Consideration of this application has now reached a stage in the Ad Hoc Interdepartmental Committee which warrants a further report to you following my memorandum of November 23,? particularly since the matter will certainly be raised soon in Cabinet by the Minister of Transport probably at next week's meeting.

On December 1 the Ad Hoc Committee had before it a Draft Memorandum to Cabinet? based on the discussions which had already taken place. We circulated a number of comments on this Draft most of which were accepted without much discussion. I attach for reference purposes copies of the minutes of this meeting? and of the memorandum for the Minister of Transport as approved. ¹⁵⁵ We have not however seen the covering memorandum which the Ministry of Transport is preparing for submission to Cabinet.

We differed at the meeting with the Department of Transport on the procedure originally proposed. The memorandum which Transport had prepared contained, in addition to recommendations concerning the C.C.C. application, paragraphs setting forth the general outlines of a Canadian national policy for the telecommunications field. It seemed to us that an important policy of this kind should not be settled in such a relatively short time merely because a particular application had been received. However, the Department of Transport representatives felt that they had considered this and similar problems so frequently that it was not only possible but desirable to put forward the basis of general policy at the present time.

In the light of the changes made in the conclusions of the original Transport memorandum (which would have the effect of making these conclusions regarding future policies less rigid and nationalistic), and because the subject matter is so closely the concern of the Department of Transport, we did not feel justified in holding up the Committee's memorandum.

We also suggested that the submission should not be made to Cabinet until the views of the Chiefs of Staff had been obtained. We understand that Transport may proceed before these views are ready but this fact will certainly be noted in the memorandum to Cabinet.

I do not feel that this Department needs to put forward reservations concerning the revised conclusions reached by the interdepartmental committee. In general, the position is that the C.C.C. could be granted landing licenses for the cable, subject to certain technical stipulations, on the condition that the company undertakes not to terminate circuits in Canada except for:

(i) defence communication requirements to points outside Canada in excess of presently available circuits and/or

(ii) circuits for commercial uses leased to Canadian owned or controlled companies.

One important suggestion which we made and which it is hoped Cabinet will approve is covered by paragraph 18 of the memorandum for the Minister of Transport. It seemed desirable to protect ourselves against possible recriminations by the United States authorities suggesting that Canada had refused to grant permission for a cable necessary for the defence services of United States and of NATO. We proposed that the United States Embassy here be advised that if the United States Government wished to separate the defence aspects, and to submit a proposal for the landing of a cable by the United States Government to serve defence installations in Greenland, Iceland or the United Kingdom, such a proposal would be given the speedy consideration customary in defence matters between our two countries.

We have advised Mr. Robertson of these developments and he will shortly be discussing this question with the United Kingdom Postmaster General.

We also gave Earnscliffe a copy of the conclusions contained in the memorandum to the Minister of Transport in return for the information which Earnscliffe had previously provided on the reaction at the United Kingdom official level to the C.C.C. application. In doing so, we emphasized that these conclusions had not yet been approved by Ministers. In addition, during the Ad Hoc Committee meetings, we made it clear that we were participating without knowledge of your views and that you should be regarded as uncommitted.

Mr. MacLaren's law firm have already written the Minister of Transport concerning the C.C.C. application. The Commercial Cable Company will certainly not like the reservation contained in (ii) above if it is approved by Cabinet, and we will no doubt have further representations from Mr. MacLaren.

Have you any comments on these developments which you wish us to discuss with officials of other Departments? ¹⁵⁶

J[ULES] L[ÉGER]