ST. LAWRENCE PROJECT; PROPOSALS FOR US PARTICIPATION IN
CONSTRUCTION OF SEAWAY

11. The Prime Minister, referring to discussion at the meeting of December 17th, 1952, said that, in his budget message to be delivered to Congress on January 9th, President Truman would include a strong recommendation to Congress for US participation in construction of the St. Lawrence Seaway. Furthermore, the new Republican chairmen of the principal congressional committees concerned with St. Lawrence matters had already announced that they intended to introduce legislation immediately covering a joint seaway or a joint seaway and power project. Senator Taft had also stated that he intended to do everything possible to have the St. Lawrence project approved by Congress early in the present session.

In the circumstances, it was thought that the present arrangements for the power project in the International Rapids Section could be jeopardized if the Canadian Government failed to respond to the President's proposal which the US Ambassador to Canada had been instructed to bring officially to the attention of the Prime Minister during the next day or so and to similar proposals announced by congressional leaders of the new Administration.

It had, therefore, been suggested that following the US Ambassador's interview with the Prime Minister, Mr. Woodward might usefully be given a memorandum clearly setting forth the Canadian position in the matter.

A draft memorandum was circulated and read.

(Memorandum, Privy Council Office, Jan. 7th, 1952, Cab. Doc. 6-53)?

12. The Secretary of State for External Affairs suggested that the draft memorandum was possibly a shade too uncompromising in tone and urged that it should not offer any excuse for delay on the granting of a licence by the Federal Power Commission to the New York State Power Authority. This should be avoided at all costs. He suggested certain changes in the wording of the last paragraph including a sentence to be added to the effect that the Canadian Government naturally expected that any discussion on US participation in the construction of the seaway would not be such as to cause undue delay in the construction of the seaway.

Furthermore, although it had been estimated that some $35 million might be saved if the seaway in the International Rapids Section were constructed in US rather than in Canadian territory, it would be advisable to comment more fully on the Canadian position for the benefit of the press and public here in order that Canadians not be left with the impression that the Government was lightly abandoning the all-Canadian scheme which had gained strong support throughout the country.

13. Mr. St-Laurent agreed that the Canadian position could profitably be spelled out more fully for the benefit of the public. In this connection, it should be made quite clear that Canada had a perfectly sound scheme which had been approved by the Parliament of Canada and the Legislature of Ontario and that the Government was, of course, prepared to carry out that plan as soon as all the preliminary arrangements had been completed and authorizations obtained, but that if before the plan could be undertaken the US wished to submit an alternative plan involving joint participation in the construction of the seaway (which incidentally might involve a saving of some $35 million) the Government would naturally be prepared to discuss such a plan with the US authorities provided that such discussion did not cause any serious delay in the construction of either the power project or the seaway.

14. Mr. Pearson noted that the draft memorandum stated that the Canadian Government would be prepared to discuss a joint scheme with the US Government once an appropriate entity had been fully authorized and was able to construct the US share of the power development in the International Rapids Section. This would seem to imply that Canada did not contemplate entering into any such discussions until after possible court injunctions against the New York Power Authority had been lifted.

15. Mr. St-Laurent was of [the] opinion that Canada should agree to enter into such discussions once the New York Power Authority had been licensed by the Federal Power Commission and designated by the US Administration even though protracted court actions might prevent New York from undertaking actual construction. Canada's willingness to negotiate under such circumstances might possibly be helpful in hastening the removal of any such injunctions against New York.

16. The Cabinet, after further discussion, noted the Prime Minister's report on various proposals which had recently been made in the United States for joint development of the seaway in the International Rapids Section by both countries and agreed that --

(a) following delivery to Congress on January 9th of President Truman's budget message, in which United States participation in construction of the seaway would again be urged, a memorandum be given to the US Ambassador in the following terms:

"President Truman's observation in his budget message to Congress that there is still an opportunity for the United States to join in building the St. Lawrence Seaway has been noted by the Canadian Government. Various other proposals by members of the Congress for United States participation in the St. Lawrence Seaway have also come to the attention of the Canadian Government.

"While the Canadian Government is of course prepared to discuss, in appropriate circumstances, joint participation in the Seaway, the demand for power in the area to be served by the International Rapids power development is so urgent that the Canadian Government is most reluctant to engage in any discussion which might delay the progress of the plan now under way for the development of power in the International Rapids Section of the St. Lawrence River at the earliest possible moment.

"Once an entity is designated and authorized to proceed with construction of the United States share of the power works, if the US Government wishes to put forward a specific proposal differing from that put forward by the Canadian Government for the construction of the seaway in the international section which proposal would not delay the development of power under arrangements agreed upon in the Exchange of Notes of June 30th, 1952 and approved on October 29th, 1952 by the International Joint Commission, the Canadian Government will be prepared to discuss such a proposal.

"The Canadian Government would naturally expect the discussion to be such as not to cause any serious delay in the completion of the whole seaway."³⁸

and

(b) the memorandum to the US Ambassador be made public as soon as the President's budget message was made public together with an appropriate indication of the Government's position regarding the all-Canadian seaway and any specific alternative that the US Government might wish to suggest for joint development of the seaway in the St. Lawrence River.