A Conservative MP says federal funding for Toronto's Gay Pride parade may be responsible for junior cabinet minister Diane Ablonczy losing a key part of her portfolio.

Brad Trost, the MP for Saskatoon-Humboldt, said Ablonczy's decision to use $400,000 for the popular parade that celebrates homosexual, bisexual, and transgendered culture was not supported by most of the Tory caucus.

Trost told the anti-abortion website LifeSiteNews.com that the decision surprised the Conservative cabinet and the Prime Minister's Office.

He said that responsibility for the Marquee Tourism Events Program, a $100 million initiative, has been given to another cabinet minister. The two-year program helps fund major tourism events such as the Calgary Stampede, which received nearly $2 million or Ottawa's Bluesfest, which took about $1.5 million from the program.

Industry Minister Tony Clement has taken over the program, his office confirmed.

Liberal MP Carolyn Bennett demanded that Prime Minister Stephen Harper explain the reasoning behind the demotion.

"If this indeed has happened . . . the prime minister needs to tell Canadians, did he indeed punish a minister for doing her job?" she told CTV News Channel Tuesday.

Bennett added that if Trost's allegation is true, the decision is "atrocious" as the Pride parade clearly meets the criteria for the funding program.

Bennett slammed Trost for his "boasting . . . one of his colleagues has had a file removed from her because she had the audacity to support a celebration of human rights."

She said Ablonczy was one of the most talented ministers in the Tory caucus. Ablonczy, the MP for Calgary-Nose Hill, was first elected to the House of Commons in 1993.

But social conservatives have hailed the move.

"I think it clears the air a little bit . . . the federal government doesn't support the pride event," Jeff Gunnerson of the Campaign Life Coalition told CTV News.

City Councillor Kyle Rae told CTV News Channel he was "worried that the federal government is failing to be sensitive to the diversity here in Toronto."

"For someone to be shocked by Pride being funded by the federal government, they are in another time."

Not all Conservatives agree with the decision. One emailed CTV News and called the move narrow-minded, saying it might hurt the party's chances in the next election in places like Toronto.

The city's Gay Pride Parade is one of the biggest in the world and of its top tourism events. This year's parade attracted more than one million people. It has been an annual event since 1981.

The controversy represents yet another black eye in the relationship between Toronto and the federal Conservatives.

Transport Minister John Baird and the City of Toronto have been at each other's throats for months. Baird apologized to Mayor David Miller in June for telling the city to "f--- off," which was overheard by a reporter.

Baird then denied the city's application for stimulus cash to fund improvements to the TTC, saying the request did not meet federal requirements.

With a report by CTV's Graham Richardson in Ottawa