Right Hon. L. S. St. Laurent (Prime Minister):

Mr. Speaker, it gives me great pleasure to be able to announce to the house that an agreement has been signed with the government of Ontario respecting the development of hydro power in the international rapids section of the St. Lawrence river. I now table two copies of the agreement which will of course have to be submitted for approval both by parliament and by the legislature of Ontario. As hon. members will have ample opportunity to consider its provisions at a later date, I will make only a brief statement now as to its general form and purposes.

The agreement with Ontario has been concluded in the expectation that the United States will not participate in the seaway project, and it has been drawn up on the understanding that the navigation works will be undertaken by the federal government and will be entirely within Canada. It contemplates that Ontario will undertake the power development concurrently with an appropriate agency in the United States.

In such circumstances it is desirable that a firm agreement exist between Canada and Ontario in order that Canadian treaty obligations be fulfilled and that other interests in Canada should be safeguarded.

The undertakings on behalf of Ontario are broadly to develop the power resources of the international rapids section of the St. Lawrence river concurrently with an appropriate authority in the United States in accordance with the plan known as the "controlled single stage project (238-242)". This

is the same plan as was advanced and made part of the great lakes-St. Lawrence basin agreement of 1941 between Canada and the United States. However, the agreement provides that this plan may be modified as may be agreed upon between Canada and Ontario.

The Canadian government, for its part, undertakes to do all in its power to obtain the approval of the international joint commission to an application to be made by Ontario in an acceptable form for authority from that international body to construct the necessary works. Under the boundary waters treaty of 1909 this approval would be necessary since the international rapids section of the St. Lawrence river is a boundary water. Canada's undertaking in this respect is qualified, however, to the extent that its action must be consistent with its obligations under the boundary waters treaty and that regard must be had for all Canadian interests in the St. Lawrence river.

Some of the other more important provisions may be enumerated briefly:

1. Canada will transfer to Ontario the administration of such lands belonging to Canada as are required for the project, and Ontario will pay compensation for these except for lands or property forming part of the existing canal system.

2. Ontario will transfer to Canada the administration of such lands belonging to Ontario as are specified by Canada as being required for works to carry a deep waterway in the international rapids section.

3. Ontario will establish a commission to safeguard and enhance scenic beauty and historic associations in the section to whatever extent may be appropriate.

It is recognized that before all the arrangements are consummated, as contemplated in this agreement, the great lakes-St. Lawrence basin agreement of 1941 between Canada and the United States may be approved by congress and by parliament. In that event, it would be the intention of the government to reconsider with the government of Ontario the terms of the agreement signed today and to modify them in recognition of the arrangements that would then exist between Canada and the United States with respect to the seaway project.

1504 HOUSE OF

Defence Production-Security Measures DEFENCE PRODUCTION

Right Hon. L. S. St. Laurent (Prime Minister):

I should like to make a statement with respect to the security measures that have to be taken in connection with defence contracts. The hon. member for York West (Mr. Adamson) spoke in the debate on the address on Wednesday, November 28, of this matter, which is of general concern, and about which I think hon. members might wish to have a statement from the government. It has to do with the problem of safeguarding secret information in industries engaged on defence production.

The hon. member referred to the case of a Mr. George R. Jackson who was recently released from employment by the A. V. Roe Company. Mr. Jackson's case is currently being reviewed and I do not intend to deal with it now. It is the general problem about which I wish to say something.

I think the hon. member for York West has done a service in bringing this matter forward in the serious way he did. The government has to deal with a lot of difficult and unpleasant problems in the conditions of today and of these one of the most difficult, and certainly one of the most unpleasant, is trying to assess the reliability of people who deal or may have to deal with vital defence matters.

As a part of our defence program, contracts have to be placed for the production of various types of equipment, and in many cases this involves the use of details of a highly secret character; secrets which in many cases belong as much to other governments as to our own. Now there are people both in this country and outside who are very anxious to obtain such secrets and who are making constant efforts to find out as much about them as they can. It is, accordingly, vital that no risks be taken which can be reasonably avoided with the security of such defence items. The government is responsible for protecting their secrecy in so far as this country is concerned.

For that reason, any company entering into a contract for the production of defence equipment in Canada must agree that it will exclude from access to secret material any persons about whose reliability the government has any serious doubt. This means that in cases where an individual's background, particularly any associations with communist or pro-communist organizations, or his present associations or even, in some cases, some instability or other qualities of character

raise doubts as to the security of secret matters placed in his hands, then that person must not be allowed access to any secret or vital defence items. It is not possible to give the individual the benefit of the doubt. Reliability for security is not the sort of thing about which conclusive proof one way or the other is usually possible. Sometimes it is, but more often it is a matter of judgment based on all the information that is available. Where the national security is involved, the government simply cannot take the position that defence secrets are to be available to everyone against whom a cut and dried case cannot be made.

The reliability of the overwhelming majority of industrial employees in Canada is beyond doubt. In the case of the few who cannot be said with certainty to be reliable, the government has always to consider two things: the need to avoid doing any injury to an individual and the protection of material vital to the security of this country.

In cases where it is considered that the security of secret material might be endangered by giving a particular individual access to it, the company employing him is informed that such access cannot be allowed. The company is not instructed to dismiss him. I want particularly to emphasize this because there have been statements to the contrary both in the Jackson case and on other occasions. Neither the Department of Defence Production nor any other agency of the government has instructed a company to dismiss an employee for security reasons. A decision that a person should not be entrusted with secret information is not a decision that he is disloyal, and it does not mean that he should be dismissed. It simply means what I have said-that he should not have access to secret information.

There are usually positions in a plant that do not involve security, and transfers to them can be made. It may happen that in some plants which are engaged wholly on defence work such transfers are impossible, for one reason or another. In those cases the company is faced with the choice of releasing the individual or giving up its contract. These are the most difficult cases to handle. It may be that in all instances companies have not done their utmost to find means of making transfers. The importance of always doing so is being brought to their attention. Employers should always try to avoid dismissals if at all possible. They have a duty not to increase the difficulties or disabilities of persons whose only misfortune is that their

reliability is open to question. It is very important that such persons should not be branded as disloyal.

What I want to make clear, however, is that the decision of the government is solely whether it can or cannot risk the security of some vital matter by allowing a particular person to have access to it.- It is up to the employing company to decide what to do about the particular employees who cannot be allowed access to the secret material.

I have dealt thus far with the nature of the problem and the character of the task that the government attempts to perform in protecting the security of defence production. The procedure in handling the matter is also a problem.

The hon. member for York West suggested, as others commenting on this matter have suggested, that there should be a board or panel to hear representations from individuals before decisions are taken as to their reliability for security. This suggestion appeals to most fair-minded people because it seems to accord with the general principles on which we proceed in dealing with charges or claims against a man in criminal or civil law and in other instances. There are, however, particular considerations that have to be weighed on the other side.

In the first place, the assessment of the reliability of a person does not necessarily, or even usually, involve anything that could be regarded as "charges" against him. Decisions on reliability are taken every day in the public service and, indeed, in business and in almost every sort of organization. Most hon. members will at one time or another have been in a position where they have to decide whether they could or could not rely on a particular person in some important matter.

The only thing that distinguishes the cases I am talking about is that in defence production, and more particularly in the development stage of defence production, some methods and processes are of enormous importance and their betrayal could do injury to the whole nation. Reliability is more critically important than in most other circumstances. The question at issue is not guilt or innocence of some particular charge. The sole question is whether a certain person can or cannot be entrusted' with secret defence material. It would give a completely false atmosphere to the matter if it were assumed that reliability can somehow be put beyond doubt by meeting formal charges-or indeed, that reliability cannot be brought into doubt except on the basis of formal charges. Assessment of character may be the only consideration in

Defence Production-Security Measures some instances. That is not a matter of charges, or of trial or of proof. It is a matter of judgment.

A second consideration to be borne in mind is that in dealing with reliability in defence production we are not in the realm of what have come to be called "human rights" and "fundamental freedoms". There is no human right or fundamental freedom involved. No person has a right of access to secret defence items, and no man's freedom is infringed when he is denied such access. In a particular case a company may decide that it has no place where it can employ a man who cannot be given access to defence matters. In such a case the man's job becomes involved. Where that is so, it is always possible for a company to ask that a case be reviewed to see if the decision cannot be reversed, and the government is always ready to make such a review. But in the last analysis, the question for the government and the question it must decide is whether it is or is not satisfied that there would be no risk to the security of some secret material or process by letting a certain person have access to it. No outside panel or board can take that responsibility. No matter how much the government might like to be relieved of this very unpleasant duty no government would have the right to shift to others the responsibility for the security of our defence secrets.

There is a further consideration of an entirely different order that is also relevant. It is that hearings could and probably would compromise our general security precautions. Some of the people about whose access to secret material we have to be most concerned operate in the interests of an organization that is skilfully and tightly bound together. This organization acts with a ruthlessness and a readiness to sacrifice its own followers, which we find it almost impossible to appreciate. It is only by careful, long continued and patient work that means have been established by our police forces of getting information about the operations of this organization. The organization would be more than ready to precipitate hearings involving their own followers, even if it meant the personal ruin of those individuals, if the hearings would lay bare the sources of information that the police have established. If hearings were held, the information as to the background or other considerations causing doubt about an individual would have to be revealed. I do not see how a "hearing" could be regarded as serving any purpose if that were not so. More than that, it would be argued that the validity of such information or the grounds for doubt could not be assessed nor could any "charges" be properly refuted unless the kind and sources

North Atlantic Treaty

of information were disclosed, the informants questioned, and so forth. If that were done in even two or three instances, they might be sufficient to nullify, in very short order, such security defences as we have been able to build up after years of painstaking effort. The well-organized opponents of our way of life would be more than ready to sacrifice a good many of their supporters to gain the kind of information that hearings would inevitably reveal.

For the reasons I have given, the government has thus far taken the view that no one has a valid claim to be given a hearing before he is denied access to secret defence material or processes of defence production. It has considered that a system of hearings should not be instituted. This means, of course, that the responsibility of the government is the greater to see thht every case is carefully assessed and that no decisions as to the reliability of an individual are lightly taken. They are not lightly taken. Moreover, the cases can always be re-examined and the government will have no reluctance about reversing an original decision if further review suggests that it can safely be reversed. This whole matter is, however, distorted and seen in a false light, if it is confused with loyalty and thought of in terms of specific, provable or disprovable charges. You can doubt the reliability of a man for the security of some vital defence matter without considering him to be disloyal. You can continue to doubt no matter how much he argues or protests.

The problem that is thrust on the government of assessing the reliability of employees in defence industries, and occasionally of deciding in some case that reliability is uncertain, is not a pleasant one. In the present state of things it is, however, an unavoidable one. It is the government itself which is and must be answerable for the security of our defence secrets. The government is, however, fully aware of the importance of ensuring in so far as possible that no injury is done to any individual through the decisions that must be taken. Security procedures are constantly under review, and if they can be improved, the government will always be ready to make the improvements and will always welcome and seriously consider constructive suggestions to that end.

Hon. Brooke Claxion (Minister of National Defence):

Mr. Speaker, it is usual for a statement to be made in this house when a minister returns from an international conference of major importance. The eighth

meeting of the North Atlantic council concluded at Rome last week. This was the first meeting attended by the supreme commander, General Eisenhower, and the meeting met under the inspiration of his personality. At the conclusion of its business, the council of twelve nations agreed on a statement to be made public. Because of the nature of the meeting and of the business transacted there, and also because my colleagues, the Minister of Finance (Mr. Abbott) and the Secretary of State for External Affairs (Mr. Pearson), as well as myself, have not yet had an opportunity to report to the government, it is not possible to go into greater detail than is contained in this statement. For the convenience of hon. members, however, I should like to table a copy of the statement that was issued in Rome.

Canada's contribution to European defence-

Hon. Brooke Claxton (Minisier of Naiional Defence):

Mr. Speaker, while during these last two weeks I have been out of sight here, apparently, judging from Hansard. I have not been entirely forgotten. I feel that at this time the house would expect from me a word of personal explanation of matters arising out of press reports published in my absence. I have read the Hansard references and most of the press reports, but I do not intend to enter into details-that has already been covered here-and I certainly do not mean to indulge in any recriminations. My real purpose is to assure the house that I had no intention of making announcements in Europe of new policies of which hon. members had not been informed in this chamber.

I made references to accommodation for our troops and to airfields, and no doubt those matters were much less familiar to some hon. members and members of the press than I had supposed; and it may be that there was some justification for a feeling that some kind of announcement of new policy had been made. I am sorry indeed if any answers I gave to questions created the impression that I was making important announcements outside the house. I have always tried to give the house all possible information on defence matters and, when the house is in session, to make all statements of major new developments and new policies in this chamber.

On looking over the reports, I think I can understand how the misunderstanding arose. As hon. members had been informed, the decision to dispatch the 27th Canadian infantry brigade group was not taken until the government had been assured that temporary accommodation was available. That temporary accommodation would have to be

replaced by new accommodation. It is a fact, not a policy, that troops must be housed. As for airfields for the use of our air squadrons, hon. members had already been informed that airfields were not available on the continent, and that pending their availability, Canadian squadrons would be stationed in the United Kingdom at North Luffenham. Consequently, it was known that airfields would have to be provided on the continent.

We knew also that, in accord with the policy that parliament had accepted that Canada should do its share in NATO, we would also have to participate in meeting the costs of infrastructure-to use that horrible expression. To me that appeared to be a statement of a situation, of a condition, of a fact, and not of a policy.

Indeed it was not possible for me to state a new policy because the government had not yet decided upon one; and the government had not yet decided upon policy because the North Atlantic treaty nations concerned had not and have not yet fully worked out an agreement as to precisely how this should be done or how the over-all costs should be shared. That is one of the matters we discussed on the other side and it is a matter that was under active discussion in connection with the Rome meeting, and it is still under the most active consideration at Paris.

There is also the question of working out arrangements for accommodation and other facilities in Germany when the occupation statute is converted into an agreement. This is under consideration by the three occupying powers and the German government today.

Consequently, it is not possible either to announce a policy or to give any details or estimates of the over-all costs that might be involved. Just as soon as firm arrangements are worked out with the other countries concerned, they will be announced.

Against this background I repeat that I am indeed sorry if any hon. member feels that I was discussing new policies of which the house had not been informed and I assure you, sir, I had no such intention. Now that the smoke has cleared from the atmosphere here and elsewhere, I must leave it to hon. members themselves to decide in the light of the real facts whether I did or not.

Mr. Graydon:

May I ask the minister if he is in a position to indicate what our commitments are with respect to military installations on the continent?

Mr. Claxton:

No. I have just said that I am not.

Mr. Graydon:

Then the press report of four or five airdromes and landing fields is incorrect?

North Atlantic Treaty

Mr. Claxton:

We will need four or five airfields to furnish our eleven squadrons with flying facilities. We will also need housing accommodation. But how much will be needed, where it will be located or what it will cost, we are in no position to say today.

Mr. Green:

May I ask the minister this question? Is the construction or purchase to be at the cost of Canada?

Mr. Claxton:

Of Canada?

Mr. Green:

Yes.

Mr. Claxton:

I am not in a position to say that. I can go this far and say that part of the cost will form part of the costs that will be shared by all North Atlantic treaty nations in accordance with an agreed formula. Part of it may have to be borne directly by us. Preliminary estimates of the most tentative character would indicate that whichever course is followed would not make much financial difference to us.