It's a small cut for Ottawa's bottom line. Now the question is what impact it will have on Canada's role in the world.
The $170-million to be sliced from the budget of the Department of Foreign Affairs could come from shuttering embassies, pulling out of international organizations or cutting diplomats' pay.
The department's budget of about $2.5-billion includes about $900-million in grants, which pay for things such as United Nations dues. Its operating budget, money used for running embassies and conducting diplomacy around the globe, is only about $1.4-billion, so if the cuts fall mostly there, it could slice about 10 per cent from the diplomats' budget.
The Department of Foreign Affairs has always been unloved in Ottawa, by the Conservative government and the bean-counters at the Finance Department, who often see the diplomats as privileged figures swanning about foreign capitals. There is, among the signals from Thursday's budget, an indication that ambassadors' residences will be sold, diplomats' pay and rent allowances will be cut.
But the department has been squeezed for several years, essentially lopping about $180-million, noted Canada's former ambassador to the UN, Paul Heinbecker. "When you reduce the funds, you get less," he said. "So we're going to have a foreign service that does less."
Among the biggest decisions are the closing of consulates and embassies – moves that can annoy foreign countries or reduce the presence of trade counsellors.
There, like many other Western countries, Ottawa is expected to cut in the developed world – likely among its 20 missions in the United States and possibly in smaller European centres, too. The closures are expected to be coupled with the opening of a smaller number of new missions, however, focused on trade in emerging markets.
The government has also signalled it might pull out of some international organizations – the dues and grants it pays directly to organizations make up about a third of the Foreign Affairs budget. In many cases, they can't be trimmed – dues for things like the UN and OECD are assessed, like a tax, so if you are a member, you pay. Ottawa won't pull out of such high-profile organizations, but it could withdraw from smaller ones; the problem is the savings won't be as big.
For diplomats, there is a signal that things will get tougher, at least in some cases. Ottawa plans to extend the standard posting abroad from three years to four. Some diplomats, posted in beautiful capitals, won't mind. The worry, said Tim Edwards, president of the Professional Association of Foreign Service Officers, is that Ottawa will also extend hardship postings, in desolate or war-torn capitals – where postings are usually shorter, perhaps one or two years.
And diplomats' pay, and money for the places they live, are also being cut – just how far is still unknown. Mr. Edwards said the current directives for the foreign service premium – the extra pay and rent allowances diplomats get while abroad – are too complicated, and could use some reform. But the level of the cuts is worrisome: "We're pretty sure the government hasn't put this in the budget to give us more," he said.
If the reductions are significant, it will have an impact on foreign service officers, especially those who live in expensive or dangerous cities. The foreign service premium is a feature of their pay that makes up for differences in standards of living and the impact on two-income couples who move back and forth from Canada to foreign postings, where one spouse often cannot work.
Those complaints aren't likely to win a lot of sympathy with the public, but could have an impact on the foreign service over time, as the career becomes less attractive. But many other cuts offer far more stark, immediate choices: What will Canada stop doing abroad, and where?