We understand that the attached memorandum on this subject will be brought before Cabinet on November 12, by the Minister of National Defence. The memorandum recommends that the United States be authorized to proceed with activities in Canada connected with the BMEWS project under terms and conditions to be set out in an exchange of notes between the two Governments. A United States draft note was forwarded to us in July and has been considered by interested Canadian Government Departments. The suggestions for revision of the United States draft are contained in the paper which forms part of the attached submission to Cabinet. That paper has been approved by senior officials of the Departments concerned including representatives of this Department.

The draft note submitted by the United States in July was designed to cover in general terms activities in Canada connected with the establishment by the United States of an early warning system against ballistic missiles. At this stage, the United States activities which would affect Canada are almost entirely in the communications field, i.e., the establishment of communication links from BMEWS radars in Thule and in Alaska. The agreement, if concluded, would cover only the "passive" element of a defence system against missiles, i.e., detection and warning equipment. The "active" element of the system, i.e., heavy radars and anti-missile missiles, will form the other essential part of the system. We have as yet little indication of United States plans in this respect which would affect Canada.

Ministers have recognized the importance of the missile threat to Canada and have agreed that it is appropriate for Canada to participate in defence systems designed to meet this threat. The Canadian Government has already given its approval to a number of specific installations connected with the system which the United States wished to build in this year's construction season. These approvals are noted in paragraph 3 of the paper included in the attached submission. This piece-meal approach to the problem has bothered Ministers but they have recognized that the state of the art is so primitive that circumstances force ad hoc decisions.

Some concern has been expressed even in service quarters that we are not being kept fully informed of developments in the United States in the field of anti-missile weapons. One factor of importance in this connection is the rivalry which exists between the United States Air Force and the United States Army as to who will control the anti-missile weapons. Our object must be to participate as effectively as we can in the development of the whole anti-missile defence system while entangling ourselves as little as we can in the inter-service struggle going on in United States.

Officials of the interested Departments have agreed that it would be desirable when forwarding Canadian comments on the United States draft note of July to indicate that the Canadian Government is anxious to have full details as early as possible on the active phase of the anti-missile defence system. This point was made by the Canadian Section at a recent meeting of the Permanent Joint Board on Defence. The Canadian Section pointed out that such information was extremely important both from the point of view of military planning and Canadian defence production.

A number of detailed observations are made in the attached paper which are not of special concern to this Department. Some of them will no doubt be dealt with by the Ministers of Defence Production and Transport. The Minister of Defence Production is particularly anxious that as early as possible in the development cycle of new weapons connected with the active phase of missile defence Canadian industry should be given an opportunity to participate. The Minister of Transport is concerned with the implications for Canadian Government telecommunications policy of the provision of military communication facilities which run through Canada to other countries.

I recommend that you give your concurrence to the attached paper in order that this Department may reopen negotiations with the United States authorities on a satisfactory exchange of notes to cover this first phase of BMEWS activities in Canada.¹⁷⁹

D.V. LEP[AN]

for Under-Secretary of State
for External Affairs

[PIÈCE JOINTE 1/ENCLOSURE 1]

Note du ministre de la Défense nationale
pour le Cabinet

Memorandum from Minister of National Defence
to Cabinet

Secret

Ottawa, November 7, 1958

The United States are establishing a number of high powered radars to detect and track ballistic missiles approaching North America. One of these radars is being established at Thule, Greenland, and one in Alaska. To enable instantaneous and reliable communication of information from these radars to NORAD Headquarters a rearward communication system is required. Parts of this system will pass through Canadian territory.

On July 11th, 1958, a proposed note, covering U.S. communication proposals, was received by External Affairs. A Canadian interdepartmental group was established with representation from the various government departments concerned to study the contents of the proposed note. This group made a report to the Panel on Economic Aspects of Defence Questions, and the Panel, after consideration of the paper, which is attached hereunder, recommend that authority be granted to enter into negotiations with the United States for the exchange of notes covering the establishment of that portion of the communications system passing through Canada, in accordance with the conclusions arrived at by the interdepartmental group.

I concur in this recommendation.

[G. PEARKES]

[PIÈCE JOINTE 2/ENCLOSURE 2]

Note pour le Comité sur les aspects économiques de la défense

Memorandum to Panel on Economic Aspect of Defence

Secret

BALLISTIC MISSILE EARLY WARNING SYSTEM - OVERALL AGREEMENT

Introduction

1. The United States, as an integral and essential part of the North American Continental Defence System in which Canada is a partner, has undertaken a programme to provide facilities for detection and early warning of a possible attack by ballistic missiles. The United States state there is a need for two separate highly reliable communications routes required from each of the Ballistic Missile Early Warning System (BMEWS) sites in Greenland and Alaska to NORAD. The proposed long-lines communications support for the BMEW System is outlined in Appendix "A".?

2. The BMEW System is planned not as an independent system, but takes into account other communications needs and facilities in the area, which will mutually support one another.

3. One of the detection installations is planned for Thule, Greenland, and its effectiveness will depend on the establishment of reliable communication to support the installation. Due to the indicated urgency of taking certain preliminary steps in connection with this project in advance of the consideration of an overall agreement on conditions covering the BMEW System, Canada has been requested to deal with certain aspects of the project on a piece-meal basis. This has resulted in the following developments:

1. The Canadian Government, in Note #38, dated March 10, 1958, authorized the United States, subject to certain conditions, to conduct on Canadian territory a number of tests and surveys relating to the communications needed for the system, without prejudice to the decision of the Government on any subsequent request by the United States for permission to construct such communications facilities.
2. Following Cabinet consideration on April 29, 1958, of a United States request for clearance by Canada in their placing orders for cable, repeaters and contracting for a cable laying ship, the United States were advised by the Minister of Defence Production, in a letter dated May 1, 1958, that, in view of the urgency of this matter, the Canadian Government had given approval to their requests, without prejudice to the Canadian Government approval covering the overall communication project.
3. A United States request was received under date of July 11, 1958, for authorization to begin construction this summer of certain facilities at Cape Dyer, Baffin Island, needed for the purpose of laying a single submarine cable between Thule, Greenland and Cape Dyer. Following consideration by the interested Ministers, the United States were advised of Canadian concurrence in their request, subject to certain stated conditions concerning construction contractors, equipment procurement, cable landing, etc., and without prejudice to any decision on the overall agreement.

Proposed Overall Agreement

4. The United States Embassy, in a letter dated July 11, 1958, have submitted a proposed draft note for an overall agreement which would govern the use of Canadian communication facilities and the establishment of certain new facilities in Canada in support of the Ballistic Missile Early Warning System. The United States have also furnished the substantive portions of a proposed letter from the USAF to the Department of Defence Production covering the construction and procurement of electronics equipment under the proposed BMEWS Agreement.

5. There may be need to clarify with the United States authorities exactly what facilities they are seeking to have covered by the exchange of notes which they have proposed. On the face of it, the United States note could be considered to cover communication facilities designed to serve not only the Thule station, but also the Fairbanks station. As it is proposed to differentiate between the Thule System and the Fairbanks System, this approach should be made clear in the exchange of notes.

6. The interested Canadian departments have examined the United States proposed draft note and have established that in general it follows the format most recently agreed to in the Statement of Conditions on the SAC Refuelling Base Agreement, and other notes, including those on the Distant Early Warning Line.

7. Significant matters covered by the draft overall agreement as prepared by the U.S. are as follows:

1. Communications Facilities. The United States do not plan to establish on Canadian territory any new communications routes for separate operation where existing government or commercial facilities are adequate or where it is feasible for the present operators to expand and improve existing, but inadequate facilities. Lease arrangements are contemplated in all cases where commercial facilities are to be utilized, with operation to continue under the commercial companies involved. If communications facilities covered by existing agreements are affected, it is proposed that the provisions of such agreements shall, so far as practicable, apply with respect to manning and operation of any additions or improvements to such facilities.
2. Manning. The question of manning and operation of new communication facilities established in Canada, including the extent of Canadian participation shall be determined by agreement between the appropriate government agencies on the understanding that the system's contractor of the United States may be required to operate some or all of such facilities for an initial two year period and, also, that Canada reserves the right, on reasonable notice, to take over the operation and manning of all or any of the communications installations located in Canada in connection with BMEWS.
3. Financing. The United States, will, unless otherwise agreed, be responsible for the cost of establishment, operation and maintenance of the portion of the System located in Canada. Except, that Canada shall pay any added costs, including costs of operation, which result from adopting any part of the communications system required for the BMEWS project to accommodate purely Canadian requirements.
4. Period of Operation. The U.S. operate the facilities and station personnel for the System for ten years from the date the agreement enters into force, or such shorter period as may be agreed upon in light of mutual defence interests. After the ten year period, in the event that either government concludes that the operation of the facilities is no longer required and that the other government does not agree, the question of continuing need will be referred to the Permanent Joint Board on Defence.

8. In addition to the matters referred to in the preceding paragraph, the United States in furnishing explanatory comments on the draft agreement, have indicated that it is possible that certain forward acquisition radar sites and missile sites may be proposed for location in Canada. They indicate that the planning and development work have not progressed to the point that any useful forecast can be made at this time of the implications for Canada of the active missile defence. If and when any additional sites are contemplated, they have proposed that an addendum to the BMEWS agreement, adopted by mutual agreement, should be the method of covering such activities in Canada.

9. Comments of representatives of interested Canadian departments on the U.S. draft and supporting documentation, are as follows:

1. Manning. Reference should be made to the number of personnel to be stationed at sites - along the lines of the provision in paragraph 9 of the SAC Agreement, which reads: "... the numbers of personnel to be stationed at any particular site will be a matter for agreement between the appropriate agencies of the two Governments, and will, in any case, not exceed the minimum required to operate the facilities effectively."
2. Telecommunications. That paragraph 12 of the draft be rewritten along the lines of the redraft at Appendix "B"? to cover land circuits, radio stations and submarine cables. This would ensure that provision for the satisfaction of the requirement for circuits or equipment by leases or other appropriate arrangements with Canadian commercial companies or government agencies should include the possibility of "new circuits" as well as by extension or improvement of existing circuits or equipment. The reference to radio stations would conform to the provision in the SAC Note. The addition of a reference to submarine cables would enable arrangements to be made for each cable which may involve peculiar policy considerations.
3. Construction and Procurement of Electronic Equipment. The draft statement of conditions provides that contracts for construction and the procurement of electronic equipment shall be determined by agreement between appropriate agencies of the two governments. This procedure has been worked out by the Department of Defence Production and it is proposed to set the agreement out in a confidential exchange of letters between the USAF and DDP. The proposed procedure conforms to the agreement reached on the SAC Refuelling Conditions. The confidential letter between the USAF and DDP will state that all construction work will be undertaken through Canadian contractors and that the procurement of electronic equipment will be awarded as far as practicable, to Canadian companies, with the question of practicability being resolved on the basis of an assessment of such factors as availability at the time period, cost, performance and capabilities of Canadian and US companies. It is the intention of the Department of Defence Production to participate with the USAF and the systems contractor in carrying out these conditions and to monitor the contracts which are awarded in Canada. For this purpose a permanent liaison officer has been established at the BMEWS Project Office.
4. Canadian Law. It is noted that the draft provides that nothing in the agreement shall derogate from the application of Canadian law in Canada.
5. Matters Affecting Canadian Eskimos. That a paragraph be added to the US draft to provide for the restoration of sites, along the lines agreed to in the DEWDROP Exchange of Notes, as follows: "If in the opinion of the Department of Northern Affairs and National Resources the condition of buildings, equipment or other material which are no longer to be used for the Project may have an injurious effect upon the Eskimos, the two governments will consult with a view to working out mutually satisfactory arrangements for razing any equipment, and restoring the site to a reasonable condition, bearing in mind the authorized uses to which the site has been put."
6. Extension of Agreement by Means of Addendum. The exact nature of the type of agreement which might be required to cover possible acquisition radar and missile sites in Canada cannot be determined at this time. As separate agreements may be necessary for installations of this type, it is not considered desirable to advise the United States that we can agree to having this type of installation covered by means of an agreed addendum to a BMEWS agreement.

Conclusions

10. It is recommended that the following conclusions be taken into account:

1. That the establishment of the BMEW System with the necessary communications through Canada is a requirement of highly significant military importance as it would augment the existing defence arrangements for North America by providing facilities for the detection and early warning of a possible attack by ballistic missiles.
2. From the military standpoint, it would be desirable for the Canadian military to participate in the technical development of the System, and in the exploration of the implications for Canada of the active anti-missile defences.
3. That the U.S. should be authorized to proceed with the project under appropriate terms and conditions which should take into account the points raised in paragraph 9.
4. That Canadian authorization to proceed with the development of a communications system be restricted, in so far as usage is concerned, to meeting the requirements of BMEWS and of other projects covered by governmental agreements.