UNESCO is funded by both legally-binding and voluntary contributions from its member states. Canada's decision will affect future voluntary contributions, which are now about $10 million a year.
But all UNESCO members must make annual contributions. A spending plan for the Foreign Affairs Department tabled in Parliament shows Canada plans to give UNESCO about $12 million a year until 2014 as part of its legally-binding obligation to the agency. Those payments will continue following the UN agency's move.
"We're just deeply concerned with the decision that UNESCO has taken," Foreign Affairs Minister John Baird said Tuesday.
"This issue should be negotiated between the two parties. It is not in the best interests of peace in the Middle East and we're, you know, tremendously disappointed. We wanted to signal that disappointment."
The United Nations Educational, Scientific and Cultural Organization — or UNESCO — admitted Palestine as a full member state Monday by a vote of 107 to 14, with 52 abstentions.
Canada and the United States, both staunch allies of Israel, were among the 14 countries opposed to granting the Palestinian Authority membership in UNESCO.
The vote represented an interim success for the Palestinian leadership after its bid for UN recognition as a state and full membership in the global body was delayed by the Security Council in September.
Israel has fiercely opposed the bid, and it has no chance of passing because the Obama administration has promised to veto any resolution in the Security Council.
Israel claims the UNESCO vote will only hamper its stalled peace talks with the Palestinian Authority.
"The Palestinian move at UNESCO, as with similar such steps with other UN bodies, is tantamount to a rejection of the international community's efforts to advance the peace process," the Israeli foreign ministry said in a statement.
Baird also said UNESCO will still get all voluntary money that has already been committed.
"The bottom line is there's going to be a large hole in UNESCO's budget because of the American law which withdraws funding, and people at UNESCO should not look to Canada to fill that budget hole," he said.
"They'll have to go to the countries who supported this resolution, that caused this budget loophole. And if they want to appeal to Canada to make even more contributions to voluntary UNESCO initiatives, we will not be looking at entertaining new ones."
The United States has also announced it will pull its US$60 million in funding from UNESCO, which depends heavily on American funding — Washington provides 22 per cent of its budget — but has survived without it in the past.