On the 29th of Mar 1909, George Foster (later Sir George), one of the most prominent members of the Conservative Party, introduced a resolution to the effect:
"that in view of her great and varied resources, of her geographical position and national environments, and of that spirit of self-help and self-respect which alone befits a strong and growing people, Canada should no longer delay in assuming her proper share of the responsibility and financial burden incident to the suitable protection of her exposed coastline and great seaports"
Though several options were available to provide that protection, Foster preferred a policy that:
"created a naval force owned by the Dominion, and gradually Canadianized to the point where there might be a Canadian Admiral on a Canadian coast."
The result would be an imperial adjunct to the Royal Navy for the defence of the Dominion and the Empire, in which Canada would have:
"some of her body, her bones, her blood, and her mental power, her national pride."
In responding, Sir Wilfred Laurier, the Prime Minister, wished the house to understand that Canada, as a self-governing Dominion was concerned by the question of control. He felt
"the problem before us is the association of our small naval strength with the great organization of fleets of the mother country, so as to secure the highest efficiency and unity without sacrificing our right to the constitutional control of our own funds, and of any flotilla built and maintained at our own cost."
To achieve that end, Laurier offered, in place of the Foster resolution, one of his own, which began by stating that:
"This House fully recognizes the duty of the people of Canada, as they increase in numbers and wealth, to assume in larger measure the responsibilities of national defence.
The House is of the opinion that under the present constitutional relations between the mother country and the self-governing dominions, the payment of regular and periodical contributions to the imperial treasury for naval and military purposes would not, so far as Canada is concerned, be the most satisfactory solution to the question of defence.
The House will cordially approve of any necessary expenditure designed to promote the speedy organization of a Canadian naval service in cooperation with and in close relation to the imperial navy, along the lines suggested by the Admiralty at the last Imperial Conference, and in full sympathy with the view that the naval supremacy of Britain is essential to the security of commerce, the safety of the empire and the peace of the world.
The House expresses Us firm conviction that whenever the need arises the Canadian people will be found ready and willing to make any sacrifice that is required to give to the imperial authorities the most loyal and hearty cooperation in every movement for the maintenance of the integrity and honour of the empire."
That resolution, approving the establishment of a Canadian Naval Service, was passed unanimously in the House of Commons in Ottawa. The Admiralty recommendation
"for a Dominion Government desirous of creating a navy should aim at forming a distinct Fleet unit, and the smallest unit is one which, while manageable in time of peace, is capable of being used in its component parts in time of war".
Since torpedo boats and submarines would not be able to cooperate with larger ships on the high seas, a scheme limited to these types would not result in a self-contained fleet capable of offence action. Such a flotilla, moreover, would afford a restricted future to its personnel, and inadequate training for the senior officers. The smallest unit which was recommended would consist of an armoured cruiser of the Indomitable class, three unarmoured cruisers of the Bristol class, six river-class destroyers, three C-class submarines and certain auxiliaries.
Such a unit would be able to defend trade routes as well as coasts, and to deal with a hostile squadron in its waters, and could moreover be easily combined with a squadron of the RN. It would require 2300 officers and men, its initial cost would be about $10 Million, and the annual cost of its maintenance would be about $1,700,000. It would be manned by Canadians, though the RN would lend officers and men to start training. To meet the requirements of interoperability, there should be a common standard for building, armaments, discipline and base facilities.
A subsidiary colonial conterence is held 29 July to 19 August 1909, and the Admiralty accepted the principle of Dominion Naval forces, stationed in the Dominions and under Dominion control. This would meet the Canadian requirement for control, control considered essential to maintain the principle of Colonial self-government.
On the 12th of Jan, 1910, the Naval Service Bill was introduced into House of Commons. Government proposal was for a naval force of 11 ships, costing $3 Million annually. However, the house was split. Some favoured a Dominion Navy because of the status it would confer, some favoured contributions to RN instead because it would provide more bang for the buck as it was anticipated that in a war, a Canadian subsidized battleship would do far better against the Germans that a couple of cruisers and destroyers would. A third group disliked any form of naval policy, and had the farsighted notion that air ships should be investigated because the encouragement of air activities might mean more to the country in the near future that a whole fleet of small cruisers or even of dreadnoughts. However, on third reading, the Naval Service Bill passed.
The Naval Service Bill received Royal Assent on the 4th of May, 1910. It created a Department of the Naval Service under the Minister of Marine and Fisheries, who would be the minister of the Naval Service, and authorized the appointment of a Deputy Minister. The Command in Chief of the naval forces was declared to continue and be vested in the King. A Director of the Naval Service was provided for , to be the professional head of the service, preferably with a rank not lower than that of Rear-Admiral. The Governor-in-Council was authorized to organize and maintain a permanent naval force, to appoint a Naval Board to advise the Minister, and from time to time authorize complements of officers and men.
A Naval Reserve Force and a Naval Volunteer Force were authorized, with both forces liable for active service in an emergency. A naval college was provided for in order to train prospective officers in all branches of naval science, strategy and tactics. The Naval Discipline Act of 1866, and Kings Regulations and Admiralty Instructions were to apply to the service.