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Dec 31 1943

RE- Hydro Agreements

In the Session of 1943 following upwards of a year's preliminary negotiating with the Province of Quebec of which Mr. Duplessis was Premier, an Agreement on the division of the water powers on the Ottawa River was reached with Quebec. The point was that instead of attempting to jointly develop each water and distribute one-half of the power to each Province respectively, it was felt that the water powers themselves might be apportioned to the respective Provinces so that each Province would possess the whole power coming from the site allotted to it. This involved the transference by each Province to the other of the right to enter upon the lands of the other Province expropriate, flood or exercise acts of ownership necessary to complete the water power development.

The legal points involved in a joint development of each power site by the two Provinces had developed in connection with the Chats Falls private development which was a point of controversy in the 1934 Power Contract election. These political difficulties were swept away by each Province empowering the other to come in and take advantage of the existing provincial laws.

The Physical facts behind the division of power sites were that the Upper Ottawa sites were much closer to existing Ontario power users in distance than the Lower Ottawa power sites notably the Carillon development which is the lowest down of all and particularly usable by Montreal and therefore valuable to Quebec. I may say the facts which produced variations in power development at the different sites had to do with flow of water, suitability of site to total user of water, heighth [sic] of land, also as the river progresses toward St. Lawrence more water flows into it.

It should be noted also that certain Dominion interest, you may recollect the Sifton battle for the control of the Ottawa River sites, still simmered in Ottawa, and it was necessary to get Ottawa's approval of this Agreement as it was an inter-provincial River.

From the first-- Challies and Drew on behalf of the Eastern Ontario power districts viciously fought the whole project on two grounds, first: they wanted the impracticable division of power between the Provinces at each site. This would have made more power territorily [sic] closer to Eastern Ontario. It would, however, have handicapped the other power districts of Ontario as imposing a greater distance for the power to travel. Moreover, it would have delayed the development of the peculiarly Eastern Ontario power sites, such as Mississippi whose development was at once entered upon under the Hepburn Government before it left office. The other answer and the complete answer is the fact that Eastern Ontario when the time came would get the benefit of the St. Lawrence River development which carried one million horse power and as a matter of fact Eastern Ontario has never used what was available to it as evidenced by the fact that the Dominion permitted a part of Eastern Ontario power to the Niagara Hudson Company at a point below Montreal whose name I have forgotten.

The progress of the Bill and Agreement through the House was impeded by Drew's bitter and continued obstruction assisted especially by Challies and all the Members of his Government. The passage was held up for weeks, and it is one of the big achievements of the Hepburn Government that it was put through. Owing to the Hepburn influence with Duplessis which was great and the fear of him at Ottawa, particularly after the Ottawa Government's Sifton episode brought all the parties together and made the agreement and act possible.

[Following is a handwitten note continuing from above and filling the page; it is in T.B. McQuesten's handwriting]:

The fact also is that many individuals and Companies in Montreal feared the entry of Ontario into the Ottawa River Field. Challies brother was an Electrical Engineer employed in one of the private power Companies in Quebec.

Also do not forget the Sifton interest in the Ottawa River Sites and in the licenses to use water which are granted by the Dominion in Navigable waters which include the Ottawa River. These gentlemen were still hopeful and had many friends both in and out of Parliament. Ottawa also had to be clubbed into submission.1

1 T.B. McQuesten met with much opposition as he attempted to broker agreements for Hydro power between Ontario and Quebec and the Federal government. He was Hydro Commissioner from 1934-1937.

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