Baird made his first public statement in the House of Commons on Wednesday on the controversial move by the Israelis, which was meant as retaliation after the Palestinians won greater recognition at the United Nations last week.
The Israeli settlement announcement sparked international condemnation from all of Canada's allies, including the United States, which voted against the Palestinian motion at the UN.
The Harper government has been criticized for staying virtually silent on the Israeli move, beyond a generic statement that unilateral moves by either side were not good for the prospects of peace.
Baird reiterated the government's heavy criticism of the Palestinian statehood bid during question period when he was asked about the settlements by the Bloc Quebecois.
But he emphasized that neither the UN vote nor the settlement announcement is helpful.
"We have been a strong supporter of economic development and security relations in the West Bank through our humanitarian and foreign aid developments, with respect to the Palestinian Authority," said Baird.
"However, the PA's action and provocative rhetoric at the United Nations would obviously elicit a response from Israel. Neither is helpful to advance the cause of peace and we do not support either."
Baird was responding to a question by Bloc Quebecois MP Jean-Francois Fortin, who called for "a more balanced position" and from Canada.
"Even Israel's allies are denouncing this renewed colonization," said Fortin.
The exchange marked the first time the government was questioned in the Commons on Israel's new settlement announcement, which came a day after the UN recognized the state of Palestine as a non-member observer.
Meanwhile, Israeli and Palestinian relations continued to deteriorate Wednesday over the settlement dispute.
Israel continued to move forward with plans that would see the construction of 3,000 new settler homes in the West Bank and east Jerusalem.
The Palestinians were using their newfound status to push the UN Security Council to adopt a resolution to stop Israel from "methodically and aggressively pushing ahead with this unlawful land grab and colonization of Palestine."
The U.S. State Department condemned the "unhelpful rhetoric" of the Palestinians.
The U.S. would likely veto a Security Council resolution condemning Israel, and it has said it won't tolerate the Palestinians taking Israel the International Criminal Court, something that is now an option with its increased UN recognition.
The U.S. also has expressed its opposition to the new Israeli settlement plan in a harsher-than-usual tone.
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