A new channel in that section of the Great Lakes system joining Lake Erie to Lake Huron, known as the Southeast Bend, is considered essential by both Canadian shipping interests and officials of the Department of Transport so that larger ships capable of using the facilities in the lower stretches of the St. Lawrence-Great Lakes Waterway may reach the waters of Lake Huron and beyond. The U.S. Army Corps of Engineers has obtained authority and funds from Congress to construct this new channel. However, work cannot begin until mutually acceptable terms covering all aspects of the operation have been worked out between Canada and the United States. These terms, once agreed upon, will be embodied in an exchange of notes.²⁸⁶

2. On May 3, 1956²⁸⁷Cabinet agreed that the United States might be authorized to construct the proposed channel subject to certain conditions.²⁸⁸ There have been exchanges of views with the Americans on the conditions that are to be included in the eventual exchange of notes. Most of our original conditions have been accepted by the Americans. Our latest proposals, embodying the conditions already accepted and suggesting alternatives where necessary, have been worked out interdepartmentally and are set forth in paragraph 5 of the attached memorandum to Cabinet, which is being submitted for your signature. If Cabinet agrees, we shall seek to have these terms incorporated in an exchange of notes with the U.S.A.

3. Condition (g) specifies that "the work carried out in Canadian territory shall be without prejudice to the sovereign rights of Canada." At all times, therefore, Canadian sovereignty will be respected and maintained in the area where the work is being carried out. Furthermore, when the work has been completed, the improved channel will belong to Canada and we will be responsible for its operation and maintenance.

4. Condition (h) outlines the requirement that Canadian contractors will be given equal opportunity with American contractors to bid on any portion of the work; in addition, there is the stipulation that, even should U.S. contractors be successful in securing the tenders, "Canadian technicians, supervisory staff and workers should be given employment in so far as those of necessary qualifications are available...".

5. These two aspects of tendering for contracts have arisen in another context, that of Canada-U.S. defence facilities on Canadian soil. In the defence field we may be successful in our attempts to insist on the inclusion of a clause stipulating that Canadian contractors and Canadian labour only be used for the construction of these facilities because it is the Americans who are anxious to have them installed. On the Southeast Bend, on the other hand, the proposed channel is something which we are anxious to see completed because it will provide an essential facility on the route to the Lakehead. On this occasion, therefore, Canada stands to gain immediate and tangible benefits; in consequence, it would be unrealistic to seek more than an equal opportunity clause permitting Canadian contractors to tender bids along with American contractors for the necessary construction jobs. The Minister of Public Works has held very strong views in the matter of restricting bids on defence contracts to Canadian firms. However, the attached draft has been submitted to him by his Department, and we are informed he has raised no objection.

6. It would be extremely difficult for us to enforce a condition whereby Canadian labour only would be employed on the Southeast Bend project where, although on Canadian soil, the operations would be so close to the boundary that U.S. citizens would be aware of all that was taking place. Unemployment in the Detroit area has increased since the United States originally agreed, in July 1957, to our employment conditions — para. 5(h). However, we expect to be able to retain the provision giving preference to Canadian labour other than certain contractors' key personnel.

J. L[éger]

[Ottawa], January 9, 1958

Confidential

U.S. PROPOSAL TO CONSTRUCT NEW CHANNEL AT SOUTHEAST BEND IN THE ST. CLAIR RIVER

The United States Embassy has proposed an exchange of notes to provide for the dredging and disposal of soil in the St. Clair River and Lake St. Clair for the purpose of deepening the Great Lakes connecting channels in those areas.

2. The Embassy has pointed out that in the interests of the growing needs of commerce and the safe operation of iron-ore and other vessels it is considered necessary either to widen and deepen the existing channel at Southeast Bend or to construct a cut-off channel through the marshy area on the Canadian side of the river. Canadian Government officials consider that because the proposed cut-off channel would eliminate the sharp reverse curve which is combined with a relatively narrow channel for two-way traffic through the Bend, this project would be preferable to widening and deepening the existing channel.

3. It has been the practice for the United States Government to assume responsibility for the cost of improving the connecting channels in the Upper Great Lakes. Canada has, of course, assumed responsibility for the Welland Canal and for the improvement of the channels in the St. Lawrence River at and below Montreal. In 1956 Congress authorized the entire programme of Great Lakes connecting channel improvements, of which the St. Clair River project is a part, to be prosecuted under the direction of the Secretary of the Army and the supervision of the Chief of Engineers, United States Army Corps of Engineers.

4. The cost of constructing the proposed cut-off channel at Southeast Bend is estimated at $8 million, exclusive of navigation aids. This amount is $5,491,000 more than the estimate for improving the present channel. The annual cost of dredging maintenance in the new channel would be approximately $100,000. The principal local interests in Canada which would be affected by the construction of the new channel are the Indian Band of the Walpole Island Reservation and the St. Clair Shooting Club, which has acquired a lease from the Indian Band for duck shooting. The cost of compensation to the local interests in Canada would probably be not less than $200,000 according to information supplied by officials of the Department of Public Works and the Indian Affairs Branch of the Department of Citizenship and Immigration who have held preliminary discussions with the Walpole Island Indian Band. In addition, some disturbances may be caused to the migratory birds which use this area for breeding and feeding grounds and to certain species of fish.

5. It is proposed that conditions be attached to the Canadian Government's approval along the following lines:

1. That the plans and specifications for the construction of the channel, including those for spoil disposal areas and such revetment works as may be necessary to ensure reasonable permanence of the banks of the channel, shall be approved by the Canadian Government.
2. That dredging and excavations and the deposit of dredged and excavated materials shall not be carried out on Canadian territory until a date to be fixed by the Canadian Government. In this way, the Canadian Government will have such time as it may require to make all necessary arrangements to permit the dredging to be started, such as acquiring the property concerned and removing all structures and equipment located on such property. As soon as these arrangements have been completed, the United States Embassy will be informed of the date on which operations may commence.
3. That the United States Government will ensure, in a manner satisfactory to the Canadian Government, that the contractor or contractors for this work will as a matter of contract responsibility be required to (i) perform and complete the work in accordance with the plans and specifications as duly approved by the Canadian authorities; (ii) be responsible for all damages to persons or property that occur as a result of their fault or negligence in connection with the prosecution of the work; (iii) carry adequate insurance commensurate with the responsibility; and (iv) satisfy the requirements of all applicable Canadian law.
4. That the United States will indemnify and save Canada harmless in respect of all claims of third parties in any way arising in the United States out of the construction or maintenance of the channel.
5. That during the progress of the work, and subsequent thereto, such soundings, gaugings and meterings shall be carried out by the United States authorities as the Canadian authorities may require, and the Government of Canada kept informed of the results obtained. Authorized Canadian Government representatives shall be free at all times to inspect the works during progress, and to make such check surveys with soundings, meterings and gaugings, in any part of the St. Clair River as may be considered desirable at any time.
6. That any machine, plant, vessel, barge or the operators or crews thereof, used on these works, shall not be permitted to tie up, discharge ashes, fuel oil, waste oil, etc., in a manner prejudicial to the health, well-being and activities of the owners and/or users of land or water areas, or to commit any other nuisance in Canadian territory during the progress of, or subsequent to, the carrying out of these works. The attention of the United States Government is also drawn to Section 33 of the Fisheries Act of Canada and Section 40 of the Regulations under the Migratory Birds Convention Act which refer to the pollution of waters with specific reference to the effect upon fish and migratory birds.
7. That the works carried out in Canadian territory shall be without prejudice to the sovereign rights of Canada.
8. That Canadian contractors shall be given an equal opportunity with United States contractors to bid on any portion of the work; when, however, United States contractors are awarded contracts for work in Canada, Canadian technicians, supervisory staff and workers should be given employment in so far as those of necessary qualifications are available, except where United States key and permanent personnel for dredges are essential; clearance in this regard to be made through the National Employment Service of Canada; the rates of pay and working conditions for all labour employed in Canadian territory on the project will be set after consultation with the Canadian Department of Labour in accordance with the Canadian Fair Wages and Hours of Labour Act.
   1. That the appropriate customs procedure to be followed concerning dredging equipment materials and consumable items will be drawn up when the general conditions of contracting and employment have been ascertained by the two Governments.
9. That the Unemployment Insurance Act of Canada, and regulations thereunder, will apply to any Canadian workmen who may be employed on the project and also to United States workmen employed on this project if they are employed on Canadian territory by a contractor (not by the United States Army Corps of Engineers) and cannot be covered under any employment insurance law of the United States; if any Canadian workmen are employed directly by the United States Army Corps of Engineers the arrangement whereby the United States Armed Forces will insure Canadian employees from July 1, 1956, will apply.
10. That the United States Government will ensure that the necessary arrangements are made with the authorities of the Province of Ontario concerning the Workmen's Compensation Act of that province.

(l) Administrative arrangements concerning this project may be made from time to time between authorized agencies of the two Governments.

6. In order to facilitate the construction of the new channel, the Canadian Government should undertake to make the following arrangements:

1. Canada will retain title to all territory required for the channel. At the same time the Government of Canada will grant and assure the United States, without charge, such rights of access, use and occupancy as may be required for the construction of the new cut.
2. To pay equitable compensation to the Indian Band.
3. As Canada will retain sovereignty over the territory through which the channel is constructed, the Canadian Government will be responsible for the administration and maintenance of the completed channel in such a manner as may from time to time be agreed between the two Governments.
4. Nothing in the international agreement shall derogate from the application of Canadian law in Canada provided that, if in unusual circumstances its application may lead to unreasonable delay or difficulty in the construction of the channel, the United States Government may request the assistance of the Canadian Government in seeking appropriate alleviation. In order to facilitate the construction of the new channel, the Canadian Government will give sympathetic consideration to any such request submitted by the United States Government.

Recommendation

The Secretary of State for External Affairs, with the concurrence of the Minister of Public Works and the Acting Minister of Citizenship and Immigration, recommends:

1. That the Department of Public Works, who will make provision for the necessary funds, be authorized to enter into negotiations with the Indian Band on Walpole Island concerning the acquisition of Indian lands for this project.
2. That when a suitable agreement has been reached between the Canadian Government and the Indian Band concerning the acquisition of Indian lands, the United States Government be authorized to construct the proposed cut-off channel in Canadian territory, subject to conditions along the lines of those set out above.
3. That Canada should assume responsibility for the maintenance and administration of the channel.²⁸⁹

Sidney Smith

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²⁸⁵Note marginale:/Marginal note: American Division: approved by the Minister. M. C[adieux]

²⁸⁶Voir Canada, Recueil des traités, 1959, n^o6.
See Canada, Treaty Series, 1959, No. 6. ²⁸⁷Note marginale:/Marginal note:
This date is correct. There was a long gap in the US-Can. corresp[ondence].
Between June/56 and July/57. D.W. M[?]

²⁸⁸Voir/See Volume 23, Document 300.

²⁸⁹Le 3 février 1958, le Cabinet a reporté à plus tard le suivi de ces recommandations en attendant l'issue des négociations relatives à des terres appartenant à la bande indienne de Walpole Island.
On February 3, 1958, Cabinet deferred acting on these recommendations pending the outcome of negotiations for land belonging to the Walpole Island Indian Band.