Canadian diplomats in New York City have expensed tens of thousands of dollars worth of tips to doormen and parking garage attendants in the past three years.
A spokesman for Foreign Affairs Minister John Baird says the federal government is moving to stop the practice of billing the taxpayer for the gifts.
Rick Roth says Baird views the practice as a "completely unacceptable use of taxpayers' dollars."
The Canadian Press has learned a policy was approved in 2011 for the Canadian consulate and Canada's mission to the United Nations.
A policy document obtained by The Canadian Press says it's normal practice to give Christmas gifts at the end of the year to staff working in residential buildings, such as superintendents and doormen.
Foreign affairs sources say for the 2011-2012 and 2012-2013 budget years a total of $47,601 in gratuities have been paid.
Baird's decision to ban the gratuities does not include restaurant tips.