A situation is now arising regarding the St. Lawrence Seaway channel excavations North and South of Cornwall Island that seems to require a general decision of principle by Cabinet even before the engineering data can be fully ascertained. The decision concerns the conditions on which Canada will allow the United States to carry out channel excavations in the vicinity of Cornwall Island and the necessity of informing the United States Government officially now of the Canadian views. If a decision is not taken at this time and Canada allows the matter to drift, it will not be possible to complete the dredging north and south of Cornwall Island before the end of 1958 as scheduled.

When Canada and the United States agreed on January 11, 1952,¹⁰⁸ to discuss steps leading to the approval by the International Joint Commission of the St. Lawrence Power Project, both governments did so on the understanding that, should the 1941 Seaway Agreement not be approved by the United States Congress, the Government of Canada would proceed with the construction of the Seaway. This decision was taken subsequent to the Canada-Ontario Agreement of 1951 which provided that Canada would do works solely for navigation and Ontario Hydro would undertake to do works solely for power and works common to power and navigation.

Among the works common to power and navigation are certain excavations North and South of Cornwall Island. These excavations were referred to in the applications made by both governments on June 30, 1952,¹⁰⁹ to the International Joint Commission, and they were shown in brown on the map? (copy attached) which also indicated that final location of excavation (of the parts shown in brown) was to be determined from results of further model experiments and studies. The Applications by the governments detailing channel enlargements, and the Commission's Order of Approval, indicated that downstream from the powerhouses, channel enlargements will be carried out for the purpose of reducing the tailwater level at the powerhouses. It was also stated that final locations and cross-sections of these channel enlargements will be determined from further studies.

The International Joint Commission approved these Applications on October 29, 1952. As a result of further discussions between the two governments, an Exchange of Notes was concluded on August 17, 1954,¹¹⁰ which indicated that the United States Government intended to participate in the St. Lawrence Seaway Project by constructing certain canals and locks as authorized under Public Law 358. Canada, for its part, indicated that it would construct the remaining works for a seaway from Montreal to Lake Erie, including a canal and lock at Iroquois. Public Law 358 (the so-called Wiley-Dondero Act of May 13, 1954) provides that the United States St. Lawrence Seaway Development Corporation may construct works solely for navigation designated in the joint report of January 3, 1941. Accordingly, there seems to be some question whether the United States St. Lawrence Seaway Development Corporation can undertake those works which are designated as works common to power and navigation. In addition, as between the Power Authority of the State of New York and the United States St. Lawrence Seaway Development Corporation, there appears to be no binding agreement similar to the Canada-Ontario Agreement of 1951 which determines who should carry out the works common to power and navigation below the Barnhart Island powerhouses. The United States St. Lawrence Seaway Development Corporation, for its part, maintains that the Power entities are obliged to undertake the excavations North and South of Cornwall Island.

Some model studies have been carried on to determine what channel enlargements below the powerhouses are required for power purposes. These have not yet been completed. Other studies are just now being undertaken in Canada. At present, it appears that the Power entities are not anxious to undertake other than a minimum of channel excavations immediately adjacent to the tailrace. If the Power entities determine that the economics do not favour dredging North and South of Cornwall Island, it may mean that no ships other than shallow draft will be able to reach the locks on the United States side opposite Cornwall unless the United States Seaway Development Corporation or some combination of entities agreed to assume the burden of channel excavations in that area. The situation thus created would be clearly ridiculous.

Any dredging South of Cornwall Island in order to allow vessels to enter the United States locks opposite Cornwall Island will have an adverse effect upon the level or flow in the Canadian waters North of Cornwall Island. As the waters in the vicinity of the Island are boundary waters, both the United States and Canadian Governments are to be guided in their acts by the provisions of the Boundary Waters Treaty of 1909. The first paragraph of Article III of that Treaty provides that neither government shall, except by a special agreement between them or by the approval of the International Joint Commission, make any use of or obstruct or divert waters so as to affect the natural level or flow of boundary waters on the other side of the line. The second paragraph of Article III states that the above provisions are not intended to limit the existing rights of both governments to carry on works for the deepening of channels for the benefit of commerce and navigation, provided such works are wholly on one side of the line and do not materially affect the level or flow of the boundary waters on the other side. It is clear that the dredging South of Cornwall Island will materially affect the level or flow of waters on the North side. The extent to which the levels or flow will be affected has not yet been fully determined.

It can be said, in summary, that the Order of the International Joint Commission dated October 29, 1952, was an Order for the development of the power potential of the International Section which was based on the assumption that Canada would do all the necessary navigation works. At that time, dredging North of Cornwall Island was necessary for navigation purposes. It now appears that with the navigation works being located by the United States South of Cornwall Island, the Power entities do not see that they would gain any benefit other than through dredging at the tail-race. Accordingly, no dredging North and South of Cornwall Island, other than that at the tail-race, is likely to be undertaken unless it is done by the United States Seaway Development Corporation, or some combination of entities, in order to gain access to the Robinson Bay Locks. Such dredging may, of course, produce some incidental benefits for the Power entities.

Two questions now arise. The first one is on what terms should the Government of Canada allow the United States to dredge South of Cornwall Island? The second question concerns the division of costs between the entities concerned or both countries.

Under Article III of the Boundary Waters Treaty of 1909, the Canadian Government can have this matter determined either by making Application to the International Joint Commission or by a special agreement with the United States Government. It appears that the second course, being the speedier, is to be preferred at this time.

In deciding upon the substance of the agreement, the Canadian Government could insist that the levels or flows be restored or it could agree that the levels or flows be not restored now, but that the United States give a guarantee that should Canada desire in future to build a navigation channel on its side at Cornwall, the United States gives its agreement in advance to such works. It seems, however, that such an agreement - which might be implemented in, say, 25 years' time - ought to be consigned in a more solemn manner than in an exchange of notes, otherwise it could be repudiated. The only satisfactory form for such an undertaking to be executed in the future would be a treaty requiring United States Senate approval. In view of past experience, this is not very feasible. If the agreement is to be executed immediately, however, it could take the form of an exchange of notes.

It therefore appears that, as regards dredging North and South of Cornwall Island, both countries are hostages to each other's fortunes in a way which would not exist in the future, and that the Canadian Government should require that any disturbance to the level and flow North of Cornwall Island caused by United States channel excavations South of Cornwall Island should be compensated in the form of a navigation channel North of Cornwall Island. In order to solve the problem for the future, such a navigation channel should be constructed now to at least the depth of the channels now being dug in the international section of the river. Therefore, it seems that both countries should reach a special agreement to ensure that a navigation channel is built now in the North Channel, and on the division of costs.

A study of estimates made separately by the United States Seaway Development Corporation and the St. Lawrence Seaway Authority indicates that the total works North and South of Cornwall Island (including a navigation channel North of the Island) would cost about $28 million. It so happens that these works would be physically situated approximately half in Canada and half in the United States. If a division of costs on a 50-50 basis were agreed with the United States, it would assist the United States Seaway Development Corporation in remaining within its statutory budgetary limits. In addition, such a division might be acceptable to the United States because part of the works are to be done in boundary waters concerning which the Boundary Waters Treaty of 1909 provides that each country shall have equal and similar rights. In so far as Canada is concerned, the costs (less benefits accruing to the Power entities) could be borne appropriately by Seaway tolls.

Recommendations

The Committee recommends that:

(a) diplomatic negotiations be undertaken with a view to reaching a special agreement with the United States regarding the channel excavations North and South of Cornwall Island, other than those at the tail race of the powerhouses;

(b) the agreement should provide that the compensating works North of Cornwall Island should take the form of channel excavations for deep water navigation purposes;

(c) the agreement may provide that Canada and the United States share equally the total cost of the excavations North and South of Cornwall Island, on the condition that provision is made for the carrying out by Canadian contractors and labour of approximately 50% of the work;

(d) the Canadian share of these channel excavations, less the contribution of the power authorities under (e) below, should be charged to Seaway tolls;

(e) the costs of the benefits accruing directly to the Power entities as a result of excavations North and South of Cornwall Island should be borne by them.¹¹¹ Respectfully submitted,

G.C. MARLER