Rogue Tory
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Following this meeting, Diefenbaker admitted his “perplexities” about the Arrow to Robert Bryce and asked for his advice. The cabinet secretary gave the prime minister a forthright memorandum on September 5, recommending policies that extended the logic of Canadian-American defence integration implied in the minister’s proposals. He suggested immediate cancellation of the Arrow program, adoption of the two Bomarc batteries and relocation of others into Canada, purchase of “40 or 50” American F-106 aircraft, formal negotiations with the United States to accept nuclear warheads for Canadian Bomarcs and interceptors on the British two-key model, and agreement with the United States on an “integrated defence production program” for aircraft and missiles. Bryce explained that his views had changed because the military threat was shifting from bombers to long-range missiles, and because the costs of the Arrow could no longer be justified. He concluded with a subtle political point linking the Arrow’s cancellation to the acceptance of nuclear warheads. “I think it would help in putting across this difficult decision to the public and perhaps help somewhat in deterring the Russians if we could announce at the same time our decision to make arrangements to use nuclear defensive weapons in Canada, though not to produce them.”134
At the next discussion in cabinet, the prime minister noted that ministers were “relatively well agreed on the purely defence aspects”; the problem remaining was “the effect on employment and the general economic situation.” Fleming led the argument for immediate cancellation. Given the escalating costs and the absence of a compelling military need, he could see no middle course between cancellation and production. Going into production would distort the government’s budget priorities and undermine its plans for general development. Others responded that cancellation now might be “the one psychological factor” that would tip the economy into a serious recession, whereas a reprieve of a few months might give the companies time to prepare replacement projects, and take the economy into better days when it could absorb large layoffs.135 Despite the judgment of the minister of finance, the elements of a compromise seemed to be emerging. Next day the prime minister called for delay of “a week or two” to find it.136
Two weeks later, on September 21, Diefenbaker told cabinet that he had met with Crawford Gordon, president of A.V. Roe, who had made no new proposals; Pearkes and Fleming reported that Gordon’s estimates of savings involved in cancelling the fire control and missile systems were imprecise and exaggerated.137 Cabinet remained irreconcilably divided on the “central question” of cancellation: it would have major economic and psychological effects, but production contrary to military advice might open the government to charges “of wasting many hundreds of millions of dollars for what were political or economic reasons. That might seriously shake the confidence in the government of the man in the street.”138
The prime minister proposed a precise compromise: the development stage of the Arrow and Iroquois should be maintained until the end of March 1959, at a cost of about $86 million (already covered in current estimates), but production should not begin. In the meantime, reviews should determine whether to continue or suspend the project, and whether to proceed with alternative missile or aircraft purchases. Cabinet approved his suggestions, confirmed the decisions to build two Bomarc bases and new radar installations, and wrapped up its prolonged deliberations the next day by agreeing to cancel the fire control and missile systems at once. The minister of defence suggested that the latter decision foreshadowed the probable termination of the Arrow in six months, but that door remained open.139
It was obvious to members of the cabinet that their temporizing decision was made on economic and political - not military - grounds. The prospect of massive and concentrated autumn layoffs was too much to face, but so was the prospect of an open-ended drain on the budget, stretching through the whole parliamentary term. Diefenbaker gave them - and A.V. Roe - six months to think about a final choice. Ever after, he claimed that the September decision warned A.V. Roe bluntly of a stay of execution, with six months to compose its affairs.140 But A.V. Roe could as easily believe that this second reprieve marked the way in which the Diefenbaker government made its hard decisions - by gradual capitulation under political pressure. Six months would bring them closer to production. Would the government then dare to destroy this beautiful technical marvel?
On September 23 Diefenbaker announced the changes of policy in a low-key press statement that gave priority to the decisions on the Bomarc, additions to the Pinetree radar system, and a new computer guidance system (SAGE or semi-automatic ground environment) for Canadian NORAD forces. When he turned to the future of the Arrow, he seemed to be giving gentle but unmistakable notice of termination.
In view of the introduction of missiles into the Canadian air defence system and the reduction in the expected need for manned, supersonic, interceptor aircraft, the government has decided that it would not be advisable at this time to put the CF-105 into production. The government believes, however, that to discontinue abruptly the development of this aircraft and its engine, with its consequent effects upon the industry, would not be prudent with the international outlook as uncertain and tense as it is. As a measure of insurance with present tensions as they are, therefore, the government has decided that the development programme for the Arrow aircraft and Iroquois engine should be continued until next March, when the situation will be reviewed again in the light of all the existing circumstances at that time.
Although both the Arrow aircraft and the Iroquois engine appear now to be likely to be better than any alternatives expected to be ready by 1961, it is questionable whether in any event their margin of superiority is worth the very high cost of producing them by reason of the relatively small numbers likely to be required…
It now seems evident that in the larger weapon systems now required for air forces, Canadian work in the design, development and production of defence equipment will have to be closely integrated with the major programmes of the United States. The U.S. government recognizes this and they are now prepared to work out production sharing arrangements with us. To accomplish effective integration of defence production resources of Canada and the United States will require time and continuing efforts of co-operation.141
Diefenbaker paid tribute to the “excellent scientific and technical teams … created for these projects” (with some fuzziness about whether he was referring to the cancelled ASTRA and Sparrow systems, or the still-surviving Arrow and Iroquois), but added that “it will be recognized, I believe, that as the age of missiles appears certain to lead to a major reduction in the need for fighter aircraft, Canada cannot expect to support a large industry developing and producing aircraft solely for diminishing Canadian defence requirements.” To do so would be “not only wasteful but unjustifiable.”142 For Diefenbaker this was a generous, six-month golden handshake for A.V. Roe, offered as he turned southwards into the American embrace. With his friend Dwight Eisenhower in the White House and the frightening prospect of nuclear war always in the background, Diefenbaker accepted that shift to the south as both comforting and inevitable.
Although the short-term outcome turned on economic factors, the prime minister apparently did not seek the advice of his economic adviser, Merril Menzies, until the cabinet decision had been made. On September 23 Menzies responded to “our brief discussion” by noting that the decision “eases the problem of adjustment within the industry for the time being.” He assumed, however, that production would not follow, and that “it will be necessary for the Government to take action to mitigate the serious structural disruption of the Canadian aircraft industry which must ensue.” He proposed that cabinet should commit from $10 million to $20 million (10 percent of the savings arising from the current decision) to an urgent study of how best to shift “the human and material resources presently engaged … into new fields of productive research and development.” Such an announcement would assure that “the needs of a vital Canadian industry, as well as
the employment of some of the most highly skilled and specialized Canadians will not be forgotten.”143 Diefenbaker ignored the suggestion.
Despite their interest in the decision, members of the Conservative caucus and the press gallery learned nothing of cabinet discussions until the prime minister’s announcement on September 23. The press was universally surprised by what it saw as the government’s toughness, and almost universally supportive. “The plain truth is,” wrote Blair Fraser in Maclean’s, “nobody thought the government would have the courage to make such a painful decision. The fact that the decision was right didn’t carry enough weight. It meant an early end to more than twenty thousand jobs, most of them in the very heartland of the Conservative Party. It went against the emotional urges of all Canadian air force men, and of most air-force veterans. It disappointed a big Canadian industry with many big Conservative shareholders. In short, it was political poison, of a kind to scare any politician out of a year’s growth.”144 The Globe and Mail welcomed the decision as “not only wise and courageous, but one which will save the taxpayers a good deal of money.” It added, however, that the Arrow development team must be kept together, and foresaw that the economies might make production of the aircraft possible.145 “No one can say positively whether or not the cabinet decisions … were the right ones,” the Saskatoon Star-Phoenix commented in an echo of the cabinet’s own uncertainty. “But it can be said emphatically that the government acted forthrightly and courageously.”146
A.V. Roe put on a bold face. Crawford Gordon told Avro employees that he expected a decision in six months to go into production after all.147 Pre-production building of the test models, and flight testing, went forward at a hectic pace. In late October he explained to the company’s annual meeting his reasons for confidence. Manned interceptors, he said, remained essential to North American defence; pilotless anti-aircraft missiles like the Bomarc complemented but could not replace them. The Arrow remained the obvious, custom-designed aircraft for the RCAF, and the cost savings in fire control and armaments meant that the purchase price would now be “compatible with the Canadian economy.” Gordon conceded that he had no assurance from the government about the forthcoming decision; his confidence rested solely on the strength of his arguments. He closed with some political warnings. The aircraft industry was now “a spearhead of advancing technology and … a major factor in national development and international prestige.” Avro and Orenda had put Canada into the first rank, with 4000 “highly skilled engineers and technicians” whose dispersal would destroy the country’s potential. Above all, he predicted a loss of national independence. “Complete reliance on other countries for even the crucial weapons with which to defend ourselves would be a long step backward from the position of independence which this country has been laboriously building over the years. Our right to an independent and authoritative voice in world affairs would, in my opinion, be greatly diminished.”148
Beyond these public statements, there was no direct communication between the prime minister and the company during the autumn. While Diefenbaker made his world tour, A.V. Roe and its supporters mounted an intensive public lobbying campaign in the Toronto region. Letters of support for the company flowed steadily to the prime minister’s office and to the press, and inspired feature articles on the Arrow proliferated.149 When the cabinet next discussed the issue following Diefenbaker’s return, the prime minister expressed his extreme displeasure. “If the government decided to continue development it would be accused of giving in to a powerful lobby. Pressure was coming from other sources in Ontario too. Even if he thought the decision reached last September was wrong, he was determined, because of what had happened since, to adhere firmly to it.”150 Pearkes told cabinet that the United States had reiterated, at recent meetings of the Canada-US joint ministerial committee on defence in Paris, that it had no interest in purchasing the Arrow. He took for granted that the program would be cancelled. Cabinet agreed that it would decide on the future of the Arrow before the opening of parliament in January, but the conclusion already seemed clear. No provision for building the plane was included in the draft estimates for 1959.
Still the prime minister hesitated. The decision was postponed through six more meetings of cabinet from December 31 to February 14 as ministers canvassed the prospects for softening the blows on Avro and providing alternate means of air defence. No minister openly opposed a decision to cancel, yet discussion flowed endlessly and repetitively like the tides. Finally, when Avro threatened layoffs unless there were an immediate increase in its approved spending limits, cabinet agreed to make a formal decision on February 17.151
That day Diefenbaker told cabinet an announcement cancelling the Arrow was being prepared and that “it included a section on arrangements with the United States for production sharing and a section on the acquisition by Canada of nuclear weapons for defence.” J.M. Macdonnell and Donald Fleming reported that Premier Frost had challenged a decision to halt the Arrow in “strong terms” and “pungent language.” But nothing would alter the prime minister’s determination; every further delay would add to the unnecessary cost. The announcement would be made in the House on Friday, February 20, and communicated to the companies at the same time.152
Diefenbaker told the House of Commons on February 20 that the government had examined “the probable nature of the threats to North America in future years, the alternative means of defence against such threats, and the estimated costs thereof.”153 It had decided on immediate cancellation of the Arrow and Iroquois programs because the threat of attack by bomber was diminishing, and because alternative means of meeting that threat had developed earlier than expected. Defence would focus increasingly on intercontinental missiles rather than long-range bombers. The United States had drawn the same conclusions and had cancelled aircraft projects similar to the Arrow.
For the moment the government had made no decision about a replacement for the Arrow, and had no other work for the Avro and Orenda factories. But it would meet “all outstanding commitments … equitably.” Diefenbaker expressed regret for the decision, but insisted that “there is no other feasible or justifiable course open to us. We must not abdicate our responsibility to assure that the huge sums which it is our duty to ask parliament to provide for defence are being expended in the most effective way to achieve that purpose.”
Diefenbaker said that the previously announced Bomarc bases, SAGE electronics, and additional radar stations would be financed jointly by the United States and Canada, with the United States meeting two-thirds of costs; that construction would be done by Canadian firms; and that production of the technical equipment would be “reasonably and fairly” shared between the two countries. Because “the irresistible dictates of geography” had made defence a joint enterprise, Canada would contribute fully “in terms both of quantity and quality in deterring and resisting aggression.”
Acceptance of the Bomarc meant that “careful thought is being given to the principles that in our opinion are applicable to the acquisition and control of nuclear weapons.”
The full potential of these defensive weapons is achieved only when they are armed with nuclear warheads. The government is, therefore, examining with the United States government questions connected with the acquisition of nuclear warheads for Bomarc and other defensive weapons for use by the Canadian forces in Canada, and the storage of warheads in Canada. Problems connected with the arming of the Canadian brigade in Europe with short range nuclear weapons for NATO’s defence tasks are also being studied.
We are confident that we shall be able to reach formal agreement with the United States on appropriate means to serve the common objective. It will of course be some time before these weapons will be available for use by Canadian forces.
Diefenbaker coupled this commitment with his government’s opposition to the independent production or control of nuclear weapons, continuing disarmament negotiations, and the solidarity of NATO policy. Canada accepted reluct
antly “the need in present circumstances for nuclear weapons of a defensive character,” but the ownership and custody of nuclear weapons in Canada would remain with the United States. Their use from Canadian soil, however, would only result from joint decisions under agreements approved in advance by both governments. The government had made grave choices after “much soul-searching,” and the prime minister expected that the House would place them “above partisan political considerations.”154
The statement was subtly framed so that the discussion of nuclear weapons overbalanced the cancellation of the Arrow and reduced it to secondary importance. Given the sobering state of the world and the weight of the cabinet’s dilemmas, who would dare to challenge its anguished choices? Mere contracts, mere employment, mere national technology were trivia beside the apocalyptic spectre of atomic warfare. That trivializing contrast lay behind all discussion of nuclear weapons; it was a tempting device for suppressing practical debate. Diefenbaker sensed its usefulness as surely as did the US Department of Defense when it offered the Bomarcs to Canada on enticing terms. He fell into its trap. He had disposed of the Canadian aircraft in a Faustian pact.
Three ministers passed him notes of congratulation in the House. “You have left unsaid nothing that should or could have been said. Magnificent,” wrote Davie Fulton. “A tour de force,” wrote J.M. Macdonnell. “That put everything in its right perspective. A great speech,” wrote George Hees.155