The federal government has sold an Oslo mansion for well below its original asking price of $20-million, fuelling new concern that the Conservatives are unloading diplomatic assets at fire-sale prices.

The sell-off of official residences is picking up steam – at least seven houses have been sold since June.

Canada's official residence in the Norwegian capital sold for $12.5-million on Sept. 29 after two years on the market. Ottawa's $20-million asking price was front-page news locally when the property first went on sale.

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A Foreign Affairs spokesperson said a municipal zoning decision limited the development options on the land, which is why it sold for considerably less than the original asking price.

Canada is not alone in looking to cash in on the growing demand for key urban properties in major world cities. The World Property Journal reported this year that this is an international trend as governments view older, centrally located buildings as too costly to maintain. The heightened need for security also makes urban street-front properties less appealing.

Scroll through images of Canada's diplomatic residences up for sale



The federal government argues some of these buildings are needlessly opulent and expensive. The sales are defended as being in the best interests of taxpayers in an era of spending restraint.

But the unique nature and history of some of the properties exposes the government to criticism as to whether it is getting proper value. There are also questions as to whether the sell-off of key gathering spots could ultimately harm Canada's reputation abroad.

"It seems to be a bit of a fire sale on diplomatic assets," said NDP foreign affairs critic Paul Dewar, who questions whether there is proper oversight to ensure value for money.

The seven recently sold residences include homes in Mexico City ($3.33-million), Detroit ($840,000), Seattle ($2.07-million), two residences in Washington ($2.6-million and $1.7-million) and one in Brussels that was for the head of Canada's NATO mission ($2.1-million). The government also has a conditional offer on Canada's official residence in Bern, Switzerland.

In addition to the combined $22.7-million raised by the sale of the seven houses, nine other properties are on the market for a combined asking price of $30.8-million.

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Details have not yet been released on the most controversial potential sale – Villa Grandi, Canada's official residence in Rome.

The federal government was accepting bids until Dec. 1, but never posted an asking price for the Italian residence.

Foreign Affairs spokesperson John Babcock said the government is reviewing the results of the process.

Some former diplomats and veterans have opposed the sale, given that the house was purchased with war reparations from Italy and holds a symbolic connection to the role Canadian troops played in Italy during the Second World War.

Two former Canadian ambassadors to Italy, Robert Fowler and Jeremy Kinsman, have strongly opposed the sale. Mr. Fowler, who lived in the residence from 2000 to 2006, told MPs that the embassy "was paid for with the blood of 6,000 Canadian soldiers."

In an interview Thursday, Mr. Kinsman – who lived in the residence from 1996 to 2000, said he generally supports selling off residences and having ambassadors live in less-expensive condos, but Villa Grandi is an exception.

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"It reflected a status for Canada that we enjoy because of that campaign," he said. "Italian-Canadians were also very proud of that status and the prominence that it gave Canada."

Mr. Kinsman said the government is presenting a misleading picture of the maintenance costs of the building to justify the sale.

"This is something that we didn't pay for and for Canada to make this windfall of 30-million bucks or something out of something that was a gift from the Italian government for our soldiers … it just strikes me as really cheap and dishonest and with no sense of history or meaning," he said.

Diplomatic assets can generate a hefty price, and the John A. Macdonald embassy building in London sold last year for $530-million.

Former ambassador Peter Sutherland, who led Canadian missions in Saudi Arabia, the Philippines and India, said decisions should be made on a case-by-case basis and take into account whether there will still be accessible places for the ambassador to host receptions.

"Residences can be very useful for holding official events," he said. "They can be cost-efficient. If you go to a hotel for example, you've got more of an institutional surrounding, but you've also got a very high cost. At the residence, you can control all the factors involved and can create a very comfortable ambience where you can have interesting discussions."

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In addition to Rome, nine other diplomatic properties are currently for sale. They are in Atlanta, Bridgetown, Brussels, Copenhagen, Dallas, Denver, Helsinki, Port of Spain and Stockholm.

An additional residence in Miami is not yet on the market, but the government is looking for a real estate agent.