In November 1950, the United States Government proposed that a joint refer­ence be made to the International Joint Commission calling for a full investigation of the present methods of the regulation of the Lake of the Woods and its watershed.

The Commission has investigated most of this watershed pursuant to two previ­ous references, one on the Lake of the Woods in 1912, and another on the Rainy Lake area in 1925.¹²⁷ Both investigations resulted in the conclusion of conventions between Canada and the United States, the Lake of the Woods Convention of 1925, and the Rainy Lake Convention of 1938.¹²⁸ The methods of regulation established by these conventions worked satisfactorily until 1950, when an extensive flood occurred despite every effort to prevent it. It was this flood which led to the United States proposal of a new investigation.

The United States proposal was discussed at a meeting of officials of the Gov­ernments of Canada, Ontario and Manitoba. The provincial representatives indi­cated that they would prefer not to have this subject re-opened. If, however, Canada could not refuse to agree to a reference, they considered that the terms of reference suggested by the United States would not be satisfactory. If a reference were to result in such a change in the method of regulation as would reduce the volume of water storage in the Lake of the Woods, hydro-electric power production in both provinces would suffer.

As a result of this meeting a reply was sent to the United States Embassy asking for information about the nature and extent of the damage caused in the United States by the 1950 flood. It was thought that if the damage was found to be not very extensive it would then be possible to point out to the United States Government that the cost of an investigation would not be justified in comparison with the amount of damage suffered. In reply, however, the United States Government said that the determination of the nature and extent of the damage would be a matter for the Commission, and repeated its request for a joint reference.

If we were to refuse to agree to a joint reference the United States, under the provisions of the Boundary Waters Treaty of 1909,¹²⁹ could refer the matter to the Commission without our consent. The investigation would then be based on the terms of reference proposed by the United States, which are prejudicial to the important Canadian interests involved. (The United States draft is attached as Appendix A.)

For this reason, a revised draft of terms of reference has been prepared by the interested Canadian Government departments. This draft has been sent to the two provinces and we have been informed that it is satisfactory from their point of view. It begins by asking the Commission whether the existing arrangements are adequate. Only if they are inadequate is the Commission to make an investigation. If an investigation is made, the Commission is to bear in mind "the necessity of preserving the storage ranges" provided for by the present arrangement. (This draft is attached as Appendix B.)

I recommend that the Canadian Government agree to a joint reference to the Commission on the basis of the draft terms of reference in Appendix B.¹³⁰

L.B.PEARSON

[PIÈCE JOINTE 1/ENCLOSURE 1]

Appendice A

Appendix A

September______, 1950

DRAFT REFERENCE PROPOSED BY THE UNITED STATES

In view of the damage caused in the Lake of the Woods watershed by the flood of 1950, and in order to determine whether it is practicable and desirable from the viewpoints of the Governments of Canada and the United States of America to devise and carry into effect an improved plan of regulation and utilization of the waters of the Lake of the Woods watershed in the Provinces of Ontario and Mani­toba and in the State of Minnesota, the Governments of Canada and the United States of America have agreed to refer the matter to the International Joint Com­mission for investigation and report, together with conclusions and recommenda­tions, pursuant to Article IX of the Treaty between the United States of America and Great Britain in respect to Canada, signed at Washington on the 11th day of January, 1909, relating to Boundary Waters.

2. It is desired that the Commission, after reviewing the plans of regulation put into effect pursuant to the Convention between Canada and the United States of America, signed at Washington February 24, 1925, relating to regulation of the level of Lake of the Woods, and the Convention between the United States and Canada signed at Ottawa September 15, 1938, relating to emergency regulation of the level of Rainy Lake and of other boundary waters in the Rainy Lake watershed, shall determine whether, in its judgment, considering the Lake of the Woods and its entire watershed, and more particularly the various lakes in the watershed and their inlets and outlets, it would be feasible and desirable to devise and carry into effect a better general plan of regulation of these waters, their inflow and outflow channels, and utilization of the water resources, of the Lake of the Woods watershed as a whole having in mind existing and future requirements for (A) domestic water sup­ply and sanitation, (B) navigation, (C) the control of floods throughout the basin for the protection of properties along the shores of the various lakes and their connect­ing waters, including agricultural lands and other properties adversely affected by high lake levels, (D) efficient development of water power, (E) reclamation of wet lands, (F) conservation of fish and wildlife, (G) recreation, and (H) other beneficial purposes.

3. In the event that the Commission should find that further works, projects or measures to effect better control and regulation and more extensive utilization of the waters of the Lake of the Woods watershed are desirable, it should indicate how the interests on either side of the international boundary would be benefited or adversely affected thereby, and should estimate the costs of such works, projects or measures including indemnification for damage to public or private property and the costs of remedial works, projects or measures that may be found to be justified, and should indicate how the costs of any such works, projects or measures and the amounts of any resulting damage may equitably be apportioned among interests on either side of the boundary or between the two Governments.

4. The Commission should include in its report a review of all prior investiga­tions and reports relating to the Lake of the Woods watershed or parts thereof made under authority of the Governments of the United States and Canada. It is desired further that the Commission's report pursuant to this Reference contain information on the history and present status of existing dams, water power plants, navigation works, and other properties, whether publicly or privately owned, located within the Lake of the Woods watershed insofar as such information may be germane to the subject under consideration.

5. In the conduct of its investigations and otherwise in the performance of its duties under this Reference, the Commission may utilize the services of engineers and other specially qualified personnel of the technical agencies of Canada and the United States and will so far as possible make use of information and technical data heretofore acquired by such technical agencies or which may become available during the course of the investigation, thus avoiding duplication of effort and unnecessary expense.

[PIÈCE JOINTE 2/ENCLOSURE 2]

Appendice B

Appendix B

DRAFT LAKE OF THE WOODS REFERENCE

In view of the excessive run-off and the resultant high water levels experienced during 1950 in that portion of the Lake of the Woods watershed the regulation of which is provided for in the Convention between Canada and the United States of America signed at Washington on February 24, 1925, and the Convention between the United States and Canada signed at Ottawa, September 15, 1938, and the subse­quent Order of the International Joint Commission of June 8, 1949, the Govern­ments of the United States and Canada have agreed, in accordance with Article IX of the Boundary Waters Treaty of January 11, 1909, to request the International Joint Commission:

(1) to indicate whether the Lake of the Woods Convention of 1925 and the Order of the International Joint Commission of June 8, 1949, pertaining to Rainy and Namakan Lakes, adequately provide for a contingency such as arose in 1950;

(2) if the answer to (1) is negative, to review the plans for regulation put into effect pursuant to the above-mentioned Conventions, and to consider what, if any, other methods of regulation might provide better protection to foreshore interests, bearing in mind,

(a) the necessity of preserving the storage ranges provided in the Convention of 1925 and the Order of the International Joint Commission of June 8, 1949; and

(b) the desirability of protecting all interests against excessively low lake levels;

(3) to indicate whether any of the methods considered under (2) are, in the Com­mission's judgement, economically justifiable, bearing in mind,

(a) the alternative possibility of adjusting the flowage easement provided for in the Convention of 1925; and

(b) the extent of any damage which may have been suffered by the inhabitants of Canada and the United States as a result of high water levels during the period of regulation under the Convention of 1925 and the Order of the International Joint Commission of June 8, 1949;

(4) to indicate, should a new method or methods of regulation be considered to be economically justifiable,

(a) what further works, projects or methods for control and regulation of the waters under reference are required;

(b) how the interests on either side of the international boundary would be benefitted or adversely affected thereby;

(c) the estimated cost of such projects or measures including indemnification for damage to public or private property and the cost of necessary remedial works; (d) how the cost of any such works and the amounts of any resulting damage may equitably be apportioned between the two Governments;

(5) to indicate, should a new method of regulation not be considered to be eco­nomically justifiable, whether an adjustment of the existing flowage easement pro­vided by the Convention of 1925 is, in the judgement of the Commission, feasible and economically justifiable;

(6) if an adjustment of the flowage easement is considered to be feasible and economically justifiable, to indicate,

(a) the level to which the existing flowage easement might be adjusted;

(b) how the interests on either side of the international boundary would be benefitted or adversely affected thereby;

(c) the estimated cost of such an adjustment;

(d) how this cost may be equitably apportioned between the two Governments. In the conduct of its investigations, and otherwise in the performance of its duties under this Reference, the International Joint Commission may utilize the ser­vices of engineers and other specially qualified personnel of technical agencies of Canada and the United States, and will so far as possible, make use of information and technical data which has been acquired by such technical agencies or which may become available during the course of the investigation, thus avoiding dupli­cation of effort and unnecessary expense.

¹²⁷ Pour la réfisrence au secteur de lac à la Pluie, voir/For reference concerning Rainy Lake area, see Treaties and Agreements affecting Canada in force between His Majesty and the United States of America with subsidiary documents, 1814-1925 (Ottawa: King's Printer, 1927), pp. 524-525.

¹²⁸ Pour la Convention sur le lac des Bois de 1925, voir/For Lake of the Woods Convention of 1925, see Treaties and Agreements affecting Canada in force between His Majesty and the United States of America with subsidiary documents, 1814-1925, pp. 520-525.
Pour la Convention sur le lac à la Pluie de 1938, voir Canada, Recueil des traités, 1940, N° 9. For Rainy Lake Convention of 1938, see Canada, Treaty Series, 1940, No. 9.

¹²⁹Voir/See Treaties and Agreements affecting Canada in force between His Majesty and the United
States of America with subsidiary documents, 1814-1925, pp. 312-319.

¹³⁰ Approuvé par le Cabinet, le 16 mai 1951./Approved by Cabinet, May 16, 1951.