“A Very Careful Balance:” The 1961 Triangular Agreement and the Conduct of Canadian–American Relations

Abstract

This analysis examines the negotiation of a critical 1961 defence production agreement between Canada and the United States. Through this triangular transaction, the United States transferred American F-101 interceptors to Canadian ownership and paid $150 million to procure F-104 fighters in Canada. In return, Canada contributed $50 million to the F-104 project and assumed the significant costs of operating stations in the Pinetree radar line. Complex diplomatic discussions led to the conclusion of this deal. On the Canadian side, economic stagnation and the controversial cancellation of the Avro Arrow interceptor forced Prime Minister John Diefenbaker's government to seek an arrangement that would revive Canada's troubled aircraft industry whilst minimising nationalist opposition to the acquisition of American-built interceptors. The successive American administrations of Dwight Eisenhower and John F. Kennedy, on the other hand, were guided by the military imperative of transferring F-101 aircraft to allow Canada to fulfil its continental air defence commitments and the political consideration of using the triangular arrangement as a cure-all for the many irritants plaguing the Canadian–American relationship. Ultimately, the successful conclusion of the agreement demonstrates the complexity of bilateral relations during the Cold War and provides a compelling case study of the inter-relation of political, military, and economic factors influencing the conduct of foreign affairs between close allies.