The Canadian International Development Agency will instead be merged into the Department of Foreign Affairs and International Trade, Thursday's federal budget announced.
The move finishes something the Conservatives began in 2006, when they remarried the trade and foreign affairs portfolios to emphasize that trade policy was a key part of their foreign affairs agenda.
Now that those departments have adopted CIDA, the family is complete.
"This enhanced alignment of our foreign, development, trade and commercial policies and programs will allow the government to have greater policy coherence on priority issues and will result in greater overall impact of our efforts," the budget document said in explaining the decision.
Rumours of CIDA's demise as a stand-alone department have been circulating in the not-for-profit sector since the agency's aid budget was drastically slashed in the last budget.
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Thursday's budget move attracted immediate criticism from aid organizations.
"Canada's foreign policy and trade interests should not compromise the purpose of aid — which is poverty alleviation and human rights," Anthony Scoggins, Oxfam's director of international programs, said in a statement.
"Foreign Affairs is not in the business of reducing poverty. We risk losing the expertise, focus, effectiveness — and results — that CIDA staff brought to this goal."
The agency was created in 1968 with a mission to lead "Canada's international effort to help people living in poverty."
Its highest-profile projects in recent years were the rebuilding efforts associated with the war in Afghanistan and the aftermath of the January 2010 earthquake in Haiti.
Both those projects paved the way, to some extent, for the merger announced Thursday as they were undertaken as part of broader foreign policy goals in each country.
Canada was urged to keep following that model in a review of its aid policies by the Organization for Economic Co-operation and Development last year.
"Using these cases as an example, Canada should devise a whole-of-government approach to all of its development programmes," the report said.
CIDA directly funds projects in more than 30 other countries, as well as spending millions through international partners such as the World Health Organization and World Food Program.
"Canada's international development investments play a vital role in improving the lives of those most in need around the world," CIDA Minister Julian Fantino said in a statement.
"It is a tangible expression of the best of Canadian values and a demonstration of our unwavering support for freedom, democracy, human rights and the rule of law."
The new department will be called the Department of Foreign Affairs, Trade and Development.
The aid portfolio will have its own cabinet minister and the budget said the government will codify his or her responsibilities for development and humanitarian aid, similar to the rules they laid out for the minister of international trade when that post was created in 2006.
The budget does not specify a cost for the amalgamation, nor if it will save the government money in administrative or program costs.
The move requires new legislation and no timeline is laid out for that.
How much cash will still go to international aid in the longterm is also not discussed.
Last year's federal budget ordered a $377-million cut in foreign aid by 2014-2015.
To achieve that, CIDA this year was set to eliminate programs in Cambodia, China, Malawi, Nepal, Niger, Rwanda, Zambia and Zimbabwe, for a total of $39 million in savings.
Budgets for aid to Bolivia, Pakistan, Mozambique, Ethiopia, Tanzania and South Africa were being reduced to save $76 million.
Fantino has signalled in recent months that the agency's focus would change to encourage economic growth through support of local industries such as mining, agriculture and banking.
Those are three sectors in which Canadian businesses are actively involved abroad and Fantino has discussed publicly the role he sees for them in improving living conditions in the countries in which they work.
The budget adopts that philosophy.
"The mechanisms through which we are advancing our development objectives are increasingly more multi-faceted and more often now include our bilateral and multilateral relationships, trade and commercial interests and engagement with Canadian stakeholders, including civil society and the private sector," the document said.
"As the linkages between our foreign policy, development and trade objectives continue to grow, the opportunity to leverage each of these grows at equal pace."
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