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                  <text>Document disclosed under the Access to Information Act DocurJ^t6ivulg3e)*WB®tK4*te»P4/1yces a I'information

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ECONOMIC DIVISI01I

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P,Tp
DIVISIONAL
DIARY
S E C R E T

Eirch 31* 1964
Defence Liaison (1) Division
Your Esmorandun for tbe Minister of Karen
11
Application of IAEA Safeguards to Canadian nuclear Programme

tie have examined with interest the imaginative and
tie Unprepared proposal on this subject set out in your
memorandum. He would endorse the objectives of the
proposal and the arguments which you have advanced in
favour of It. It is the purpose of this memorandum to
enlarge upon various points union you have mentioned and
which could require careful and detailed examination
before a decision could be taken to proceed with the proposal.

DISARRAHBtff
DIVISION

2.
In your memorandum you have commented on various
points concerning tbe defence implications of tho proposal
and we have no quarrel with your comments as far as they
go. nevertheless, it seems to us that the proposal does
have defence Implications for both the Immediate and the
long-term future which will require very thorough study
with regard to their Indirect as well as their direct
effects.
3.
Some of tbe points which we have in mind as deserving
of very detailed study nay perhaps be best brought out by
questions either rhetorical or factual. Would the proposed
course of action have the Incidental effect of focusing
additional and undesirable attention upon Canada«s acceptance of U.S. fabricated nuclear weapons? Could we, despite

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our acceptance of nuclear weapons under joint control,
convincingly present the proposed action ao a significant stop in tho direction of restricting the spread
of nuclear weapons? Is it In fact tho case, as your
memorandum suggests, that our possession of nuclear
weapons under joint control would not give rise to
complications following a request to the IAEA to apply
inspection to "all Canadian nuclear facilities"?
4.
The points suggested by these questions are more
or less political in nature. There are othor more
practical questions which have also occurred to us.
Among thoso are the followingi
1) The imposition of international Inspection would
expose not only potential military secrets but also
processes of undoubted commercial value. While
the IAEA, in developing its safeguards programme,
must have developed methods for dealing with this
problem, can we be sure that its arrangements would
provide satisfactory protection of Canadian commercial interests involved?
2) Apart from establishments accommodating nuclear
weapons under joint control and tbe lease of facilities
at chalk River for U.S. and U.K. use, are there not
other nuclear activities either present or which
might be undertaken on Canadian territory by other
powers? (We have in mind, for example, the possibility of U.S. use of "portable" nuclear pouer
plants in tbe Arctic.)
3} Would there be difficulties concerning reception in
Canadian ports of vessels either nuclear powered
or equipped with nuclear weapons? Would there be
problems about overflight of Canadian territory
or landing at Canadian air fields of aircraft
carrying nuclear weapons?

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4) ttilltary applications of nuclear science
are not limited to weapons as such, i.e.
devices designed either to produce an
explosion or to disseminate radio activity,
nuclear propulsion units for ships are already
in sorvice and nuclear reaction engines are
under examination for aircraft and missiles.
It is indeed suggested in tbe recent White
Paper on Dafenco that Canada might undertake
the construction of nuclear propulsion units
for submarines. These activities are and will
presumably remain classified. To what extent
would this create a problem, in view of the
fact tbat development and construction of propulsion units for military purposes would
probably be carried out by Canada Independently?
5.
With regard to the precise text of your memorandum,
It appears to be implied In paragraphs 11 and 13 that
Canada does not at present require In connection with
exports of nuclear equipment and materials safeguards
"equivalent to an IAEA standard"• It was our impression
that, apart perhaps from some uncertainty about equivalents
of standards,Canada does In fact require safeguards in
connection with such exports except to tbe U.S. and the
U.K., and that it Is for this reason that earlier French
feelers concerning tbe supply of uranium did not lead
to agreement. If our Impression Is correct tho course
of action proposed, except as applied to exports to the
United States and tho United Kingdom, would represent
a continuation of present policy rather than an innovation.
6.
You have suggested that a logical forum for further
examination of those ideas would be tho Advisory Panel
on Atoaic Energy. While we do not know how active the
Panel has been in recent years, our understanding of its
membership and terms of reference would lead us to support

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this suggestion. In this connection we assume that
the Chairman, Chiefs of Staff and the Chairman of the
Defence Reaearcb Board continue to be members of this
Panel, as they were some years ago.

Defence Liaison (1) Division

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