Canada is radically changing how it doles out foreign aid, funding partnerships with chosen mining giants and development groups while ignoring those most in need, critics say.

Ottawa hands out Can$5 billion (US$5.02 billion) in aid annually, benefiting mostly Haiti, Afghanistan, Ethiopia and Pakistan.

But in late March, Prime Minister Stephen Harper's Conservative government slashed its development assistance to poorer countries by 7.5 percent or Can$377 million, as part of a bid to balance its budget within three years.

Several aid groups said the cuts to their programs were "excessive," and the latest blow in an "extreme makeover" of Canada's foreign aid program lauded by International Cooperation Minister Bev Oda.

Oda says the move aims to make its help "more effective."

In one of the major changes, the Canadian International Development Agency (CIDA) awarded Can$6.7 million to three groups that have partnered with mining firms IAMGOLD, Barrick and Rio Tinto Alcan to provide job training to youths in South America and Africa, where they have mines.

"The most effective way to reduce poverty is to stimulate a country's economy, creating more opportunities and jobs for people in need," said Oda's spokesman Justin Broekema.

"By helping people acquire the needed skills more people will be able to enter the workforce and increase their household income."

The aid community is split on the merits of partnering with for-profit firms. Some view the government funding as a subsidy to provide companies with cheap labor, while others say it creates wealth in poor communities with rampant unemployment.

Julia Sanchez, head of the Canadian Council for International Cooperation coalition of non-governmental organizations, conceded that aid groups have partnered with resource companies in the past. But "what's new is (direct) support from CIDA," she said.

The government has also demanded more accountability on how taxpayer funds are spent, an approach decried by critics as a heavy-handed and overly structured.

Broekema said "no NGO is entitled to support from Canadian taxpayers."

Aid groups previously requested funding for their own projects. Now, they must bid on projects that correspond to the government's priorities in 20 countries, ramping up competition between the groups.

Under the new arrangement, many aid groups saw their funding slashed. Development and Peace had its Can$45 million in funding over five years cut down to a third.

Development and Peace's chief of international operations Giglio Brunelli said the new arrangement means Ottawa is also choosing which countries receive aid.

"In recent years, Canada's foreign aid has become a way of asserting its presence in other countries instead of help for those most in need," he said.

Advocacy groups that promote stances at odds with the Conservative government on such hot-button issues as the Israel-Palestinian conflict or global warming have been slashed.

Rights and Democracy, created by parliament in 1988 to promote human rights around the world, was shut down because it was pro-Palestinian, some alleged.

Meanwhile, a dozen new aid groups that emerged suddenly were funded by the government.

"There is clearly a break with secular NGOs and investment in denominational organizations," said Francois Audet of the Canadian Research Institute on Humanitarian Crisis and Aid.

Sanchez, of the NGO coalition, pointed to "greater government ties" with socially conservative groups.

"Is it a coincidence that these groups are getting the bulk of aid funding?" she asked. "We're trying to understand."