CANADIAN NATIONAL TELEGRAPHS COPY DL St. John's Nfld 21 1957 Dec. 21 Right Hon. John G. Diefenbaker
Prime Minister of Canada Ottawa
I understand that you are bringing before parliament a measure enabling you to enter into agreements with Atlantic provinces governments for the development of thermal electric power plants stop I respectfully suggest that the word thermal would in practice virtually eliminate Newfoundland from any assistance from Ottawa stop My request could be met by adding the word hydro in case there is any reason why you must use the word thermal stop I would greatly appreciate your complying with this request stop Kindest regards
J. R. Smallwood
Ottawa, December 21, 1957. My dear Premier:
I have your telegram of December 21 in regard to the application of thermo-power agreements to the province of Newfoundland.
I am asking my colleague, the Minister of Northern Affairs and National Resources, to look into this matter and get in touch with you. I know that he will be glad to see what can be done to bring Newfoundland clearly within the terms of the proposed agreements.
May I express my best wishes for the holiday season,
John G. Diefenbaker.
The Honourable J. R. Smallwood, M.L.A., Premier of Newfoundland,
St. John's, Newfoundland.
Ottawa 4, Canada, January 8, 1958.
The Honourable J. R. Smallwood,
Premier of Newfoundland,
St. John's, Newfoundland.
My dear Premier,
I refer to your telegram and the reply from the Prime Minister, both dated December 21, concerning the application to Newfoundland of the legislation now before parliament with regard to thermal power in the Atlantic provinces. The Prime Minister asked me to get in touch with you further about the points you raised.
For your information I am enclosing herewith a copy of the bill that has now received
first reading in the House of Commons. As you will note, it is drafted in terms sufficiently wide that agreements can be made, within its provisions, with any of the Atlantic provinces. In short, the kind of arrangement that is being made with New Brunswick and with Nova Scotia, or a modification of it, could be made with the province of Newfoundland if the government of Newfoundland so desired.
You suggest in your telegram that "the word thermal would in practice virtually eliminate Newfoundland from any assistance from Ottawa". I think this impression arises from a misunderstanding. As you will note from an examination of the bill, it is only thermal power plants that come under its terms. Hydroelectric power plants are not covered by this legislation. However, the interconnection and transmission fines and related facilities that can be built are not limited to fines for the transmission of power produced in thermal electric plants. It would thus be quite possible to enter into an agreement with the government of Newfoundland for the provision of transmission and interconnection fines which, as you know, are often very costly and of great importance in the development of any power system.
In the case of hydroelectric plants there has, as you know, been an arrangement made with New Brunswick for the financing on an eight-year basis of the Beechwood plant. The Prime Minister has indicated that a similar arrangement could be made in other instances if an equally valid case for such financial assistance could be shown. The speech from the throne on October 14 also indicated that the government is prepared to enter into a joint program with British Columbia to develop the power of the Columbia river. I have been authorized by the government to say that if major hydroelectric projects elsewhere in Canada were to lend themselves to the possibility of a joint program on the same sort of basis the government would be prepared to give consideration to such a proposal. Conceivably this is the sort of thing that might be of interest to Newfoundland.
From what I have said you will appreciate that the policies that have been announced by the government with respect to power developments have had particular regard for the special problems of the Atlantic area and have also differentiated as between thermal and hydroelectric projects. It is, however, quite apparent that the programs do not by any means exclude Newfoundland from benefit under them.