At the last meeting of PJBD, the State Department and External Affairs Members reached agreement on the text of a draft statement of conditions (copy attached) which it was believed would be acceptable to the authorities of both countries. It was intended that as soon as the agreed draft had been concurred in by the United States officials concerned and the United States Air Force had reached a decision as to the number and locations of the stations required, a formal diplomatic request would be put forward by the United States Government to the Canadian Government for permission to construct and operate the stations.

The External Affairs Member undertook to refer the draft agreement to the appropriate Canadian officials at once and as soon as the agreement of all concerned at official level had been obtained, the United States Embassy in Ottawa would be notified of this fact informally. When the formal United States request was received the matter would be referred to the Canadian Government for final approval.

There were two sections in the draft agreement which required particular consideration by the appropriate Canadian authorities. The first related to the requirement that electronic equipment be manufactured in Canada when practicable. The Department of Defence Production has concurred in the text of the agreed draft of this section. The second of these two sections dealt with the problem of the cost of modifying the communications arrangements for the existing Pinetree network in order to link in the new temporary stations. The RCAF was not satisfied with the proposed wording of this section and has put forward an alternative wording which has been referred to the U.S. Section of the PJBD for consideration. The text of the RCAF proposal is included in the attached draft of the agreement.

W.H. Barton

Secret
[Ottawa], June 29, 1954

(In this Statement of Conditions, unless the context otherwise requires, "Canada" means the Government of Canada, and "United States" means the Government of the United States of America.)

1. Sites

Canada will acquire and retain title to all lands required for the radar stations and their ancillary facilities. The Canadian Government grants and assures to the United States Government, without charge, such rights of access, use and occupancy as may be required for the construction, equipment and operation of the stations, pursuant to the provisions in the following paragraphs.

2. Plans

The detailed plans of the buildings, roads (including access roads), use of local materials (rock fill, sand, gravel, etc.), and other arrangements related to construction and major items of equipment will require the approval of the appropriate Canadian authorities (to be designated by the Canadian Government) in advance of construction. Canadian officials shall have the right of inspection during construction. Any plans for subsequent construction shall also be submitted for the approval of the appropriate Canadian officials.

3. Construction

(a) Canadian contractors will be extended equal consideration with United States contractors in the awarding of construction contracts, and Canadian and United States contractors shall have equal consideration in the procurement of materials, equipment and supplies in either Canada or the United States.

(b) Any contractors awarded a contract for construction in Canada will be required to give preference to qualified Canadian labour for such construction. The rates of pay and working conditions for this labour will be set after consultation with the Canadian Federal Department of Labour and will be set in accordance with the Canadian Fair Wages and Hours of Labour Act of 1935.

(c) Canadian law will apply.

4. Provision of Electronic Equipment

The Canadian Government reaffirms the principle that electronic equipment at radar installations on Canadian territory should, so far as practicable, be manufactured in Canada. The question of practicability must, in each case, be a matter for consultation between the two Governments. After studying the plans for the establishment of the radar stations covered in this agreement the agencies of the Canadian Government concerned are satisfied that the initial provision of Canadian electronic equipment for these stations is not practicable. However, the Canadian Government requires that the above-stated principle shall apply in the future to the procurement of replacement or additional electronic equipment. The appropriate Canadian and United States agencies shall in these circumstances consult with each other to determine the application of the principle. In considering the question of practicability, one of the factors to be taken into account shall be the relative costs of procurement from Canadian and United States sources.

5. Financing (As drafted at April, 1954, Meeting of PJBD)

The cost of construction and operation of these stations shall be the responsibility of the United States Government, with the exception of military personnel costs, if Canada should man any of these stations at a later date. In the event that the erection of these stations requires changes in the present communications arrangements for Radar Extension Plan covered in the Exchange of Notes of August 1, 1951, it will be necessary for appropriate authorities of the two Governments to work out agreed technical arrangements whereby the Canadian Government will be assured against bearing any resulting expense exceeding those contemplated by existing arrangements.

5. Financing (as subsequently proposed by RCAF)

The cost of construction and operation of these stations shall be the responsibility of the United States Government, with the exception of military personnel costs if Canada should man any of these stations at a later date. In the event that the erection of these stations requires changes in communication arrangements for the Radar Extension Plan covered in the Exchange of Notes of 1 August 1951, and as detailed in the Schedule of Primary Communications for the Radar Extension Plan agreed Washington DC 15 March 1952, as subsequently amended, it will be necessary for appropriate authorities of the two governments to work out agreed technical arrangements whereby the Canadian Government will be assured against bearing any resulting expenses exceeding those contemplated by scheduled communications, or which might arise from their rearrangement or cancellation.

6. Manning

The United States may station personnel at the sites under the control and command of United States military authorities, PROVIDED that upon provision of reasonable notice Canada may take over the manning of any or all of the installations.

7. Period of Operation of the Stations

The Canadian and United States Governments agree that all or any of the stations shall be maintained in operation for a period of ten years or such shorter period as shall be agreed by both countries in the light of their mutual defence interests. Thereafter, in the event that either Government concludes that any or all of the stations are no longer required, the question of continuing need will be referred to the Permanent Joint Board on Defence. In considering the question of need, the Permanent Joint Board on Defence will take into account the relationship of the station or stations to other radar installations established in the mutual defence interest of the two countries. Following consideration by the Permanent Joint Board on Defence, as provided above, either Government may terminate the arrangement in which case the station will be closed and the following arrangement regarding ownership and disposition of the installations will apply.

8. Ownership of Removable Property

Ownership of all removable property brought into Canada or purchased in Canada and placed on the sites, including readily demountable structures, shall remain in the United States. The United States shall have the unrestricted right of removing or disposing of all such property, PROVIDED that the removal or disposition shall not impair the operation of any station whose discontinuance had not been determined in accordance with the provisions of paragraph 7 above, and PROVIDED further that removal or disposition takes place within a reasonable time after the date on which the operation of the station has been discontinued.

9. Radio Installations

Arrangements respecting such technical matters as radio frequencies, types of emission, and power, also the location of antenna masts and the question of their marking and lighting will be co-ordinated with the Department of Transport through the Royal Canadian Air Force and will be subject to the approval of the Department of Transport.

10. Supplementary Arrangements and Administrative Agreements

Supplementary arrangements or administrative agreements between authorized agencies of the two Governments may be made from time to time for the purpose of carrying out the intent of this agreement.

11. Taxes

The Canadian Government will seek to obtain for the United States Government the same taxation exemptions as have operated in the Pinetree project.