Divers/Cité, Montreal's gay pride arts festival, will not receive $155,000 in federal funding that organizers had been expecting. (CBC)

The fate of this year’s Divers/Cité festival in Montreal was up in the air on Wednesday after the federal government said it would not approve funding for the event.

Divers/Cité, Montreal’s gay pride arts festival, was counting on $155,000 in new funding from Ottawa.

In an email from Industry Canada, spokeswoman Christiane Fox said there are just too many worthwhile events to allow government funding for all of them.

The directors of Divers/Cité in Montreal said bureaucrats told them their funding request met all the criteria, and that final approval was with Industry Minister Tony Clement’s office. But on Monday, organizers were told the Conservative government had rejected their request.

Suzanne Girard, director of Divers/Cité, said Wednesday the event's organizers are reeling from the news.

"To be told that there is no money, when there is. They have $100 million put aside; they chose not to give to Divers/Cité. The reasons … we don’t know. Is it we're gay? Is it we're Montrealers? We’re Québécois? It's incredible they would decide at this late date, five days before our event starts,” said Girard.

Girard said the Divers/Cité festival, in its 17th year, provides vital economic stimulus.

"Per capita, we bring in more tourism than any other festival in Canada. And you can ask any Montreal taxi driver, the hotels … about our impact on Montreal … we are a niche market, we are an extremely important tourism event," said Girard.

Girard said that without the funding, whole days of the eight-day festival might get cancelled.

Divers/Cité features gay and lesbian performers from around the world, and brings in 55,000 visitors to Montreal every year. It’s currently scheduled to run July 26 to August 2.

With files from The Canadian Press