On July 6, 1955 the House of Representatives of the United States Congress approved a bill concerning a proposal to divert from Lake Michigan at Chicago into the Illinois waterway for a period of three years, a maximum of 2500 C.F.S. in addition to all domestic pumpage, instead of the present maximum of 1500 C.F.S. An identical Senate bill is expected to be referred to the Senate Committee on Public Works and then to the Senate before the end of the current Congressional session.

2. Our Embassy in Washington predicts that the bill will be passed and that the President will not veto the bill as he did a similar bill last year.

3. In the past, the Government of Canada has always opposed any attempt to increase the diversion at Chicago on the grounds that such a diversion will adversely affect navigation and power in Canada. From a report to the International Joint Commission by the International Lake Ontario Board of Engineers, dated June 14, 1955, it appears that the increased diversion of 1000 C.F.S. provided for in the United States bills would not have any substantial adverse effect on navigation in Lake Michigan and downstream. Such a diversion would, on the other hand, cause to Canada, over the next 15 years, a total loss in power of 310,100,000 kilowatt hours. It is therefore proposed that a note be sent to the State Department at an appropriate time. This note would express the view that Canada would prefer that the International Joint Commission terminate its studies of the levels of the Great Lakes before any unilateral action be taken as regards the Chicago diversion. It would further state that unless an agreement is reached by Canada and the United States to replace the power lost by Canada because of the diversion. Canada reserves the right to claim for damages under Article II of the Boundary Waters Treaty. The note would also refer to Article VI of the Treaty between Canada and the United States concerning the Niagara River signed on February 27, 1950,²⁰⁶ and suggest the revision of this article, which provides that the water made available for power purposes by that Treaty be divided equally between the two countries.

Recommendations

4. The Secretary of State for External Affairs therefore recommends that the Embassy in Washington be instructed to deliver to the United States Department, at an appropriate time, a note along the lines of the attached one.

L.B. Pearson

On instruction of my Government, I should like to refer to Bill H.R. 3210, approved by the House of Representatives on July 6, 1955, concerning a proposal to divert water from Lake Michigan into the Illinois waterway for a period of 3 years at an annual average rate of 2500 c.f.s., in addition to all domestic pumpage.

The Canadian Government considers that implementation of this legislation would have a serious detrimental effect on the power potential of the Niagara and the St. Lawrence river. The interim report dated June 14, 1955 to the International Joint Commission by the International Lake Ontario Board of Engineers, appointed to study the water levels of Lake Ontario indicates that the effect on Lake Ontario levels of an increase of 1000 c.f.s. in the diversion at Chicago for a period of 3 years, would cause an aggregate total loss of power to the actual and planned power developments in Canada amounting to 310,100,000 k.w.h. over the next 15 years.

The Canadian Government therefore considers that, unless the United States Government agrees to replace the quantity of power which Canada would lose if this diversion were effected, the Canadian Government would have a right, under accepted principles of international law and under paragraph 1 of Article 2 of the Boundary Waters Treaty, to claim for damages to compensate this serious loss of power.

The Canadian Government considers also that the loss of power potential at Niagara Falls due to the diversion of waters contemplated in H.R. 3210 would necessitate a revision of Article VI of the Treaty between the United States and Canada concerning the Niagara river signed on February 27, 1950, which provides that the water made available for power purposes by that Treaty shall be divided equally between the two countries.

The Canadian Government wishes to draw attention to the fact that the Interim Report on the effect on Lake Ontario of an increase of 1000 c.f.s. in the diversion at Chicago for a period of 3 years deals with one aspect of a matter now before the International Joint Commission and that it would be in the best interest of Canada and the United States to allow the Commission to complete its studies under the Reference of 1950 on the levels of Lake Ontario, before any change in arrangements affecting the levels and the power developments in the Great Lakes basin and the St. Lawrence river are authorized.²⁰⁷