Budget cuts hurting embassies: DFAIT reports By Lee Berthiaume Published September 1, 2010

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Recent budget cuts at Canadian embassies and high commissions are having dramatic ramifications on the country's representation abroad, according to Foreign Affairs reports.

In particular, the documents reveal that last summer's decision to slash travel and hospitality budgets has made it difficult to make key contacts and build trade relations, and has kept missions from covering more than one country effectively.

The department instigated a major cost-cutting exercise last summer that saw, among other things, many travel and hospitality budgets cut in half. Each mission also has what's called a "Post Initiative Fund," a small discretionary fund used to raise Canada's profile and advance its interests. Many missions saw this fund reduced as well.

At the time, Foreign Affairs Minister Lawrence Cannon defended the move as "a re-allocation process to make sure resources are being used as effectively as possible." Foreign Affairs spokespeople also said there was "flexibility built into the initiative to ensure missions continue to advance the government's priorities effectively."

The inspection reports, however, paint a different story.

"Recent budget cuts have limited travel and affected the delivery of consular services to areas outside of Pretoria," reads a report published following an inspection in October of Canada's high commission in South Africa. "It has also restricted [honorary consulate] site visits to liaise with local authorities, train staff and verify inventory."

All Canadian embassies and high commissions are subject to inspections by the Foreign Affairs department's special Office of the Inspector General to ensure compliance with regulations, alignment with government policies, as well as efficiency and value. Information is gleaned from documentation as well as interviews with management, Canadian staff and locally-engaged employees.

These inspections are undertaken on an irregular basis. For example, there was seven years between the last two inspections at the high commission in Pretoria, South Africa, while nine years elapsed at the embassy in Beirut.

It appears that staff at some missions have harboured concerns about resource levels for some time.

"The Financial Management Officer from Berlin visits yearly," reads a report that was prepared following an inspection of the Canadian Embassy in Helsinki, Finland, in September. "He recently came to set up signature cards and meet with the new HOM to discuss the budget and recent cuts. During his visit, he mentioned that he believed the Mission had not been appropriately funded since 2006."

However, a limited review of slightly older inspection reports made it clear that the crux of the complaints and concerns at Canadian missions abroad dealt directly with last summer's cost-cutting exercise.

"There was a 50% cut to the Post Initiative Fund (PIF) and similar reductions to the travel and hospitality allocations," reads a report following an inspection of the embassy in Bucharest, Romania, in mid-September. "The staff mentioned that it will be increasingly difficult for the Program to effectively cover Bulgaria and Moldova with a reduced budget."

As a result of the cuts, it appears Canadian diplomats have been forced to rely on newspapers, websites and other public sources of information—which generally don't include a Canadian content or focus.

"There was...a tendency to rely mostly on open sources of information," reads the Bucharest inspection report. "The [Political Economic] Section should increase its reporting focussing on Canadian interests based on primary sources.... Reporting on events...was more limited given that the [program manager] has not been able to travel to these countries on a regular basis."

The ability to provide consular services has also been affected.

"The 50 percent budget cut experienced this year is a concern, given the unpredictability of client demand," reads the Bucharest report. "The Program highlighted the need to monitor its service delivery. [Redacted] and the Consular staff may have to rely on other forms of contact such as telephone or mail."

In the face of the changes, at least one report noted "frustration" on the part of Canadian diplomats.

"While members of the staff understood the need for fiscal restraint, they are concerned that such limited budgets will have an impact on the effectiveness of programs," reads the Helsinki inspection report. "There is also some frustration with the disproportionate time and effort required to manage such small budgets, as procedures have not been simplified following budget reductions."

However, last year's cost-cutting exercise wasn't the only development that appears to have affected the way Canadian diplomats are working abroad.

"The recent addition of responsibility for Madagascar and Malawi, coupled with the closure of the Cape Town office, has increased workload," reads the Pretoria inspection report's assessment of consular services in South Africa. "Most Canadian visitors to South Africa go to Cape Town and, as there is no longer a presence there, Canadian citizens must contact the Mission in Pretoria with inquiries."

In addition, the report reads, "the [mission's political staff have] recently been assigned responsibility for Madagascar and, with the closure of the Capetown office, now provides coverage for Parliamentary and other events, without additional resources."

It appears limited resources have also made it difficult for Canadian diplomats to leverage successes achieved by providing aid to countries.

"CIDA's large presence and its contribution to the country has created a favourable climate for Canada-Mali relations," reads a report prepared following an inspection of the Canadian embassy in Bamako, Mali, in November.

"The Mission has not, however, been able to fully leverage these advantages due to the lack of resources within the Political Economic Relations and Public Affairs (PERPA) and International Business Development (IBD) programs."

It was hoped that the creation of a new political position in December 2009 would help, while consideration was being given to the creation of a locally-engaged staff position in 2010.

Like the majority of departments, Foreign Affairs and International Trade is slated to have its budget frozen starting this year in an effort to tackle the deficit the government wracked up fighting the economic recession.