OTTAWA - The federal government will not cut diplomatic relations with the Palestinians in response to their newly won recognition from the United Nations, but future aid funding could be on the chopping block.
Canada's $300 million in aid spending to the Palestinians is under review, as Foreign Affairs Minister John Baird readies himself for meetings in Ottawa next week with his senior diplomats from Israel, the West Bank and the UN missions in New York and Geneva.
Baird temporarily recalled the envoys Friday to get their views on the implications of the UN General Assembly vote which granted status to the Palestinians as a non-member observer state.
The Harper government has made it clear, both privately and publicly, that the Palestinians would face repercussions for their pursuit of statehood.
The two most obvious options are severing diplomatic ties and suspending aid contributions to the Palestinian Authority.
"Canada is deeply disappointed but not surprised by yesterday’s result at the United Nations General Assembly," Baird said in a statement. "Canada will now review the full range of its bilateral relationship with the Palestinian Authority."
The Harper government has a track record using both diplomatic tools. It recently shuttered the embassies of Syria and Iran, sending their diplomats packing and severing ties. One of its first foreign policy acts after winning power six years ago was to freeze its $300-million contribution to the Palestinians after the surprising election win by the political wing of terrorist organization Hamas in Gaza.
Despite Friday's diplomatic recall, sources say Baird isn't planning to tell the Palestinian delegation in Ottawa to abandon its mission.
"I can tell you we have no intention at this point of cutting off relations or sending Palestinian diplomats home," said a senior government official, who would only speak on condition of anonymity.
Baird himself echoed that view in a televised interview with the CBC.
But Canada's five-year, $300-million commitment formally expires early next year, and is therefore under review.
The Palestinian aid money goes towards strengthening its justice system, private sector economic development, and health and education assistance.
Said Hamad, the chief Palestinian representative to Canada, issued a statement late Friday that offered an olive branch to Canada, Israel and the other countries that voted against it.
"The Palestinian Liberation Organization fully respects the votes cast by all member states in the General Assembly, irrespective of whether they were in favour of, abstained from, or were cast against the resolution," the statement said.
"We will continue to engage all states in order to advance the objective of an independent Palestinian state, living in peace and security side by side with Israel."
Hamad also said the UN recognition "does not delegitimize any other state."
While the government ponders its next moves towards the Palestinians, the aftermath of Thursday's historic vote left Canada virtually isolated on the world stage.
Canada was joined by Israel and its key ally, the United States, and was among only nine of the UN's 193 member countries to vote against the Palestinians. Forty-one countries abstained.
The rest of Canada's voting bloc was rounded out by the Czech Republic, Marshall Islands, Micronesia, Nauru, Palau and Panama.
But the widening gap between Canada and the Muslim world was graphically illustrated when Baird scored a prime speaking slot at Thursday's general assembly vote, delivering a forceful speech — and a No vote — on Canada's behalf.
Baird was sandwiched between the only two other foreign ministers to get speaking time prior to the vote — his counterparts from Turkey and Indonesia, two key Muslim allies, whose ministers recently visited Ottawa.
Baird hosted Indonesia's Marty Natalegawa in August and Turkey's Ahmet Davutoglu in September. Both countries have been identified as key allies in the Baird's internal foreign policy review.
Unlike Baird, Natalegawa and Davutoglu offered passionate defences of Palestine's right to statehood and spoke of its long suffering people.
"The time has come for the international community to set things right. No longer can the world turn a blind eye to the long sufferings of the Palestinian people, the denial of the basic human rights and their fundamental freedoms, the obstruction of their rights to self determination and to independence," said Natalegawa, who noted that Indonesia — the world's most populous Muslim country — was co-sponsoring the Palestinian resolution.
Natalegawa also referred to the "enormous barriers erected by the occupying power" in the Palestinian territories.
In sharp disagreement with Baird, Davutoglu said the recognition would spark the peace process, not hinder it. He said Gaza was a place where "thousands of people live through an inhumane blockade in an open prison."
Baird is among those who are concerned that the Palestinians will use their new status to file war crimes charges against Israel in the International Criminal Court.
U.S. lawmakers have warned they will table legislation that would deny Palestinians future funding if they go that route.
Baird has expressed legitimate concerns about the impact of the Palestinians' elevated status, said foreign policy expert Fen Hampson, head of the global security program at the Centre for International Governance Innovation in Waterloo, Ont.
But he warned against overreacting.
"We should be careful about wielding a heavy stick to penalize the Palestinians on humanitarian aid and development assistance for their actions," he added.
"We should not go out of our way to alienate our friends in the Muslim world who are more sympathetic to the plight of Palestinians by being too strident on this issue. At the end of the day our influence on the Middle East peace process, which itself is moribund but one day may be revived, depends on our ability and willingness to talk to both sides."