes in the funding landscape, which includes having contingency plans in place while new funding possibilities are being pursued.

RISK 3: weLLbeIng Given the external environment, if the safety and security of staff are not ensured, and their emotional and mental health is not adequately supported, there is a risk that their wellbeing, morale and the overall productivity of the organization will be affected.

A healthy and engaged workforce is integral to the success of IDRC. The prolonged uncertainty in the external environment and ongoing organizational change may continue to impact staff’s overall wellbeing. In addition, the risk of staff safety and/or security incidents—particularly in countries with fragile contexts— increases, which calls for precautionary measures to be in place.

Ongoing measures include implementing adequate policies and proactively training on travel security and offering flexibility in work arrangements for a better work-life balance, along with various other forms of assistance in support of wellbeing.

IDR C AnnUAL RePOR T 2022–2023

KEY CORPORATE RISKS

RISK RESPONSES

RISK 4: CAPACITIeS Given the competitive labour market, if IDRC is not successful in attracting, developing and retaining talent, there is a risk that the Centre’s ability to deliver on strategic objectives will be impacted.

As the marketplace presents a variety of opportunities, external candidates are very selective of where they want to work.

Recognizing this challenge, particular attention is paid to transition planning and timely onboarding of new employees. Ongoing mitigating measures in a competitive labour market include modernizing job advertising using recruitment firms for areas where recruitment difficulties exist and presenting development opportunities to retain and promote talent.

RISK 5: ORgAnIzATIOnAL ChAnge Given the change processes that are underway to deliver on Strategy 2030 and improve the effectiveness of IDRC, there is a risk that ongoing multiple change initiatives, if not sufficiently prioritized and coordinated, will cause organization-wide fatigue and underachievement of change objectives.

IDRC is undertaking several change initiatives to implement Strategy 2030 and optimize overall organizational effectiveness.

The success of organizational change is therefore dependent on a consistent and coordinated approach to managing the impact of change. Ongoing controls include proper oversight, planning, coordination and adaptation, ongoing prioritization of the change agenda and effective internal communications.

Internal audit is a key element of IDRC’s accountability structure. Its purpose is to enhance and protect organizational value by providing risk-based and independent assurance, advice and insight. This is accomplished by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes which support management’s efforts in the achievement of the Centre’s mission and strategic objectives. The purpose, authority and independence, responsibilities, scope of work and professional standards for internal audit are defined in the board-approved Internal Audit Charter, published on IDRC’s website.

The higher expenses are primarily due to parliamentary appropriation that was received during the financial year to support a vaccine clinical trial against the Sudan Ebolavirus and consequently was not budgeted (see Figure 1).

FIGURE 1: ReSeARCh PROJeCT eXPenSeS 200 000 180 000 160 000 140 000 ($000)

Internal audit

120 000 80 000

Funded by parliamentary appropriaƟon

60 000 40 000 20 000 0

Results and outlook

Funded by donor contribuƟons

100 000

Budget Actual

Budget Actual

Budget Actual

Mar 2021

Mar 2022

Mar 2023

Performance indicators

Program allocations

Performance indicators allow the Centre to monitor its performance and identify areas where corrective measures must be taken when appropriate. IDRC uses a robust set of performance indicators to ensure the Centre is on track to meet its vision and objectives as outlined in Strategy 2030.

Program allocations represent funds approved for new research projects with disbursements over the project duration. Allocations can be funded by parliamentary appropriation alone or through a combination of parliamentary appropriation and donor contributions. The overall allocations funded by parliamentary appropriation of $147.9 million are in line with the budget of $147.8 million. Allocations funded by donor contributions of $86.3 million are above the budget of $76.2 million at 31 March 2023 due to a large, donor-funded project that was signed late in 2021–2022, which delayed the allocations to 2022– 2023 (see Figure 2).

Research project expenses compared to budget Research project expenses are carefully monitored, given they represent IDRC’s largest expense and are the primary means by which IDRC fulfills its mandate. At 31 March 2023, $182.8 million or 101.4% of the overall research project expenses budget of $180.3 million was achieved.

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23

FIGURE 2: PROgRAM ALLOCATIOnS 250 000

200 000

($000)

150 000 Funded by donor contribuƟons 100 000

Funded by parliamentary appropriaƟon

50 000

0

FIGURE 4: CORPORATe AnD ADMInISTRATIve eXPenSeS RATIO

Budget Actual Budget Actual Budget Actual Mar 2021

Mar 2022

to ensure it is operating efficiently and providing maximum value to taxpayers and external donors. The actual corporate and administrative expenses increased in 2022–2023 primarily due to one-time expenses for the design and fit-up of the Centre’s new head office space.

The percentage of corporate and administrative expenses for the year ending 31 March 2023 decreased to 9.9%, as a result of higher overall expenses than in previous years (primarily research project expenses). IDRC’s corporate and administrative expenses are within the desired target range of 8% to 11% (see Figure 4).

Mar 2023

30.0 25.0

IDRC requires highly skilled employees to undertake the work required to deliver on its mandate. Therefore, it is important that the Centre continually invests in learning and development to ensure employees develop and maintain the skills required for IDRC to succeed in a rapidly changing world. The Centre invested 1.2% of its payroll in employee learning and professional development during the year ended 31 March 2023, higher than the target of 1.0%. The costs are above budget given the need to keep up with rapid technological changes and build new skills to respond to changes in IDRC’s operating environment (see figure 3).

FIGURE 3: LeARnIng AnD PROfeSSIOnAL DeveLOPMenT 1.4% 1.2% 1.0% 0.8%

($ millions)

Investment in learning and professional development

20.0 15.0 10.0

17.8

18.3

2018–2019

2019–2020

21.0

20.9

2020–2021

2021–2022

5.0 0.0

Corporate services AdministraƟve costs as % of total expenses

Overall financial summary The 2022–2023 financial year was a year of growth as IDRC received increased revenues from both nonrecurring parliamentary appropriations and donor contributions. These funds were used to invest in highquality research in developing countries, thereby building a more sustainable and inclusive world. This was all done in the context of the head office relocation. The operating deficit was planned and was funded through unrestricted equity and reserved equity.

Expenses of $245.2 million ($201.7 million in 2021–2022)

0.2% 0.0% 2020–2021

2021–2022 % spent

2022–2023

Annual target of 1%

Corporate and administrative expense ratio IDRC continuously ensures that the majority of funds received go towards directly fulfilling its mandate.

Consequently, IDRC monitors its corporate and administrative expense ratio (i.e., corporate and administrative expenses as a % of total expenses) in order

24

IDR C AnnUAL RePOR T 2022–2023

2022–2023

Expenses

0.6% 0.4%

24.3

11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

Revenues of $231.9 million ($216.2 million in 2021–2022)

TABLE 1: SUMMARy Of eXPenSeS AnD RevenUeS 2022–2023 2021–2022 ($000)

$ change

% change

Actual

Actual

actual a

actual a

122 495

89 910

32 585

36.2%

❶

60 315

56 158

4 157

7.4%

❷ ❸

Development research programming Research projects funded by parliamentary appropriation

Research projects funded by donor contributions

Enhancing research capabilities

38 130

34 689

3 441

9.9%

220 940

180 757

40 183

22.2%

Corporate and administrative services

24 300

20 925

3 375

16.1%

Total expenses

245 240

201 682

43 558

21.6%

Total revenues

231 884

216 161

15 723

7.3%

Net results of operations

(13 356)

14 479

(27 835)

(192.2%)

a

❹

❺

$ and % change actual in 2022–2023 over 2021–2022.

Variances

❶

Research projects funded by parliamentary appropriation

year-over-year increase relates to research activities picking up and greater program allocations being made in the 2022–2023 financial year as compared to last year.

❷

Research projects funded by donor contributions

year-over-year increase of $4.2 million is due to increased program allocations and programming activities on new donor agreements ramping up in the 2022–2023 financial year.

❸

enhancing research capabilities

year-over-year increase of $3.4 million is primarily due to one-time purchases of furniture and technological equipment for the new head office space and the gradual resumption of travel activities.

❹

Corporate and administrative services

year-over-year increase of $3.4 million is due to one-time expenses for the new head office location and greater use of professional services relating to information technology.

❺

Total revenues

year-over-year increase in revenue is due to both an increase in non-recurring parliamentary appropriations and donor contributions.

Expenses The results from this exercise are incorporated throughout the Annual Report’s Management Discussion & Analysis.

IDRC reports expenses under two principal headings: development research programming and corporate and administrative services. The direct costs of ongoing scientific and technical research projects that the Centre funded in development research programming are presented by source of funding (see Table 1). Most of these projects are carried out by independent institutions with the support of research grants. Projects also include research activities undertaken by individuals with the support of individual training grants, scholarships, fellowships, internships and individual research and research-related grants. Research project expenses fluctuate annually based on the project portfolio.

Research project payments are based upon the recipient’s progress on research activities and the submission of satisfactory grant deliverables.

Development research programming includes enhancing research capabilities, which is an important advisory and knowledge brokerage function that is central to IDRC’s business and overall corporate performance.

Corporate and administrative services provide a variety of functions that support the Centre’s overall operations and corporate responsibilities. These expenses include services such as information governance and digital solutions, human resources, finance and administration, legal, risk management and internal audit.

The table below presents actual expenses by category against budget for the 2022–2023 financial year and a year-over-year comparison of expenses.

2022)

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TABLE 2: yeAR-OveR-yeAR eXPenSeS by CATegORy 2022–2023 ($000)

Actual

Research projects

182 810

180 251

Professional services

4 267

3 273

Salaries and benefits

Budget

42 220

Accommodations

2 799

Travel

1 328

Software services

Furniture, equipment and maintenance Amortization

Interest on lease liabilities

678

Depreciation of right-of-use assets Other

994

2 825

1 442

51.0 %

1 177

780.9 %

3 193

607.0 %

41 184

1 036

2 213

(2 212)

586

151

26.5 %

1 871

(1 114)

1 201

( 444)

468

210

331

347

104.8 %

( 145)

(6.6%)

(1 324)

267

2.5 %

1 746

178

526

62

196

44

2 355

2 427

( 72)

3 042

( 687)

245 240

251 385

(6 145)

201 682

43 558

2 054

Total expenses

actual

189

5 043

240

Insurance

actual

25.2 %

( 866)

757

Actual

36 742

3 665 1 824

% change

146 068

(4 560)

2 013

$ change

2 559

46 780

3 540

3 719

Variance

2021–2022

2 065

( 11)

2 199

15.3 %

(37.0%)

❶ ❷ ❸ ❹ ❺

22.4 %

(22.6%) 21.6 %

Variances

❶

Salaries and benefits

budget variance is primarily related to lower salaries and benefits due to a greater number of vacancies than anticipated at the time of budgeting, including positions for externally funded programs.

❷

Professional services

budget variance is due to various information governance and technology contracts related to improved data-reporting capabilities and services related to furniture dismantling of the prior head office location. year-over-year increase is due primarily to various information governance and technology contracts which were related to both implementation of improved data-reporting capabilities and one-time information technology expenses to enhance the technological capabilities of the new head office space.

❸

budget variance is due to lower utility payments, maintenance and property taxes for office premises than anticipated at the time of budget preparation.

Accommodations

year-over-year decrease is due to lower accommodations cost in 2021–2022 as a result of a reversal of an accounting provision for the dismantling of the previous IDRC head office location.

❹

budget variance due to less actual travel than planned at the time of budgeting as the return to travel following the pandemic has been slower than expected.

Travel

year-over-year increase as the prior year actuals were minimal due to travel restrictions associated with the COVID-19 pandemic.

❺

furniture, equipment and maintenance

year-over-year increase is due to the one-time purchases of furniture and technological equipment for the new head office space.

IDRC often combines donor funds with its own internal funds to amplify funding arrangements with donors. The Centre manages donor contributions pursuant to a co-funding agreement. In 2022–2023, IDRC contributed $16.0 million of its internal funds towards agreements linked to donor contributions. This represents 15.0% of the total Parliamentfunded research project expenses (see figure 5).

FIGURE 5: DeveLOPMenT ReSeARCh PROJeCT eXPenSeS In 2022–2023

IDRC divides its research project expenses by program based upon needs at the time that funding is allocated. In 2022– 2023, the Centre’s largest expenses were in the Education and Science program, followed by the Global Health program (see figure 6).

FIGURE 6: DeveLOPMenT ReSeARCh PROJeCT eXPenSeS In 2022–2023 by PROgRAM DIvISIOn ($ MILLIONS)

200.0

Education and Science

39.1

180.0

Global Health 160.0

Funded by donor contributions

60.3

($ million)

140.0 120.0

16.0

Funded by parliamentary appropriation — linked to donor contributions

80.0 106.5

122.5

40.0 20.0 0.0

26

Climate Resilient Food System

Total: 182.8

100.0

60.0

32.6

IDR C AnnUAL RePOR T 2022–2023

Funded by parliamentary appropriation

63.4

Sustainable Inclusive Economies 18.2 14.8

14.7

Democratic and Inclusive Governance Flexible Funds

Revenues

revenue over the life of the co-funding agreement when the related expenses are incurred. Consequently, while projects funded by donor contributions significantly contribute to advancing the Centre’s mandate, their impact on net results and year-end equity is limited.

IDRC’s revenues include a parliamentary appropriation, donor contributions and revenues from other sources.

The parliamentary appropriation funding is part of Canada’s international assistance envelope and allocated to the Centre to support the delivery of its mandate. IDRC also receives donor contributions to either research programs or specific projects which are recognized as donor contribution

The table below presents actual revenues against budget for the 2022–2023 financial year, and a year-over-year comparison of revenues.

TABLE 3: RevenUeS 2022–2023 ($000)

Actual

Budget

Parliamentary appropriation – Recurring

150 911

150 911

7 380

2 790

Total parliamentary appropriation

158 291

153 701

Donor contributions

71 434

86 592

Investment and other income

2 159

353

231 884

240 646

Parliamentary appropriation – Non-Recurring

Total revenues a

2021–2022

$ change

% change

a

actual a

actual

% variance

Actual

-

-

148 611

2 300

4 590

164.5%

-

7 380

4 590

3.0%

148 611

9 680

(15 158)

(17.5%)

66 283

5 151

7.8%

❸

1 806

512.3%

1 267

892

70.4%

4

(8 762)

(3.6%)

216 161

15 723

7.3 %

Variance

1.5%

❶ ❷

n/a 6.5%

$ and % change actual in 2022–2023 over 2021–2022.

Variances

❶

Parliamentary appropriation – Recurring

year-over-year increase due to the increase of $2.3 million pursuant to previous commitments from the Government of Canada to strengthen IDRC’s presence in West Africa and enhance programming across West Africa and la Francophonie.

❷

Parliamentary appropriation – non-Recurring

year-over-year increase due to the transfers from the Canadian Institutes of Health Research (CIHR) and the Social Sciences and Humanities Research Council (SSHRC) totalling $4.6 million to support Canada-developing country research on the health and economic wellbeing of women in the global recovery from COVID-19 and the transfer of $2.3 million from CIHR and the Public Health Agency of Canada to support a vaccine clinical trial against the Sudan Ebolavirus. The balance is from annual non-recurring transfer from other government organizations.

❸

Donor contributions

year-over-year increase as donor contributions revenue fluctuates year-over-year. These fluctuations are linked to the phase in the lifecycle of the programs. budget variance is due to changes in the pipeline of donor agreements and the timing of expenditures for active agreements. Donor contributions are received in advance and recognized as revenue when the related project expenses are incurred. The fact that payments did not occur as per the projected timing, especially in large and complex multi-year programs, reflects the inherent unpredictability related to the conduct of research activities.

Investment and other income

budget variance due primarily to rise in interest rates and foreign exchange gains.

IDRC’s largest donor in both 2022–2023 and 2021–2022 was the Global Partnership for Education fund, followed by foreign bilateral agencies (see figure 7).

FIGURE 7: RevenUeS fROM DOnOR COnTRIbUTIOnS a 30.0 25.0 ($ millions)

❹

20.0

24.4

26.2 21.7

15.0 14.2

13.4

10.0

11.5 8.4

5.0

10.9 2.7

0.0 Global Partnership for Education fund

Foreign bilateral agencies

Foundations

2022- 2023

Global Affairs Canada

4.3

Other organizations

2021- 2022

a Expended on development research programming

and administrative costs.

M O b I L I z I n g A L L I A n C e S f O R g R e AT e S T I M PA C T

27

derived from the cycle of funding received from donor contributions. Liabilities contain a large portion of deferred revenue, which represents donor funds received but not yet recognized as revenue.

Financial position The Centre’s financial position is summarized in Figure 8.

The majority of assets consist of cash and investments

FIGURE 8: SUMMARy Of ASSeTS AnD LIAbILITIeS 140.0

160.0

($ millions)

26.9

100.0

14.5

13.3

Property, equipment and intangible assets

1.7 3.8

Right-of-use assets Accounts receivable and prepaid expenses

43.1

60.0 40.0

1.1 4.2

19.6

80.0

18.4

Employee benefits Lease liabilities

60.0 40.0

Investments

65.1

48.1

20.0

89.4

27.5

100.0

35.1

80.0

1.1

120.0

($ millions)

5.1

120.0

119.1

120.2

136.5

140.0

Accounts payables and accrued liabilities

70.9

65.7

20.0

Deferred revenue

Cash and cash equivalent

0.0

0.0

March 2023

March 2022

March 2023

Assets

March 2022 Liabilities

Total assets increased by 13.6% to $136.5 million (from $120.2 million as at 31 March 2022). The right-of-use assets increased as a result of the lease agreement for IDRC’s new head office space in Ottawa, which began in November 2022. Cash balances decreased primarily due to the purchase of investments as well as property and equipment. The Centre invests excess liquidities resulting from donor funds not required in the short-term to earn higher interest than can be generated in bank accounts. Most of the investments consist of bonds, guaranteed investment certificates and treasury bills (refer to Note 3 of the financial statements).

Total liabilities increased by 33.2% to $119.1 million (from $89.4 million as at 31 March 2022). This is primarily due to an increase in lease liabilities relating to the lease agreement for the new head office space in Ottawa. The employee benefits amount shown in Figure 8 represents the non-current portion; the current portion is included within accrued liabilities.

IDRC’s equity consists of four classes: restricted, reserved, unrestricted and net investments in capital assets. The equity amount in each class is established in accordance with the Centre’s equity policy (see Table 4).

TABLE 4: eQUITy 2022–2023 ($000)

Actual

Unrestricted Restricted Reserved

Total equity a

% change

Actual

actual a

actual a

Variance

1 442

( 326)

1 768

12 590

(11 148)

773.2 %

5 122

1 692

3 430

1 692

3 430

(67.0%) 76.8 %

1 285

11

1 285

11

9 540

15 189

(5 649)

15 189

(5 649)

17 400

17 840

( 440)

30 756

(13 356)

(0.8%)

59.2 %

% change actual in 2022–2023 over 2021–2022.

Restricted equity is stable at $1.3 million. The balance represents funds received as bequests and donations to be used to support young researchers through fellowships, scholarships or internships.

The Centre decreased its reserved equity to $9.5 million at 31 March 2023. The purpose of the reserved equity is to absorb fluctuations in the disbursement of outstanding research project commitments, and to fund initiatives outside of normal operations, as well as future investments in property, equipment and intangibles. At 31 March 2023, an amount of $6.0 million was reserved to absorb fluctuations in the disbursements of outstanding research project commitments and a total of $3.5 million was set

28

$ change

Budget

1 296

Net investments in capital assets

2021–2022

IDR C AnnUAL RePOR T 2022–2023

aside in the reserved equity for the fit-up of regional office leased premises.

The unrestricted equity represents the residual balance of equity after the allotments to restricted and reserved equity and reflects all variances from revenues and expenses. The balance at 31 March 2023 is $1.4 million. This balance is primarily due to the timing of research expenses in the 2022–2023 financial year.

The $5.1 million net investments in capital assets segregate the portion of the equity representing IDRC’s net investments in capital assets. The balance increased by $3.4 million yearover-year as a result of the fit-up and purchase of equipment for the new head office leased space (see table 5).

TABLE 5: CAPITAL ASSeTS ($000) Balance

($000)

1 April 2022

Net changes

1 306

1 920

39

( 39)

Leasehold improvements Computer equipment

271

Software

Office furniture, equipment and vehicles

3 226 286

-

73

1 537

1 610

1 692

3 430

5 122

Communication systems

3

Total property, equipment and intangible assets

15

Balance

31 March 2023

( 3)

-

Other key financial information

Historical review and future outlook

Figure 9 shows the value of outstanding commitments on research projects for the five previous financial years, as well as the projected value for the 2023–2024 financial year.

IDRC conducts forward-looking financial planning using conservative assumptions for both revenues and expenses, while maintaining a focus on maximizing parliamentaryfunded project funding. Management will continue to focus on handling operational expenses to meet organizational needs under Strategy 2030, while ensuring the efficient use of financial resources to create impact and add value. The 2023–2024 budget was prepared with a focus on establishing the necessary financial, human and technological resources required to advance in the achievement of the objectives set out in Strategy 2030. The 2023–2024 budget assumes no further impact of the COVID-19 pandemic. The operating context is one of high inflation while continuing to focus on maximizing program funding and deepening and expanding donor partnerships.

The 2023–2024 budget also reflects IDRC’s move towards adopting an Environmental, Social and Governance (ESG) framework. Consequently, the budget reflects the resources required to implement the ESG framework as well as measures the Centre is and will be taking to improve its ESG performance, such as adapting its travel practices in order to reduce the Centre’s carbon footprint.

FIGURE 9: OUTSTAnDIng COMMITMenTS On ReSeARCh PROJeCTS 400 341.7

350

�$ millions�

300

269.2 237.8

250 200 150

177.4

197.4

216.8 78.7

62.6

84.9

126.5

134.8

131.9

2019

2020

2021

50.9

100 50

169.7 83.7

159.1

185.5

172.0

0 2022

Actuals as at 31 March Donor-funded

2023

2024 Projected

Parliamentary appropriation-funded

As at 31 March 2023, the Centre is committed to disburse up to $269.2 million for development research programming activities. It is anticipated that the funds will be disbursed over the next six years. The increase in 2023–2024 is attributable to greater program allocations funded by donor contributions, which is driven by upcoming milestones and will reduce as milestones are achieved and payments are released. These commitments are subject to funds provided

by Parliament and by donors on co-funded agreements.

They are also subject to the compliance of recipients with the terms and conditions of their grant agreements.

Table 6 provides an historical review of IDRC for the last five financial years for the expenses and revenues found on the Statement of Comprehensive Income, as well as information on program allocations and outstanding commitments. It also presents the financial outlook, providing an overview of the expenses, revenues, allocations and equity forecasts for the 2023–2024 financial year.

M O b I L I z I n g A L L I A n C e S f O R g R e AT e S T I M PA C T

29

TABLE 6: hISTORICAL RevIew AnD bUDgeT OUTLOOK Budget

Actual

2023-2024

2022-2023

2021-2022

2020-2021

2019-2020

2018-2019

Research projects funded by parliamentary appropriation

107 440

122 495

89 910

98 433

88 661

99 084

Research projects funded by donor contributions

94 356

60 315

56 158

47 095

41 688

42 976

Enhancing research capabilities

47 571

38 130

34 689

38 204

43 322

45 756

Development research programming

249 367

220 940

180 757

183 732

173 671

187 816

($000)

Statement of comprehensive income Expenses Development research programming

Corporate and administrative services

a

a

22 757

24 300

20 925

21 015

18 302

17 828

272 124

245 240

201 682

204 747

191 973

205 644

150 939

150 911

148 611

145 654

142 907

140 366

5 945

7 380

-

-

-

-

113 527

71 434

66 283

56 897

51 637

54 256

Revenues Parliamentary appropriation — recurring Parliamentary appropriation — non-recurring Donor contributions Investment and other income

598

2 159

1 267

567

1 191

1 210

271 009

231 884

216 161

203 117

195 735

195 832

�1 115�

�13 356�

14 479

�1 630�

3 762

�9 812�

8.4%

9.9%

10.4%

10.3%

9.5%

8.7%

Funded by recurring parliamentary appropriation

120 000

147 858

129 951

100 386

99 431

97 064

Funded by donor contributions

157 561

86 267

36 721

66 992

66 945

49 186

Funded by parliamentary appropriation

171 959

185 450

159 060

131 899

134 835

126 500

Funded by donor contributions

169 713

83 677

78 706

84 917

62 564

50 888

Net results of operations

Other financial information Financial ratio Corporate and administrative expenses ratio Program allocations Development research programming

Outstanding commitments

a The amount was adjusted to reflect the 2021–2022 presentation.

The figure below shows the status of donor contributions as at 31 March 2023 and distinguishes revenue already recognized versus future revenue.

FIGURE 10: STATUS Of DOnOR COnTRIbUTIOn AgReeMenTS (AS AT 31 MARCh 2023) 700 600

($ millions)

500 348.9

400 300

592.1

200 243.2

100 0

30

Active agreements (Total life value)

Revenues (Life to date)

IDR C AnnUAL RePOR T 2022–2023

Future revenue

As at 31 March 2023, the Centre manages co-funding agreements valued at $592.1 million (see Figure 10). Of this amount, $243.2 million has been recognized as revenue. This leaves a balance of $348.9 million, which represents donor contribution revenue for the next three to five years. Signing new co-funding agreements in the future will replenish this future revenue source.

Sven TORfInn/PAnOS

financial statements

In Tsholotsho District, Zimbabwe, a woman takes notes about the crops growing in test plots as smallholder farmers seek drought-resistant varieties. The region has suffered from severe drought linked to the El Niño weather cycle.

Financial statements Management Responsibility for Financial Statements The financial statements and all other financial information presented in this Annual Report are the responsibility of management and have been approved by the Board of Governors. Management has prepared the financial statements in accordance with International Financial Reporting Standards and, where appropriate, the financial statements include amounts that reflect management’s best estimates and judgment. Financial information presented elsewhere in the Annual Report is consistent with the information presented in the financial statements.

Management is responsible for the integrity and reliability of the financial statements and accounting systems from which they are derived. The Centre maintains an internal control framework to provide reasonable assurance that the financial information is reliable, transactions are authorized and recognized, assets are safeguarded, and liabilities recognized. Management also ensures that resources are managed economically and efficiently in the attainment of corporate objectives and that operations are carried out in accordance with the International Development Research Centre Act and by-law of the Centre.

Responsibilities of the Centre’s internal auditors incorporate reviewing internal controls, including accounting and financial controls and their application. The Auditor General of Canada conducts an independent audit of the annual financial statements in accordance with Canadian generally accepted auditing standards. The audit includes appropriate tests and procedures to enable the Auditor General of Canada to express an opinion on the financial statements. The internal and external auditors have full and free access to the Finance and Audit Committee of the Board.

The Board of Governors is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control. The Board benefits from the assistance of its Finance and Audit Committee in overseeing and discharging its financial oversight responsibility, which includes the review of the financial statements with management and the external auditors before recommending their approval to the Board. The Committee, which is made up of independent governors, meets with management, the internal auditors and the external auditors on a regular basis.

On behalf of management,

Julie Shouldice Acting President

Ottawa, Canada 21 June 2023

32

IDRC ANNUAL REPORT 2022–2023

Geneviève Leguerrier, CPA Vice-President, Resources, and Chief Financial Officer

Statement of Financial Position (in thousands of Canadian dollars) as at 31 March

2023

2022

48 081 —))) 15 676 13 317 77 074

40 075 25 000 4 999 14 533 84 607

27 403 5 122 —))) 26 884 136 483

30 121 1 653 39 3 749 120 169

19 579 862 63 318 83 759

18 477 1 864 60 374 80 715

7 619 1 070 26 635 119 083

5 323 1 079 2 296 89 413

1 442 1 296 5 122 9 540 17 400

12 590 1 285 1 692 15 189 30 756

136 483

120 169

Assets Current Cash (Note 2) Cash equivalent (Note 3) Investments (Note 3) Accounts receivable and prepaid expenses (Note 4) Non-current Investments (Note 3) Property and equipment (Note 5) Intangible assets (Note 6) Right-of-use assets (Note 7)

Liabilities Current Accounts payable and accrued liabilities (Note 8) Lease liabilities (Note 9) Deferred revenue (Note 10) Non-current Deferred revenue (Note 10) Employee benefits (Note 11) Lease liabilities (Note 9)

Equity

Unrestricted Restricted (Note 12) Net investments in capital assets (Notes 5 and 6) Reserved

Commitments (Note 13) Contingencies (Note 14) The accompanying notes form an integral part of these financial statements.

These financial statements were approved by the Board of Governors on 21 June 2023.

Dorothy Nyambi Chairperson Board of Governors

36

IDRC ANNUAL REPORT 2022–2023

Hilary Rose Chairperson Finance and Audit Committee

Statement of Comprehensive Income (in thousands of Canadian dollars) for the year ended 31 March

2023

2022

Development research programming (Note 15) Research projects funded by parliamentary appropriation (Note 16) Research projects funded by donor contributions (Note 16) Enhancing research capabilities

122 495) 60 315) 38 130) 220 940)

89 910) 56 158) 34 689) 180 757)

Corporate and administrative services (Notes 15)

24 300)

20 925)

245 240)

201 682)

71 434 1 492 667

66 283 ) 1 108 159

73 593)

67 550))

Cost of operations before parliamentary appropriation

(171 647)

(134 132))

Parliamentary appropriation (Note 17)

158 291)

148 611))

Net results of operations

(13 356)

14 479)

Expenses

Total expenses

Revenues

Donor contributions (Note 17) Other income Investment income

The accompanying notes form an integral part of these financial statements.

MOBILIZING ALLIANCES FOR GREATEST IMPACT

37

Statement of Changes in Equity (in thousands of Canadian dollars) for the year ended 31 March

2023

2022

12 590) (13 356) 2 208) 1 442)

—)) 14 479) (1 889) 12 590)

Restricted equity Beginning of year Net increase (decrease) Balance end of year

1 285) 11) 1 296)

1 291) (6) 1 285)

Net investments in capital assets Beginning of year Net increase (decrease) Balance end of year

1 692) 3 430) 5 122)

2 333) (641) 1 692)

Reserved equity Beginning of year Net transfers from (to) other classes of equity Balance end of year

15 189) (5 649) 9 540)

Equity, end of year

17 400)

Unrestricted equity Beginning of year Net results of operations Net transfers from (to) other classes of equity Balance end of year

The accompanying notes form an integral part of these financial statements.

38

IDRC ANNUAL REPORT 2022–2023

)

12 653) 2 536) 15 189) 30 756

Statement of Cash Flows (in thousands of Canadian dollars) for the year ended 31 March

Operating activities Net results of operations

Adjustments to determine net cash (used in)/from operating activities Amortization and depreciation of intangible assets and property and equipment Depreciation of right-of-use assets Amortization of investment premiums/discounts Loss on disposal of property and equipment and intangible assets Gain on lease modification Employee benefits Change in non-cash operating items Accounts receivable and prepaid expenses Accounts payable and accrued liabilities Deferred revenue

2023

2022

(13 356)

14 479)

757) 2 355) (29) 17) (84) (9) 3 007

)

1 200) 3 042) 117) 155) —)) (120) 4 394)

(3 413) 1 306) 9 869) 7 762)

4 106) 1 285) 2 035) 7 426)

(2 587)

26 299)

Purchase of investments Maturity of investments Acquisition of property and equipment Net proceeds of disposition of property and equipment

(12 930) 4 999) (4 441) 33)

(37 757) 2 520) (251) —))

Cash flows used in investing activities

(12 339)

(35 488)

Payment of lease liabilities

(2 068)

(2 998)

Cash flows used in financing activities

(2 068)

(2 998)

Decrease in cash

(16 994)

(12 187)

Cash and cash equivalents beginning of year

65 075)

77 262)

Cash and cash equivalents end of year

48 081)

65 075)

Cash flows (used in) from operating activities

Investing activities

Financing activities

Supplementary Information (Note 21) The accompanying notes form an integral part of these financial statements.

MOBILIZING ALLIANCES FOR GREATEST IMPACT

39

Notes to the Financial Statements For the year ended 31 March 2023

1.

Basis of Preparation A) General Information The International Development Research Centre (the Centre or IDRC), a Canadian Crown corporation without share capital, is not an agent of His Majesty and was established as a registered charity in 1970 by the Parliament of Canada through the International Development Research Centre Act. The Centre is funded primarily through an annual appropriation received from the Parliament of Canada. In accordance with section 85(1.1) of the Financial Administration Act, the Centre is exempt from Divisions I to IV of Part X of the Act, except for sections 89.8 to 89.92, subsection 105(2) and sections 113.1, 119, 131 to 148 and 154.01.

The mandate of the Centre is to initiate, encourage, support and conduct research into the problems of the developing regions of the world and into the means for applying and adapting scientific, technical and other knowledge to the economic and social advancement of those regions.

B) Basis of preparation These financial statements comply with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). These financial statements are prepared on a historical cost basis except for investments, which are measured at amortized cost and certain financial instruments, which are measured at fair value through profit and loss.

These financial statements are presented in Canadian dollars, which is the functional currency of the Centre. All values are rounded to the nearest thousand ($000) except where otherwise indicated.

C) Significant Accounting policies The significant accounting policies are presented in these financial statements in the appropriate section of these notes. These accounting policies have been used throughout all periods presented in the financial statements unless otherwise disclosed.

D) Significant Judgements and Estimates In the process of applying the Centre’s accounting policies and the application of accounting standards, management is required to make judgements, estimates and assumptions with regards to the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors considered relevant. Actual results may differ from these estimates. These judgements, estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the year. Uncertainty about these assumptions and estimates, or changes in the significant judgments made, could result in adjustments to the disclosed amounts of the assets or liabilities in future years.

Information about judgements, estimates and assumptions that are relevant to understanding these financial statements are disclosed in the relevant notes as follows: -

Credit risk (Note 4 Accounts receivable and prepaid expenses) Useful lives of assets (Note 5 Property and equipment) Measurement of borrowing rates (Note 7 Right-of-use assets) Factors for determining employee benefits (Note 11 Employee benefits) Provisions and contingent liabilities (Note 14 Contingencies) Financial instruments risks (Note 19 Financial instruments and related risks)

The judgments, estimates and assumptions are reviewed regularly. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

E) Taxation The Centre is exempt from the payment of income tax, as per section 149 of the Income Tax Act.

40

IDRC ANNUAL REPORT 2022–2023

F)

Application of new accounting standards I.

New standards, amendments and interpretations that took effect in 2022

There were no new standards, amendments or interpretations issued by the International Accounting Standards Board or the IFRS Interpretation Committee that had an impact on the current financial statements.

II.

Standards, amendments and interpretations not yet in effect

Amendments to IAS 1 Presentation of Financial Statements require the disclosure of the material accounting policies rather than significant accounting policies. The standard now includes guidance on how to identify material accounting policies stating that an accounting policy is material if, when combined with other information within the financial statements, it can reasonably be expected to influence the decisions of the primary users of the financial statements. IFRS Practice Statement 2 Making Materiality Judgements has been amended to include guidance on how to apply materiality to accounting policy disclosures. The amendments are to be applied prospectively. Management is currently assessing the impact of adopting this amendment on the Centre’s financial statements.

There are no other future accounting standards or amendments issued by the IASB that are expected to have a significant impact on the Centre’s financial statements.

2.

Cash Accounting policy

Cash includes funds on deposit at financial institutions and nominal petty cash at regional offices. Cash is carried at fair value and its performance is actively monitored. Cash not immediately required for working capital can be invested as per the Centre’s Investment Policy.

3.

Investments and cash equivalents Accounting policy

Investments consist of non-derivative financial assets with fixed or determinable payments of principal and interest and fixed maturities. Cash equivalents consist of treasury bills with a maturity of less than 90 days. The Centre’s business model is to hold the investments and cash equivalents until maturity to collect the contractual cash flows. The Centre currently holds listed bonds, guaranteed investment certificates and treasury bills that are initially recorded at fair value plus transaction costs that are directly attributable to the acquisition and subsequently measured at amortized cost using the effective interest method and are subject to impairment. Gains and losses are recognized in the statement of comprehensive income in the year in which the investments are derecognized, modified or impaired. The Centre has an investment policy approved by the Finance and Audit Committee of the Board. Interest income is accrued when earned and included in income for the year.

Supporting information

The Centre’s investment portfolios consist of Canadian federal, provincial, municipal, corporate, schedule I and II bank financial instruments. The bonds have effective interest rates ranging from 0.53% to 3.48% (coupon rates ranging from 1.40% to 7.35%) and guaranteed investment certificates (GICs) have fixed interest rates ranging from 0.50% to 4.50%. The maturity dates of the bonds vary from September 2023 to March 2031 and those of the GICs vary from April 2023 to February 2028. Management intends to hold all investments to maturity.

The net book value, measured at amortized cost, and fair value of these investments, are shown in the following tables. The fair values of the investments can be determined by (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); (b) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., prices) or indirectly (i.e., derived from prices) (Level 2); or (c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). The fair values of the Centre’s investments are not quoted in an active market, but rather are determined from quoted prices in a decentralized over-the-counter market, which is considered Level 2 in the fair value hierarchy.

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Net book value at amortized cost 31 March 2023

Bonds:

Fair Value 31 March 2023

3 010

Federal

2 705

17 221

Provincial

16 503

3 951

Corporate

Fair Value 31 March 2022

2 998

2 754

3 962

3 743

10 257

3 610

897

Municipal

Net book value at amortized cost 31 March 2022

843

9 687

904

865

Total bonds

25 079

23 661

18 121

17 049

Guaranteed investment certificates Treasury bills – less than 90 days (cash equivalents)

18 000

18 222

12 000

12 100

—)))

—)))

25 000

25 000

—)))

—)))

4 999

4 998

43 079

41 883

60 120

59 147

Treasury bills – more than 90 days

Effective interest rates and maturity terms

4.

Effective Interest Rate

Within one year

After one year but no more than five years

More than five years

Bonds: Federal Provincial Corporate Municipal Total Bonds

1.85%) 0.53% to 3.48% 1.84% to 3.20% 2.31%

— 7 676 — — 7 676

— 681 3 009 — 3 690

3 010 8 864 942 897 13 713

Guaranteed investment certificates

0.50% to 4.5%)

8 000

10 000

—

18 000

13 690

13 713

43 079

Accounting policy

Accounts receivable and prepaid expenses are incurred in the normal course of business. The accounts receivable are due upon issuance and the carrying values approximate their fair value due to the short-term nature of these instruments.

These are not considered by management to present a significant credit risk. The Centre did not identify any receivables that are either past due or impaired as at 31 March 2023 (31 March 2022: nil).

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IDRC ANNUAL REPORT 2022–2023

3 010 17 221 3 951 897 25 079

15 676

Accounts receivable and prepaid expenses

Accounting estimates and judgements

Total

Supporting information 31 March 2023

31 March 2022

Prepaid expenses

2 845 6 550 2 444 11 839 1 478

6 640 5 035 1 637 13 312 1 221

Total accounts receivable and prepaid expenses

13 317

14 533

Accounts receivable Parliamentary appropriation Donor contributions Other

5.

Property and equipment Accounting policy

Property and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost includes any expenditure directly related to the acquisition of the asset, dismantling costs to remove the items and restoring the site on which they are located. All maintenance expenditures are recognized in the statement of comprehensive income.

Property and equipment are depreciated over their useful lives once the assets are available for use by the Centre and are recognized on a straight-line basis. The estimated useful life of each asset category is as follows: Asset category Computer equipment Office furniture and equipment Vehicles Communication systems Leasehold improvements

Useful life 5 years 5 years 3 to 7 years 5 years Shorter of lease term or the asset’s useful economic life

An item of property and equipment is derecognized upon disposal, or when no future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the property or equipment (calculated as the difference between the net disposal proceeds and the carrying amount of said asset) is included in the statement of comprehensive income in the year the asset is derecognized. The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year-end and adjusted prospectively when necessary.

An assessment is made annually as to whether an asset or a group of assets contained in this category is impaired. Any adjustment to the carrying value of the asset is recorded in the statement of comprehensive income.

Accounting estimates and judgements

The following are key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the financial statements within the next 12 months: • Useful lives are assessed annually and are based on management’s best estimates of the period of service provided by the assets.

• Changes to useful life estimates would affect future depreciation expenses and the future carrying value of assets.

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Supporting information

Cost at 31 March 2022 Additions Disposals at 31 March 2023

Computer equipment

Office furniture & equipment

Vehicles

1 956) 163) (1 244) 875)

796) 1 638 (732) 1 702)

210) — (81) 129)

(788) (73) 732) (129)

Accumulated depreciation at 31 March 2022 (1 685) Depreciation for the year (120) 1 216) Disposals at 31 March 2023 (589) Net book value at 31 March 2022 at 31 March 2023

271) 286)

8)

1 573)

Leasehold improvements

Total

662) — (445) 217)

11 146) 2 436) (9 446) 4 136)

14 770) 4 237) (11 948) 7 059)

(145)

(659)

(9 840)

(13 117)

(6) 59 (92)

(3) 445 (217)

(516) 9 446 (910)

(718) 11 898) (1 937)

65)

37)

Communication systems

3)

—)

1 306)

3 226)

At 31 March 2023, the Centre had no impairment of property and equipment.

6.

Intangible assets Accounting policy

The Centre’s intangible assets consist of software that is not an integral part of any hardware. The software is initially recorded at cost, which includes the cost of material and any other costs directly attributable to bringing the software to a working state for its intended use. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. The amortization period and method for intangible assets are reviewed at each financial year-end.

Amortization is recognized on a straight-line basis over the useful lives of the assets. The estimated useful life of items in this asset class ranges from 3 to 5 years.

An intangible asset is derecognized upon disposal or when no future economic benefits are expected from its use or disposal.

The amortization expense is recognized in the statement of comprehensive income. An assessment is made annually as to whether an intangible or a group of intangible assets is impaired. Any adjustment to the carrying value of the asset is recorded in the statement of comprehensive income.

Supporting information Cost at 31 March 2022 Additions Disposals at 31 March 2023 Accumulated amortization at 31 March 2022 Amortization for the year Disposals at 31 March 2023 Net book value at 31 March 2022 at 31 March 2023

Software 500) —) (91) 409) (461) (39) 91) (409) 39) —)

At 31 March 2023, the Centre had no impairment of intangible assets.

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IDRC ANNUAL REPORT 2022–2023

1 653)

5 122)

7.

Right-of-use assets Accounting policy

The Centre leases office space in six countries in the normal course of its business. The average base lease term for office space is eight years. At the inception of a contract, the Centre assesses whether the contract is or contains a lease that conveys the right to use an asset for a period in exchange for considerations. The Centre recognizes a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is a lessee, except for low-value leases such as information technology equipment or leases with a term of 12 months or less. The Centre applies the recognition exemption for these leases where the lease payments of these contracts are accounted for as furniture, equipment and maintenance expenses under corporate and administrative services expenses in the statement of comprehensive income on a straight-line basis over the term of the lease (see note 15). The Centre uses a practical expedient in the standard to not separate non-lease components from lease components.

The right-of-use assets are measured at cost, which includes the amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date, less any lease incentives received, any initial direct costs incurred and an estimate of the dismantling costs to restore the underlying asset.

Right-of-use assets are depreciated over the lease terms on a straight-line basis. The lease term includes periods covered by an option to extend if the Centre is reasonably certain to exercise the option. At the end of each reporting period, an assessment is performed to determine whether there is any indication that right-of-use assets may be impaired. If any such indication exists, the recoverable amount of the right-of-use asset is estimated and an impairment expense is recognized if the carrying value of the right-of-use asset exceeds its recoverable amount.

Accounting estimates and judgements

The incremental borrowing rates applied to lease liabilities vary depending on the economic environment in which the lease was entered into, the country-specific risk-free rate and the lease term. The incremental borrowing rates represent the applicable rate had the Centre borrowed funds over a similar term with a similar asset in a similar economic environment. The rate is calculated using various inputs as the Centre does not borrow.

Supporting information

The Centre calculated the lease liabilities using the incremental borrowing rate of between 3.8% and 13.5%. The weighted average rate at 31 March 2023 is 5.38% (31 March 2022: 7.01%).

31 March 2023

31 March 2022

13 168) 25 490) 38 658)

13 168) —))) 13 168)

Accumulated depreciation Beginning of year Depreciation expense for the year

) (9 419) (2 355) (11 774)

(6 377) (3 042) (9 419)

Net book value end of year

26 884)

3 749)

Cost Leases beginning of year Additions

The Centre incurred $122 of expenses related to leases of low-value assets for which the recognition exemption was applied.

The Centre had an 11-month lease for office space in India that ended on 28 February 2023, for which the recognition exemption for short-term leases was applied. The value of this lease was $280 and the Centre incurred $276 of expenses related to this short-term lease. The Centre signed a new lease for the same office space which will commence on 1 March 2023 for a duration of 11 months, therefore the recognition exemption for short-term leases will be applied. The total value of this lease is $275 and the Centre incurred $25 of expenses related to this short-term lease. In addition, the Centre signed a new lease for a different office location in India. This commenced on 1 March 2023 for a duration of 10 years, which includes a five-year renewal option. Once this space is ready to be occupied, the short-term lease will be terminated.

The Centre also had a one-year lease for office space in Jordan that commenced on 1 November 2021 for which the recognition exemption was also applied. The total value of the lease was $40, and the Centre incurred $41 of expenses related to this short-term

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45

lease. The lease was renewed for an additional year for a total value of $44 and the Centre incurred $19 of expenses related to this short-term lease.

The Centre also signed a lease modification in March 2023 for the office space in Uruguay to extend the term by 10 years which includes a five-year renewal period.

A lease agreement was signed in September 2020 for the Centre’s office space in Ottawa. This lease commenced on 1 November 2022 for a duration of 20 years, which includes a five-year renewal option.

8. Accounts payable and accrued liabilities Accounting policy

Accounts payable and accrued liabilities are incurred in the normal course of operations and are classified as current liabilities if payment is due within one year or less. Accounts payable and accrued liabilities are recognized initially at fair value and subsequently measured at amortized cost.

Supporting information

Accounts payable and accrued liabilities of the Centre principally comprise amounts outstanding for purchases relating to operational activities, grants due to be paid under agreements and accruals for employee paid annual leave and overtime. The carrying amounts set out below approximate their fair value due to the short-term nature of these liabilities.

Grant payables and accruals Trade payables Payroll Severance benefit (Note 11) Other

31 March 2023

31 March 2022

9 432 5 218 4 543 69 317 19 579

9 196 4 695 4 198 62 326 18 477

9. Lease liabilities Accounting policy

Lease liabilities are comprised of amounts owing for right-of-use assets. At the commencement date, the lease liability is accounted for at the present value of the fixed future lease payments. Subsequent to the commencement date, the liability is remeasured by discounting the revised lease payments using a revised discount rate if the lease term changes. The lease payments are discounted using the Centre’s notional incremental borrowing rate.

Beginning of year Additions Interest expense Lease payments Lease liabilities included in the statement of financial position Current Non-current (after one year, but not more than five) Non-current (more than five years)

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IDRC ANNUAL REPORT 2022–2023

31 March 2023

31 March 2022

4 160) 25 405) 678) (2 746) 27 497)

7 158) —)) 330) (3 328) 4 160)

) 862) 4 189) 22 446) 27 497)

1 864)) 1 090)) 1 206)) 4 160))

Maturity analysis of contractual undiscounted cash flows Current Non-current (after one year, but not more than five) Non-current (more than five years)

31 March 2023

31 March 2022

2 307) 9 347) 30 112) 41 766)

2 111)) 1 813)) 1 449)) 5 373))

10. Deferred revenue Deferred revenue includes the unspent portion of funds received or receivable on donor contribution activities and the unspent portion of certain parliamentary appropriations received for specific projects and programs.

Supporting information a.

Donor contribution funding for development research programming

Current Non-current

31 March 2023

31 March 2022

55 933 7 619 63 552

53 734 5 323 59 057

Of the total deferred donor contribution funding, Global Affairs Canada accounts for $12 224 (31 March 2022: $9 040), of which $11 349 (31 March 2022: $7 040) was received and $875 (31 March 2022: $2 000) is receivable at year-end. b.

Parliamentary appropriations – projects and programs

Current

c.

Total deferred revenues Current Non-current

31 March 2023

31 March 2022

7 385

6 640

31 March 2023

31 March 2022

63 318 7 619 70 937

60 374 5 323 65 697

11. Employee benefits Accounting policy

Pension benefits – head office Most employees of the Centre working in its head office are covered by the Public Service Pension Plan (the Plan), a defined benefit plan established through legislation and sponsored by the Government of Canada. Contributions are required by both the employees and the Centre to cover current service costs. Pursuant to legislation currently in place, the Centre has no legal or constructive obligation to pay further contributions with respect to any past service or funding deficiencies of the Plan.

Consequently, contributions are recognized as an expense in the year when employees have rendered services and represent the total pension obligation of the Centre.

Pension benefits – regional offices The Centre offers a number of defined contribution plans that provide pension and other benefits to eligible employees in regional offices. The Centre’s contributions reflect the full cost as employer. This amount is currently based on a multiple of an employee’s required contribution to the plans. The Centre’s contributions are expensed during the year the service is rendered and represent the total obligation of the Centre.

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47

Severance benefit Prior to June 2012, the Centre provided a voluntary departure severance benefit to certain of its employees based on years of service and final salary. A number of employees have chosen to receive their accumulated severance benefit only at departure from the Centre (upon voluntary resignation or retirement).

Management determines the remaining accrued obligation for voluntary severance benefits using an actuarial valuation that is conducted annually. The most recent actuarial valuation was completed for the year ended 31 March 2023.

Sick leave benefit The Centre allows employees a number of fully paid sick days in each year. Unused sick days can be accumulated indefinitely but do not vest in that they cannot be paid out in cash or used as vacation. Management determines the accrued obligation for sick leave benefits using an actuarial valuation that is conducted annually. The most recent actuarial valuation was completed for the year ended 31 March 2023. The Centre presents the benefit as a current liability.

Accounting estimates and judgments

Employee benefit obligations to be settled in the future require assumptions to establish the benefit obligations. Defined benefit accounting is intended to reflect the recognition of the benefit costs over the employee’s approximate service period or when an event triggering the benefit entitlement occurs based on the terms of the plan. The significant actuarial assumptions used by the Centre in measuring the benefit obligation and benefit costs are the discount rate, mortality tables, and inflation rate, which has an impact on the long-term rates of compensation increase. The Centre consults with external actuaries regarding these assumptions annually. Changes in these assumptions can have an impact on the defined benefit obligation.

Supporting information

Pension benefits – head office The President of the Treasury Board of Canada sets the required employer contributions based on a multiple of the employees’ required contribution. The general contribution rate for the employer effective at year-end was 11.1% of gross salary (31 March 2022: 10.5%). Total contributions of $2 877 (31 March 2022: $2 847) were recognized as an expense in the current year.

The Government of Canada holds a statutory obligation for the payment of benefits relating to the Plan. Pension benefits generally accrue up to a maximum period of 35 years at an annual rate of 2% of pensionable service times the number of years. The pensionable service value is calculated as the average of the best five consecutive years of earnings. The benefits are coordinated with the Canada and Québec Pension Plan benefits and are indexed to inflation.

Pension benefits – regional offices The Centre’s contributions to all regional office plans for the year ended 31 March 2023 were $463 (31 March 2022: $423).

Severance benefit This benefit plan is not pre-funded and thus has no designated assets, resulting in a plan deficit equal to the accrued benefit obligation. Benefits will be paid from available cash assets and future appropriations.

Accrued benefit obligation – end of prior year Current service cost Interest cost Benefits paid during the year Actuarial loss (gain) Accrued benefit obligation – end of year

Current Non-current

31 March 2023

31 March 2022

1 141) 17) 42) (236) 175) 1 139)

1 252) 17) 35) (156) (7) 1 141)

31 March 2023

31 March 2022

69) 1 070) 1 139)

62) 1 079) 1 141)

Sick leave benefit The Centre’s sick leave benefit, which is included in current liabilities at 31 March 2023, is $492 (31 March 2022: $677).

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IDRC ANNUAL REPORT 2022–2023

12. Equity management The Centre’s equity balances are comprised of unrestricted, restricted, net investments in capital assets, and reserved equity. The Centre has an equity management policy in place to ensure that it is appropriately funded and that the equity position is identified, measured and managed.

The Centre’s objective, with respect to its equity management, is to ensure that sufficient funds are maintained to adequately protect the financial position of the Centre.

Equity is managed through a Board-approved equity policy that restricts a portion of equity to fund special or significant programs and operational initiatives planned for future financial years. Management also reserves a portion of equity as a financial planning reserve. The financial planning reserve is intended to absorb the impact of significant variances in development research programming expenditures. The Centre is not subject to any externally imposed equity requirements.

Supporting information

Restricted equity Restricted equity for special or significant programs and operational initiatives is drawn down as the funds are used for these programs and initiatives. In 2011–2012, $1.1 million was set aside in restricted equity as part of an endowment bequeathed to the Centre to enable, in perpetuity, the annual awarding of the John G. Bene Fellowship in Community Forestry. In 2016–2017, $0.1 million was added to restricted equity for funds received for The David and Ruth Hopper & Ramesh and Pilar Bhatia Canada Fund bursaries. These funds are being used to support young researchers through fellowships, scholarships or internships.

Net investments in capital assets This represents the Centre’s net investment in capital assets that will be depreciated or amortized over future accounting periods (see Notes 5 and 6).

Reserved equity The objectives of the reserved equity are to protect the financial position of the Centre by ensuring that a reasonable balance of funds is reserved by management to absorb fluctuations in the disbursement of multi-year outstanding research program commitments, and to fund future purchases of property, equipment and intangibles, as well as future initiatives.

13. Commitments Research project-related The Centre is committed to making payments of up to $269.1 million (31 March 2022: $237.8 million) during the next six years, subject to funds being provided by Parliament or donors and to compliance by recipients with the terms and conditions of their grant agreements. Of this amount, $185.4 million (31 March 2022: $159.1 million) is expected to be funded from future parliamentary appropriations and $83.7 million (31 March 2022: $78.7 million) from donor contribution agreements.

Within one year After one year, but not more than five More than five years Total future payments

31 March 2023

31 March 2022

112 719 156 258 150 269 127

119 182 117 978 606 237 766

Other The Centre has entered into various agreements for goods and services in Canada and abroad. These agreements expire at different dates up to 2042. Future payments related to these commitments are as follows:

Within one year After one year, but not more than five More than five years Total future payments

31 March 2023

31 March 2022

7 521 12 960 39 646 60 127

13 058 10 021 17 783 40 862

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14. Contingencies The Centre may, from time to time, be involved in legal proceedings, claims and litigation that arise in the normal course of business. Based on the advice of legal counsel, management does not expect the outcome of any of these proceedings to have a material effect on the statement of financial position or on the statement of comprehensive income.

As at 31 March 2023, there was one ongoing claim totalling $1.1 million for which a provision has been recorded as a liability (31 March 2022: $1.1. million).

15. Schedule of Expenses

Development research programming Contributions to institutions and individuals Core salaries and benefits Co-funded project salaries and benefits a Professional services Furniture, equipment, and maintenance Accommodations Depreciation of right-of-use assets Travel Co-funded project expenses a Amortization and depreciation of property and equipment and intangible assets Interest on lease liabilities Meetings and conferences Other

Corporate and administrative services Salaries and benefits Professional services Software expenses Furniture, equipment, and maintenance Depreciation of right-of-use assets Accommodations Interest on lease liabilities Amortization and depreciation of property and equipment and intangible assets Travel Loss on disposal of property and equipment and intangible assets Other Total expenses a

50

31 March 2023

31 March 2022

177 287 22 959 5 629 5 442 1 841 1 765 1 578 1 124 961 546

140 562 22 419 5 480 5 644 29 1 268 2 068 144 732 877

454 225 1 129 220 940

224 232 1 078 180 757

13 632 3 434 1 884 1 806 777 537 224 211

13 285 2 258 1 652 423 974 398 106 323

180 28

3 155

1 587 24 300

1 348 20 925

245 240

201 682

Includes all costs directly related to the development of research capabilities in co-funded projects and programs. These represent total expenses of $6 590 (31 March 2022: $6 212). Enhancing research capabilities expenses represent IDRC’s multifaceted role as research funder, adviser, and knowledge broker. This means that IDRC is a research funder and builds recipient capacity throughout the research process.

IDRC ANNUAL REPORT 2022–2023

16. Grant payments Accounting policy

All grant payments to institutions carrying out research projects approved by the Centre are subject to the provision of funds by Parliament or by donors. They are recorded as an expense, either under research projects funded by parliamentary appropriation or research projects funded by donor contributions, in the year they come due as per the terms and conditions of the agreements.

Refunds on previously disbursed grant payments are credited against the current year expenses or to other income in situations where the grant account has been closed.

17. Revenue Accounting Policy

Parliamentary appropriation The parliamentary appropriation is recorded as revenue in the year for which it is approved by Parliament. The exception is for those funds received for specific projects and programs, which are deferred and recognized as related expenses when they are incurred.

The Centre does not receive parliamentary appropriations for which the primary condition is that the Centre purchase, construct or otherwise acquire property or equipment. Aside from parliamentary appropriations received for specific projects and programs, there are no conditions or contingencies existing under which the parliamentary appropriation would be required to be repaid once received by the Centre. The IDRC Act gives the Board of Governors the authority to allocate all appropriated funds.

Donor contributions The Centre enters into co-funding (contribution) agreements with various donors to complement the Centre’s funding of research for development by deepening and broadening its programming reach, increasing resources for development research projects and programs, and bringing innovation to scale. The Centre manages donor contributions together with its own contribution funded from the parliamentary appropriation. Funds received or receivable under donor contribution agreements are recorded as deferred revenues until the Centre complies with the conditions attached to the agreements. These deferred revenues are recognized as revenues on a systematic basis in the year in which the expenses are incurred for the purposes they were received.

Supporting information Approved parliamentary appropriation Portion deferred for projects and programs Parliamentary appropriation recognized in the statement of comprehensive income

31 March 2023

31 March 2022

159 036) (745)

155 251) (6 640)

158 291)

148 611)

A breakdown of the revenue and expense recognition for donor contributions is provided below.

Global Partnership for Education Fund (GPE) Global Affairs Canada (GAC) Swedish International Development Cooperation Agency (SIDA) Foreign, Commonwealth & Development Office (FCDO) Bill & Melinda Gates Foundation Ministry of Foreign Affairs Netherlands Azrieli Foundation The William and Flora Hewlett Foundation Norwegian Agency for Development Cooperation (NORAD) The Secretary of State for Health and Social Care (DHSC) Rockefeller Foundation Australian Centre for International Agricultural Research Other donor agencies

31 March 2023

31 March 2022

24 367 8 467 8 038 6 534 4 776 3 560 3 496 3 086 3 083 2 475 2 351 499 702 71 434

26 222 10 922 8 300 1 790 6 638 1 525 508 2 408 —)) 3 479 1 564 1 707 1 220 66 283

The Centre recovers administrative costs from the management of donor contribution funding. The total recovery for the year ended 31 March 2023 was $6 237 (31 March 2022: $5 782) of which $769 (31 March 2022: $977) was from GAC.

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18. Related party transactions Accounting policy

The Government of Canada, as the parent of the Centre, has control over the Centre and causes the Centre to be related, due to common ownership, to all Government of Canada created departments, agencies, and Crown corporations. The Centre enters into transactions with other Government of Canada entities in the normal course of operations, under the same terms and conditions that apply to unrelated parties. Any transactions are recorded at their exchange amounts, which are determined to approximate fair value.

Related party transactions are disclosed in Notes 10 and 17 to these financial statements.

Compensation of key management personnel Key management personnel include the Board of Governors, the president, and the vice-presidents. Compensation paid or payable to key management personnel during the year is summarized in the table below.

Salaries and short-term benefits Post-employment and termination benefits

31 March 2023

31 March 2022

1 780 354 2 134

1 605 185 1 790

19. Financial instruments and related risks Accounting policy

The Centre’s financial instruments consist of cash, investments, accounts receivable, accounts payable, and accrued liabilities that are incurred in the normal course of business. Financial instruments are initially recognized at fair value, which is usually considered to be the transaction price (consideration given). Subsequent to initial recognition, they are measured based on their classification.

The classifications are as follows: Financial instruments Cash Investments Accounts receivable Accounts payable and accrued liabilities

Classification and measurement Financial assets at fair value through profit and loss Financial assets at amortized cost Financial assets at amortized cost Financial liabilities at amortized cost

Impairment of financial assets An assessment is made at each reporting date as to whether a financial asset or group of financial assets is impaired using a single forward-looking expected credit loss model. Any adjustment to the carrying value of the financial asset is recorded in the statement of comprehensive income. As at 31 March 2023, the Centre had no impairment of financial assets.

Financial instruments risks The principal risks to which the Centre is exposed as a result of holding financial instruments are credit risk, market risk and liquidity risk. The Centre has various financial instruments such as cash, investments, accounts receivable, accounts payable and accrued liabilities which arise from operations.

Credit risk Credit risk is the risk that the counterparty to a financial instrument will default on its obligations to the Centre, resulting in financial losses. The Centre is exposed to credit risk since it has investments and extends credit to its recipients and donors in the normal course of business. The maximum exposure is represented by cash, investments and accounts receivable amounts disclosed on the Centre’s statement of financial position. The Centre does not use credit derivatives or similar instruments to mitigate risk, and, as such, the maximum exposure is the full carrying value or face value of the financial asset. The Centre minimizes credit risk on cash by depositing the cash only with a reputable and high-quality financial institution. Credit risk associated with accounts receivable is considered by management to be minimal since most receivables are due from Canadian government entities. Credit risk associated with donor receivables is considered low by management since most receivables are due from Canadian or foreign government entities that have contracted with the Centre. The Centre’s investment policy sets out guidelines that define the minimally

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IDRC ANNUAL REPORT 2022–2023

acceptable counterparty credit ratings pertaining to investments. Investments in financial institutions and corporations must have minimum ratings from two external rating agencies that are equivalent to DBRS ratings for short-term instruments of R1L for governments, Schedule I and II banks and corporations. DBRS ratings for medium/long-term instruments must hold a minimum rating of A (Low) for governments, AA (Low) for Schedule I banks with a $4M investment limit, A (Low) for Schedule I banks with a $1M investment limit, Schedule II banks and corporations. The Centre regularly reviews the credit ratings of issuers with whom the Centre holds investments and confers with the Vice-President, Resources and Chief Financial Officer when the issuer’s credit rating declines below the policy guidelines. The investment policy is reviewed and approved as required by the Finance and Audit Committee of the Board of Governors. These policies and procedures are designed to manage and limit the credit risk associated with these financial instruments.

Concentrations of credit risk The Centre’s exposure to credit risk is summarized as follows: DBRS rating Federal Provincial Corporate Municipal Canadian Schedule I Banks Canadian Schedule II Banks

AAA/R1H R1M/A+ to AA+ A- to AA+ AA/A+ R1L to R1H/AA- to AA+ A+

31 March 2023

31 March 2022

3 010 17 221 3 951 897 17 800 200 43 079

32 997 10 257 15 962 904 — — 60 120

Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk is comprised of three types of risk: currency risk, interest rate risk and other price risk. The Centre is exposed to potential losses as a result of movements in interest and foreign exchange rates.

Currency risk Currency risk is the potential adverse impact of foreign exchange rate movements on the fair value or future cash flows of financial instruments. The Centre has exposure to currency risk in part from the local operating costs of five regional offices throughout the world. The Centre does not hedge its regional office expenses against fluctuations in foreign exchange rates and accepts the operational and financial risks associated with any such fluctuations that are not considered to be significant.

The Centre has multi-year contribution agreements with non-Canadian donors that are denominated in currencies other than the Canadian dollar. When progress payments are received from those donors, they are translated as described in Note 20. In turn, the Centre incurs expenses and issues multi-year grant agreements denominated in Canadian dollars. The Centre manages its currency risk on these activities by setting aside a portion of the donor contribution agreement funding to absorb exchange gains and losses.

The magnitude of the funding set aside is gauged against actual currency fluctuations on a yearly basis, with additions made only when needed and releases made only toward the end of the agreement, when no longer required. The Centre does not hedge its foreign currency revenues against fluctuations in foreign exchange rates and accepts the operational and financial risks associated with any such fluctuations that, on a financial year basis, are not considered to be significant.

Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Centre is exposed to fluctuations in interest rates on its investments as this would affect the fair value of the instruments. Management intends to hold these instruments until maturity, collecting contractual cash flows over the term of the investment and mitigating exposure to fair value changes. The Centre’s interest rate risk is not considered significant.

Liquidity risk Liquidity risk is the risk that the Centre will encounter difficulty in meeting its financial obligations as they fall due. Liquidity risk can arise from mismatched cash flows related to assets and liabilities. The corporate treasury function is responsible for the Centre’s liquidity management. This risk is managed by monitoring forecasted and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Centre may also hold investments in marketable securities readily convertible to cash to ensure that sufficient liquidity can be made available to meet forecasted cash requirements. Given the timing of receipts and payments, the Centre’s exposure to liquidity risk is not significant.

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20. Foreign currency translation Accounting policy

Transactions in currencies other than the Centre’s functional currency are recognized at rates in effect at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated to Canadian dollars using the exchange rate at that date. Exchange gains and losses are recognized in other income in the period in which they arise. Non-monetary items are measured at historical cost and are not revalued. The Centre does not actively hedge against foreign currency fluctuations.

21. Supplemental Cash Flow Information 31 March 2023 Interest charges on lease obligations Interest received from bank deposits Interest received from investments

678 883 630

31 March 2022 330 —) 147

The change in accounts receivables and prepaid expenses excludes an amount of $-4.6 million (31 March 2022: $11.7 million), as the amount relates to deferred revenue.

The change in accounts payable and accrued liabilities excludes an amount of $0.2 million (31 March 2022: $0.5 million), as the amount relates to acquisition of property and equipment, within investing activities.

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IDRC ANNUAL REPORT 2022–2023

How to reach us idrc.ca Follow us Subscribe to IDRC’s online Bulletin: https://idrc.ca/subscribe IDRC’s Digital Library: https://idl-bnc-idrc.dspacedirect.org Digital operations and support: informationservices@idrc.ca General information: info@idrc.ca Head Office International Development Research Centre PO Box 8500, Ottawa, ON, Canada K1G 3H9 (mailing address) 45 O’Connor Street, Ottawa, ON, Canada K1P 1A4 Phone: +1 613-236-6163 Fax: +1 613-238-7230 Email: info@idrc.ca Latin America and the Caribbean Regional Office Juncal 1385 Piso 14, 11.000 Montevideo, Uruguay Phone: +598 2915 0492 Fax: +598 2915 0881 Email: lacro@idrc.ca

Middle East and North Africa Regional Office PO Box 851527 Zahran Gate Complex – Suite 302 25 Ismael Haqqi Abdo Street Intersection of Queen Alia Airport Road and Queen Zain al-Sharaf Street Al Dyar District, 11185, Amman, Jordan Phone: 00962(0)6 582 8303 Email: mero@idrc.ca Asia Regional Office 208 Jor Bagh, New Delhi 110003, India Phone: +91 11 2461 9411 Fax: +91 11 2462 2707 Email: aro@idrc.ca

Eastern and Southern Africa Regional Office PO Box 62084 00200, Nairobi, Kenya Eaton Place, 3rd floor United Nations Crescent, Gigiri, Nairobi, Kenya Phone: +254 709--74000 Fax: +254 20 2711 063 Email: esaro@idrc.ca Central and West Africa Regional Office PO Box 25121 CP 10700 Dakar Fann Immeuble 2K Plaza Route des Almadies Dakar, Senegal Phone: +221 33 820 09 66 Email: waroinfo@idrc.ca

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