The United States Embassy, in Note No. 235 of May 19, 1955, requested the views of the Canadian Government on a proposal submitted by the United States Army Corps of Engineers for improving the St. Clair River Channel. This is part of a larger programme for the widening and deepening of all the Great Lakes connecting channels by the Government of the United States. The improvement of the St. Clair Channel might be accomplished in one of two ways: (a) widening and deepening the existing channel at Southeast Bend or (b) constructing a cut-off channel through the marshy area on the Canadian side of the St. Clair River. It is considered by the United States Government that one of the two mentioned alternatives is essential to the growing needs of navigation and commerce. Recommendations have been made to the United States Congress by the United States Army Corps of Engineers in support of a new cut-off channel. Whether this alternative will be acceptable to the United States Government depends upon consideration of the economic advantages to be gained, and the conditions which the Canadian Government will impose for the granting of permission to construct the cut through Canadian territory.

2. An interdepartmental committee has given consideration to the plans outlined in the United States Embassy Note and is of the opinion that it is in Canada's interests to have the channel improved. Since 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, it is believed that this project would be preferable to widening and deepening the existing channel. For this reason, and because the new channel would be almost entirely in Canadian territory (as opposed to previous dredging which straddled the International Boundary) and therefore involve conditions for which there is no precedent, it is proposed that the Canadian reply to the United States Embassy Note should concern itself specifically with this one project. Should the Canadian conditions be unacceptable to the Government of the United States, or should the project for a cut-off channel be considered uneconomic for other reasons and therefore abandoned, then consideration could be given by the Canadian Government, if requested, to the widening and deepening of the existing channel.

3. In the past, though conditions are not the same now, the United States Government has traditionally assumed responsibility for the cost of improving the Upper Great Lakes connecting channels. Accordingly, in 1955, Congress was asked to authorize the entire programme of Great Lakes channel improvements, of which the St. Clair River project is a part. The bill was passed by the House of Representatives August 1, 1955, but did not receive the approval of the Senate until March 9, 1956. The bill has now been submitted for the approval of the President.

4. The United States Army Corps of Engineers estimates that the construction of the new cut would cost approximately $5,491,000 more than widening and deepening the existing channel. The annual cost of dredging maintenance would be approximately $40,000. The principal local interests in Canada which would be affected by the construction of the new channel are the Indians of the Walpole Island reservation and the St. Clair Shooting Club, which has acquired a lease from the Indians in this area for duck shooting. The cost of compensation to the local interests in Canada would probably not exceed $200,000, since this figure has been mentioned by the Walpole Island Indian Band Council as the amount the Indians should receive. In addition, some disturbances may be created to the migratory birds which have historically used this area for breeding and feeding grounds and to certain species of fish which are to be found in these waters.

5. As the new cut would be almost entirely in Canadian territory, various alternative arrangements might be made with the United States:

(a) The Canadian Government could construct the new cut and pay the entire cost of the project, or,

(b) while retaining sovereignty over the territory, the Canadian Government could authorize the United States Government to construct the cut, maintain it and pay compensation to any local interests affected, or,

(c) while retaining sovereignty over the territory, the Canadian Government could authorize the United States Government to construct the cut, with Canada assuming responsibility for the payment of compensation to local interests in Canada, and for maintenance of the channel.

The Canadian Government might request, particularly under arrangement (c), that Canadian contractors be given an equal opportunity to bid on all or part of the project and that Canadian labour might, where practicable, be employed.

6. In reaching a decision on which alternative arrangement would be most appropriate, the following considerations might be taken into account:

(a) The United States has traditionally assumed responsibility for any improvements in the Upper Great Lakes connecting channels. Canada, for its part, built, maintains and operates the Welland Canal and has undertaken the dredging of the St. Lawrence River below Montreal. Accordingly, it would not appear to be necessary for Canada to assume heavy capital expenditures in the Upper Great Lakes connecting channels;

(b) Experience with United States defence projects in Canada shows that difficulties arise when the United States Government constructs works on Canadian territory;

(c) It is not desirable that the United States should acquire, or even appear to acquire, proprietary rights on Canadian territory as a result of the constructions, maintenance or operation of a project of this nature;

(d) Since the proposed channel would be almost entirely in Canadian territory, opportunity should be given to Canadian contractors to bid on the project and to Canadian workmen to obtain employment. This is the arrangement in effect for defence projects which the United States has desired to be constructed in Canada;

(e) If the United States Government constructs the channel, appropriate conditions should be laid down to protect Canadian interests, both private and public.

7. If our reply to the United States Embassy is based on the arrangement set out in paragraph 5(c), authorizing the United States Government to construct this channel in Canadian territory, the following basic conditions might be included in the Canadian reply to the United States Embassy Note No. 235:

(a) That the final plans for the construction of the channel, including plans 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;

(b) That dredging and excavations and the deposit of dredged and excavated materials shall not be carried out on Canadian territory until such time as the Canadian Government has made arrangements for the entry of personnel and equipment;

(c) That the United States shall accept the responsibility for safeguarding the interests of navigation and riparian owners during the progress of the work, and the cost of remedial works and compensation if the interests of navigation or riparian owners are affected during the construction of the channel;

(d) That the works to be carried out in Canadian territory shall be without prejudice to the sovereign rights of Canada;

(e) That Canadian contractors shall be given an equal opportunity with United States contractors to bid on all or part of the work and that Canadian workers shall be given employment in so far as those of necessary qualifications are available;

(f) That the appropriate customs procedures to be followed concerning dredging equipment and consumable items will be drawn up when the general conditions of contracting and employment have been agreed upon by the Governments of Canada and the United States.

Recommendation:

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

(a) That the United States Government be authorized to construct the proposed cut-off channel in Canadian territory under the conditions set out above;

(b) That Canada should pay for compensation to local interests in Canada and assume responsibility for maintenance and administration of the channel.

L.B. PEARSON