Note No. 143 of May 20. 1948, † from the United States Embassy, appended hereto, resurrects the question of the Passamaquoddy Tidal Power Project, and suggests that it be referred to the International Joint Commission under Article IX of the Boundary Waters Treaty of 1909.

2. A note on the scope and history of the Passamaquoddy Project is attached to this memorandum.

3. Also annexed hereto, for your signature if you concur, is a noncommittal note † to the United States Embassy, asking for information as to the exact nature of the project the United States authorities have in mind, and stating that their proposal will receive due consideration.

4. The United States Embassy's note states that draft terms of reference will be forwarded in the near future for our consideration. In view of the many factors involved in a project of this type, you would probably agree that it will be necessary to refer the draft terms of reference to an interdepartmental committee. The committee would presumably require representation from this Department, Mines and Resources, Fisheries and Public Works, and possibly from Finance, Transport, Trade and Commerce, Reconstruction and Supply and National Defence. With your concurrence, therefore, I propose to furnish the Deputy Ministers of these Departments with copies of the notes exchanged between this Department and the United States Embassy and with our note on the history of the project.

5. I do not believe that there will be any need to set up an interdepartmental committee until the United States Government has given more specific information regarding the project it has in mind, and has forwarded draft terms of reference for our consideration.

L.B. P[EARSON]

[PIECE JOINTE/ENCLOSURE]

Note

Memorandum

[Ottawa], May 29, 1948

THE PASSAMAQUODDY TIDAL POWER PROJECT

The United States Embassy, in its Note No. 143 of May 20, 1948, has resurrected the question of the Passamaquoddy Tidal Power Project, and has suggested that it be made the subject of a joint reference to the International Joint Commission under Article XX of the Boundary Waters Treaty of 1909.

2. The original Passamaquoddy project was to have been undertaken by private capital at a cost of approximately $100,000,000 and was designed to generate some three billion kilowatt hours of electricity per annum. It involved damming Passamaquoddy Bay, through which passes the International Boundary, between Maine and New Brunswick, and Cobscook Bay, which lies wholly in the State of Maine. The former would have been artificially maintained near high tide level, and the latter near low tide level, while a controlled flow between the two basins thus formed would have utilized the head created by the great tidal range in the Bay of Fundy for the continuous generation of hydro-electric power. A system of gates would have provided for the replenishment of Passamaquoddy Bay at high tide and for emptying Cobscook Bay at low tide, while locks would have been provided for shipping using the water inside the two basins.

3. The original project was sponsored by an engineer named Dexter P. Cooper, who formed companies in Canada and the United States. The "Act to incorporate the Canadian Dexter P. Cooper Company" (16-17 George V, c. 23, assented to June 15, 1926) provided that the construction of the necessary works in Canada should be commenced within three years and completed within six years. It further provided that the works could not be commenced until they had received the approval of the Ministers of Public Works, Marine and Fisheries, and of the Interior, of the International Joint Commission, and of the Governor in Council.

4. Opposition to this scheme developed in New Brunswick and, to some extent in Nova Scotia, principally because of an anticipated adverse effect on the herring-sardine industry of the area. (Other objections related to ice formation in Passamaquoddy Bay, and to possible changes in tidal levels, fishing conditions, water temperatures and climate conditions throughout the Bay of Fundy area.) The Company did not receive the necessary approval from the various authorities concerned (no reference appears to have been made to the International Joint Commission) and the authority for the Company to proceed with its undertaking lapsed on June 15, 1929, after a Bill to extend the time limit had been rejected by the Private Bills Committee of the House of Commons.

5. In a note dated May 15, 1929, the United States Legation in Ottawa sought further Canadian consideration for the extension of the time limit, and suggested that a Canadian Commission be appointed to examine the fisheries questions involved. The Canadian reply, dated June 1, 1929, said that further consideration could not be given to the rejected legislation at that time, but that the Canadian Government would be prepared to authorize additional study of the fisheries questions and to cooperate with the United States authorities to this effect.

6. 1n July, 1929, a sub-committee of the North American Committee on Fisheries Investigation recommended a two-year study of the probable effects of the power project, and in a note to the United States Minister, dated September 20, 1929, it was proposed that the two governments share the cost of such an investigation, estimated at $45,000 per annum.

7. The proposal was agreed to, and between 1931 and 1933 the "International Commission Appointed to Investigate the Probable Effects of the Damming of Passamaquoddy and Cobscook Bays on the Fisheries of that Region" carried on its work. In December, 1933, it brought in an inconclusive report. The report reaffirmed what was already known - that approximately 2,5 per cent of the $1,500,000-yearly herring industry of the area was carried on inside the portions to be dammed, and that this percentage would probably be obliterated by the project. The effect outside the dams could not be determined without further study, and quite possibly, without constructing the dams themselves.

8. No further serious attempt appears to have been made to advance the main Passamaquoddy scheme. Mr. Cooper, however, continued to seek federal aid in the United States for various smaller projects confined to Cobscook Bay. Federal agencies in the United States considered these proposals but rejected them principally on the grounds that there appeared to be no market for the power which would be developed. Finally, in 1935, a Public Works Administration allotment of $10,000,000 was made for the commencement of one of the Cobscook Bay projects. 1t is understood that approximately $7,000,000 was spent - mainly in the construction of a model community on the shores of Cobscook Bay - before the undertaking was finally abandoned in 1936. It may be noted that this project was popularly referred to as the Passamaquoddy Project, even though Passamaquoddy Bay itself was not directly affected.

9. No official correspondence appears to have been exchanged between Canada and the United States in connection with this latter project, even though the completion of the project might have affected tidal currents and fishing conditions in Canadian waters.

10. Restricted. A noncommittal note is being sent in reply to the United States Embassy's note of May 20, 1948, and it is planned to inform the other interested Government Departments of the exchange of notes. When, and if, draft terms of reference to the International Joint Commission are passed to us by the United States Embassy, it will probably be necessary to set up an interdepartmental committee to study them.