Foreign Relations of the United States, 1977–1980, Volume XXVII, Western Europe

72. Telegram From the Embassy in Canada to the Department of State¹

434.

Ottawa, February 4, 1977, 0121Z

SUBJECT

• Trudeau Comes to Washington.

Ref:

• State 22607.

1. Summary. New political and economic vulnerabilities appear to make Trudeau ready to enter into a closer, more supportive relationship with the U.S. To seize the opportunity I recommend that the President show generosity on individual bilateral issues, address the Quebec question, and spend some time on such major bilateral issues as environment and gas. End summary.

2. Trudeau comes to Washington in an embattled state. For a year the Liberals have trailed the Conservatives in the polls, and Trudeau has not yet been able to convert the Quebec crisis² into a political comeback. The economy remains boggy, with all indicators performing less well than in the States. Above all, Canada is shaken by the Parti Quebecois challenge to its future existence as a confederation.

3. But for all his new weakness, Trudeau is likely to remain Canada’s leader until the next election (expected in mid-1978) and quite possibly beyond. You will find him in a fighting mood, determined to rally Canadians to preserve their union. I think he’ll make some headway in doing so in the course of the year.

4. For Trudeau the meeting with the President has unusual importance. With its new political and economic vulnerabilities, Canada needs U.S. support. Trudeau is not prepared to acknowledge this publicly or even privately, but he appears ready to act on it. Already this last year Trudeau has progressively muted the nationalist and anti-American elements of his policy. With completion of the (largely platonic) third option ties to Europe and Japan,³ with resurgence of interest in and admiration for the United States in Canada, and with the Quebec crisis, I believe he is now ready to launch with us a new constructive phase in Canada/U.S. relations.

5. In line with this, Trudeau hopes to develop a close personal relationship with the President, permitting frequent meetings and contacts. He is not fully satisfied with his relations with three past Presidents (so he tells me), and found himself less at ease with them than with European leaders. Indeed so conscious has Trudeau been of American power that he has tended to be unnaturally deferential and subdued in presence of U.S. Presidents, more than ordinarily defiant at a distance. I think he is determined to overcome both excesses this time.

6. Quebec will be very much on Trudeau’s mind, although he may not acknowledge it. He has been uncertain (so he has let me know) how the American Government and business will react to separatism, and whether one or the other may attempt to exploit the split in Canada. The cool reaction to Levesque’s January 25 pitch in New York⁴ may reassure him, and I understand he plans to appeal to the federalist sympathies of Americans in his address to Congress, to the extent he can do so without appearing to debate Levesque before an American audience.

7. Against this background, the Trudeau visit offers an exceptional opportunity to advance our relationship. To seize it three things will in my view be needed.

8. First, we should be generous. President should be prepared to suspend constructions on the Lone Tree segment of the Garrison Diversion pending review of the project and IJC recommendations.⁵ I recognize the local job and political impact of this action, but believe the gain in our relationship fully compensates. We should be prepared to agree in principle that tolls be raised on the St. Lawrence Seaway, subject to appropriate accounting and negotiation.⁶ We should tell the Canadians that we are prepared to go ahead with them in a joint regional oil storage facility in Newfoundland. If asked by Trudeau for relief from the new limitations on tax deductions for conventions outside of the United States, the President should say that he is prepared to back some relief, possibly of a transitional nature for Canada (as well as possibly Mexico and the Caribbean).⁷ We should of course thank Trudeau for helpful actions on emergency gas supplies,⁸ and border TV.⁹ Most of these issues could be handled with ExtAff Minister Jamieson or Trudeau’s foreign policy advisor Head.

9. Second, we should be prepared to address the Quebec issue. In private, the President should raise the issue if Trudeau does not. He should say that there is no way a disaggregated Canada would be in the U.S. interest, and note the importance of Canada’s success to us as an industrial democracy, in East/West, North/South and cross-border relations. He might ask whether there is anything that we can do to help. Trudeau will probably decline the offer, and may be reluctant to discuss the issue, but this approach and particularly the tone with which it is done can allay some of his underlying concerns about how we will act in the current crisis. Publicly, subject to the judgment of Trudeau, it would be helpful for the President to express the importance to the U.S. of having as a neighbor a strong, successful, prosperous Canada occupying its place in the world. Such a statement, without interfering in Canadian affairs or slamming Quebec, would serve notice to the separatists that they can expect no comfort from us. It would also help contain the fears (or hopes) of many Canadians who openly speculate that the United States would pick up the pieces if Canada broke apart—speculation that can itself be destabilizing.

10. Third, we should set the stage for major progress in economic management and other bilateral concerns.

(A) Getting the Canadian economy moving. One percent additional growth in Canada has a greater impact on the U.S. than a similar increase in the big four Western European countries taken as a whole. Convinced that inflation is the chief enemy, the Canadian Government has delayed stimulative action despite record unemployment and discouraging growth forecasts. Government is now edging towards stimulus, easing money, getting ready to end wage and price controls, talking about job programs. We should encourage them to move faster. Septel¹⁰ gives details of current situation and policy options.

(B) Transmission of North Slope gas.¹¹ This will be the toughest decision for Canada to take this year, with an array of Indians and Eskimos, environmentalists and nationalists lined up against Mackenzie Valley line. Canadian studies are lagging behind ours, and the government won’t have both the NEB and Justice Berger reports in hand until June.¹² Parliament rises in July, returns in September or early October. President should underscore extraordinary importance of cooperating in making route decision, and press Canada to keep in sync. Although pressures for fast action will be very strong, he should indicate willingness to consider delaying his decision from September 01 to October 15,¹³ provided the two sides are developing a joint option. That would give Canadians time to contact Parliament and if necessary have a debate.

(C) Oil transmission. President should express interest in keeping open option of bringing from Alaska oil through Kitimat.

(D) Environment. President should pledge himself to carry through municipal waste treatment commitments under the Great Lakes Water Quality Agreement,¹⁴ and to use upcoming review to achieve the long-term goal of a major improvement in the Great Lakes water quality. He should also make a general statement on strengthening cooperation in all cross-boundary environment issues, asking whether it would be appropriate to enlarge the mandate of the IJC for this purpose.

(E) Defense. President should describe his defense plans, note Canadian equipment expenditure increases, and express interest in early purchase of a replacement for the CF–101’s and CF–104’s.

(F) Border and fisheries. President should pledge a maximum effort to settle the boundary, long-term fisheries and resource arrangements in the Gulf of Maine, on the Pacific, and in the Beaufort Sea this year.¹⁵ If short-term fisheries issue is still open, President could propose parallel unilateral action as a solution. Septel addresses that option.¹⁶

(G) Nuclear safeguards. President should note new Canadian position on safeguards,¹⁷ describe terms of U.S. review,¹⁸ indicate that President Ford’s October statement will be a floor for U.S. policy.¹⁹

(H) Trade. President should express some concern about recent Canadian actions to restrict imports of a wide range of textile and clothing products, pointing out that he is also under pressure to take protectionist action and that actions such as Canada’s make it more difficult for everyone to adhere to the OECD trade pledge.

11. Comment. I recognize that above constitutes more detailed exchange on bilateral issues than envisaged by Secretary in his conversation with Ambassador Warren December 31. However I think it important for two reasons. First, as Trudeau has told me a couple of times, no meeting will be credible to Canadian media and public unless it addresses bilateral issues. Absent such discussion, media here will play visit as another U.S. putdown with main U.S./Canada issues too trivial for U.S. President to address. Second, it will be more difficult to work our way through the mass of bilateral issues coming up this year if the Canadian administration has doubts about intent at Presidential level. I recognize the additional demand on the President’s time, but believe that preparation on each of these issues can be summary. Some, as noted above, could be handled at lower level.

12. Assume that summit, arms control, U.S. economic policy, Mideast and Cyprus, Southern Africa, North/South will all be on the agenda.

13. Above message reflects talks with Jamieson, Head, and (at an earlier point) Trudeau. I will be seeing Trudeau about a week prior to the visit.

Enders

1. Source: National Archives, RG 59, Central Foreign Policy File, D770039–1079. Secret; Immediate; Exdis.
2. On November 15, 1976, the PQ, which advocated independence from Canada, won a majority of seats in Quebec’s provincial legislature. See Foreign Relations, 1969–1976, Volume E–15, Part 2, Western Europe, 1973–1976, Document 120.
3. Reference is to Trudeau’s policy goal of reducing Canada’s economic dependence on the United States by increasing economic relations with other countries, a policy that is known as the “third option.”
4. On January 25, Levesque made a speech to the Economic Club in New York in which he asked for support for Quebec’s transition to independence. (Henry Ginger, “Levesque, in City, Asks Business to Support Separation of Quebec,” New York Times, January 26, 1979, pp. A1, A3)
5. Reference is to the Garrison Diversion project in North Dakota, which would transfer water from the Missouri River to the drainages of the Souris and Red Rivers whence it would flow to Canada. The Canadian Government expressed concerns that the project might pollute Canadian waters. (“U.S. Delays Dam Project After Plea From Ottawa,” New York Times, March 2, 1977, p. 7)
6. Telegram 295577 to Ottawa, December 4, 1976, reported that U.S. and Canadian representatives met in Washington on December 2 for consultations on the St. Lawrence Seaway, during which the Canadians proposed raising tolls, which had remained unchanged since 1959. (National Archives, RG 59, Central Foreign Policy File, D760448–0892)
7. Reference is to the Tax Reform Act of 1976, which reduced tax deductions for travel to foreign business conventions. (“Canada Winces at U.S. Tax Law,” New York Times, January 30, 1977, p. F17)
8. Telegrams 372 and 381 from Ottawa, January 31, and telegram 433 from Ottawa, February 3, reported on NEB efforts to maximize Canadian deliveries of natural gas and other petroleum products, in part under an agreement according to which the New York electricity pool guaranteed coverage of peak demand in the Ontario area. (National Archives, RG 59, Central Foreign Policy File, D770034–0516, D770034–0729, and D770039–0774)
9. Reference is to a dispute over the deletion of U.S. commercials in favor of Canadian commercials from television programs that Canadian cable TV systems received from U.S. stations near the border. In a letter dated December 23, 1976, Jamieson agreed to a moratorium on deletion pending the Canadian Supreme Court’s settlement of a case brought by several U.S. television stations. (Telegram 5004 from Ottawa, December 23, 1976; telegram 127 from Ottawa, January 14, and telegram 404 from Ottawa, February 1; National Archives, RG 59, Central Foreign Policy File, D760471–0693, D770015–0273, and D770036–0520)
10. Not found.
11. In 1977, the United States and Canada expected to decide how to transport Alaskan natural gas to the lower 48 states by choosing among a proposal by Arctic Gas, a Canadian-American consortium, to build a pipeline to transport the gas through Canada’s Mackenzie River Valley; a proposal by the Northwest Pipeline Corporation to build a pipeline along the Alaska Highway; and a proposal by the El Paso Natural Gas Company to transport liquid petroleum gas in ships from southern Alaska to the West Coast ports. (Edward Cowan, “House-Senate Panel Adopts Compromise on Gas Legislation,” New York Times, February 2, 1977, p. 1)
12. Berger was to report on the results of an inquiry, ordered by the Canadian Government, into the economic, environmental, and social impact of the Mackenzie River Valley Pipeline. The NEB was also expected to issue a report on the Mackenzie River Valley Pipeline. (William Borders, “Big Canadian Debate Under Way on Future of Vast Northlands,” New York Times, March 6, 1975, p. 2; Steven Rattner, “Gas Pipeline From Alaska Across Canada Proposed,” New York Times, May 3, 1977, p. 59)
13. The Alaska Natural Gas Transportation Act of 1976 required that the Federal Power Commission recommend a pipeline route by May 1977, that the President decide on a route by September 1977, and that Congress accept or reject the President’s decision by November 1977. (Alaska Natural Gas Transportation Act, October 22, 1976, PL 94–586, 15 USC 719 et seq.)
14. Reference is to the Great Lakes Water Quality Agreement, which was signed on April 15, 1972. (“Remarks on Signing the Great Lakes Water Quality Agreement Between the United States and Canada,” Public Papers: Nixon, 1972, pp. 541–542)
15. Reference is to efforts to negotiate U.S.-Canadian agreements on maritime boundaries, fisheries, and resource issues following the implementation of a 200-mile economic zone, which was scheduled to go into effect on March 1. (Memorandum from Borg to Brzezinski, February 18; Carter Library, National Security Affairs, VIP Visit File, Box 2, Canada, Prime Minister Trudeau, 2/21–23/77: Cables and Memos)
16. Not found.
17. Telegram 5055 from Ottawa, December 23, 1976, reported that on December 22, 1976, Jamieson announced to the House of Commons “a further strengthening of safeguard requirements for export of Canadian reactors and uranium. Future shipments to non-nuclear weapons states will be restricted to those ratifying the NPT or otherwise accepting international safeguards on their entire rpt entire nuclear program. This expands 1974 safeguards policy to cover nuclear materials a country receives from other suppliers or produces on its own, as well as materials supplied by Canada.” (National Archives, RG 59, Central Foreign Policy File, D760471–0727)
18. On January 21, the Carter administration began a comprehensive review of non-proliferation policy. See Foreign Relations, 1977–1980, Volume XXVI, Arms Control and Nonproliferation, Document 317.
19. See “Statement on Nuclear Policy,” October 28, 1976, Public Papers: Ford, 1976, pp. 2763–2778.