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A couple admire the 1970 painting " Homage to Grey Owl" by Canadian artist Jean-Paul Riopelle at the Montreal Museum of Fine Arts, March 13, 2002. The Department of Foreign Affairs is poised to sell off paintings in its collection by some of the most famous and sought after artists in Canadian history, including Riopelle, Borduas and Kurelek, to make some extra cash.SHAUN BEST/REUTERS

Foreign Affairs Minister John Baird has put a stop to his department's sale of paintings by some of the most famous and sought-after artists in Canadian history, including Riopelle, Borduas and Kurelek.

The sale, the first of its kind in the department's history, was part of wide-ranging budget cuts involving the closure of some offices and belt-tightening across the foreign service.

Some of the art has hung in Canadian embassies, consulates and official residences around the world since the 1930s, purchased when the artists were up-and-coming.

A Jean-Paul Lemieux called "Girl with Fur Hat" was bought from the artist directly for $600 in 1963. The department estimates its value at $300,000, but a Lemieux recently fetched $2.34-million at auction.

The idea was to sell the art to museums and public institutions, but at a 30 per cent discount.

The move had been in the works for two years, and is part of a strategy to cut costs in the department. The details were outlined in documents obtained by The Canadian Press under the Access to Information Act.

A memo from last summer showed the sale plan was well in motion.

"All but one of the 22 pieces of art have been gathered in storage in (Ottawa)," wrote the manager of the department's fine art collection in August 2011.

"The one outstanding painting to be returned is coming from Tunisia in September."

The department had been cagey about the sale, and last week would only tell The Canadian Press that "none of the 20 pieces have been sold or given away." Questions about the status of the sale, and where the art is now, went unanswered.

But on Monday, after The Canadian Press published details of the sale, Mr. Baird's spokesman said the entire sale is off.

"We have no plans to sell these paintings...," said Joseph Lavoie. "It was a proposal which the current minister has decided not to execute."

A government source said Mr. Baird is a fan of fine art, and was concerned that past taxpayer investments be respected.

Information has still not been provided on the current location of the artworks.

The value of the 22 identified pieces was set at $4-million. Another 140 pieces have been considered as a second phase of the sale. The proposal was supposed to return $3-million to the department annually between 2011-2014, and then $1-million each year after that.

"The DFAIT new business model includes a new approach to the management of the art collection," wrote one assistant deputy minister in September 2010.

"While endorsing the current policy objectives of showcasing emerging and contemporary Canadian art at our Embassies, High Commissions and Official Residences abroad, to ensure risks are managed and to make annual purchases self-sustaining, as well as part of a savings initiative, a selection of pieces from the collection will be offered for sale."

The department created a furor in Quebec last summer when it removed two paintings by modern master Alfred Pellan from the lobby of its Ottawa headquarters and replaced them with a photo portrait of the Queen. Those two paintings were also slated for sale, but were subsequently removed from the list.

The other pieces identified by the department include a Jean Paul Riopelle oil painting acquired in 1959 for $900, currently valued at $300,000. The records suggest it had hung in Washington, D.C. since the 1950s.

Mr. Riopelle's daughter Yseult, who maintains the Riopelle catalogue, told The Canadian Press she was unaware the painting even existed.

Also included in the proposed sale were two paintings by Mr. Riopelle's mentor Paul-Emile Borduas, an untitled piece and a 1953 work entitled "La Cathedral enguirlandee," the piece that had hung in the embassy in Tunisia.

Concordia University art historian Francois-Marc Gagnon said the Riopelle would possibly fetch $1-million or more if it was put up for auction. Collectors around the world salivate over Mr. Riopelle's striking works of abstract expressionism.

"They are very important, Borduas and Riopelle in particular, because they were at the beginning of the movement of non-figurative, abstract art across Canada," says Gagnon, who is the founding director of the Gail and Stephen Jarislowsky Institute for Studies in Canadian Art.

"In that sense, they're very important to the history of art in Canada for the development of modern art here. They were people who lived in Europe, and in the case of Borduas, even in the United States. They made Canadian art known around the world, both in Paris and in New York. For our history, they're people who had a very significant contribution, there's no doubt."

One of the most valuable pieces in the proposed sale is by landscape artist Clarence Alphonse Gagnon, valued at $500,000.

Painters from outside Quebec on the list included Jack Bush, Edwin Holgate, David Milne and William Kurelek.

The piece by Mr. Kurelek, depicting a barn on fire and called "Our World Today," is currently on loan for a travelling show of his work. Mr. Kurelek, a Ukrainian-Canadian from the Prairies, depicted the lives of many cultural groups across Canada. Many Canadians might be familiar with his illustrations in "A Prairie Boy's Summer" and "A Prairie Boy's Winter."

David Tuck of the Wynick/Tuck Gallery says embassies have often been the main place for Canadian artists to gain recognition, because Canada doesn't have the same number of wealthy museums and collectors that countries like the U.S. do.

"It's very disappointing to see their commitment diminishing, and I think it's frankly counterproductive over the long-term," said Mr. Tuck. "The balance of payments...on cultural exports is huge a source of revenue for developed cultural economies and it's an area where Canada has lots of work to do in still, and I think this is a backward step."

The records make clear that bureaucrats inside Foreign Affairs have been uncomfortable with the sale.

"You know my views about privatizing public goods which I continue to firmly believe and have expressed...," wrote one public servant.

"However, I will also support Deputy decisions as long as they are realistic and do not put the integrity of our programs at risk."

Others repeatedly underlined to higher-ups in the department that their vision of recouping millions by selling to museums was unrealistic. One bureaucrat warned about negative publicity.

"In view of the public reaction and attention that was created by the simple removal of two paintings from the lobby of the Lester B. Pearson building at the end of June, we should reconsider the risk involved with the proposed sale of DFAIT art assets...," the bureaucrat wrote.

"It might be controversial and potentially embarrassing to the government to announce that they are now available for sale."

Although Foreign Affairs provided no details on the proposed sale, internal communications plans make a few elements clear.

One is that the department did not want to have to resort to auctioning the pieces off. It also will not sell any artwork that was donated to the department.

And the department emphasizes, at least privately, that its policy is to support emerging and contemporary artists – it does not have the same sort of historical mandate as a museum.

The 494 "high-value" pieces held by the department were appraised at a market value of approximately $18.7-million, according to the records. The entire collection, including donation pieces and other lower-value items, is valued at $35-million.

The government was forced to buy back china and silverware from Rideau Hall for $100,000 after it had sold them for $4,000 on a government surplus auction website in 2009. The Sun newspaper chain reported that some of the items included three sterling silver flower baskets on loan from Buckingham Palace.

The artwork held by the Department of Foreign Affairs is also considered the property of the Queen.