MONTREAL - Its statues of revolutionary heroes, green lawns and wedding-cake-style presidential palace were once a source of Haitian pride.

But since a massive earthquake struck two years ago, the country's landmark national square has become a filthy, dangerous refugee camp surrounding a flattened palace.

The Canadian government announced a project Wednesday to restore Port-au-Prince's historic Champs de Mars square, which is now filled with a sea of tents.

Canada's initiative will also provide housing for 5,000 families forced into the area after Jan. 12, 2010, when the 7.0-magnitude temblor killed more than 200,000 people, injured 300,000 and left 1.5 million homeless.

International Co-operation Minister Bev Oda made the announcement in the Haitian capital alongside President Michel Martelly, one day before the quake's two-year anniversary.

Oda told The Canadian Press in an interview that Ottawa is disappointed over the plodding post-quake reconstruction. But she said there has also been progress.

Martelly painted Canada's $19.9-million Champs de Mars project as a symbol that life in Haiti is slowly getting back to normal.

"Sending such a signal allows us to let the world know, (to let) our people in Haiti know, that we are moving forward," Martelly told reporters Wednesday during a joint news conference with Oda from Port-au-Prince.

"This Champs de Mars situation that we addressed today is the most important, as (the park) surrounds the palace, as it is located where (there are) statues of our heroes."

Before the quake, Champs de Mars was a wide-open green space in the heart of the capital.

Today, it is a rat-infested makeshift city home to some 20,000 people, many of whom live under the constant fear of being targeted by thieves, bandits and rapists.

Their rickety shelters and tents sit in the shadow of statues of historical figures, including revolutionary hero Toussaint Louverture and Alexandre Petion, a former president and founder of Haiti.

The presidential palace, flattened by the quake, lies in ruins nearby. France has said it would help rebuild it.

Before she left for Haiti earlier this week, Oda said in an interview that she had hoped conditions would have improved enough to enable more homeless Haitians to vacate tents by now.

The country's numerous displacement camps, which popped up in areas hit hardest by the quake, are an example of the slower-than-expected progress, she said.

Today, some 500,000 people still live in Haiti's encampments -- a figure that does represent some improvement. One million were living in tents last year, on the first anniversary of the earthquake.

"Generally, I think we're all disappointed at the rate of progress, that we had expectations (that) have not been met," Oda said.

"(We're) disappointed that so many situations have caused delay. Would I have liked to have seen more progress two years later? Absolutely, yes."

Oda blamed much of Haiti's hobbled reconstruction on hurdles that surfaced after the quake, including a paralyzing, months-long political crisis and an ongoing cholera epidemic that had struck 520,000 people and killed 7,000 by mid-December.

Still, with the help of billions of dollars in international aid, the country has taken modest strides forward over the last 24 months.

Oda listed some of the Canadian contributions: temporary shelters for thousands of Haitians right after the quake, hundreds of thousands of daily meals for schoolchildren and debris removal.

About half the rubble from the disaster -- a mind-boggling five million cubic metres, or enough to fill five football stadiums -- has been removed, according to the United Nations Development Programme.

UNDP associate administrator Rebeca Grynspan said the massive cleanup was a big part of some 300,000 temporary jobs created in Haiti, where the unemployment rate hovers around 60 per cent.

She called it the "largest job-creation program in the world." The organization is now focusing on creating longer-term employment.

Canada has committed more than $1 billion to Haiti through its regular foreign development initiatives, one-third of which had already been promised before the earthquake. The final total includes Ottawa's $220-million pledge to match the private donations from ordinary Canadians after the disaster.

Money for the Champs de Mars restoration plan, which is expected to resettle 1,800 families this year and another 3,200 through 2013, comes from the previously announced funds.

Only Afghanistan ($214 million) received more Canadian International Development Agency funding than Haiti ($209 million) for long-term development and reconstruction during the 2010-2011 fiscal period.

"I think that we have to recognize that there has been progress and some key progress has been made," Oda said.

But a Canadian official, who spoke on condition of anonymity, said Ottawa should use more of its clout to combat endemic corruption within Haiti's political system.

"I think that Canada could, in concert with the U.S. and other donors, take a harder stance and tougher wake-up call positions to the government of Haiti," the influential official said.

"I think that we pander to them a little bit more than we have to."

Instead of fostering sustainability and economic development, the source said the international community continues to foster dependency in Haiti.

The official credited Canada for undertaking projects in good faith, such as building a new hospital, improving road infrastructure and training police.

"The problem is just the Haitian context makes it extremely challenging to see progress in a really tangible way or very quickly," said the official, who believes Canadian donations are still making a difference.

"For that, I think people just need to be patient."

But one area where CIDA should reassess efforts is within its "capacity-building" programs, designed to strengthen Haiti's government departments, he said.

The weak Haitian state remains just too corrupt, the key official added.

"There are some good people right at the top, but once you skim the surface of the Haitian public service there is no one below it, there's no direction, there's no capacity to build," said the source, who suggested that more funding be redirected to address basic human needs.

The official asked how, with hundreds of millions of dollars pouring in from around the world, most Haitians still don't have easy access to clean drinking water or dehydration salts, for those suffering from cholera.

Martelly, who came to power in May following months of political chaos created by election fraud, did not have a fully functioning government until a few months ago.

Prime Minister Garry Conille took office last fall following five months of political deadlock in the Senate, after lawmakers rejected Martelly's two previous nominees for the post.

The wait hindered Martelly's ability to govern -- a delay that also slowed post-quake reconstruction.

The popular musician, known as "Sweet Micky," promised Wednesday that he will clean up his country.

"We understand that one of the reasons why Haiti has been going backwards is because corruption was legalized in the past," Martelly replied when asked how he could reassure international donors -- and Canadians -- that their aid money will address the needs it was intended for.

"We are changing the way things are done, but again, because corruption was everywhere, because the problems are not just corruption (and) we have so much to do ... it will take time."

Martelly said he will implement new measures to protect the identity of anti-corruption whistleblowers and to ensure that police investigate allegations of wrongdoing.

For her part, Oda said shoring up Haiti's government ministries, by introducing tools like stricter budget procedures, will help address corruption concerns.

CIDA, she said, already has one of the most rigorous processes of any similar development agency to ensure money is actually being spent where it's supposed to be.

It has also managed to get more money out the door, more quickly, than some of its peers, Oda said. To date, the UNDP says $3.5 billion of $5 billion in international pledges has been disbursed.

Oda said Canada has already transferred around 90 per cent of its pledged funds, giving it one of the best disbursement rates of any donor. By comparison, the U.S. had only disbursed around 58 per cent of its pledge by December, according to the UN.

She pointed to the Champs de Mars resettlement project, which will also create job and education opportunities for people living in the camps, as an example that Haiti's longer-term reconstruction phase is underway.

"We're not moving people out of a space into another space, we're moving people into homes," Oda said.