The goal of this paper is to provide an overview of Canadian bilateral foreign aid (1971-2016) to Bangladesh and evidence that Canadian aid has failed to support the sustainable rural development in Bangladesh followed by a plausible explanation of its failure. Despite ongoing Canadian bilateral assistance in Bangladesh, little is known about the accomplishment and failures of Canadian aid in support of rural development. The overview of Canadian bilateral foreign aid describes aid support (food, commodity and project) at national level. This research also compares Canadian bilateral foreign aid with other major donors. This research paper provides three arguments which demonstrate that Canadian aid has failed to support sustainable rural development in Bangladesh. First, Canada's programming framework for Bangladesh is dependent on policy papers at national level such as Poverty Reduction Strategy Papers (PRSP), Annual Development Plan (ADP) and National Rural Development Policy (NRDP) but these policy papers expresses very little concern about rural development. Second, project aid analysis (2001-2016) shows that Canadian bilateral aid has not been targeted at rural development of Bangladesh. Third, Canadian aid has supported the Bangladesh Rural Advancement Committee (BRAC) to support the basic education sector but this study suggest that BRAC has not successfully addressed rural primary education in Bangladesh. The paper concludes by suggesting that increased Canadian policy coherence can help to mitigate the failures of Canadian bilateral assistance and support sustainable rural development in Bangladesh.