OTTAWA, August 11th, 1961.
THE MINISTER:
Re: Telegram dated August 10th, 1961,
from the Premier of Newfoundland
to the Prime Minister of Canada
The US Gap Filler Stations in Newfoundland, to which Mr Smallwood refers, appear to be:-
The above Stations have either closed down or are in process of doing so and the "target" date for complete withdrawal of USAF personnel is October 1st, 1961, although the logistic complexities involved in these remote locations may affect the date of actual withdrawal. Among other fixtures at each of the six Stations there are electrical generating plants consisting of 5-100 kw generators with auxiliary equipment and switchboards which cost originally more than $100,000.00. This makes a total of 30 generators whereas Mr Smallwood refers to 40 of these equipments. It may be that there would be 10 more in other US Stations that will be closing but the six Stations listed above are the only ones on which we now have detailed information.
Under arrangements formerly in effect between the US and Canadian Governments covering situations of this kind, but now under review between the two governments, the buildings and fixtures comprising the Stations would pass to Canada and, in the event of any of the assets not being required by Canada, would be disposed of by the Crown Assets Disposal Corporation.
Recently the RCAF has been examining its requirement position with respect to these US Stations and, while the formal report is not yet available, it is understood that there is not likely to be any defence requirement for the buildings or fixtures in situ. It may be, however, that there would be a requirement for the electrical generating plants for use at other locations.
In the event that there is no requirement by DND or other Federal Government departments for these power plants, they would be turned over to the Crown Assets Disposal Corporation for disposal, asuming that the inter-government arrangements formerly in force are reinstated following the current review referred to in paragraph 3 above.
In the light of the foregoing, it is suggested that Mr Smallwood might be told that the Federal Government's requirement position with respect to the electrical generating plants is now under review and in the event that there is no Federal requirement, the plants would probably be turned over to Crown Assets Disposal Corporation with advice of the Province's interest. Incidentally, we are not aware of any dissolution of the Disposal Corporation, but it may be that Mr Smallwood is referring to the fact that Crown Assets Disposal Corporation is not at present handling disposal of US surplus assets in Canada pending results of the current review.
It will be recalled that the giving up by US of the installations referred to above was agreed to in an Exchange of Notes between Canada and the United States, being US Note No 546 dated April 1st, 1961, and Canada Note No 69 of May 4th, 1961.
Original signed by
RG MacNeill
(EB Armstrong)
Deputy Minister.