Canada to unfreeze funds for UN Palestinian refugee agency, CBC reports

OTTAWA (Reuters) - Canada is planning to resume funding to the U.N. Palestinian refugee agency UNRWA weeks after pausing donations over Israeli allegations that 12 of the agency's staff were involved in the Oct. 7 Hamas attacks, CBC News reported late on Tuesday.

The federal government plans to go ahead with a scheduled C$25 million ($18.5 million) payment in April and announce new funding, CBC reported, citing an unnamed government official.

Spokespeople in the foreign ministry and in the ministry of international development, which oversees Canadian aid, declined to comment on the CBC report.

If confirmed, Canada could be among the first countries to unfreeze funding for the agency that employs 13,000 people in Gaza to run schools, healthcare clinics and other social services, and to distribute humanitarian aid.

None of the 16 countries that paused a total of $450 million in funding to UNRWA had reversed their decision yet, UNRWA director of communications Juliette Touma told Reuters earlier on Wednesday. Many of those countries were are likely having second thoughts and payments could resume soon, Norwegian Foreign Minister Espen Barth Eide said on Wednesday.

On Monday, UNRWA head Philippe Lazzarini said the agency was "functioning hand-to-mouth" due to the funding pause that was triggered by Israel's accusation in January that 12 UNRWA staff participated in the Hamas attack.

The UNRWA staff were fired and an independent internal U.N. investigation was launched after the allegations.

Israeli authorities have long called for the agency to be dismantled, arguing that its mission is obsolete and it fosters anti-Israeli sentiment among its staff, in its schools and in its wider social mission. UNRWA strongly disputes this characterisation.

($1 = 1.3508 Canadian dollars)

(Reporting by Ismail Shakil and Steve Scherer in Ottawa; Editing by Josie Kao)