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As a result of the Diefenbaker Conservatives win at the polls in 1957, the Canadian government made a decision to abandon the Avro Arrow CF-105 fighter in favour of joint North American defence with the United States. As Soviet bombers extended their range of operations and as intercontinental Nuclear missile became a reality with the launch of Sputnik in 1957, a new approach to defence for the cold war needed to be considered.

A soviet attack would in all likelihood come over the arctic, across Canada and into the U.S.. On August 1st, 1957 an agreement was announced that a new organization was to be formed between Canada and the United States to be known as NORAD or the  North American Air Defence Agreement. This was intended to be an integrated system of defensive measures, installations and systems that would provide early warning and protection to North America in case of an attack by the Soviet Union.

It was to be based in Cheyenne Mountain, Colorado, and would place surveillance perimeters in the high Canadian Arctic as well as in strategic locations around the world. Both Canada and the U.S. would be required to commit to any actions taken. The RCAF ad the USAF would be effectively placed under a single command which would coordinate it's response and action to perceived and real threats.

The first true test of the system did not come from the north but from Cuba in 1962 when Soviet missiles were placed on that island and which directly threatened the United States. The Kennedy administration went on alert as soon as it realized that the missiles were there and then asked the Canadian government t issue the same orders so that NORAD could track the situation. Diefenbaker took several days before he would allow the alert order to be issued which severely strained the joint command concept.

By the 1980.s technology had changed with the advent of Nuclear submarines and cruise missiles and the official title of NORAD was changed to North American Aerospace Command. President Reagan was looking to the Strategic Defensive Initiative as an Alternative to Mutually Assured Destruction theory and asked that testing be conducted in Canada on the Cold Lake military base to track cruise missiles as a joint NORAD operation. The political fallout was intense but the Canadian Government, while not endorsing SDI or Star Wars as some called it, did work with the US in conducting the tests.

By the 1990's with the disappearance of the Soviet Union and early warning technology being deployed more and more in space, the NORAD agreement has become less important as a joint US/Canadian agreement.

Some suggest that NORAD was the forerunner of other US Canadian deals such as the North American Free Trade Agreement which has substantially impacted the economies of Canada, the U.S. and Mexico.