Present
The Prime Minister, (Mr. Diefenbaker), in the Chair,
The Minister of Public Works (Mr. Green),
The Minister of Finance (Mr. Fleming),
The Minister of Veterans Affairs (Mr. Brooks),
The Minister of Transport (Mr. Hees),
The Solicitor General (Mr. Balcer),
The Minister of National Defence (Mr. Pearkes),
The Minister of Trade and Commerce (Mr. Churchill),
The Minister of Justice (Mr. Fulton),
The Minister of National Revenue (Mr. Nowlan),
The Minister of Agriculture (Mr. Harkness),
The Minister of Citizenship and Immigration (Mrs. Fairclough),
The Minister of Fisheries (Mr. MacLean),
The Minister of Labour (Mr. Starr),
The Postmaster General (Mr. William Hamilton),
The Minister without Portfolio (Mr. Macdonnell),
The Minister without Portfolio (Mr. Browne),
The Minister of National Health and Welfare (Mr. Monteith),
The Minister of Northern Affairs and National Resources (Mr. Alvin Hamilton),
The Secretary of State for External Affairs (Mr. Smith),
The Minister of Defence Production (Mr. O'Hurley),
The Secretary of State (Mr. Courtemanche).
The Secretary to the Cabinet (Mr. Bryce),
The Assistant Secretary to the Cabinet (Mr. Martin).

. . .

CANADA-WEST INDIES AID PROGRAMME
(PREVIOUS REFERENCE MARCH 4, 1958)

44. The Secretary of State for External Affairs said that, since the Prime Minister's announ-cement of last September on the five-year $10 million aid programme for the West Indies, officials of both countries had been working out details of the programme.

The government was committed to provide two ships and, on the basis of the discussion with representatives of the West Indies, it was estimated that, in the more efficient Canadian yards, construction would cost a total of $7.5 million. Canadian officials had pointed out that this item would absorb a large proportion of the total funds available, and that the operating costs would place a heavy burden on the limited budgetary resources of the West Indies. They had suggested alternative specifications for the ships, involving lower construction and operating costs, which might yet meet the economic requirements of the Islands. However, Ministers and officials of the West Indies reiterated their views that any ships below the specifications originally proposed would not meet their needs adequately and they accepted the consequences of their preference for the larger ships.

In view of these considerations he recommended that Canada provide the two ships at the specifications proposed by the West Indies. The government of the West Indies were aware that construction costs in Canada were relatively high, but they wished, nevertheless, that the ships be built here. To ensure economy of construction he proposed that the two be constructed in the same yard.

Proposals had also been developed for the use of the remaining $2.5 million over a five-year period. These were as follows:

(a) Port and harbour development - $1,500,000

(b) Inventory of natural resources - $130,000

(c) Provision of a Canadian team to work with West Indians

          on soil survey work - $20,000

(d) Provision of advisory and technical staff in various fields

          from Canada - $425,000

(e) Training facilities for West Indians in Canada - $230,000

(f) Unallocated, pending determination of final cost of ships

          and further discussions - $195,000

$2,500,000

Most of these items involved the provision of technical assistance which the Cabinet had already approved in general terms.

An explanatory memorandum had been circulated, (Minister's memorandum, Feb. 20, - Cab. Doc. 60-59).?

45. During the discussion it was said that it would be very difficult to assign the construction of both ships to the same yard. They should go to different yards. It was regrettable that the West Indians had insisted on costly refinements for the ships, and it was to be hoped that they would not use this excessive cost as a level for additional aid. There would be little if any left of the $10 million when the two ships had been paid for.

46. The Cabinet noted the report of the Secretary of State for External Affairs on the $10 million Canada West Indies Aid programme and,

(a) approved the construction of two ships for inter-island shipping services, at an estimated total cost of $7.5 million, on the basis of the specifications proposed by the West Indies, and agreed to the preparation of the necessary design and detailed specifications, on the understanding that contracts for the ships would be awarded to two different shipping yards in Canada; and,

(b) noted the balance of the proposed programme on the understanding that specific authority would be requested to proceed with any other project.

R.B. BRYCE
Secretary to the Cabinet