Present:

The Prime Minister (Mr. St-Laurent) in the Chair,

The Minister of Trade and Commerce

and Minister of Defence Production (Mr. Howe),

The Minister of Agriculture (Mr. Gardiner),

The Minister of Public Works (Mr. Fournier),

The Minister of National Defence (Mr. Claxton),

The Minister of Transport (Mr. Chevrier),

The Minister of National Health and Welfare (Mr. Martin),

The Minister of National Revenue (Dr. McCann),

The Minister of Labour (Mr. Gregg),

The Secretary of State for External Affairs (Mr. Pearson),

The Minister of Resources and Development (Mr. Winters),

The Secretary of State (Mr. Bradley),

The Minister of Veterans Affairs (Mr. Lapointe),

The Minister of Mines and Technical Surveys (Mr. Prudham).

Mr. C.C. Eberts, Privy Council Office.

ST. LAWRENCE WATERWAY AND POWER PROJECT

1. The Prime Minister, referring to the discussion at the meeting of February 22nd, 1951, said that the Chairman of the Ontario Hydro-Electric Power Commis­sion had called on him to discuss future Canadian policy regarding the St. Law­rence waterway and power project, in view of Ontario's need for additional power and the possibility that the United States Congress would not endorse, during its current session, the 1941 Agreement on the combined waterway and power project.

Mr. St-Laurent had told Mr. Saunders that the government recognized Ontario's need for additional power by the end of 1956 and could be counted on to do every­thing possible, in the light of the relationship with the United States in this matter, to ensure that the power side of the St. Lawrence project was completed in time. In view of the situation in Congress, he had undertaken to discuss with the other mem­bers of the government, the possibility of taking early action looking to separate power development (by Ontario and New York) and construction of the waterway by Canada alone. It might be desirable to consider introducing in the House of Commons legislation enabling Canada to proceed with the construction of the waterway, making it clear at the same time that U.S. participation in this scheme would still be welcome. Mr. Saunders thought that U.S. opponents of the waterway scheme would reverse their attitude if it were made clear that Canada planned to undertake construction of the waterway at its own expense. He had also said that, should Congress fail to endorse the combined scheme this year, he believed that New York and Ontario would be prepared to build the power facilities and common works and that Ontario would, if necessary, be prepared to handle the expropriation of lands and the payment of damages on the Canadian side.

2. The Secretary of State for External Affairs said the Canadian Ambassador in Washington had reported that Congress, with only the House of Representatives so far considering the matter, might not approve the 1941 Agreement during its cur­rent session. He had also pointed out that, should the House of Representatives endorse the combined project and the Senate postpone action on it until the next session, it would be very difficult to obtain agreement to proceed with separate power development by Ontario and New York.

3. The Minister of Trade and Commerce and Minister of Defence Productionpointed out that the U.S. Secretary of Commerce, in conversation, had accepted the fact that, should Congress not approve the combined project this year, Canada would proceed with the waterway on its own. He thought it inadvisable to indicate any intention to take separate Canadian action for another few weeks, until the intentions of Congress were clearer. Otherwise, there might be the criticism in the United States that Congress had not been given sufficient time to consider the U.S. position in the matter.

4. The Cabinet, after further discussion, noted the report of the Prime Minister regarding discussions he had had with the Chairman of the Ontario Hydro-Electric Power Commission, with regard to future Canadian policy on the St. Lawrence waterway and power project, and agreed that, until the intentions of the United States Congress became clearer, nothing be done for another few weeks to indicate the possibility of separate Canadian action on the project.