Canada announced Monday it will provide some US$70 million in financing to the UN agency for Palestinian refugees, which has been reeling from US funding cuts.
The aid amounting to CAN$90 million will be distributed over three years and comes after the agency's chief warned last month it was facing its "worst financial crisis" ever.
The agency known as UNRWA runs schools and provides health services as well as other humanitarian aid to an estimated 5.7 million Palestinians with refugee status.
"This support will help respond to the rising needs of vulnerable Palestinian refugees in UNRWA's five areas of operation (the West Bank, Gaza, Syria, Lebanon and Jordan)," Canada's foreign ministry said in a statement.
It added that the aid will allow more than half a million children to receive a quality education and will help finance more than 140 primary health clinics, as well as provide shelter and food to indigent refugees.
"The needs of Palestinian refugees are undeniable, especially during a global pandemic: They face high rates of poverty, food insecurity and unemployment," said Karina Gould, minister of international development.
Prime Minister Justin Trudeau's government restored aid to the agency in 2016 after it had been cut four years earlier by his conservative predecessor Stephen Harper.
From 2016-2019, Canada spent CAN$110 million to support the agency. It also provided CAN$1.5 million in April to help it respond to the pandemic.
Israel has long pushed for UNRWA's closure, arguing it helps perpetuate the conflict with the Palestinians.
It criticises its method of classifying Palestinian refugees since their descendants are also eligible for the status.
US President Donald Trump's administration supported Israel's stance by cutting aid in 2018.
Washington had been providing UNRWA $300 million a year, roughly a third of its core annual budget.