439. Telegram From the Embassy in Canada to the Department of State0

75. In accordance with External Affairs Minister Green’s suggestion, I called on him this morning to say goodbye and to discuss Canadian-American relations. Green was most cordial throughout the 40-minute conversation. His tone was serious and thoughtful. He expressed the most profound gratitude for US financial assistance and for the understanding attitude shown by Secretary Dillon and Under Secretary Ball in dealing with Canada’s balance of payments problems. He was gratified that the GATT waiver problem had been resolved. He asked me for my views on Canadian-American problems. I responded by saying I thought the Columbia River treaty1 was a major issue, and [Page 1188]that many people in the US Government were extremely anxious to know of the prospects for ratification.

Mr. Green agreed that the Columbia River treaty was indeed a problem. He said that the Liberals and the NDP both wanted re-negotiation. He asked me what the US reaction to re-negotiation would be. I said I thought anything apart from minor adjustments would be extremely difficult if not impossible, and that even minor adjustments would present problems. Green said that the chief accusation against the government was that the deal had resulted in a “sellout” of Canadian interests. He said he was himself convinced that it was a fair and reasonable treaty, and that no “sellout” of Canadian interests had occurred. Nevertheless, the charge made it difficult to proceed with ratification, especially given the parliamentary situation. I asked him whether the government had as yet made a deal with Bennett,2 and he said no. He was unable to forecast whether any deal with Bennett seemed feasible in the period before Parliament assembles in September. He dwelt at some length on the sale of downstream benefits implying that the US would like to see the Bennett proposal adopted. I assured him we were quite neutral on whether downstream benefits were sold or not. He said one of the criticisms from the Liberals and NDP was that no price was quoted in the treaty for the sale of power; he wondered whether a price could be quoted. I told him the price depended on the amount of power offered and the term for which it might be available.

Green said that the government proposes to put the treaty before commons in September, where it will be subjected to the committee process during which General McNaughton will have extensive opportunity present his views. Liberals and NDP will join chorus, but Green feels Liberals unlikely wreck chances ratification and therefore treaty may conceivably be ratified. I got impression that government intends put treaty before Commons regardless whether deal had been made with Bennett.

I asked Green what attitude on part of US would be most helpful in advancing ratification of treaty, and he replied that it would be best for US to keep as quiet as possible, as we have been doing. I asked him whether he thought we should indicate that re-negotiation was out of question, if this were the case, and he said such statement might strengthen hands of those who say Canada was out-negotiated. I urged that Canadian Government keep USG confidentially informed of its plans with respect to ratification so that US actions and statements might be helpful rather then unwittingly harmful. Green implied he thought this good idea but made no categorical promises.

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I told Green I thought other major question which made relations difficult was in field of defense. (Separate telegram will cover this part of conversation.)3

Green said he felt that relations between Canadian and American peoples, businesses, professional institutions, labor groups and governments were essentially very good, and that there only two or three topics about which we disagreed. I told him I thought this true numerically, but that both Columbia River and defense loomed large in thoughts of those in USG who dealt with Canadian affairs. I said I thought improvement in relations would depend in substantial measure on some changes in Columbia situation and in connection with defense. He did not disagree, but said that it was important to maintain public posture to effect that relations were good. I said that this was desirable but should be accompanied by candor in diplomatic discussions of unresolved problems and be some evidence of progress.

Green closed conversation by saying he was sure that Canada had more troubles than anybody and it needed American help. I told him I was sure we were prepared to be helpful, but that we had problems too.

Armstrong
  1. Source: Department of State, Central Files, 611.42/7–1762. Confidential. Repeated to Vancouver.
  2. Reference is to the agreement on the cooperative development of the water resources of the Columbia River Basin, signed at Washington, January 17, 1961, and entered into force September 16, 1964; TIAS 5638 (15 UST 1555).
  3. W.A.C. Bennett, Premier of British Columbia.
  4. Telegram 78, July 16, reported that Green had stated that the Canadian Government had given no thought to the nuclear weapons issue since the election on June 18 and noted that any initiative on the question should come from Ottawa. (Department of State, Central Files, 611.42/7–1762)