DIVERSION OF YUKON RIVER WATERS, YUKON TERRITORY, TO PROPOSED POWER PLANTS IN TAIYA RIVER VALLEY, ALASKA

The undersigned wish to report on the above project which will utilize Canadian waters to develop a large block of power for a proposed aluminum plant in the Taiya River Valley, south east Alaska.

The project involves the building of a dam on the Yukon River at Miles Canyon 3 miles south of Whitehorse, Yukon Territory, and the raising of the water levels of all tributary waters of the Yukon River south of the damsite, to an approximate elevation of 2,205 feet, Geodetic datum. Some 5,000 cubic feet per second of water will then be diverted south westerly across the International Boundary, and through the Mount St. Elias Range to the Taiya River Valley, Alaska, by means of two large hydraulic tunnels. The upper or No. 1 tunnel will be 10.2 miles long and the lower or No. 2 tunnel 11.2 miles long. (See attached map t) At the lower end of each tunnel a power plant will be constructed and which will utilize a total head of some 2,200 feet to develop approximately 1,100,000 horse power. The second or lower tunnel will supply water to No. 2 plant at approximately sea level. The power developed will be used to manufacture aluminum from bauxite ore brought in by boat, will also supply a new town of some 2,000 aluminum workers and their families and will be transmitted to consumers at other points where the amount of power required and the limited distance involved, makes this economically feasible.

In addition to the main power plants described above, the project includes a plant of not less than 10,000 horse power at the Whitehorse dam to meet all requirements of the Whitehorse district that are within economic transmitting distance. Sufficient water will be released at the Whitehorse dam to meet navigation needs on the Yukon River during the season, and to develop the power that may be required in that area. The amount of water to be diverted is about one half of the mean flow of the Yukon River at Whitehorse, and which is estimated at 10,000 cubic feet per second. The average flow of the Yukon River below the Whitehorse dam will thus be reduced by 5,000 cubic feet per second through both the Yukon Territory and Alaska. Constant uniform flow through the diversion works will be maintained by the great storage reservoir created by the Whitehorse dam.

The project first came to the notice of the Department of Resources and Development (then Mines and Resources) in October 1947, when high officials of the Aluminum Company of America (Alcoa) visited Ottawa and outlined its possibilities in informal conversations with some members of the Cabinet, and senior officials of the Department of Mines and Resources. Since that time further discussions have taken place, with Ministerial approval, on an informal and strictly confidential basis. As a result of these exchanges of views unalienated land in the Yukon Territory that might be affected has been temporarily reserved from entry and the Aluminum Company has been granted a permit under the Dominion Water Power regulations to make field surveys and investigations.

From the Canadian standpoint the interests of the Yukon Territory, and the benefits that might accrue to it from the development, are of paramount importance. These have been under frequent consideration and have been a subject of discussion from time to time with Alcoa officials. These officials have also been in touch with the province of British Columbia since the upper reaches of the Yukon River drainage basin lie in that province, and its water resources are substantially involved. British Columbia has indicated that it will take no official action on the project, nor does it wish any publicity until it has successfully completed arrangements with the Aluminum Company of Canada (Alcan) for a power development on the Nechako River, B.C. to supply an aluminum plant to be built in that province.

Within the past year the Department of the Interior of the United States has taken an active interest in the project, because of the Alaska territory and resources involved, and has suggested the desirability of the project being undertaken as a United States Government venture.

This proposal was discussed at an informal meeting of officials of the Canadian and the United States Governments held in Ottawa on the 21st and 22nd of November 1949.'5 The United States delegates present explained their interest in the project and expressed doubt as to whether the Aluminum Company of America would be granted the United States licences that would be required and that under these circumstances the project would preferably be undertaken by the Bureau of Reclamation of the United States Department of the Interior. The delegation strongly suggested that, as a preliminary step, the matter should be referred to the International Joint Commission. The latter would likely follow its usual practise of appointing a Joint Engineering Board composed of an equal number of engineers from the interested agencies of the two governments. This Board, after making complete field investigations including topographical surveys and borings at damsites, would submit a recommendation to the International Joint Commission which would in turn place it before the two. governments concerned.

It was the view of the Canadian representatives present at the meeting that a reference to the International Joint Commission at this time was not advisable for several reasons. The most important of these was that the province of British Columbia was greatly interested and had definitely stated it could give no formal approval at this time to the project because of its negotiations with the Aluminum Company of Canada for an aluminum plant in the province, nor for the same reason did it wish any publicity to be given to the Yukon River project. It would obviously be impossible for the International Joint Commission to embark on a project of such magnitude involving public hearings and a great deal of survey work, without a large amount of publicity resulting therefrom and which would prove most embarrassing to the British Columbia Government. At the same time, a reference to the Commission would result in the United States technical personnel undertaking survey work in Canada as members of the Joint Engineering Board.

On the other hand the Aluminum Company of America is quite prepared to undertake all surveys necessary to finally determine the feasibility of the project and on which final designs and construction plans could be based. Officials of the Company stated that they were prepared to spend as much as $1,000,000 on such surveys, providing they had reasonable assurances that Canada and the United States would approve the development in so far as their respective interests were concerned.

The attitude of the United States authorities to the Aluminum Company of America, as described by the United States representatives at the November meeting, made it most unlikely that the Company could proceed with its surveys and consequently these would have to be undertaken on some other basis. The representatives at the meeting finally decided that the surveys required at this time should be made by each country in its own territory subject to certain adjustments of parties that might be necessary in view of the rugged terrain of some of the areas where surveys would be made. The undertaking of such surveys would be subject to the approval of the governments of Canada and the United States.

The latter country has indicated its agreement to this action in note No.18 of January 24th*sword* from the American Embassy to the Secretary of State for External Affairs. In this note the United States government also advises that they have appointed Mr. W.E. Warne, Assistant Secretary of the Interior and Brigadier General J.S. Bradgen, Deputy Chief of Engineers, United States Army, as its representatives to co ordinate and plan to work with Canadian representatives that may be appointed.

The stated objective is to make the required surveys without publicity, all operations and correspondence being of a strictly confidential nature.

It now rests with the government of Canada to decide whether it will accept the recommendations of the International meeting of November last and provide funds in the 1950 51 estimates for Canada's share of the survey costs, it being agreed that each country will share these equally.

It is impossible to estimate with any degree of accuracy what these survey costs will be until Canadian representatives have met with the United States representatives already appointed and discussed the extent of the surveys to be made and how much detail in the work is required. It is the present view that surveys on which final designs could be based should not be made at this time but that they should be adequate to finally determine feasibility of the project and the scope of the engineering and construction work necessary to complete the development. As a rough approximation, the sum of $300,000 to be spent over two seasons might be indicative of Canada's financial responsibility if the surveys can be limited to the lines mentioned above.

It is proposed that if the surveys are to be undertaken the current study of the economic benefits to be derived by Canada from such a project would be continued with a view to placing all the information relating to the project before the Governments at the conclusion of the engineering studies.

It is suggested that some limitations to the survey work should be considered at this time because the proposal of the United States authorities to undertake the project as a United States government venture pre supposes the following:

(a) that the United States Congress would approve and vote the funds that would be required for the development roughly estimated at $200,000,000.

(b) that the Aluminum Company of America would be willing to buy power from the United States authorities at the price they would demand.

(c) that the Canadian authorities would agree to divert the water.

Notwithstanding these factors, it is believed that it would be desirable for Canada to proceed with the survey work without any commitments at this time in regard to the diversion of water or construction, and subject to there being no serious objections from the province of British Columbia to having surveys undertaken by Canadian parties in that province.

The undersigned recommend accordingly and also that authority be given to include the sum of $150,000 in the 1950 51 estimates together with approval for the appointment by Governor in Council of Canadian representatives to work with the American representatives already appointed-⁶

[R.H. WINTERS]
[L.B. PEARSON]

⁷⁴ Canada, Canadian Weekly Bulletin, Volume 6, No. 3, November 24, 1950, pp. 1, 10.

⁷⁵ Voir DREC, volume 15, document 997./See DCER, Volume 15, Document 997.