Whitehorse, Yukon

Thursday, December 10, 1987 1:30 p.m.

Speaker: I will call the House to order. At this time we will begin with Prayers.



Speaker: We will proceed with the order paper. Introduction of visitors? Are there any Returns or Documents for tabling? Are there any Reports of Committees? Are there any Petitions? Introduction of Bills? Are there any Notices of Motion for the Production of Papers? Are there any Notices of Motion? Are there any Statements of Ministers?


International Human Rights Day

Hon. Mr. Kimmerly: I rise today to mark International Human Rights Day. On this day, in 1948, the United Nations General Assembly proclaimed the Universal Declaration of Human Rights. It was on December 10, 1948 that these nations, representing a majority of the world’s people, agreed on a common standard of human rights.

It is of particular interest today that the leader of the two superpowers are discussing peace, disarmament and human rights. We are becoming increasingly aware that the ultimate connection between peace and human rights, or the ultimate peace issue, is human rights, and the ultimate human rights issue is peace.

Today, the Yukon Human Rights Commission is officially opening its office and today the pay equity provisions of our Human Rights Act come fully into force. It is the policy of this government to promote basic human rights so that we do our part as a territory and as a people to promote world peace.

Speaker: This then brings us to the Question Period.


Question re: Carcross housing

Mr. Phelps: It is Human Rights Day and I am interested in the human rights of the people of the Yukon, so they can get some land and build some houses on the land. We could start with some basic human rights, perhaps, and not worry too much about what is happening in Washington with regard to human rights.

A letter was sent to the Minister of Community Affairs and Transportation Services from the Carcross Housing Association. It is dated December 8, 1987 and in part says: “There is a tremendous need in our community for people to find a place to build a home. I work with the Housing Association here in Carcross and have been for several years.” It goes on to say, “So if the population of Carcross is 250, then over 10 percent of our people are in need of a home,” and the letter is asking that this government get some land and lots available so that people can build a home. There has been a critical shortage for years now.

I would like to ask the Minister what he is doing about this specific problem.

Hon. Mr. McDonald: I am sure Members are all aware of the difficulties that the government historically has had in getting residential land, or any land,  in the Carcross area.  Certainly I, on behalf of the government, have had discussions with various people in Carmacks - I am sorry, Carcross - over the availability of residential land. With respect to the subdivision that has already been developed we have also indicated to the federal government that that land should be transferred for residential purposes. Unfortunately, to date we have not been successful in the land transfers from federal to main, but there will be every attempt to do what we can using the resources that we have to ensure that residential land is available in that community as well as others.

Mr. Phelps: Maybe part of the problem is that he gets Carcross confused with Carmacks.

I raised this on November 18. I have raised it time after time, and there is a tendency for the Minister to . . .

Speaker: Would the Member please get to the supplementary question. Our guideline seven states a one sentence preamble and this would include any quotations from Hansard.

Mr. Phelps: Since a huge amount of land surrounding Carcross is owned by the territorial government - the block land transfer is that big - why has this government not done something to make some lots available?

Hon. Mr. McDonald: The availability of available housing lots and land that is suitable for housing is one factor in the equation. Clearly, if there is any opportunity for the government to develop land, or for others who wish to develop land in the Carcross area, this government would encourage that to take place. It must be remembered that all land development in the Yukon does not have to originate with the territorial government.

Mr. Phelps: It is the responsibility of the territorial government to try to meet these needs and I would like to ask the Minister: would he table any correspondence or documentation that shows that this government is doing anything to make lots available to the people who live in Carcross?

Hon. Mr. McDonald: I do know that the Department of Lands is well aware of problems not only in Carcross, but also in Carmacks and in Ross River and in communities around the territory. I do know that they are very interested in not only in doing what they can to make residential land available, but also to encourage others to develop land.

I think it is not true to say that the government is not interested in encouraging residential land to be developed; quite the contrary.

Question re: Carcross housing

Mr. Phelps: Well, that question was not answered, but I am going to try it again in this question. I would like to refer back to the letter to the Minister, from the Carcross Housing Association, which states in part: “It costs a great deal of money to make the Chooutla subdivision area suitable to build homes for people to live. What is of greater concern to us is that it is not available to the people to Carcross.”

It goes on, later on in the letter: “If your government is serious in providing homes, what about Carcross and our subdivision? Please use your influence, as a Minister of our present government, to solve the differences of the federal government and the local band authorities, for the benefit of us all.”

What is this government doing to get Chooutla subdivision on the market?

Hon. Mr. McDonald: Firstly, the Member has got me at a disadvantage. The letter may have been sent to me but the copy has got to the Leader of the Official Opposition first.

With respect to the Chooutla subdivision, the government has expressed to the federal government the need to transfer the Chooutla subdivision, and the Chooutla subdivision has not been transferred. We have made representation in the past to have the subdivision transferred to the Yukon Government, so that the lots can be made available for the community residents in the Carcross area, both native and non-native.

Mr. Phelps: I would like to know whether the government is going to stick with the arrangements under which the Chooutla subdivision was developed, at cost to the Yukon taxpayer - that one half of the developed lots would be available to the public and one half would be purchased, by Canada, for the band. Is it going to stick to that arrangement?

Hon. Mr. McDonald: I understand that that question has been asked and answered in the Legislature already. The short answer is: yes.

Mr. Phelps: Back to the question I asked as my final supplementary in the first question, which was: would the Minister table any correspondence or documentation that shows this government is doing anything to make lots available to the people who live in Carcross?

Hon. Mr. McDonald: I am not prepared to do a file search of internal memos between lands officials about what may have transpired between them on land development. The statements that they made on the public record in community meetings and statements that I have made all indicate that there has been a considerable interest in developing land in the Carcross area and in lands in other communities. I have said that publicly a number of times and it remains our position.

Question re: Beaver Creek swimming pool

Mr. McLachlan: When the Minister of Government Services department became aware of the problems concerning the construction of the pool at Beaver Creek, what did his department do to investigate the problem, if they did anything?

Hon. Mr. Kimmerly: There was a problem as a result of engineering errors. The cost to fix it is being claimed from the person who made the original errors pursuant to their professional warranty of the work.

Mr. McLachlan: Is the Minister saying that the engineering error was done by the Department of Government Services engineers or by a private outside engineering firm that was hired to supervise the project?

Hon. Mr. Kimmerly: There are two parts to the answer. There was a consultant hired for the initial engineering, but that consultant’s contract did not include supervising the project; it was  in connection with the design, specifically the site design. I am advised that the errors that were made can be completely corrected but at some cost. The outside consultant or engineer who made the error will bear that cost.

Mr. McLachlan: Is the figure of approximately $15,000 that the Minister enumerated earlier in the week as the sum total of the five change orders the only cost being borne by this government for the mess ups on that job, or are there additional costs that must come yet in order to rectify the problem?

Hon. Mr. Kimmerly: I will have difficulty giving a simple answer because the preamble was wrong. The additional costs are in additional site grading and are only a part of the approximately $15,000 in change orders that I enumerated. Specifically, there will be $6,768 attributable to that error.

Question re: Beaver Creek swimming pool

Mr. Brewster: I guess Beaver Creek has finally got onto the map. My question is to the Minister of Government Service. The Minister stated on Tuesday that it was his expectation that the work on the Beaver Creek swimming pool project had ceased because of the weather. Can the Minister now verify if this work has stopped?

Hon. Mr. Kimmerly: No, I cannot do that. After I made the speculation in the House I was informed that work was continuing and the expectation for completion is mid January. As to wheather there is work ongoing today, precisely, I do not know.

Mr. Brewster: I can inform the Minister that they were to pour cement today at Minus 31 degrees Celsius. Who is going to pay for the cracked cement?

Hon. Mr. Kimmerly: I will take that question as notice. I question the preamble of the question, but in any event I will research specifically the question of cracks in cement, if any, and supply an answer.

Mr. Brewster: I guess that is the difference between a lawyer and a practical man. Is it true that the contractors are staying in Yukon Housing Corporation housing and have their own cook, and yet there are hotels open for them?

Hon. Mr. Kimmerly: Again, that would be a question that is under the control of the contractor, not the government. I will make inquiries in Beaver Creek and advise the Member accordingly.

Question re: Beaver Creek swimming pool

Mr. Brewster: I would like to know under what program contractors can stay in Yukon Housing houses?

Hon. Mr. Kimmerly: I have already said I will research that question. However, it appears inconsistent to me that the Member a few days ago was complaining about building a house in Destruction Bay when federal housing was available. We all know that in small communities individuals accommodate themselves by what they feel is reasonable at the time, and my expectation, or speculation, is that that occurred in Beaver Creek. In any event, I will find out precisely.

Question re: Ross River housing

Mr. Lang: Maybe that is why we are having the problems that we are in Question Period. There seems to be a lot of speculation when we receive responses.

Yesterday, I directed a question to the Minister responsible for the Housing Corporation regarding a project in Ross River. The Minister was that well informed that he did not have a response for any of my questions, and he felt that he should have been given written notice. Now it has been one day. Can the Minister confirm that there are two units being build in Ross River under the auspices of the Yukon Housing Corporation?

Hon. Mr. McDonald: Yes. I thank the Member for the one day notice. There are two units being constructed, one for social housing and one for staff housing.

Mr. Lang: Is it true that the two homes being built in Ross River are prefabricated homes and were purchased in Prince George?

Hon. Mr. McDonald: The houses were originally tendered as stick built houses. The bids that were received were substantially greater than the maximum unit price that was allowed for Ross River, and contracts were ultimately awarded for construction using prefabricated units with materials supplied by Yukon Suppliers.

Mr. Lang: There is a lot of concern being expressed regarding the obvious mismanagement of this project. Could the Minister tell the House how much each unit is estimated to cost?

Hon. Mr. McDonald: I take exception to the claim that this project is being mismanaged; it is not, at all. The staff housing unit is projected to cost $110,000, and the social housing unit $113,000.

Question re: Ross River housing

Mr. Lang: Did the Minister say $110,000 and $113,000?

Hon. Mr. McDonald: That is correct. The social housing unit costs slightly more because extra facilities are being installed to accommodate mobility impaired to clients.

Mr. Lang: The Minister claims that this project is not being mismanaged. Could he confirm if construction has ceased on these two units as of one and one half weeks ago?

Hon. Mr. McDonald: I am not familiar with that detail. I will undertake to bring the information back as well as any other details that the Member would like.

Mr. Lang: Could the Minister, in doing his research, which he should have done prior to coming into the House, confirm that the two homes, ones costing $110,000 and one costing $113,000, are being done under the general supervision of the Yukon Housing Corporation?

Hon. Mr. McDonald: I will seek all the details the Member is requesting. The amount of activity that is happening within the Housing Corporation is significant and I am sorry if Members are not satisfied with the fact that I may not know what all the details of each project are with respect to the various stages of construction for each house. I will do my best to make sure that the information is related to the Legislature in a timely way. Any relevant information Members request will be provided.

Question re: Ross River housing

Mr. Lang: I have to say at the outset that as a preamble to the lack of an answer to my question, I want to point out that the Minister has a responsibility to know what is going on in these particular projects throughout the territory. This one is being particularly questioned by quite a number of people obviously because of the questions being raised. He claims there is no mismanagement being done with respect to this project. Can the Minister tell this house why the foundation was not required to be compacted when the backfill was put in for the purpose of the foundation where the homes are being put?

Hon. Mr. McDonald: I am not aware of any mismanagement with respect to these particular projects. I will undertake to bring back the information the Member requests. It is impossible for anyone to be expected to know the details of all the construction practices on all the units in the territory and it is quite unreasonable to expect that that is the case. I do not know the colours of the units either. I did check with the Destruction Bay unit and it is a light green, but there are other details that I am sure the Members will consider relevant and I will do my best to bring them to the House. My memory is not as photographic as Members may expect, but all the information Members request will be returned here.

Mr. Lang: It does not surprise me, quite frankly. We have various empty units just built throughout the territory, as discussed earlier in the session. Is it true that the government, the Yukon Housing Corporation, is going out requesting various prices for possible labour contracts to complete these two projects?

Hon. Mr. McDonald: I will take that question as notice. I think that is a detail that will be related to the Legislature. I do take responsibility for the Yukon Housing Corporation, in my capacity as Minister, quite seriously with respect to the policies that are laid out by this government. I must say though, in passing, that if the Members feel that the information being provided is not as complete as they would like, I have always attempted to give full information to the Legislature in terms of all the details. I was here in the Legislature for a number of years, the last five years, and I must admit that this is one of the better records, at least in comparison with preceding governments.

Mr. Lang: When the Minister goes back to check to see what is going on with respect to this $223,000 investment, could he come back to the House and confirm that they have just sold a house in Ross River and could he give us the price of that home?

Hon. Mr. McDonald: I can certainly undertake to do that, and I will undertake to discover the reasons for a social housing unit or staff housing unit being sold. I am not sure under what circumstances the Member is referring to. The Housing Corporation has in the past sold a whole series of units around the territory and those people who have expressed an interest in a unit and have been able to pay the going rate have been offered the unit.

Question re: Old Yukon College

Mrs. Firth: I have a question for the Minister responsible for Government Services. In the Government Services debate on the Supplementary Estimates, the Minister revealed that the Departments of Community and Transportation Services and Renewable Resources would be moving to the old Yukon College building when it is vacated, by June of 1988. My colleague from Riverdale North and I are very concerned about the traffic congestion at the intersection of Lewes Boulevard and Hospital Road, and particularly on the bridge. Could the Minister tell us if a traffic flow study has been done to assess the problem?

Hon. Mr. Kimmerly: The response of the government to that concern, as the Member well knows because I have previously spoken about it, is to consult with the City of Whitehorse specifically about those issues, as well as the issues of sewer and water and the like.

Mrs. Firth: The Minister talked about a committee of officials. Can he tell me who the officials are on that committee and how often they meet?

Hon. Mr. McDonald: If the Member would permit me to answer this question, I have some familiarity with the subject. The Department of Community and Transportation Services has a traffic engineer who has been involved in traffic flow studies with the City of Whitehorse - certainly in the Takhini area around the new Yukon College. In my experience, there has been a study proposed by the City of Whitehorse for the intersection adjacent to the bridge over the river. It has, to my knowledge, not been undertaken in any detail, although our traffic engineer has been discussing with the City of Whitehorse the possible terms of reference for that study.

Mrs. Firth: The Minister of Government Services distinctly used, as his defence of this question, a fact that there was a committee of officials meeting, which the City was very happy about. My question was not answered by either Minister. I want to know how often this committee meets and who the officials are who are on the committee.

Hon. Mr. McDonald: There is a committee that has been established to oversee major Government of Yukon projects within the City of Whitehorse. It is currently chaired by the acting Deputy Minister of Community and Transportation Services and incorporates Government Services as a member, and the City of Whitehorse planning engineers.

Question re:

Mrs. Firth: The Minister’s defence would be much more plausible if it had been a committee, as the Minister had said, specifically to identify the issue and concern of traffic flow in and out of the Riverdale area. I am not talking about any studies that were done for the new college; I am talking about the old college studies.

My question, to whichever Minister thinks he can answer the question, is: will a traffic flow study be done to address this issue before June, when the transfer of departments is to take place?

Hon. Mr. McDonald: It is our intention that preliminary analysis, at a very minimum, be undertaken to study traffic flows in and out of Riverdale. There is more to the transportation study than just that one access to Riverdale in that particular location. There is also the issue of access along the South Access Road, which has to be undertaken as well, as part of the overall plan. We discussed that in some detail in the past and that will certainly be part of a review of traffic flows in the area and certainly will be undertaken prior to June.

Mrs. Firth: The people who live in Riverdale are going to be put in a very precarious position with the traffic congestion on that bridge and at that intersection - they already are. I want to know if it will be done before the transfers in June, not that it is anticipated that we will be looking at it. Will it be done and completed so that a proper analysis can be made as to whether those departments should be transferred over there?

Hon. Mr. McDonald: The analysis will be undertaken, certain prior to June, there will be some other factors that will have to be taken into account. There will ultimately have to be detailed analysis done of traffic flow patterns in and around the bridge, including the South Access Road, which is a contributing factor. The City of Whitehorse, for its part, has put in its Capital Plan the addition of a third lane on the bridge and certainly a review of traffic flows in the area. Every effort will be made to ensure that traffic flow patterns are only improved when the college is renovated for other use.

Mrs. Firth: As it is right now, traffic flow patterns come almost to a halt. Should a fire truck or an ambulance have to get across that bridge at 8:00 in the morning or at 5:00, 5:30 at night, it would be impossible to do so.

I would like to ask the Minister if part of the preliminary studies that he has discussed, which review another lane on the bridge - does that also possibly include the building of a new bridge?

Hon. Mr. McDonald: At this time the City has not approached this government with respect to its plans on the construction of a new bridge. There has been some thought given to the construction of a new bridge, that would reach Riverdale on the other side where the existing hospital is located. But at this point in time, the Government of Yukon has had no plans to build another bridge across the Yukon River. It would certainly entertain some discussions with the City of Whitehorse but any costs of construction, and the relative shares between the City of Whitehorse and any other authority, would have to be determined at a later date.

Workers Compensation Board

Mr. McLachlan: I have the question for the Minister responsible for the Workers Compensation Board. The Minister has often prided himself on structures of boards and committees which allow for a free choice for appointments, from lists submitted by the general public and interested groups. My question for the Minister is: why, when presented with such a list for nomination to the board, did he choose to ignore those recommendations and appoint someone else not on the list - someone of his own choosing?

Hon. Mr. Kimmerly: It is totally inaccurate to say that I ignored the nominations of various unions. The fact of the matter is I called a meeting of the two people nominated by different unions, and I discussed the pros and cons of the appointment of them and other individuals at some length along the lines of the principles that should apply.

Mr. McLachlan: I want to warn the Minister that that is a very dangerous game - lets pretend politics - when he is leading people to believe that the choice is going to be made from the list that they submit. This has happened time and time again with this particular Minister.

That approach displays contempt for the public process. Why ask for a list if the Minister has no intention of honouring the process?

Hon. Mr. Kimmerly: No one was misled, unless they are willfully or blindly stating that now. The legislation about appointments to the Workers’ Compensation Board is clear; it is that there is a person to represent industry, or the ownership of business, and a person to represent labour, or employees. The government engaged in a consultation process with labour and employee groups, in order to find a nominee. No one was misled. It was always our intention to make the appointment, which is a Cabinet appointment, as per consultation, which is precisely what occurred.

Mr. McLachlan: If he says that he is picking the best possible person for the job, I have to wonder what that says to the group that prepared the original submission list. Are their choices not qualified? Is the Minister saying that he and he alone is the only one who is competent to judge proficiency and expertise and ability when filling those positions?

Hon. Mr. Kimmerly: The question hardly deserves an answer, but the question is about who is the best representative and who is best qualified. In the case of this particular appointment, all was responsibly done. I am content that we have an excellent representative of both the rural areas, the mining industry and employees on that board now.

Question re: Crestview truck terminal

Mr. Nordling: With respect to the Crestview truck terminal, in reply to my concern about safety at the entrance to the terminal, the Minister said there was a Takhini area transportation study going on, which he expected would be finished by the end of November. Has that study been finished? Has the Minister had a chance to review it?

Hon. Mr. McDonald: The answer is yes and no. The study is complete at the officials level, and the study recommendations and the report will be coming to me shortly.

Mr. Nordling: I assume that study will be available to the public. I see the Minister is nodding his head yes.

My understanding was that this traffic consultant was only to look at traffic flows, and that the YTG itself would be looking at other safety aspects, such as lighting. I noticed that there has been a light installed. Has the Minister had a report from his department on what would be done at that intersection?

Hon. Mr. McDonald: The report will be made public. The draft recommendations from the consultant were made public at a meeting in Takhini School. Those were discussed publicly, and the recommendations will be open to the public.

With respect to the light, I guess the Member is referring to the Curragh truck terminal. I am not sure what the Member is asking, but if he is asking whether or not the Department of Community and Transportation Services installed the light, I will check on that for the Member. I am not sure who was the initiator of that particular light being in place.

Question re: Annie Ned Creek

Mr. Brewster: On April 1, 1987, the following motion was passed by this House:

“THAT it is the opinion of this House that the Government of the Yukon should name the creek at kilometre 1574 Annie Ned Creek.”

Has the government officially named this creek?

Hon. Mr. Porter: I do not know the specific answer to that, although I know the matter was referred to the Committee on geographic and topographic committee, which is the committee of government set up to do such naming. I will check for the Member and ascertain as to whether or not that naming has taken place.

Mr. Brewster: Is this committee now a territorial committee or is it still a federal committee?

Hon. Mr. Porter: This is one area that the federal government enjoyed total responsibility for, and we worked in an advisory capacity to them on it. Now the responsibility has been transferred directly to this government and it is totally in the hands of the territorial government.

Mr. Brewster: Considering the age of this elderly woman, I would like to know how long it takes before these things are done?

Hon. Mr. Porter: It depends upon the initiative brought forward. One would think that an initiative, such as the one requested by the Member, would not take that long. In some other areas, however, it may be necessary for the committee to conduct research; for example, on naming a mountain range to ensure it is historically correct. I will check on the question brought forward and provide him with the answer.

Speaker: Time for Question Period has now elapsed. We will proceed with Orders of the Day.



Motion No. 25

CLERK: Item No. 3 standing in the name of Mr. Kimmerly.

Speaker: Order please. It has been moved by the hon. Mr. Kimmerly

THAT the Yukon Legislative Assembly, pursuant to Section 21 of the Human Rights Act, appoint: Percy Henry, Dorothy Lattin, Carol Geddes, Louise Profeit-LeBlanc, Pearl Keenan, Rosemary Trahearne, Betty Toews and Clive Boyd to the members on the panel of adjudicators.

Hon. Mr. Kimmerly: I shall put on the record the process by which this motion comes before the Legislature. There was debate at the time of the debate on the legislation of the Yukon Human Rights Act about the way the Commission and the adjudicators would be appointed. That debate was largely around whether this is a government appointment, partisan appointment or a legislative appointment. The debate also included the question of the independence of the Commission and the Board of Adjudicators.

The process that was followed is the same one that was followed in the last sitting in arriving at the appointments for the Commission and the adjudicators who are presently appointed.

That is that the government, or executive arm of the government, generated a list of names and we submitted that list to both Opposition parties and asked for their comments and for any additional nominees. That process occurred and the government then contacted the individuals involved and asked about their willingness to sit. Some of the people on the eventual list indicated they were not willing, and the government is proposing all of the people who were willing who were on the list that was generated. The government paid particular importance to racial, gender and rural/urban balance, and in the case of this particular board it paid attention to representation of persons or groups which could be called handicapped - or the special needs people. We have a variety of people proposed here of various ages, there are rural people. I am pleased to say females will correct the imbalance which presently exists with only three males on the panel now. These people are Yukoners from different walks of life. They were not selected because of any legal expertise or particular professional expertise, but rather for their common sense, their respect in the community, and for their representation of the broad spectrum of society that exists in Yukon.

Mr. McLachlan: I have no problem with any of the individuals named in the motion, but a few things have perhaps should be answered by the Minister by his closing speech on the motion. The number of people proposed under the Board of Adjudicators is eight. If all eight adjudicate a case, do we then introduce the possibility of a tie vote, and then what does the Minister propose to do to break that type of situation. Secondly, I wonder if the Minister can confirm that notwithstanding travel expenses for rural members, that the salary for members sitting on the board of adjudication is in fact $400 per day per member?

That is that the government, or executive arm of the government, generated a list of names and we submitted that list to both Opposition parties and asked for their comments and for any additional nominees. That process occurred and the government then contacted the individuals involved and asked about their willingness to sit. Some of the people on the eventual list indicated they were not willing, and the government is proposing all of the people who were willing who were on the list that was generated. The government paid particular importance to racial, gender and rural/urban balance, and in the case of this particular board it paid attention to representation of persons or groups which could be called handicapped - or the special needs people. We have a variety of people proposed here of various ages, there are rural people. I am pleased to say females will correct the imbalance which presently exists with only three males on the panel now. These people are Yukoners from different walks of life. They were not selected because of any legal expertise or particular professional expertise, but rather for their common sense, their respect in the community, and for their representation of the broad spectrum of society that exists in Yukon.

Mr. McLachlan: I have no problem with any of the individuals named in the motion, but a few things have perhaps should be answered by the Minister by his closing speech on the motion. The number of people proposed under the Board of Adjudicators is eight. If all eight adjudicate a case, do we then introduce the possibility of a tie vote, and then what does the Minister propose to do to break that type of situation. Secondly, I wonder if the Minister can confirm that notwithstanding travel expenses for rural members, that the salary for members sitting on the board of adjudication is in fact $400 per day per member?

Speaker: The Member will close debate if he now speaks. Does any other Member wish to be heard?

Hon. Mr. Kimmerly: It is not contemplated that all of the Members of the panel would preside over a case at the same time. That would be most unusual; I suppose it is possible. The procedure is that the chief adjudicator, Doug Bell, would select a panel and he has the statutory duty or a statutory right to select any panel. The panel could be, in fact, one person. It will more than likely be - I can say because I have discussed this matter with the existing adjudicators and Doug Bell - a panel of three people. The reason for nominating a fairly large group is to ensure that there are probably three people available. And, it would probably be sensible - and this is contemplated by the act - to look at the nature of the complaint and if, for example, it is a rural complaint, that rural people sit on the panel as opposed to a panel of all Whitehorse people. The panel would be structured not by the government but by the chief adjudicator, in accordance with what would be sensible for that particular proceeding.

The salary or the payment has not been fixed through a Cabinet regulation. I expect it will be fairly soon, but the proposal is to pay the adjudicators the same daily rate as is the rate for territorial court judges - as a daily rate but not as an honorarium per year, or per quarter, or anything like that. The proposal is to pay the people when they are working and only when they are working, on a daily rate on the basis of the rate paid to territorial court judges. The proposal is to pay the chief adjudicator an annual retainer or honorarium and that proposal is $1,000 per quarter, or $4,000 per year. It is not yet anyway a matter of government policy or regulation because that proposal has not gone to Cabinet as an Order in Council or a regulation under the Act.

Motion agreed to


Bill No. 3: Third Reading

Clerk: Third reading, Bill No. 3, standing in the name of the hon. Mr. Penikett.

Hon. Mr. Penikett: I move that Bill No. 3, entitled Third Appropriation Act 1987-88 be now read a third time and do pass.

Speaker: It has been moved by the hon. Government Leader that Bill No. 3, entitled Third Appropriation Act 1987-88 be now read a third time and do pass.

Motion agreed to

Speaker: I declare the motion carried and that Bill No. 3 has passed this House.

Hon. Mr. Porter: I move that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.

Speaker: It has been moved by the hon. Government House Leader that the Speaker do now leave the Chair and that the House resolve into the Committee of the Whole.

Motion agreed to


Chairman: Committee of the Whole will now come to order.

We will recess for 15 minutes.


Chairman: Committee of the Whole will now come to order.

Bill No. 5 - First Appropriation Act, 1988-89 - continued

Chairman: General debate?

Hon. Mr. Penikett: I understand there were some churlish comments about my being in a school concert last night. I apologize for my absence and want to thank the Minister of Justice for acting as the Minister of Finance, and the Leader of the Official Opposition for acting as a pair.

I have had a chance to look at the Blues from last night. If there are any questions that arose last night on which Members would wish elaboration, I will be pleased to try and provide that. If there are more precise comments or inquiries in new areas, I would try and respond to those as well.

Mr. Phelps: I just received a copy of the letter to the Government Leader from the Whitehorse Chamber of Commerce with respect to the Budget. I do not know if he has had a chance to see it. They had a recent directors meeting and they express some concerns. The main concern is directed at the issue of whether or not this government has closely examined the problem of excess demand for labour and materials in what has been a healthy economy - whether it has considered slowing down the capital expenditures. The fear is the destabilization in prices, labour and the materials.

Hon. Mr. Penikett: I have not received that letter. The mail system seems to work much more efficiently sometimes in mail getting to the Opposition than it does to the government side. That may be something I may want to look into.

I did not see the particular letter, but I did attend a meeting of the Yukon Chamber or the Whitehorse Chamber - forgive me, I do not remember which - some months ago where, in a general way, I was discussing the condition of the Yukon economy. I had occasion at that time to discuss with those ladies and gentlemen the potential problem of an overheated economy. In establishing a total for the first Budget, I asked the officials of the Department of Finance to do some examination of the assessment of the private sector construction activity for this year, and attempted to tailor our Capital Budget accordingly.

Our sense was that the Capital program that we voted last year, combined with the activity of the private sector, probably tested the limits of both the public and private sector to manage a construction program of that scale last year.

Accordingly, having some sense of some projects that were slated for this coming year by the private sector - and I think the Member will understand that we were only really able to assess the larger ones, we were not able to canvass the many small building decisions that have been made in the territory - I proposed, and my Cabinet colleagues acceded to the view, that we should reduce substantially the Capital Budget to the level which is proposed to the House - to a level which we think is sustainable in the mid-term. As a matter of fact I believe, if I can refer the Member back to my opening speech on Second Reading, it indicated that if our economy continues to improve at our present rate, or anything like our present rate, that we might actually have further slight reductions in the Capital Budget in the coming years.

The short answer to the question is that I have tried to indicate some sensitivity to the views of the Chamber of Commerce, not expressed in this letter but expressed in previous meetings, and have attempted to tailor this Capital Budget to what we think is the total activity which is absorbeable, or doable, in the community during the next construction season.

Mr. Phelps: It would be worthwhile, it seems to me, to get the projections pulled together and made available to the private sector as well as to the House. One of the points they seem to be concerned about, understandably, is the numerous smaller capital projects which are, and may be, labour intensive. What we had in the speech last night given by the Minister of Justice was reference to some figures for employment. If I recall correctly it was an estimate of 1,700 jobs for this year as opposed to, I think, 1800 jobs for last year. That is not much of a reduction. It seems that the small labour intensive jobs have to be looked at fairly carefully because I know that there are a lot of complaints throughout the territory from people fixing or building their own houses and that sort of thing because of the high cost of labour and materials.

Hon. Mr. Penikett: I understand what the Member is saying. I hope he would also understand that we are children as yet when it comes to trying to develop some of these tools and some of these indicators, and factoring them into considerations for the Capital Budget. Let me mention another one, of which the Member will also be aware, I am sure, when we are looking at the Capital Budget and looking at rough estimates of the job creation, we do so mindful of the fact that certain kinds of construction activities such as road building are fairly capital-intensive nowadays, whereas renovation of homes is relatively labour-intensive. In fact, renovations, as I am sure the Member knows, is much more labour-intensive than is construction. We also, hopefully, over time, will become increasingly sophisticated in the way we factor in considerations like that, including the consideration that renovations, for example, may be able to be done under a longer period during the year than construction, for obvious climatic reasons.

No one in our Department of Finance or the Department of Economic Development or Government Services - and I should point out that the Department of Government Services has no policy on this at all yet and I think you are going to have to change that - has the sophistication to be able to really capture all these things. As we develop the ability, and I think the formula financing agreement does develop the ability, to plan in one year and construct in successive years, and as the five year capital plan becomes an increasingly relevant document, I think that our ability to be able to respond to external forces such as indicated by the Chamber of Commerce will be greater and will be improved, in the public interest.

Mr. Phelps: The issue that has been raised many times before and is consistent with the concern expressed here, of course, is the formula financing. We received rather a shot in the arm because of the shortfall in our capital infrastructure. That was the argument upon which a lot of the rather large leap in funds from 1984 to 1985-86 was based, and the point is made here again that large government capital expenditures during strong economic times create an expanded infrastructure based on an artificial economy. That, I think, is a very sincere complaint here. If the economy is based primarily on government spending - and I think that is largely true, if not completely - then my next question is: do we have assurances that the government is going to be receiving funds that will allow it to continue spending this money on the capital side? The argument that was made when the formula financing was being negotiated - and a fair amount of work was done in backing up the negotiating argument - was simply that we were in a terrible state with regard to infrastructure. Now we spend a lot of money on infrastructure. Is that going to have an effect, or are we assured that the government is going to be able to sustain the capital expenditures with inflationary increases, near to the $100-220 million range we are now getting used to?

Hon. Mr. Penikett: I would like to respond without provoking a deep partisan or philosophical debate. I take issue with the notion of artificiality as stated by the Member opposite and the authors of the letter. Two of the more successful economies in the United States, California and Massachusetts, are leading their counterparts because of two factors. One is that they are increasingly finding that the condition of the infrastructure, including educational plans, is a powerful inducement to attract investment, professionals and workers to the state. The standard of education, not only to workers, but also to the children of managers and investors, is a very powerful attraction for people considering their options within the United States. California and Massachusetts have derived enormous benefits from investing heavily in that infrastructure, and it is not seen as artificial.

I hope this other point will not be misunderstood. The kind of dialogue that I want to foster, not only in the Chamber but with other groups in the community, about our economic development, is a model that is not unknown elsewhere. Massachusetts, again, had considerable success by having a continuing dialogue on exactly the kind of points raised by the Leader of the Official Opposition for good reason.

It was either last year or the year before that the Leader of the Official Opposition and I had a brief debate about Keynesian pump priming. I hope that I can persuade the Leader of the Official Opposition that I am in this respect a true Keynesian. I hope that as our economy improves, capital expenditures can be reduced. The kind of stimulus provided by these expenditures ought not to be maintained to the same extent as the economy improves because, for reasons that he indicated, there are negative consequences to that including the obvious inflationary ones.

In respect to the formula, I am reasonably optimistic about us extending the present arrangements, with some small changes, but we will have to see about that. On the question of what is sustainable, if the economy continues to recover and improve at the rate that it has been, we ought to be able to reduce the capital expenditures somewhat next year and perhaps the year after. If we assume that there was no improvement, something like the level being proposed here is sustainable for a number of years yet.

Mrs. Firth: I want to ask the Government Leader some general questions about the Capital Budget document. I understand from people who have called me with questions that the Government Leader mailed out, with a letter, some copies of the Capital Budget to people like school committee chairpersons and so on. Could he tell us who he sent copies of the budget to?

Hon. Mr. Penikett: I am sure it would include municipalities, perhaps school committee chairs, Indian Bands - I do not have a complete list at my fingertips but I could certainly provide that.

Mrs. Firth: Could the Government Leader tell us approximately how many he mailed out? Would he have that information?

Hon. Mr. Penikett: Not off the top of my head, no, but I could find that out in very short order.

Mrs. Firth: I thought the Government Leader might know because I believe a letter was signed and enclosed with the budget.

We got into some discussion last night about the supplementary information in the budget, and this supplementary information is what was brought to my attention by individuals who had received copies of the budget document. They had called me, in turn, to ask for further explanation because they found the document very difficult to understand in any way, because there was no supplementary information, as it was included last year. And I believe even last year they found some of the information quite scanty.

The discussion we got into last evening - when the Minister of Justice was representing the Minister of Finance - we got into a discussion about the numbers of lines in this budget, versus the numbers of lines in the other one. I thought I would point it out as an excellent example of how, although there may be more lines, there was no explanation of what, for example, the equipment was that was going to be purchased was under the line “Equipment”. I wonder if the Minister can elaborate a bit on that and tell us if we are no longer going to get even those scanty, brief lines indicating what the equipment or the project is.

Hon. Mr. Penikett: I hope the Member will understand that as a former Member and a former chairman of the Public Accounts Committee, I have no inclination to make an unsatisfactory presentation of the budget formats permanent. If Members indicate some dissatisfaction with the particular layout or particular information contained in the Estimates, I would be very willing to take under consideration any representations they might make on that score.

I believe my colleague last night tried to indicate that, relative to some other recent years, there was more line information. I believe it was also indicated that an effort was made to make things easier to follow this year, and we moved the project detail back to the expenditure detail pages, so that there was not the need for supplementary information any more.

I hear the Member to be saying that she would like more precise information, such as the equipment contemplated where equipment is indicated. There are, of course, two ways of doing that. We can either do that during the Estimates discussion, or, if Members wish, I am quite prepared to take under consideration the proposal to be more precise about questions like that. I would be very happy to hear from other Members who have similar concerns and take them under advisement now, in the hope that we can provide a more satisfactory presentation to Members at the time of the next Estimates.

Mrs. Firth: I am not raising the issue to be confrontational. I am simply raising it to make a representation to the government, as I believe I have every time we have debated the Capital Budget. I recognize the reasons why the Government Leader may wish to send out copies of the budget to people and if I was in his position I probably would do the same thing. However, as a former minister and person responsible for bringing information to the Legislature, I can remember the old format for the Capital Budgets - where a small two or three lines of detail were given to explain what the project was, or what was going to be purchased in the way of equipment, but providing it was not a great, lengthy, detailed document. That was provided. It was provided in the 1986/87 Budget and also in the 1987/88. I am not criticizing the format, or the change, or the fact that the government is making it more consistent with the Operation and Maintenance Budget. I am just raising a concern and making a representation to the government, that if they are going to be sending them out and want it to be more readable for the public, as well as for Members of the Legislature - we have many opportunities to raise questions and get as much information as we want. My recommendation would be to include a little more information, a little bit of detail as to what the particular lines or items are for, as they did in the 1987/88 Capital Budget where they included the supplementary page with a little more detail that people could refer to.

Hon. Mr. Penikett: Let me say I thank the Member for her representation and I will take it under advisement.

Mrs. Firth: I asked a question last evening about person years and if there was a carry over of any person years from the 1987/88 Capital Budget? In the term positions the Minister mentioned in Community and Transportation Services, were there any that had to be extended? Can he give us a number of positions that had to be carried over to finish projects or programs that had been started under the 1987/88 budget. That would be in addition to the new figure of 99.53 person years that have been identified in this budget. I read the explanatory note at the bottom of the page about the transfers from Operation and Maintenance, but my question is whether there were any left over in the previous Capital Budget that had to be carried on through this Capital Budget?

Hon. Mr. Penikett: The terms that have been extended are 2.8 from Community and Transportation Services. These are an extension of terms for project engineers, engineering technicians and a clerk typist. In Economic Development, it is a coordinator of Small Business Incentive Agreement; that is the new EDA with the federal government.

Mrs. Firth: The Government Leader did give us that information. I wanted to know if there was anything in addition to that. When he gave the second reading speech, he went through the term positions that were going to be carried over. Are they part of the 99.53, or are they additional? Are there any others?

Hon. Mr. Penikett: They are part of the 99.53. The only reason I cannot be more precise about the fiscal year we are talking about, which is starting April 1, is because of the status of the Capital person years are presently scheduled to expire on March 31, 1988.

Many of these will undoubtedly be renewed in order to continue the Capital projects on which they were working but, because this Capital Budget is smaller than the present year’s, I expect there will be fewer Capital person years, especially those associated with the construction program. We will not be considering, or dealing with, the extension or otherwise of those terms until we do the run up to the Operation and Maintenance Budget, which will be presented in the spring session.

Mrs. Firth: I am sure the Minister can appreciate the difficulty we have following the person years. I appreciate that he is saying they are going to expire March 31. Some have been identified to be carried on. They are included in the 99.53, but he has just said there will be fewer person years identified with this Budget because it was less money but, in fact, it is considerably more than last year. This one is $99.5 million, and last year’s was $88 million or so. Could the Minister explain that discrepancy?

Hon. Mr. Penikett: I am trying to find the details, but there are a certain number of person years that are transferred from Operation and Maintenance. I think 6.9 is the accurate figure. Since the staff establishment policy was approved, we had approved some terms to help deal with the Capital construction program. What I am saying is that the total person year complement for Capital, which is tied to this year’s Capital Budget, ought to be reduced somewhat, commensurate with the reduction in the Capital Budget for the next fiscal year. The question of the continuation or the extension or the renewal of the terms will be dealt with item by item, or person year by person year, or position by position, in the run up to the spring Operation and Maintenance Budget.

Mrs. Firth: Are any of these term positions tied to the vacant permanent positions that are being filled with terms that we debated in this House a little while ago? The Government Leader was indicating to us that there was a policy for filling the permanent positions with terms. Are these entirely separate and different from that?

Hon. Mr. Penikett: Yes, because, as the Member will know from her days as a Minister, the capital person years really ought ordinarily always to be terms unless of course you have a program that you know is going on be ongoing or, in effect, permanent. Given the nature of capital spending, I am not sure whether that would be a very large number of programs.

Mrs. Firth: Does the Minister have any person year sheets distributed, which would give an update of person years now, and could he have that available for the Capital Budget? I think it would be helpful for us.

Hon. Mr. Penikett: I do not have a terribly good one. I think the question that was asked earlier on about the total allocation of the person year terms, indeterminate auxiliaries, etcetera, is information which, as I indicated to the House earlier, once the new computer information system that we have in the Public Service Commission is running properly, we will be able to have that information. As I indicated to Members, I hope to have that kind of complete detail available in the spring for the information and edification of the House. I have, in rough form, a breakdown of the capital person years, but I think it has basically been made available to Members already. If the Member would like it on a single spreadsheet, I will try to get it put into that form. I apologise, but I cannot promise to do that this afternoon.

Mrs. Firth: The Minister made it available last time and I think it would be helpful to us if we could have it again. It was identified just by departments and positions and was quite useful.

I would like to ask the Minister about lapsed funds. When we debated the 1987-88 budget, which was the $114 million budget, the Minister indicated that the 1986-87 budget had lapsed funds of approximately 22 percent. Does he have a percentage figure of lapsed funds on the 1987-88 Capital Estimates?

Hon. Mr. Penikett: We do not have it on this current year. All I can do is to repeat my expressed hope that the trend lines on lapses will decline. The only information I can give is for some years previous to the construction season, which is not yet complete, but is largely complete.

Mrs. Firth: I am sure the Minister would have that figure, probably after March. Would he be able to present that to us then?

Hon. Mr. Penikett: Yes. I will ask officials of the Department of Finance to take notice of that question and try to provide it in the spring Estimates.

The lapses on the 1985-86 Capital Budget were, the Member will recall, 21.6 percent. The capital lapse on the 1986-87 Budget, which was significantly larger, was 12.4 percent - I think, an improvement. I am not sure if we can improve it at the same increment every year, but we would like to see an improvement.

Mrs. Firth: My memory is fairly good and I seem to remember the 1986-87 one having a larger lapse of funds. Then there was something like 14 percent or something on the previous one. I have some notes and I may refer to them a little later. I will jot down the numbers the Minister has just mentioned.

Could he tell us if the Department is making any preliminary estimates, or are they anticipating a certain percentage of lapsed funds?

Hon. Mr. Penikett: We do not have any estimate yet, but just let me explain to the Member, in terms of the estimate of the lapse that I gave, that it is not based on the Mains but on the final Supplementary, and in terms of looking at the dollars the Budget for the 1986-87 year was significantly higher than the Capital Budget for the 1985-86 year. The dollars lapsed are quite substantially different for those two years.

Mr. Nordling: Last year the Government Leader said that he was trying to prevent lapses. I wonder if this is being done on a department by department basis, because some departments do far better than others with respect to lapsed funds.

Hon. Mr. Penikett: Yes, but I think we should indicate that the major building departments are Community and Transportation Services and Government Services, and Government Services, except for Highways and the Housing Corporation, is largely responsible for the Capital Program. I am hoping that as the strength of the Department of Government Services increases we will be better able to manage the Capital Program, which is under its control, to the end indicated by the Member. Community and Transportation Services is responsible for the Highways Program and that is in its control.

Mr. Nordling: I was talking about efficiency and the percentage of the appropriation versus the actual expenditure. The Government Leader is right, Community and Transportation Services has quite a large budget for the year ended March 31, 1987. The Capital side had lapsed funds of $7.7 million, which is a considerable amount, but the budget, or amount approved, was over $51 million. My concern is more with the Department of Economic Development, where, on a $12.2 million appropriation, there was $5.3 million in lapsed funds, and I see that there were no supplementary line items under economic development and I wondered if, in the current year, we were looking at anything in that magnitude for lapses.

Hon. Mr. Penikett: Naturally I hope not, but as the Member will understand, there are all sorts of reasons why the Capital Program of Economic Development is not like a construction program being delivered by Community and Transportation Services or Government Services. There are a variety of reasons, including the efficiency of the way in which we notify, or advise, or inform citizens about various programs. New programs classically have a low uptake in their initial year or two, and that was certainly characteristic of the SEAL program, which has a high demand now and in fact I expect this year the claims against the program are going to be very close to the budgeted amount. The Prospectors Assistance Program, which we inherited from the government is, in fact, over subscribed, or there is more demand on it than we have funds available. I think the Mineral Exploration Incentives Agreement is a program in which there is a very heavy demand. A program like the Energy Alternatives Program had initially very little demand but that is increasing. By the same score, the Opportunities Identification Program has an increased demand over time as awareness of these programs increases.

We can also have events, as the Member will know, as we did this summer, where there was great uncertainty about the federal share of some programs - cost shared programs, the EDA, the Tourism Subagreement, the Special ERDA, and the programs delivered by the Department of Regional Industrial Expansion - and of course that will impact quite severely on the flow of money under such a program.

Mr. Nordling: Yes, I think we will get more into the specific economic development programs when we move to that department. My concern is attempting to be more accurate with the budgeting. It appears to me that the economic development budget for 1988-89 is exactly identical to the 1987-88 budget, and very similar to the 1986-87 budget. We have had the same amount of money all the time and I wonder if the system of budgeting is to get this large amount and then work through a year at a time doing your best to get it spent, rather than looking realistically at the programs and trying to bring a more accurate forecast. The Minister has stood up and said that there will be great demands on some of these programs, discussing the 1988-89 budget, and the amounts budgeted are exactly the same as they are for 1987-88.

Hon. Mr. Penikett: The Member says that we are not debating that department yet and I am sure we will get into it in more detail when we do. But I am sure the Member will also understand that this department has gone through a quite significant restructuring and that in the last two years a significant number of new and innovative programs have been introduced.

The funding for these programs was established on the basis of some estimate of the demand in the community - there will always be imperfect estimates. Often, in the first year and even in the second year of the programs, there is not the uptake that one would expect. The department has no new programs coming in for this year’s Capital Budget, and is going through a period of consolidation now. Rather than going through a period of program development, which we were initially, we are now going to try and improve program delivery. Not for the sake of spending the money but so that we can target it for maximum benefit for the Yukon community.

The other point is that under cost-shared programs, since we do not have the unilateral right of approval, there may be all sorts of reasons why we do not spend what is originally budgeted, especially when there are quite a number of large projects under consideration.

Mr. Nordling: I recognize what the Government Leader is saying. I notice, however, that with all of this uncertainty, none of these programs have been under budgeted. There was no supplementary brought forward, and I think that the Government Leader will have to admit that the budgeting has been done for an outside estimate of takers for these projects. For the year end March 31, 1987 - to miss by over $5 million on a $12 million budget is cause for some concern.

Hon. Mr. Penikett: On the face of it I share the Member’s concern. I am sure that the Member would not want to suggest that the money be spent just because it is in the budget. There are a number of programs here, based on this season - even though we do not have the final figures in - that we will be spending all of the money in the program. I mentioned a couple of those. The other programs that are going on may well use up their allocations, but at this point in the current year, we have no way of knowing that.

The nature of some programs are such that we will not have, even at period nine, a very accurate estimate of the total demand on the program. The monies established in these programs are established on the basis of agreements that are contracted between Canada and the Yukon, such as the EDAs. They can also be established based on an assessment of the probably need;, for example, the ones that are 100 percent funded by the territory. We may have to adjust those numbers up or down in future years, but the effort of the department is now to consolidate, to improve delivery and to improve the accessibility of these programs. The funding level for this year is maintained at last year’s level because we think, in aggregate terms, these are the kinds of demands that will be made on those programs.

Mr. Nordling: My concern with every department, not just Economic Development, is accurate budgeting. It is not a concern that money is being spent just to get rid of it because it is in the budget - that is why we have the supplementary estimates. They are brought in several times. Reading through Hansard - I will not accuse the Government Leader of it, because it may not have been him - I see there was a comment, that the reason changes that are known about are not reflected in the first supplementary, is because there is no use redebating and rehashing these line items until the final amounts are known. I would like some assurance from the Government Leader that the reason there was so little in the Supplementary Estimates that we went through, is not to avoid a new debate on the old Budget.

Hon. Mr. Penikett: I am not entirely a fan of unnecessary debate, but I am very proud of most of the programs in this operation, especially those that I have had some small part in developing, and I would be quite happy to debate them at any time.

With a Capital program like that of Economic Development - until you get to Period Nine, where you are talking about cost shared programs in some cases, and about loan, grant and contribution programs in other cases, you are not in any real position to be able to come back to the House and say you do not need this money or you are over expended in this area.

If, by this point, we had some project come along, such as the Cyprus Anvil project or perhaps even a project involving restarting White Pass or something, which had required us to exceed the authority on some line or in some program on the basis of some negotiations that we had now concluded, I would have been here to debate last week the request to the House for additional funding. If, however, such an event were to happen between this sitting of the House and the spring, I would come back to the House with a Period Nine Supplementary to do the same thing.

I would submit that programs, such as those kinds of programs offered by the Department of Economic Development, are different in nature than the Capital programs where you are building a school or a road or something: very shortly, we would know how much of the money spent in the current construction year had been used and how much was likely to lapse. These programs are not like that.

Mr. Phelps: With respect to the Public Accounts 1986-87, on the issue of assets and liabilities on the Capital side. I those accounts, there is the $1 million loan to British Yukon Railway that has been carried over into that period. Looking at the balance sheet, when the land is actually transferred to the government, will that not drop off and come under the item of Fixed Assets in a nominal value of $1.00?

Hon. Mr. Penikett: If it is for resale, it will go into the inventory and be evaluated. If it is for our own use - for example, if we were going to put a school or a hospital on it - then it would not be carried; I guess it would have a nominal one dollar value or something like that.

Mr. Phelps: With regard to the other item of interest, promissory notes totalling $39 million, due from the Yukon Development Corporation, is there any repayment schedule for those notes or are they just held?

Hon. Mr. Penikett: In respect of the YDC, at this point the largest part of the money YDC has is recorded as an accountable advance. Between now and this spring, we will be coming forward with what we are developing now, a financing structure. I do not want to speculate, but I am projecting that will likely involve a conversion of some portion of the advances we have made to YDC into equity grants and will be recorded accordingly. If we have a loan, then the loan schedule will be a matter of public record. I am sorry I do not have the schedule the Member is looking at right in front of me, so I cannot refer to the actual document. The intention is, as I indicated, that they are now advances, they will be converted either into a loan or equity grants between now and the spring, and I will be advising the House accordingly.

Mrs. Firth: The Minister talked about labour-intensive projects earlier this afternoon. Could he tell us who makes the determination as to whether a project is labour-intensive or not?

Hon. Mr. Penikett: The point I was trying to respond to to the Opposition Leader earlier this afternoon is that that is the kind of consideration we would increasingly like to account for, but we do not have the type of sophisticated tool at the moment which allows us to do that in any formal way except that in discussing budgets, the Management Board and its advisors can, for example, in considering two kinds of alternatives - for example, a housing construction program as opposed to a housing renovation program - know that, based on nationally available standards, such as information from CMHC as well as their own commonsense, renovation programs are more labour-intensive than construction programs.

Mrs. Firth: When does the Minister anticipate having some kind of formal structure or guidelines for doing that? I can see it fluctuating and varying, and you really cannot tell whether projects are labour-intensive or not.

Hon. Mr. Penikett: We cannot do it now, and we will not be able to do it, I submit, by next spring. But as I indicated earlier, for example the large contracting department, the department responsible for managing most of the budget, Government Services, does not yet even have one policy analyst in its entire, quite large operation. So, the ability for us to be able to do that kind of work and that kind of analysis will come, but we do not have it now. That was the point I was making to the Opposition Leader. We have some commonsense awareness of those factors but, over time, I would hope, in managing budgets of this size this government will be able, without increasing the bureaucracy greatly, to develop the techniques and tools to be able to take account of those things in preparing and developing its capital program.

Mrs. Firth: I am looking for some substantiation of comments that are made in budget speeches and Throne speeches. I know the government always says that this is a labour intensive project and they created so many person weeks of jobs, and so on. I am asking the Minister how they verify that, because it all sounds great, but when you get down to the nitty gritty of it, how do you come to that conclusion? That is what I am asking, simply for the government to substantiate the comments that they make in Throne and budget speeches.

Hon. Mr. Penikett: One of the nice things about computer technology is that over time you have some history about projects. There are some very obvious examples. LEOP we know, because of the way it is designed, is relatively quite labour intensive; highway construction is relatively capital intensive. I cannot quantify that off the top of my head and I am not sure if even the Department of Community and Transportation Services or Government Services could without some work. The only point I make is that over time, as an organization, and I do not mean this particular government represented by this party, but this entity, the Yukon Territorial Government, will increasingly be able to do that, and have the ability to do longer term forecasting and capital planning, the ability which is provided for by an arrangement like formula financing will facilitate or will enable us to develop that faster.

Mrs. Firth: When the commonsense approach is taken to determine whether a project is labour intensive or not, is there also some kind of analyses made regarding life cycle costing, such as the potential Operation and Maintenance costs that may come from one of these labour intensive projects?

Hon. Mr. Penikett: Again, that is something that this government is beginning to do. We have, as everybody has conceded, a long way to go from the time that these first questions were asked in the last few years. I know, for example, from conversations with some officials that some departments are much further along in doing this kind of work than others. I think it is a policy of Government Services at the moment, for example, in assessing retrofit projects to look at a seven year payback. I believe is the policy, so some analysis has to go into that in terms of achieving savings. There are, I think, some demonstrable savings in the Operation and Maintenance Budget achievable as a result of the highway construction program, and I believe Community and Transportation Services has increasingly been able to define those precisely.

The Finance Department has, for example, in that area, taken a very cursory look at the Operation and Maintenance implications of the Capital Program, and we believe that the expenditures of the Capital Program have resulted in something like a $1 million reduction in the Operation and Maintenance expenditures on our highway system already, and further capital expenditures ought to reduce further Operation and Maintenance savings.

I admit, at this point, that this kind of announcement is still very superficial because we are only now developing tools to be able to do it.

Mrs. Firth: When governments are enthusiastic to create jobs and labour intensive projects, quite often the direction in which they move is to concentrate all their efforts, focus and commonsense just into the labour intensiveness or job creation.

The Minister mentioned the LEOP, for example, which takes a very simple approach. A project goes ahead because of the desire to create jobs and put people to work, but there is no analysis done on who is going to maintain the project once it is built or established in a community. Someone builds park benches or sidewalks, then they start falling apart, and there is no money to repair them. Is someone doing that kind of analysis? How are they doing it? Are they doing it at the time that the project is initially started? People keep coming to the government and saying that they created these jobs, they have the results and now they need more money to maintain them. That should have been done at the very beginning.

Hon. Mr. Penikett: I will have to take the question on LEOP as notice on behalf of my colleague, the Minister of Community and Transportation Services. In terms of the larger projects, yes, we are doing that. I hope that our ability to do that will get better and better over time. At the time that we first looked at the College, there was little analysis of the Operation and Maintenance implications. We have been doing that, and we now have some kind of a handle on it is going to cost.

In the case of the Andrew Philipsen Building, we discovered that there was no assessment or analysis of the person year implications, but that is part of the operating costs. Hopefully, as we get into the ability to assess the value added implications of some of these things when we are building, for example, the school in Dawson City, given the kinds of standards that we want, it will be a relatively efficient operation. We will be able to achieve savings in terms of the Operation and Maintenance of facilities like that. That, at the design stage, will be increasingly a requirement in order to give us an assessment of the operating costs when we are considering design alternatives. and we will increasingly be able to make a wise decision about the most economical approach.

Mrs. Firth: I was not talking about the huge major government projects. I do not care what government is in office, but whomever it is and no matter what the project is, they should be doing life cycle costing. I think all the Members of the Legislative Assembly would agree to that. So we all agree to that point.

It is interesting that the Minister mentions the Yukon College, now that they have identified it and have some idea of what it is. Yesterday, when the Minister of Justice gave us some of the potential Operation and Maintenance costs, Yukon College was one that he did not give us a figure for. He said he could not give us one.

The Minister raises a question of getting into value added implications and so on. How can we even move into value added formulas and determinations with just the smaller projects? We have all kinds of programs and incentives where money is given to groups, organizations, or incentive programs - the LEOP I consider to be just another incentive program. This government constantly says that job creation and labour intensiveness is its objective and number one goal: to put Yukoners to work. I have heard of many projects that, in their enthusiasm to put people to work, it would appear there has been very little analysis done as to the potential life cycle cost and the Operation and Maintenance cost. It does not matter if they are just small programs of only a couple of million dollars, like the LEOP program, which I still think is a big program using a lot of money. It has implications. The implications are that there are things being built and being done in communities, without analysis being given to Operation and Maintenance costs.

It forces groups to keep coming back to the government for more money. Even some of the bigger projects are going to be like that. For example, with respect to the arena that is being built in Ross River, the community does not have the capability to raise enough funds to cover the Operation and Maintenance costs - in comparison to what they raise now and what they are going to have to pay in Operation and Maintenance for the new facility.

In the second reading speech, I believe the Member for Campbell was saying they want to hear from people where they should not be spending money. I said I did not think we should be spending money particularly in communities where we were forcing the communities and individuals to have to keep becoming more and more dependent on the government to continue with the projects they had started. That is a big concern we have and that communities have, particularly the community leaders.

I am trying to get some indication from the Government Leader as to whether or not that is being done. From what I understand, he is saying they do it on some major projects, like the college. Are they starting to do it on everything, so we are not putting people in the kind of position where they are going to become totally dependent on the government to sustain the job creation projects of the past?

Hon. Mr. Penikett: The sure answer is yes. Let me emphasize the point by saying that in respect to most of the projects in the communities, especially organized communities, one of the reasons why they and we were so keen to talk about the Capital Block Funding arrangements is because it does place the responsibility where the communities want it - in deciding for themselves whether they want to take on, or absorb, or bear the Operation and Maintenance implications of certain projects.

I know myself from meetings that I have had in communities that it is now, as it perhaps was not before, a much more serious discussion in a community about whether they want to have a curling facility or two sheets of ice or three sheets of ice. This is because the local leadership is very sensitive about the fact that that has a direct cost to their taxpayers to operate those facilities. And I think we are moving in the right direction there, but I can see that we still have some way to go.

Mrs. Firth: I have to express a lot of concerns from this side of House. It is that old adage - I understand what the Minister is saying, that there is consultation and so on, but I remember what we were like as a government and I know this government is the same. That the old adage stands: if you do not take the money, somebody else is going to get it, and really, we deserve it, we should be treated equally as other Canadians. That is what the senior level of government here says and what the municipalities are saying: we should be treated just as equally as all the other municipalities. So, in that enthusiasm to be treated equally and to have jobs, I think sometimes and more often, the whole aspect of Operation and Maintenance costs and increasing Operation and Maintenance costs is perhaps sometimes overlooked or it is not an immediate problem at the time so therefore it is not dealt with as a very serious problem.

It is a great concern for me, and for a lot of the constituents in Riverdale who have come to me and expressed this. We see a lot of buildings being built in the communities and in Whitehorse, where people see them every day. They ask how much money we take in in revenues, and to make it very simple: when you look at the Public Accounts it would appear that we take some $50 million in in revenues, and spend some $300 million. And people say, how can this be, how can we ever support ourselves financially?

So I feel that the government has a responsibility, as we all do here, to make sure the public is aware, and to make sure the government is doing its homework when it comes to the direction that it is taking us in the future - as to whether we are going to be able to sustain ourselves, in the eventuality that we do get provincial status. I think that is why it is looked upon in such a negative way by a lot of Yukoners that we should have provincial status immediately, because I feel the general impression is that we are better off financially under the present circumstances than we would be if we were a province. So these are simply concerns I bring forward to the Minister and I look for some expression that the concerns that I am raising are being addressed. I guess the Minister may say that I get picky or that I am more than demanding, but I like to have some concrete and specific answers to give people, and I am not finding that.

Hon. Mr. Penikett: I agree with much of what the Member says. I believe I have previously said many similar things myself. I would invite questions to Ministers along this line on the particulars as we go through the departmental budgets. I have tried to indicate in the example I gave from the Highways Department a plus-side example of the Capital Program, in terms of its impact on the operating budget. I am sure we could discuss this much further with respect to the programs of the department of Community and Transportation Services, and particularly Government Services, as we get into the debate.

Mrs. Firth: The specifics I am looking for is some indication of time, when these identifications are going to be made. A perfect example is the debate we had regarding the Business Incentives Program, the value added concept, with the Minister of Government Services. Now the Minister of Community and Transportation Services had identified a trend that seems to be developing with the northern preference, and the Minister of Government Services said that they were monitoring that situation. This government is now on its third Capital Budget and will now have spent, at the end of this third Capital Budget, somewhere in the neighbourhood of $300 million. It is fine to say that you are doing all these things, but when do we see the results of all of this. When do we know whether we are doing it right or not, and how many millions of dollars do we have to spend before we can figure out that we are doing it right?

Hon. Mr. Penikett: All I can say is that I have taken note of the Members comments. I am sure all Minister have, and we will try to respond to the concerns as we go through the departments.

Mr. McLachlan: I have a question for the Minister of Finance regarding comments that he has made on loan programs in his department - programs that the Minister knows are historically oversubscribed and that he knows are probably going to be heavily hit in the coming year, such as the Prospectors’ Assistance Program and the Mineral Exploration Incentives Program. Why, given that knowledge, do we continually keep the budgeting level at the same level in light of the comments made by the Member for Porter Creek West, about being $5 million out on a $12 million Estimate?

Hon. Mr. Penikett: At the time we were putting the Budget together we thought that this would be the approximate demand. When I indicated that programs like the Prospectors’ Assistance, the Mineral Exploration Incentives Program and one other that I cannot recall, are being used to capacity - that is about it. There is not a long lineup of people beyond the people who have qualified. If I had a program that looks like there are 30 percent more people needing it than we have budgeted for, then obviously in a subsequent year I would adjust the program allocation up, or request it from the House, and reduce the allocation for a program that was less heavily in demand.

The only caution I would have is that in the first year or two of a program I would hesitate to reduce the allocation sharply, because I know there is a lag between the time a program is announced and initially becomes available and the uptake of it by citizens.

Mr. McLachlan: I certainly was not advocating any decrease in the program. It was on the other side of the scale, which is an increase. The reason those questions come up is very distinctly because of comments we have heard in the past week about funding for a number of programs in one department, like housing units, which have gone unused when in fact the money could be channelled into programs like the Prospectors Assistance Program and the Exploration Assistance Incentive Program that show a real return. To me, that seems to be a little more indicative of a wealth producing situation for the territory. Granted, we all agree that housing programs are needed and are called for in some areas, but, in some of the cases we heard this week, I felt the effort could have been better spent in other areas.

Hon. Mr. Penikett: The Member is focusing his questions, I believe, on economic development. If, for example, in program A the demand seemed to be 50 percent ahead of the supply of funds in program B and there was a lack of demand for the program, I would have no hesitation in coming back with a Supplementary to request movement of the funds from one program to another.

I am not sure that we have, in any program, that kind of demand so much in excess of supply that would warrant that at this point.

Mr. Nordling: I would like to go back to the discussion we had last night, and discuss a couple of figures I had trouble sorting out for myself. The Minister of Justice, on behalf of the Government Leader, put some stock in them, and last night he said that we estimate that the monies to be spent under this budget will maintain or create 1,700 private sector jobs. He went on to say that this was about 100 jobs less than were created by last year’s Capital Budget. I would like to hear a bit more from the Government Leader with respect to jobs being created. I know we have discussed this in the past and it did not come across clear. The Throne Speech stated that jobs were Yukoners’ first concern, that “jobs are at the top of my government’s agenda, and jobs are the measure of its success.” What we have done in the past year is to go from 1,800 jobs being created to 1,700.

Hon. Mr. Penikett: Let me answer the second question first. I indicated at the outset, in response to questions made by the Leader of the Opposition, that the reason we were reducing the Capital Budget this year was to match it and the private sector activity to the capacity of the local construction industry and the government’s capacity to manage the capital program. We no doubt could have spent in the same order as the Capital Budget last year and created, perhaps, more jobs, but those jobs would have probably gone to people outside the territory.

They would have been recruited here at great expense, and that is not desirable.

In the computer model that is used to generate the number referred to by the Member, the departments break down the Capital expenditures into categories of types of expenditures, and they are fed into the computer. One of the reasons why we believe this particular Capital Budget before us is more capital intensive than in previous years is because, despite a 14 percent drop in spending, the job creation as a result of the Capital Budget decreases only by 6.5 percent. The model we are using to generate this has not changed from last year to this, and we can see that whatever imperfections it may have, the same methodology was used last year and this. The tentative conclusions one can draw are that this proposed Capital Budget is slightly more labour intensive than last, and that we are establishing the Capital Budget at a level that, combined with the private sector activity, maximizes the possible construction activity in this community using the local industry and the local labour that is available.

Mr. Nordling: How many of the 1,800 jobs that were created last year are permanently created? How many additional permanent jobs will come from the 1,700 created in this Budget?

Hon. Mr. Penikett: I cannot answer that question and neither can the computer model. We do know from the economic data published that the total number of new permanent jobs created in the Yukon for the last two years is about 1,800 jobs.

Mr. Nordling: My concern is similar to that expressed by the Member for Riverdale South. Are we on our way to self sufficiency? When do we hope to get there?

Hon. Mr. Penikett: I cannot tell you when, but I believe that we are on our way. I believe there is only one province in Canada that is financially self sufficient under the existing arrangements in this country. Even Alberta has not been during the present oil price drop. The percentage of our total Budget that comes from federal revenues is still too high for the long term, and I believe that everything we are doing here, including the focus on capital as opposed to operating expenditures, will in the long run reduce the federal contribution to our Budget, unless we have a major economic downturn.

Mr. Nordling: We are  not looking for any reduction in federal funding over the next two years, then? Is that my understanding from the negotiations that are going on?

Hon. Mr. Penikett: Our objective in the negotiations is the opposite to that, yes.

Mr. Nordling: By that the Government Leader is saying that they are negotiating for more money than we are getting at the present time, is that correct?

Hon. Mr. Penikett: We are negotiating for an extension of the existing arrangement.

Chairman: Is there any further general debate? We will move to the first department, which will be Economic Development: Mines and Small Business.

The Committee of the Whole will recess for 15 minutes.


Department of Economic Development: Mines and Small Business

Chairman: The Committee of the Whole will now come to order.

Department of Economic Development: Mines and Small Business

Hon. Mr. Penikett: I would like to request the wishes of the House. I can make a general statement on the introduction of this Estimate and provide some overview statement about each of the lines in the department all at once, or I could make it at the outset of debate on each line.

Mr. Nordling: I prefer that the Minister make an opening statement and present us with the information he has. Then we can deal with it one line at a time.

Hon. Mr. Penikett: The 1988-89 Estimates for the Department of Economic Development mirror closely the Capital Program developed and pursued by the department for the current fiscal year. The program has appreciably quickened the pace of the economic activity in the territory. For example, incentive funds have encouraged mineral exploration, preparation of community economic plans, the formation and expansion of businesses both in and outside of Whitehorse, and job creation.

Of the $11.5 million budgeted, 70 percent of it will be offset by recoveries. In the Energy and Mines Branch, the Estimates for the existing programs delivered by the Energy and Mines Branch, remain the same as those for the current year. It is the branch’s aim to basically repeat and improve upon the current success of the present programs without expending the budget.

Under the Prospectors Assistance Program, which is allocated $150,000 - that provides qualified individuals with the modest contribution to encourage field work in the territory and the potential for mineral discoveries - during 1986, which was the program’s pilot year, it helped 22 prospectors get into the field. This year the program gained momentum assisting 26 prospectors, and projections for next year are in the same order. In response to the earlier question from the Member for Faro, in the current year no qualified applicant was turned down.

Staff delivering this program have advised me that several recipients of the Prospectors Assistance funds this past season made promising mineral finds. Some have subsequently staked claims and have proposed to undertake exploration work or have already optioned their properties for such work in the coming year.

The Exploration Incentives Program, which is a popular program, is also in its second year. This has helped relieve private sector expenditures in mineral exploration and extend seasonal jobs. The establishment of new, productive mines in the Yukon depends very much on a high degree of exploration. I am pleased to report that the program’s $1 million budget was fully subscribed this season and assisted to work of 32 exploration companies.

Also gaining momentum is the Yukon Energy Alternatives Program, which encourages the study of development of local energy sources. The funds for this year have already been put to full use, assisting with feasibility studies on district heating, coal development, oil and gas development, and wood-fired electrical generation. It also provided a loan to the developer of a highly viable district heating system in Whitehorse, which is now under construction.

The SEAL Program continues to encourage residential, commercial and institutional building owners to improve the thermal efficiency of their buildings by 20 to 30 percent. This year, the eligibility for interest-free SEAL loans was extended to those who purchased highly efficient wood stoves and other solid fuel burners. As a result, SEAL dollars will be contributing to the reduction of air pollution, as well as to the lower demand for, and substitution of, imported fuels. Energy and Mines staff anticipate 200 Yukoners will take advantage of the SEAL monies allocated for this fiscal year, utilizing fully the $600,000 budget. The same degree of program uptake is expected for next year.

The one addition to the Energy and Mines Branch Capital Estimates for 1989 will be for Internal Energy Management. The branch will spend $30,000 to monitor and analyze energy use patterns in all government-owned facilities, with the intent to identify inefficiencies and reduce energy consumption in those facilities by as much as 30 percent. The dollars for this activity are transferred from the Department of Government Services. The dollar savings and potential for displacing expensive fuel imports, which could result from Internal Energy Management Program, could be substantial.

In the area of Economic Policy Planning and Research, as with the Energy and Mines Branch, this branch will operate on a budget similar to that of the current fiscal year. 1988-89 will be the fourth year of the Canada/Yukon Economic Development Agreement, and funding for the various subagreements is in accordance with the schedules established at the time of the signing. The 1988-89 total for all subagreements is $4,445,000. Under the Renewable Resources Economic Development Planning and Mineral Resources Subagreement, 90 percent of the program funds are recoverable from the federal government. The federal share of the Tourism Subagreement is 80 percent, while for the new Small Business Incentives Subagreement, which came on stream this past April 1, the federal government will repay 70 percent.

The EDA has stimulated considerable economic activity throughout the territory. For example, the most current of edition of EDA Update reports on projects approved or initiated during the latter half of the 1986-87 fiscal year, listing 28 projects in Tourism, including feasibility studies, marketing campaigns, and construction and expansion of facilities, 21 Renewable Resource projects, including public information seminars, resource production seminars or tests or demonstrations of new technologies, 6 mineral resources mapping and technological testing projects, and finally 13 Economic Development planning projects including several community economic plans and a study on Indian development corporations.

Encouraged by the track record of the EDA thus far, our government is actively working to renew the EDA Sub-agreements beyond their present term. Comments raised in an EDA-sponsored workshop on community planning held in Haines Junction in 1985, and heard in other forums, have led to the creation of the Community Economic Development Program. The 1988-89 fiscal year is the second year for this program, which assists community groups with crucial stages in turning their economic development plans into actions and jobs. The program will be funded for the same amount in this fiscal year: $150,000.

Another capital program administered by Policy, Planning and Research is the Applied Technology and Research Program, which has been allocated a further $100,000 for the coming fiscal year to provide innovative Yukoners with incentive contributions.

Participations in two import substitution workshops and many other sectoral workshops identified the need for increased use of new technology in the Yukon and support to test commercial applications of new technologies under Yukon’s specific conditions. There is no sector of the Yukon economy that technological innovations could not benefit greatly by expanding possibilities for resource development and processing and import substitution. New technologies in agricultur, wood heating, placer mining and telecommunications are but a few examples being explored.

One reduction in the 1988-89 Estimates for policy planning and research by the sum of $412,000 is the result of expired federal funding for the Northern Oil and Gas Action Plan. This program was set up in 1984 to generate data needed by the government to prepare for the Beaufort hydrocarbon development. In light of the renewed activity in the Beaufort region, the federal Treasury Board will sometime next year look at extending NOGAP, however, we have requested expenditure authority for $1 only because at this point the program is slated to expire at the end of the fiscal year.

In the small business area, this branch is best known by its Business Development Offices. It delivers the Business Loans Program, which is the pillar of support for Yukon’s business community and changes to the Business Development Assistance Act regulations have made this program even more beneficial to local proprietors, we think. As much as 80 percent of eligible costs now qualify for the low interest loans up to a new maximum of $500,000. As well, program revisions allow for loan guarantees on working capital and inventory and for reduced equity requirements from community based enterprises.

That change should greatly benefit Yukon communities outside Whitehorse where access to capital has been a continuing source of aggravation.

The 1988-89 Estimate for the Loan Assistance program has been trimmed to $2.7 million as compared to current funding of $3.25 million. The reduction comes as a result of improved availability of loan funds from other agencies in the territory, including the new programs I mentioned previously. Despite this measured reduction, the Economic Development staff anticipate the business loans program will still generate approximately 100 jobs and lever as much as $5 million in private sector investment throughout the Yukon.

The 1988-89 budget for Special ARDA remains at $1,045,000 and 50 percent of this sum is recoverable from the federal government. Special ARDA, as Members know, aims to encourage entrepreneurship strength in traditional and economic activities and provide training in skills transmission within the aboriginal community. The forecast to the end of 1987-88 and for 1988-89 indicates that Special ARDA will, each year, assist approximately 45 applicants to lever about $700,000 of additional investment in economic projects under Indian control.

The Opportunity Identification program provides contributions towards the study and development of new projects for the local and export market. The 1988-89 budget offers the same level of funding as the current year: $250,000. The Opportunity Identification is a popular program, with 70 percent of this year’s funding already committed as of October 1. In addition to levering private sector funds, the program encourages economic diversification, the plugging of import dollar leakages, and the development of export markets. These economic spinoffs will in turn, we believe, result in significant job creation.

Our Department’s consultations throughout the recent months and years have heard repeated messages from Yukoners to the government. Two of these recurring messages are as follows: the Renewable Resources sector of the Yukon economy must be strengthened and expanded; and existing and would-be Yukon businesses need greater access to capital.

As the result of these soundings, two programs have been developed: the Renewable Resources/Commercial Development program addresses the first message. It targets renewable resource based businesses, community enterprise corporations and band development corporations, and offers financial incentives for renewable resource development activities undertaken by these groups. The financial assistance made available by this program can be accessed in two ways. First, established  renewable resource businesses that are planning to borrow money to expand their inventory of raw materials or finished products may apply for an interest relief contribution of up to $10,000. In other words, a sawmill for example who obtains a loan to buy more logs in winter for summertime milling or to increase the mill’s inventory of finished lumber for sale in the upcoming building season could apply for a contribution to offset the interest on that loan.

The second way in which the Renewable Resources Commercial Development Program can be tapped is this: applicants who wish to test the feasibility of a new community, band, or individual venture utilizing a renewable resource, and who are in a position to implement the venture, should it prove feasible, may qualify for a contribution of up to $25,000. The applicants provide at least 25 percent of project costs. In cases where the results of the study or demonstration project will be of benefit to an industry or a community as a whole, consideration is given to 100 percent funding.

In 1988-89, we will see the second year of the Renewable Resources Commercial Development Program, for which $150,000 has been budgeted in the Capital Estimates.

The second often heard message, which I mentioned earlier, concerns the availability of financing or capital, especially for rural businesses. As a complement to the Yukon Business Loans Program, we have introduced a Venture Capital Program and the three components of the program are as follows: an employee share purchase plan, which provides individual employees, or groups of employees, with up to 25 percent of the cost to purchase voting shares in the employer’s business; a Community Enterprise Incentive Program, which provides community enterprise corporations with up to 25 percent of the capital requirements, as identified in an approved business plan; and a Strategic Investments Program which gives Yukon investors a 25 percent rebate on shares purchased in a business of strategic importance to the growth and diversification of the Yukon economy, to a maximum of $10,000 per investor.

As a package, the Venture Capital Program can help new and existing businesses to attract new capital, and thus to expand their operations and market potential and to create more jobs. At the same time, the program also promotes employee participation in the decisions affecting their jobs, the formation of community based enterprises and the investment of Yukoners’ savings in businesses strategic to Yukon’s future development.

The Venture Capital Program estimate for 1988-89 is $500,000, the same as its allotment for the current year. By offering 25 percent funding in all cases, the program will effectively lever each year, we hope, a minimum of $1.5 million in private sector capital, a healthy injection of capital into the Yukon’s small business sector.

These remarks conclude my outline of the 1988 Capital Estimates for the Department of Economic Development. I would like to emphasize that many of the program that I have mentioned we are, I hope, improving, and improving the delivery in a few cases in accordance with the messages that we have heard from the business community and from citizens around the territory.

We have tried to be responsive to comments from our clients in setting directions and adjusting the scope and range and practice of our programs.

I am confident that the Capital Budget for 1988-89 will continue the economic growth that we have seen in the Yukon Territory, and that the programs that we are offering are consistent with the provision of the development of the territory, which has been articulated to us by our clients and by citizens around the territory.

Mr. Nordling: In this budget, there are not any new programs or projects being introduced. Can the Minister of Economic Development tell me if there are any new programs or projects that are being planned or are in the works? Are there any new directions being taken in the programming area? The Minister mentioned improving delivery and new initiatives. I would like to hear a little more detail on those areas.

Hon. Mr. Penikett: We are trying to streamline our procedures and improve the turnaround time from application to delivery. We are trying to improve the access to our programs in rural Yukon, and we have done that by having three business development officers located outside Whitehorse. We will be talking to other agencies, including the federal government and the aboriginal community. There will also be economic development offices to improve our coordination with them and the access to our programs by citizens in all of the communities.

I described in my earlier remarks the only substantially new initiatives that we are undertaking. The only other major prospect that has not been described in my remarks is the possibility of the department being involved in the reopening of the White Pass Yukon Railroad. Since, at this time, we have no specific proposals or expenditure planned in respect to this activity, I cannot advise the House of anything other than that we have begun some preliminary discussions, not only with Mr. Hougen, but also with the government of Canada and Alaska.

Mr. Nordling: Could the Minister tell us if there are any specific problem areas in the program that he has identified and that he will be working specifically on? One of the very few budget changes from last year has been reduced from $300,000 to $150,000 for renewable resource commercial development. Are there problems with the use of this program or was it over budgeted? What is the government planning to do in this area for the next year?

Hon. Mr. Penikett: Because we changed the scope of the loan fund, we felt there was only a requirement for approximately the amount we have estimated this time, rather than the previous amount indicated for the existing fiscal year.

Mr. Nordling: Am I to take it from that specific answer that there are no other areas where the government has been having problems attracting people to use the programs?

Hon. Mr. Penikett: In the Yukon 2000 process, we have had a large number of suggestions and recommendations for the way in which this department’s operations and programs should be structured. Those are still being gathered up and integrated into the strategic statement, which will not be ready until the new year. As a result of that process, I could be announcing some changes or restructuring of either of the programs or the way they are delivered in the next fiscal year, but I am not ready to do so at this moment. If I announced such changes after April 1, 1988, they would either not take effect until the Capital Budget that would be presented next fall or it is conceivable - as I cannot anticipate whether they may require some legislative changes - that I would have to come back to the House for approvals.

Mr. Nordling: It appears to me that, with respect to this department, that the Minister is hoping to be three times lucky. We have had the same budget for the last three years. It has not been spent, and the Minister is now saying: this is the real budget, we were not quite on, the programs were new and were just getting under way, and these figures are the right ones.

In general debate on the Budget, I referred to the year ended March 31, 1987, when the budgeting was out by such a degree. I would suggest that if the Minister were in private business and budgeted for $12 million and spent $7 million, he would be fired. This year we are going to be all right. We will get the full $12 million spent.

Before I go on to person years and detail in the programs, is there anything else the government is contemplating or dealing with, other than the railway? We hear rumours about a purchase of NorthwesTel. If there is anything in the wind in that direction, would the Minister let us know now?

Hon. Mr. Penikett: The Minister of Community and Transportation Services has previously indicated to the House the establishment of a working group to deal with the impact on the Yukon community of NorthwesTel being put up for sale. The Department of Economic Development is represented on that working group, but since this board has only met once we have no determinations about what our response to this initiative will be. I want to say to the Member, with respect to NorthwesTel, that the lead department is Community and Transportation Services - the department which has the mandate in the communications field. I would expect if things develop in a way that this department may be involved in that area, I would be announcing the developments to the House. There is at this point nothing to report to the House beyond what the Minister has already reported.

Mr. Nordling: I would like to go a little bit further for the sake of information. Does the Minister, as Government Leader, see discussions taking place with the Northwest Territories and with British Columbia with respect to the takeover of NorthwesTel.

Hon. Mr. Penikett: I could foresee that, but for my part I have not had discussions with either the Leader of the Northwest Territorial government nor the British Columbia government. To respond to the general point: yes, I think that would be useful and necessary at some point before we make any final decisions about how we are going to respond to the NorthwesTel change of ownership.

Mr. Nordling: I would like to ask about the person years. In the summary on page four we have 17 person years and that is up by about six from 1987-88. I would like to hear from the Minister on that matter. I believe there were 11 identified for the 1987-88 Budget.

Hon. Mr. Penikett: I believe at the time of the final Supplementary last year we were talking about 13 person years and this budget shows a total of 17. Four of those person years are transfers from the Operation and Maintenance Program and I believe I indicated earlier what those positions are. They are people whose principle functions are in Capital Programs and that is why they are transferred.

Mr. Nordling: Can the Minister now tell us how many of these positions are carried over from the previous year and how many are new?

Hon. Mr. Penikett: Unlike capital projects, these are all carried over. I believe the 1987-88 Capital Mains talked about it. There were 11 capital person years then; in addition to that, we have the internal management program which has one person year: the Business Incentives Subagreement Coordinator position which is the result of that new EDA subagreement. There is one person year associated with coordinating that. Then there are the four person years which are transferred from Operation and Maintenance to this budget. They are: the chief of financial programs under EDA, the Mining Development Officer, Energy Program Coordinator and the Economic Development Officer - all people whose duties revolve around the managing our ongoing capital programs.

Mr. Nordling: The Minister gave us a little bit of information this time on some of the new programs. I would ask if there are written guidelines that can be provided for us at this time?

Hon. Mr. Penikett: There is public information about those new programs. I do not have enough copies to make available to everybody in the House, but perhaps the Member would accept my undertaking to provide copies to all Members of the House by Monday.

Mrs. Firth: I want to ask the Minister a question about something he just mentioned about the four person years and how they were to manage the new programs. Is the Minister telling us that every time the government starts a new program they hire a full person year to manage that program?

Hon. Mr. Penikett: No, but as the Member will know, the Internal Energy Management program is one that does require one person to do it. The Business Incentives Subagreement is a significant enough program that one person is warranted. The other four that I talked about here are transfers from the Operation and Maintenance program and therefore, at this moment, they amount to a reduction in the Operation and Maintenance program and are being added to the Capital program. Because, in rationalizing the operation, we are not making a decision, but are trying to distinguish between these people who are working in Operation and Maintenance and in Capital Budget. Since these people’s efforts are devoted to managing the Capital Budget, we thought they appropriately, in terms of accountability to the House, should be shown in this budget.

Mrs. Firth: Can the Minister tell us how many person years are presently in the One Stop Business Shop?

Hon. Mr. Penikett: I will. If the Member will permit some other questions, I will provide that information, either in a minute or two, or as I can get it.

Mrs. Firth: So do I understand, then, that the mining manager, or mining administrator - or however the Government Leader referred to that program officer - would manage the programs related to the Capital Budget in mining? Say the Prospectors Assistance and Exploration Incentives Program. Am I on the right track here?

Hon. Mr. Penikett: Yes, that is exactly right. That person manages those two programs.

Mrs. Firth: Perhaps the Minister could tell us how they determine whether the programs need their own manager. How do they make that decision?

Hon. Mr. Penikett: In some areas, as the Member will know from her days as Minister, we have a capital program of a certain size that you can anticipate requiring a certain number of managers. If you look at the dollar value of these programs, just over $1 million - that is, in fact I believe a norm in this government that a $1 million program will require at least one manager. The Member will also know that we have another person in the mining operation whose job is principally involved around the development of policy; therefore, they operate their own Operation and Maintenance budget. That is the distinction that we are making there.

Mrs. Firth: Yes, I understand that. I guess the point is that you can have a large allotment identified for a program, but in this case I do not think the numbers of applicants are excessive. I know the Minister mentioned something about Prospectors Assistance: there were 22 and 26 in one year.  I cannot remember the number for immediately for the Explorations and Incentives program but I believe we were dealing with something in total of maybe between 30 and 40 applications. Is there some determination made, based on the numbers of applications as well. Just because there is $1,150,000 that that individual is managing, it does not necessarily mean that they are inundated with hundreds and hundreds of applications. So I am just looking for the criteria that would establish that you would have to have an individual to manage that program.

Hon. Mr. Penikett: As the Member will know, some programs, because of the scale of the operation, are much more complex because the numbers of applications will require much more labour than others. The SEAL program, for example, involves a couple of hundred applications. Given that they involve energy audits and loans and so forth, the management of that is, I suspect, complicated by the numbers of applications.

The Mineral Incentives Program had something like, I believe, 45 applications. We approved - I forget how many, I gave the number earlier. The conscious effort there, within the budget that we allocated, was to try to make some judgment about the most worthy applications and the best programs; that, of course, involves a certain judgmental factor.

My general hope is that we have a staff that is appropriate to the budget and to the complexity of the programs and that we have the means to run a fairly efficient operation. The programs are quite different. There is not a neat standard as there might be with the Capital of Highways Branch budget, for example, of being able to say that we need one person for x number of dollars because the programs are so varied.

Mrs. Firth: Can the Minister tell us if these individuals would be in the same area as the Operation and Maintenance individuals in the One Stop Business Shop? What kind of coordinated effort is there between the two?

Hon. Mr. Penikett: Some of them are in the One Stop Business Shop, but the mining people would be with the other mining people because, in that case, it would be rational to have the people actually delivering a capital program also being near the people who are dealing with policy. We cannot have a neat separation. Although we have a budgetary reallocation that is distinct, they need to work together and they are physically located together.

Mrs. Firth: After the relocation of the Department of Economic Development, I understand there was some reorganization that happened. Could the Minister indicate if there has been any changes in the organizational structure? It  might be to our advantage to have an update of the organizational structure of the department.

Hon. Mr. Penikett: There is no major departmental reorganization, but on Monday I will table an organizational chart as at the time of the Capital Budget for last year as opposed to the time of the Capital Budget for this year. We can also identify, on that chart, where the person years are located. That will assist Members I am sure.

Mr. McLachlan: In regards to the community economic development, the Minister referred to first and second stage funding. Is there a limit on the amount of available funding at the second stage?

I am not exactly sure I understand the Member’s question. I am trying to find in my notes what reference he is calling upon.

Mr. McLachlan: In his opening remarks, I believe the Minister was talking about funding that is available for the Community Economic Development Program. The first stage is the formation of committees to examine various options, and so on and so forth. Once, having done that, if a community wishes to move to a particular project or creation - like a saw mill or like a moccasin plant - is there a limit on the funding available in the second stage, since that may tend to be a larger amount of money if it involves the development of full time jobs?

Hon. Mr. Penikett: The $100,000 is the limit under that program but, of course, as the Member also knows, enterprises may also be eligible to apply under the loans program, on which the limit is now $500,000.

Mr. McLachlan: The Minister said $100,000. Is that figure not $150,000?

Hon. Mr. Penikett: Under Venture Capital, it is $100,000.

Mr. McLachlan: I am referring the Community Economic Development Program. I am presuming that we are still in Community Economic Development Program.

Hon. Mr. Penikett: I am still not sure I understand the Member’s question. Under the Community Economic Development Program, which is the EDA Program, this can assist groups in the early stages of their planning. If they then develop those plans to another stage, they can apply under other programs for further assistance.

Mr. McLachlan: That may answer my concerns. I would like to ask the Minister about a decrease in funding on the loan guarantee programs. I am surprised, in an economy that is on the up side, why the amounts are reduced by $550,000. The Minister has referred to easier availability of funding from other banking sources within the community, and that is not my experience. Is the Minister saying we have had applicants out of the fund actually coming in and saying they got more money than they were expecting from a chartered bank and, therefore, now need less from your department?

Hon. Mr. Penikett: I indicated in my remarks about the Capital Budget that we are trying to adjust the Capital Budget in terms of other circumstances that would be going on. One of the environmental factors is that in one year the FBDB funds went from $3.9 million to $9 million in Whitehorse as they were reactivating themselves here. As well, the national Native Economic Development Program also has approved funding for YIDC or other related ventures. Part of establishing the budget in that area for these kind of programs was out of an awareness of what various federal agencies were doing in the same kind of area.

Mr. McLachlan: I have had a number of questions on the Opportunity Identifications type program. I want the Minister to explain if a particular individual is examining a program or process that is not here in the territory, but he wishes to leave the territory to examine the viability of that project working in another province, must he be accompanied by an official of the Business Development Office? Can the individual go down on his own or because there is government funding involved must he always be accompanied with someone in the Business Development Office who may be familiar or who has been assigned to work on that project?

Hon. Mr. Penikett: I do not know which particular applicant the Member is talking about, but I do not recall any case where I have approved funding for travel for such an officer to go outside to look at a proposal being developed by an entrepreneur outside of the territory. There may be occasions when that would come up, but I have not to my knowledge approved any such travel.

Mr. McLachlan: The Minister is saying he has not approved travel for the employee of the Government of the Yukon, or has not approved travel for an individual examining a program outside of the territory.

Hon. Mr. Penikett: Apparently, we have funded individuals to go out, but I have not funded an employee.

Mr. McLachlan: When an individual is applying under the Opportunities Identification Program, does it in any way prejudice his ability to use funding from another part of that program? I am thinking under further work needed under research and development to accommodate that particular project through Yukon’s needs. Can he still access that fund as well as OIP?

Hon. Mr. Penikett: Yes, and the reason, as I explained when I introduced the OIP, is that we do permit staffing under that. It is for small projects very hard to get feasibility money for and for people to raise feasibility money and that is the reason for the OIP. It is not a program to be used in exclusion, it is to be used by people at the front end of a project.

Mr. McLachlan: Could we have a little more explanation of the line item? What is the Minister referring to under Internal Energy Management? We have something in Government Services that refers to energy management within our operations. What are you referring to here?

Hon. Mr. Penikett: Basically, it involves doing energy audits of public buildings to decide which ones should be retrofitted and which ones should not; which ones are economic to retrofit and which are not. It would involve us making a recommendation, for example, whether to improve the insulation of a building and to make an estimate of the oil cost savings that we could achieve by doing that.

Mr. Nordling: While we are on that item, I may have missed it when the Minister went through the information in his opening speech. I see we are getting a recovery of $12,000 on that. What sort of an arrangement is that for Internal Energy Management?

Hon. Mr. Penikett: This is the $12,000 we get from Government Services as a chargeback for services we provide to the government for doing audits and those kinds of things.

Mr. Nordling: I would like to go back to the One Stop Business Shop again. The Minister was going to look for figures as to the number of employees in the Shop right now. Does he have those available?

Hon. Mr. Penikett: I am waiting for them to arrive from on high.

Mr. Nordling: Perhaps more information will come. What I would like to know is how the One Stop Business Shops are working with the individuals in the outlying areas. For example, I would like to know how many applicants they are getting, how busy they are, and how successful the applicants are. I would just like the Government Leader to comment on the success of that program.

Hon. Mr. Penikett: I cannot off the top of my head or even with the information I have available answer that question, but if the Member would accept this undertaking, I will as of an effective date such as November 1 or some date to which we have been given a record, provide a written answer to the Member as to the number of applications that have been received by each Business Development Office in each community and the number of ones that have been approved and perhaps the dollar volume of business that has been transacted through each of those offices. I will provide that information in the hope the Member will also understand that many projects may be initially received or accessed through a rural BDO but then will have to be transferred to Whitehorse for further analysis or examination because the officers in the community do not have the wherewithal to do that work, himself or herself.

Mr. Nordling: Perhaps that information could be made available, too, with the listing.

With respect to the programs, the Minister talked last year about the pilot projects and new projects not being able to be evaluated at the present time. I would like to know what the government is doing to evaluate the success of the programs. The Government Leader’s comment last year was that he would like to be able to stand back and ask: “Is this doing what we set out to do? Is it achieving what we wanted? Is the community getting value for its money?” Can the Government Leader answer those questions at this time?

Hon. Mr. Penikett: We are assessing all of the programs. I can provide detailed numbers, if Members wish, on the transactions, applicants and the volumes that are handled through the office. The Member may want to have a more substantial kind of analysis than that. As the result of the input from Yukon 2000, I will be in a better position to do that as of April 1, 1988 than I am now. The last report that I had has it that the Business Development Office has been instrumental in the approval of over $4 million in applications. When I received this report, the Business Development Office had 80 applications under consideration. The value of those applications was in excess of $9 million.

The kind of assessment of each of the program’s utilization, the economy and the efficiency of the operation is something that will be completed by the spring. We have received fairly substantial comments recently about what people like about the programs, where they think there are gaps and various comments about the delivery and accessibility. All of those things are being considered.

Mr. Nordling: Can the Minister make the specific numbers available for us when we go through the line items, which in view of the time will probably be on Monday, so that we have an idea of the numbers? I would like more substantial information and concede that I may have to wait until spring for it.

Last year the Minister talked about needing third party expertise, an expert consultant, who would be able to really tell us whether or not what we set out to do is being done. Has the government hired a consultant or anyone with specific expertise in evaluating and looking at these programs?

Hon. Mr. Penikett: We have someone at this moment looking at the programs who is a financial consultant.

Mr. Nordling: Does the Minister know now who it is, and when the work will be complete?

Hon. Mr. Penikett: Yes, it is Mr. Ken Sherwood, who was at one time the Internal Auditor in this government. His work should be finished early in the spring.

Mr. McLachlan: For Monday’s debate, would it be possible for the department to bring forward, as has been done before, a list of those who have received money under the Loan Assistance Program, and the amounts of those loans?

Hon. Mr. Penikett: I will be glad to table that information Monday.

Mr. McLachlan: Is the maximum interest rate under the government programs seven percent?

Hon. Mr. Penikett: It is the Canada prime rate.

Mr. McLachlan: I am looking at the Public Accounts for the year 1986-87, where they talk about Business Development Assistance Loans that went up from zero percent to seven percent. Who gets a loan for zero percent? I do not call that a loan. That is more of a grant.

Hon. Mr. Penikett: We were previously charging half of the FBDB rate. We are now charging, by regulation, the prime rate.

Mr. McLachlan: Who gets loans for zero percent?

Hon. Mr. Penikett: Nobody now.

Mr. McLachlan: What does the Auditor General mean in the year end statement for 1986-87, where he talks about Business Development Assistance Loans in the range of zero percent to seven percent?

Hon. Mr. Penikett: That was before we changed the regulations. There were some loans at that rate.

Mr. Nordling: With respect to Ken Sherwood. Does the Government Leader have his terms of reference, or his job description available, that he could bring in? I am interested in whether he is just doing a financial audit, or whether it is something more substantial than that.

Hon. Mr. Penikett: He is doing a financial and organizational audit, and that is for internal purposes. We also have the external audit, which is some responses from our customers as well - all of that will be facted in along with the other consultations about the programs.

Without setting up a long debate, one of these I have indicated to the department is that in the long term, I believe it is the public wish that we have fewer programs with slightly wider parameters. The number of programs at the moment is probably confusing to many citizens, and it is very hard to explain and communicate effectively about them. My general instructions to the department over time is that I think I want to see us have fewer programs with wider, but still clear, guidelines.

Mr. Nordling: Will the Government Leader make the findings of Mr. Sherwood available to us?

Hon. Mr. Penikett: No, they will have the status of internal audit documents and will not be made public because they will contain personnel evaluations, which I do not intend to make public.

Mr. Nordling: Going back to the One Stop Business Shop, I agree with the Government Leader that the number of programs has become confusing and the idea, I think, has gotten carried away in that we have this larger One Stop Business Shop and I wonder if the government will agree that it has become a lot larger and a lot harder to handle than we thought it was going to do at the beginning with three people in a store front to take all comers.

Hon. Mr. Penikett: I believe the Member is right, that we do not want to lose sight of the original purpose of the Business Development Office, but the next logical step in terms of the rationalization of the delivery of such programs is to pursue what discussions I have opened with the federal Minister of Indian and Northern Affairs, who has the responsibility of coordinating economic programs north of 60, which is that we pursue the possibility of joint delivery between the federal and territorial programs through some common one window approach. If over time we can rationalize our programs to do as we previously discussed, I believe the public will be well served by that. I would say to the Member though that some of the programs that we have initiated are only a year, or less than a year, old and the time to really decide whether they are precisely meeting the need of this market or community would be premature at this point.

Mr. Nordling: I may have just a couple more questions on general debate. I would like to leave it open, but in view of the time I would like to move that you report progress on Bill No. 5.

Motion agreed to

Hon. Mr. Porter: I move that the Speaker do now resume the Chair.

Speaker resumes the Chair

Speaker: I will now call this House to order. May I have a report from the Chairman of the Committee of the Whole?

Mr. Webster: The Committee of the Whole has considered Bill No. 5, First Appropriation Act, 1988-89 and directed me to report progress on same.

Speaker: You have heard the report from the Chairman of the Committee of the Whole. Are you agreed?

Some Members: Agreed.

Speaker: I declare the report carried.

Hon. Mr. Porter: I move that the House do now adjourn.

Speaker: It has been moved by the Hon. Government House Leader that the House do now adjourn.

Motion agreed to

Speaker: This House now stands adjourned until 1:30 p.m. Monday next.

The House adjourned at 5:26 p.m.