Foreign Relations of the United States, 1969–1976, Volume E-15, Part 2, Documents on Western Europe, 1973–1976, Second, Revised Edition

118. Memorandum From the President’s Assistant for National Security Affairs (Scowcroft) to President Ford¹

Washington, May 24, 1976.

SUBJECT

• Message to Canada on Long-Range Patrol Aircraft

US-Canadian relations have just been complicated by the Canadian Government’s decision not to proceed with the purchase of 18 Lockheed P–3 long-range maritime patrol aircraft for the modernization of Canada’s ASW capabilities—of importance in the NATO context. The decision reflects the Cabinet’s reluctance to engage the government in guarantees of private financing arrangements.

Canada made the decision to purchase the aircraft in 1975. With the Lockheed scandals this year and Lockheed’s financial situation in mind, the Canadian Government devoted close attention with Lockheed and U.S. officials to the financial arrangements for the aircraft purchase, and only a few weeks ago the matter seemed to have been satisfactorily resolved. However, on May 18, Prime Minister Trudeau—under tremendous domestic political pressure on the issue—personally led his Cabinet in reversing the previous Canadian position and in rejecting the two most likely alternatives for the approximately $300 million front end financing. At the NATO Ministerial Meeting in Oslo on May 21, Canadian Foreign Minister MacEachen confirmed that Canada would not be proceeding with the Lockheed purchase.

I think it would be worthwhile at this point for you to send a message to Prime Minister Trudeau (proposed text at Tab A) reviewing the importance you attach to adequate Canadian contributions to NATO and the importance of the ASW aircraft in this context, and informing Trudeau that you have requested the Department of Defense to assist potential U.S. suppliers in restructuring their proposals to conform with Canadian financing requirements.

It is important for our two governments to stay in close contact on this issue. Prime Minister Trudeau should understand your personal concern that there be no degradation in Canada’s contribution to NATO and your wish to ensure U.S. cooperation in seeking ways to solve the current problem.

Recommendation:

That you sign the letter at Tab A to Prime Minister Trudeau.

1. Summary: Scowcroft discussed the recent Canadian decision concerning the purchase of long-range patrol aircraft.

   Source: Ford Library, National Security Adviser, NSC Europe, Canada, and Ocean Affairs Staff Files, Box 4, Canada 1976 (5) WH. Secret. Sent for action. Attached but not published is Tab A, a May 28 letter to Trudeau that Ford signed. On June 21, Clift forwarded to Scowcroft an undated letter from Trudeau to Ford promising a review of the aircraft issue in June based on successful negotiations to reduce the initial financing required for the purchase. (Ibid., Canada 1976 (8) WH) On July 21, the Canadian Government contracted to buy 18 CP–140 long-range patrol aircraft from Lockheed; Ford welcomed the purchase in an August 4 letter to Trudeau. (Ibid., Canada 1976 (10) WH)