1. Reference is made to previous considerations as to the loan of a United States Navy submarine to Canada for the purpose of anti-submarine training.

2. In the original submission to Cabinet Defence Committee of April 20, 1959, two types of submarines were mentioned: the SSK at an estimated acquisition cost of $750,000 and the unmodified fleet class with estimated acquisition cost of $900,000. On April 22, 1959, the Cabinet Defence Committee approved in principle the recommendation of the Minister of National Defence that the Royal Canadian Navy be authorized to approach the United States Navy to negotiate the loan of a submarine, subject to the financial details to be settled between the Department of National Defence and the Treasury Board.

3. Discussions were arranged with the United States Navy authorities and it was learned that the first cost estimations had risen to $1,500,000 attributed to rising costs of labour and additional mandatory safety items which would be required to be installed.

4. This necessitated further recommendations to Cabinet Defence Committee on September 14, 1959, for the loan of a submarine at the cost of $1,500,000 who advised that:

"The Committee considered briefly the question of obtaining on loan a submarine of the SSR class instead of one of the SSK or unmodified Fleet type previously approved, and agreed that the RCN be authorized to negotiate the loan of an SSR class submarine from the US Navy, on the understanding that no commitments be entered into before the matter was referred back again to the Committee."

5. In accordance with this directive discussions have been held with United States Navy authorities and they have indicated USS Burrfish could be loaned to the Royal Canadian Navy subject to the approval of both Governments. Before being placed in reserve in 1956 USS Burrfish was overhauled by the United States Navy at a cost of $1,200,000 and the United States Navy have agreed that this would not be a charge against the Canadian Government, therefore, the initial cost of acquisition on loan for a period of five years by the Royal Canadian Navy has been reduced from $1,500,000 to $887,000 estimated as follows:

(a) Expenditures through United States agencies: ($ 877,000)

(i) Activation and overhaul including removal of special radar equipment, modification to accommodation, and ship alterations together with a complete allowance of on board spares.

not exceeding $652,000

(ii) Shore supports spares, drawings handbooks, etc.

not exceeding $110,000

(iii) Outfit of torpedoes. (required for training)

not exceeding $100,000

(iv) Personnel training.

not exceeding $15,000

(b) Expenditures through Canadian agencies: ($10,000)

(v) To meet travelling and miscellaneous expenses incurred in training of Canadian personnel.

6. The necessary funds are available in the fiscal year 1959-60.

7. In view of the fact that the revised figure of 887 thousand dollars now firmly quoted lies within the original price range, it is recommended that approval be given for formal negotiations to begin between the Government of Canada and the Government of the United States of America for the loan of USS Burrfish to the Royal Canadian Navy.⁴⁸⁰

[GEORGE PEARKES]

⁴⁸⁰Le Cabinet a étudié ce document le 15 décembre 1959 et a reporté la décision en attendant l'issue d'une demande que le Royaume-Uni fournisse un sous-marin à des fins d'entraînement. Après que les autorités britanniques aient refusé la demande, le Cabinet a autorisé l'emprunt du USS Burrfish le 8 janvier 1960. Pour les termes de l'accord avec les États-Unis, voir Recueil des traités du Canada, 1960, no 22. Cabinet considered this document on December 15, 1959 and postponed a decision pending the outcome of a request that the United Kingdom supply a submarine for training purposes. After British officials denied this request, Cabinet authorized the borrowing of the USS Burrfish on January 8, 1960. For the terms of the agreement with the United States, see Canada Treaty Series, 1960, No. 22.