Germany's seemingly unstoppable military, its submarine campaign against British merchant shipping, and its neutrality pact with the Soviet Union, convinced many, including American President Franklin Roosevelt, that Britain itself would soon be invaded or forced to surrender.
Roosevelt outlined his plan to create a joint board to oversee the defence of both nations, not just for the duration of the current crisis, but as a permanent body.
However, some Canadians, most notably former Conservative prime minister Arthur Meighen were furious - they argued that by signing this agreement, Canada was not only abandoning Britain but was effectively placing itself under the control of the United States.
British Prime Minister Winston Churchill was also angry, stating that "all these transactions will be judged [at the end of the war] in a mood different to that prevailing while the issue still hangs in the balance."
However, the creation of the NATO in 1949 (which linked Canada and the United States into a collective security agreement with Britain and Western Europe) helped to alleviate these concerns.