Prime Minister Paul Martin confirmed Friday that Canada would join a number of other G7 countries in eradicating the debt it is owed by Iraq.
Iraq owes Canada approximately $750-million (Canadian).
By forgiving the amount it is owed, the G7 is showing that it is able to overcome disagreements over the invasion of Iraq by the U.S.-led coalition last year to overthrow Saddam Hussein, Mr. Martin told a news conference in Davos, Switzerland, after a meeting with United Nations Secretary-General Kofi Annan.
"Debt reduction is critical if we want Iraqi people to have the opportunity to build a free, stable and prosperous country," the Prime Minister said in a statement on the debt reduction released Friday in Ottawa.
"Canada therefore supports a reduction of the vast majority of Iraq's debt. It is vital that this issue be dealt with quickly and effectively."
The United States has been pressing its allies in the industrialized world and throughout the Middle East to forgive the debt owed by Iraq to help it in its postwar reconstruction.
Mr. Martin said Canada will erase most of the debt through a program called the Paris Club, in which a group of creditor governments from industrialized countries work with debtor nations on restructuring the amount they owe. Friday's announcement is part of a commitment it made to the G7 last year.
The final amount of debt relief will have to be approved by all of Iraq's major creditors.
The G7 finance ministers are expected to discuss the reconstruction of Iraq in Florida on Feb. 6 and 7.
Canada is also continuing to provide humanitarian aid to Iraq, Mr. Martin said in a statement.
"Canada will provide up to $300-million in humanitarian and reconstruction efforts over the next five years. Our participation in Iraqi debt relief is one more sign of our continued efforts to ensure a brighter future for Iraqis."
