Present
The Prime Minister (Mr. Diefenbaker) in the Chair,
The Secretary of State for External Affairs (Mr. Green),
The Minister of Finance (Mr. Fleming),
The Minister of Veterans Affairs (Mr. Brooks) (for morning meeting only),
The Minister of National Defence (Mr. Pearkes),
The Minister of Trade and Commerce (Mr. Churchill),
The Minister of Justice (Mr. Fulton),
The Minister of National Revenue (Mr. Nowlan),
The Minister of Agriculture (Mr. Harkness),
The Minister of Citizenship and Immigration (Mrs. Fairclough),
The Minister of Fisheries (Mr. MacLean),
The Minister of Labour (Mr. Starr),
The Postmaster General (Mr. William Hamilton),
The Minister of Mines and Technical Surveys (Mr. Comtois),
The Minister of National Health and Welfare (Mr. Monteith),
The Minister of Northern Affairs and National Resources (Mr. Alvin Hamilton),
The Minister of Defence Production (Mr. O’Hurley),
The Minister of Public Works (Mr. Walker),
The Associate Minister of National Defence (Mr. Sévigny).
The Secretary to the Cabinet (Mr. Bryce),
The Assistant Secretary to the Cabinet (Dr. Hodgson),
The Registrar of the Cabinet (Mr. Halliday).

. . .

PEPPERRELL AIR FORCE BASE

40. The Secretary of State for External Affairs reported that in January of this year it was announced that the United States Air Force would be closing down Pepperrell Air Force Base, situated on the outskirts of St. John’s, Newfoundland placing it on caretaker status as of September.

Pepperrell was one of the 99-year leased bases and in the lease the Government of Newfoundland was named as the lessor. The question which arose now was in which government was vested the reversionary interest in the Base, the Crown in right of Canada or the Crown in right of the Province of Newfoundland. The question was not dealt with as such in the Terms of Union, but three provisions might be considered to have application. Two related to Canada taking over defence, and military and naval properties, stores and equipment. The third stated that Newfoundland public works and property not transferred to Canada shall remain the property of the province.

An opinion by the previous Deputy Attorney General was favourable to the transfer of the reversionary interest to Canada but the present incumbent felt that a court might well decide that only military properties used directly by Newfoundland became the property of Canada under the Terms of Union.

There were several departments interested in the Base. The Department of National Defence were examining possible transfer of certain defence utilities to here from Buckmaster’s Field; they were also, interested in using accommodation for increased naval forces. The Department of Transport were interested in facilities for the Marine Services Branch; the R.C.M.Police could use certain buildings in lieu of new construction and the Provincial government could use the Base Hospital and some buildings for Memorial University. There was a small continuing U.S. requirement.

There would appear to be no reason why all these requirements could not be met. It would be desirable to expedite a solution and he was recommending that the Minister of Justice enter into negotiations with the Attorney General of Newfoundland.

An explanatory memorandum was circulated, (Minister’s memorandum, Aug. 10 — Cab. Doc. 264-60).†

41. The Cabinet approved the recommendations of the Secretary of State for External Affairs,

(a) that the Minister of Justice inform the Attorney-General of Newfoundland:

(i) that the United States had transmitted to the Department of External Affairs the Notice of Abandonment of the lease;

(ii) that, without prejudice to the legal issue as to the reversionary interest, he was prepared to enter into negotiations with the Attorney-General of Newfoundland to the end that there be effected a division of Base facilities to the satisfaction of both parties;

(iii) that, subject to agreement being reached as outlined in (ii) above:

(1) Canada and the United States would enter into an agreement to meet the residual requirements of the United States for facilities at the base; and,

(2) Canada would inform the United States that there was no objection to the proposal to waive the one-year period of notice; and,

(b) that, failing an agreement between Canada and Newfoundland, the question should be re-examined by the Cabinet, particularly with respect to the question of a reference to the Supreme Court and to the nature of the reply to the United States Notice of Abandonment.

. . .