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budget 2012

In the effort to trim expenses at home, Ottawa is making deep cuts to the sums it spends to project Canada onto the world stage, slashing budgets for aid and diplomacy.

Prime Minister Stephen Harper, who two years ago championed a G8 initiative on maternal and child health in poor countries at a cost of $1.1-billion over five years, is now taking far larger sums out of Canada's already frozen foreign aid budget.

And diplomats, long out of budget favour in Mr. Harper's tenure, will not only see budgets trimmed, but are getting a signal the government wants to clip their privileges: some ambassadorial residences will be sold, and pay for diplomats who operate Canada's embassies and consulates abroad will be reduced.

The cuts to spending on the government's international vocation – in a budget that also emphasized efforts to increase trade – come on top of squeezes in Mr. Harper's first round of deficit-cutting measures two years ago.

Aid spending, once projected to grow by 8 per cent each year, was frozen at $5-billion in 2010. Thursday's budget will cut it by $377-million, or 7.5 per cent, by 2014-15. There was no indication of what would be cut, although the government pledged some of the reductions would come from trimming operations at the headquarters of the Canadian International Development Agency. Aid organization Oxfam Canada called the move a sign the Harper government is "turning its back on the world's poor."

The $170-million to be cut from the Department of Foreign Affairs and International Trade's $2.5-billion budget by 2014-15 will make only a small impact on the government's bottom line, but it is likely to bring deep cuts to operations.

About $900-million of that budget pays dues for important international groups such as the United Nations and the Organization for Economic Co-operation and Development, and although the government said in Thursday's budget it might pull out of some organizations, most of the reductions are likely to come from regular operating costs.

The government said it will sell some ambassadors' residences and get cheaper ones to make a one-time profit of $80-million. But it also said it would adjust the pay for diplomats – who typically earn more when posted abroad than in Ottawa – to bring their compensation in line with private-sector benefits.