OTTAWA–A gay and lesbian arts festival that was told it met all government criteria under a new tourism stimulus program learned today it was rejected for funding.

The news arrived at Montreal's Divers-Cite a few weeks after tension swept the Conservative caucus over funding for Toronto's Pride week, and just days before the beginning of their event.

The directors of Divers-Cite had actually sprung to the defence of Stephen Harper's government earlier this month, telling The Canadian Press that the Conservatives had never treated them differently. Some in the gay community attacked them for their comments.

They had submitted a bid under the new Marquee Tourism Events Program for $155,000 to add performers and promotion to this year's $2-million event.

Government relations and marketing director Paul Girard said bureaucrats handling his file at Industry Canada told him his application met all the criteria, and had been sent up to Minister Tony Clement's office for final approval.