Thursday, April 14, 1988 - 1:30 p.m.
Speaker: I will now call the House to order. We will proceed with Prayers.
Speaker: We will proceed at this time with the Order Paper.
Introduction of visitors?
Are there any returns or documents for tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Mr. McDonald: I have for tabling answers to questions from the Member for Porter Creek West respecting traffic safety at the Yukon Alaska Transport Terminal. I also have for tabling draft regulations pursuant to the Motor Transport Act that will be released shortly.
Speaker: Are there any reports of committees?
Are there any petitions?
Introduction of bills?
INTRODUCTION OF BILLS
Bill No. 37: Introduction and First Reading
Hon. Mr. McDonald: I move that Bill No. 37, entitled the Motor Transport Act, be now introduced and read a first time.
Speaker: It has been moved by the Minister of Community and Transportation Services that Bill No. 37, entitled the Motor Transport Act, be now introduced and read a first time.
Motion agreed to
Bill No. 22: Introduction and First Reading
Hon. Mr. McDonald: I move that Bill No. 22, entitled the Arts Centre Act, be now introduced and read a first time.
Speaker: It has been moved by the Minister of Community and Transportation Services that Bill No 22, entitled the Arts Centre Act, be now introduced and read a first time.
Motion agreed to
Speaker: Are there any notices of motion for the production of papers?
Are there any notices of motion?
Are there any statements by Ministers?
Expansion of Regional Resource Roads Program: Resource Transportation Access Program
Hon. Mr. McDonald: It is with great pleasure that I rise today to announce an expansion of the Regional Resource Roads Program.
I am sure all Members are aware of the popularity and success of this program in the mining, forestry, fishing and farming industries.
Members will also be aware that this government has committed $7.5 million to this program over three years. Regional resource roads are a vital part of the governments commitment to improve the roads in the territory. That commitment has been backed with over $60 million in general road construction during these three years - an unprecedented amount.
Regional resource roads boost our economy in two ways: in the construction of the roads initially and then in the development of the areas opened up by those roads.
This means construction jobs now and more jobs later in mining, forestry, fishing, farming and tourism. Jobs where they are most needed - in our rural communities where the resources of the future are waiting to be developed.
Our experience has now shown us two ways in which this program can be improved to make it even more useful. We are responding to the requests of the Yukons resource industries with two changes.
First, we are finding that in some cases the best resource road does not have to be a new road. The territorys long mining history has left us with earlier trails and roads that can be upgraded for use by modern equipment. This type of project is now eligible for funding.
Second, in some other cases, the best access is not a road at all. Air and water transportation can often be more cost effective and produce less environmental impact. For this reason, we are expanding the roads program to include: remote airstrips, helicopter landing pads, floatplane bases and small boat docks.
To reflect these changes, the name of the program has been changed to the Resource Transportation Access Program (RTAP).
Finally, we are cutting some of the red tape of applications can be reviewed more quickly. As well, we will be using some new methods to track both the short-term and long-term benefits of projects to local communities and to the Yukon as a whole.
I believe these benefits are real and substantial, and I believe both workers and developers recognize this.
Speaker: This then brings us to Question Period.
Question re: Operation Falcon
Mr. Phelps: I have a number of questions regarding a motion that was passed in this House on November 6, 1987. That motion concerned Operation Falcon. There was an amendment to the motion put forward by the Minister of Renewable Resources to the effect that this government would initiate an investigation under the Public Inquiries Act if the federal government failed to initiate an inquiry into Operation Falcon.
We had initially set a time limit of, I think, 90 days on the federal government acting, before triggering an independent inquiry of - I think it was - 90 days. How long does the Minister intend to wait before he recommends that this government initiate a public inquiry into Operation Falcon?
Hon. Mr. Kimmerly: I thank the Member opposite for that question, because it gives me an opportunity to report to the House the progress on that particular matter. The Minister of Renewable Resources sent a letter to the federal government, I believe, and I, too, sent a letter to both the Solicitor General of Canada and the Minister of Justice and the Attorney General of Canada. My letter was sent on December 14.
I received a letter back, an acknowledgement from the Solicitor General, and I spoke personally to the Minister of Justice in Saskatoon, approximately a month ago. I received a letter - I forget the date - the week before the House resumed sitting in Dawson City, from the federal Minister of Justice, saying that the matter of the federal inquiry was still actively under review.
Until that decision is made, it would be premature of this government to set a particular date.
Mr. Phelps: The motion obviously contemplates waiting a reasonable period of time. What does the government see as a reasonable period of time to wait before initiating their own public inquiry, as the motion suggests?
Hon. Mr. Kimmerly: I understand the question, and I would like to respond very specifically. However, it appears to me that, as long as the federal government are actively considering the matter, it would be premature to make a more or less arbitrary announcement of a deadline.
The federal governments inquiry is into a huge mass of documentation and a process that occurred over several years. It appears that several months of study are not out of the question.
Mr. Phelps: The motion contemplates the inquiry being held in the Yukon, and the investigation, hearings and witnesses being produced through the Government of Yukon, whether the conduct is initiated by the federal government or this government.
Has the Minister of Justices department identified any monies in the budget this year for the conduct of, or participation by this government in, a public inquiry, whether it is this government or the federal government?
Hon. Mr. Kimmerly: Yes, we have, but we have followed the long-standing practice of voting one dollar under inquiries. It has always been the practice to finance inquiries by supplementals.
Question re: Operation Falcon
Mr. Phelps: I am pleased to see a public inquiry is still seen as a vague possibility by the Minister, particularly when it is their amendment to the motion that would trigger a public inquiry through this government.
What kind of preparation has the Minister of Renewable Resources department been making, since the motion was passed, for participating in the public inquiry? Have his officials been interviewing potential witnesses?
Hon. Mr. Porter: I think it would be premature to anticipate an inquiry that it has not yet been decided will be held.
Mr. Phelps: Since the opposite side was so eager to see this public inquiry take place, surely the Minister can advise us as to whether his department has made any preparations at all. Since his amendment to the motion was passed on December 6, it would show that they are preparing for participating in a federal public inquiry or conducting their own public inquiry into this serious matter.
Hon. Mr. Porter: Once a decision has been made to hold an inquiry, be it a federal inquiry or a territorial public inquiry, the Department of Renewable Resources would then prepare for such an inquiry.
Mr. Phelps: Am I to take it that nothing has been done and no attempt has been made to record evidence that may disappear between now and the commencement of the inevitable public inquiry?
Hon. Mr. Porter: The first obvious question to be addressed is the question of holding an inquiry prior to dedicating staff of the department to meet the needs of the terms of reference of that inquiry. There has been documentation of evidence and that would be available
Question re: National Transportation Act.
Mr. McLachlan: I have a question for the Minister of Transportation Services. New legislation being passed at the federal level in Ottawa on the National Transportation Act requires the provinces and the territories to amend legislations so that it may in turn mesh with the new revised legislation from Ottawa. The Minister may be aware that there are some situations in northern Ontario where drivers protested about being only able to drive for 10 hours and then having to stop their rigs. Since it is virtually impossible to make the Yukon-Alaska trip from Whitehorse to Faro and back to Whitehorse in 10 hours, at least to do it safely, is the Minister aware that this legislation at the federal level would effect the Yukon-Alaska concentrate hall from Faro.
Hon. Mr. McDonald: I would like the Members to recognize in the gallery the former MLA for Klondike, Mr. Fred Berger.
The issue the member refers to is not the jurisdiction of the legislation itself, but the National Safety Code, which was developed on a nation-wide basis pursuant to the legislation, and the code has as one of its elements the hours of work that would be allowable by any particular trucking operation. The issue has come up at the Ministers of Transportation meetings in the past, at which I have been in attendance - the issue as to whether or not it would be safe to consider hours of operation beyond a certain time - because clearly the operation of a truck or a rig over very long periods of time with the same driver can produce safety problems. This is the position that the employees and the unions have expressed. At the same time, there is a desire by the Yukon transportation industry to see flexibility in the hours of work because there is a recognition that there are long hauls and it would be unrealistic to put a flat limit on the numbers of hours that would be permitted for any particular single shift of work.
For that reason, the governments have all agreed to consider the hours of work provision in the National Safety Code as being flexible, but there would have to be some reassurance, if there was a request for work beyond 10 hours in a shift, by the driver operator or the owner that this would not produce a safety hazard for the travelling public. We left it flexible, and we have left it up to each jurisdiction to draw its own conclusions.
Mr. McLachlan: Is the Minister saying that exemptions can be granted at the Ministerial level, or who decides in the end that the drivers can carry on for 12 or 14 hours? What does he base that on?
Hon. Mr. McDonald: Exemptions can be made by the respective governments regarding this provision of the National Safety Code, that is true. Like the Employment Standards Act, where there is provision for exemptions, there has to be some proof that the exemption is not only warranted but does not produce adverse results. That would be the case in any exemption to the National Safety Code as well.
Mr. McLachlan: In the event where the second half of this ore haul is across the international border to Skagway, will there be any conflict with US legislation and the National Safety Code, that is being revised in Ottawa, that would also cause a problem with the 10 hour limit?
Hon. Mr. McDonald: There ought not to be any conflict with the hours of work because the amount of time actually spent in the US on the ore haul would be fairly limited. We have determined that there is no conflict of that sort in that provision. There are provisions that will differ between Canada and the US. The laws in the US will be abided by when the truckers are there, and the laws in Canada will be abided by here.
Question re: Thomson inquiry
Mr. Phillips: On December 3, 1987, the Minister of Justice announced a judicial council inquiry into the Bill Thomson affair. Can the Minister tell us if that inquiry is now complete?
Hon. Mr. Kimmerly: To the best of my knowledge, it is not complete. I would know if it was, and I have not been so informed.
Mr. Phillips: There are not a great many facts in this inquiry, and it is local. When does the Minister expect it to be complete?
Hon. Mr. Kimmerly: The Judicial Council, for this purpose, is acting as an independent body. It would be only speculation to guess at a date.
Mr. Phillips: When this inquiry is complete, will the Minister table its results in the House? Will he make the results public?
Hon. Mr. Kimmerly: This is an independent body. I would expect that they will decide those questions.
Question re: Health review
Mrs. Firth: The Member for Faro and I asked the Minister of Health and Human Resources some questions about the major health review that she had announced. It is called the Community Institutional Services Evaluation Report. Who is doing the review?
Hon. Mrs. Joe: That review is being done by two consulting firms from Whitehorse and one from out of the territory. I could get the names and bring them back on Monday.
Mrs. Firth: The Minister was supposed to bring that information back. That is why I am asking for it again. How much is the review costing?
Hon. Mrs. Joe: I can bring that information at the same time.
Mrs. Firth: Is the review going on? Has the contract been awarded? Is it in the process?
Hon. Mrs. Joe: I mentioned in my response to that motion that the study had been started the week before.
Question re: Land availability
Mr. Lang: With respect to the question of the availability of building lots, the Minister of Community and Transportation Services has announced they will make 116 building lots available in August or September. The building season will be three-quarters finished, if not completely.
Is it the policy of the government that 116 lots will meet the present demand and the future demand, in 1990?
Hon. Mr. McDonald: I suppose the Member is exclusively referring to serviced residential lots. There are other building lots being provided without water and sewer services. The proposal for an increase to the inventory is for this coming year. As I indicated during the Capital Estimates, there is every intention to proceed with land development in the Granger Subdivision, phase two, in the following year. The planning will be done this year, and the construction will be done next year.
In the meantime, the government and the City of Whitehorse are looking for other areas within the City of Whitehorse where serviced residential lots can be provided.
Mr. Lang: The Minister did not answer my question. Do his projections indicate that 116 lots will be enough to meet the demand of the building seasons of 1988 and 1989?
Hon. Mr. McDonald: The Member asked the question once before already. I indicated that I thought that this would go a good distance, without knowing with any certainty, of course, how many people were going to show up at the Lands Branch desk. We can certainly count those expressions of interest that have been made so far, but there is never any way to determine with absolute certainty exactly how many lots are going to be applied for, over the counter at our lands office. There is every expectation that the 113 lots that will be developed in the Granger area will go a very good distance to satisfying the demand. Given what the Yukon Economic Council has said about the need for new housing starts - which is approximately 120 per year - we feel that that, along with the considerable lot vacancy in the City of Whitehorse right now, privately held, that this ought to be sufficient this coming year. We will have a fair indication when the people actually come to the desk to apply for land.
Mr. Lang: The concern on this side is that, when people come to the government to demand land, obviously the government does not have any serviced building lots to sell. Our concern is not only this year but looking ahead to next year for a surplus of land being made available. Has the government considered going ahead with phase two, as well, this year, as opposed to strictly phase one, for the purposes of land development in the Granger Subdivision?
Hon. Mr. McDonald: Yes, and I indicated during the Capital Estimates that, last year, we went ahead with phase one planning and pre-engineering, and this year we are going forward with the planning and pre-engineering for phase two. We have got the design ready and the tenders are in the paper, with respect to the actual construction. Those documents are not ready for phase two, but we are getting them ready.
Question re: Land availability
Mr. Lang: Is the government prepared to go ahead with tendering phase two this year, so that we could have a very good surplus of land available for the general public through the Government of Yukon for over the counter sale - as opposed to this situation where we are getting way behind?
Hon. Mr. McDonald: We are going to move on Granger phase two as soon as we can, as soon as the documents are ready and the pre-engineering has been done. I have indicated already to the department that proceeding with Granger phase two is not a possibility, but it will be a reality. They are taking those marching orders to develop Granger phase two.
Mr. Lang: Once again the Minister has not been definitive in his statement. Is phase two going to be tendered out this year and developed, and will further lots be available for sale by this fall?
Hon. Mr. McDonald: The Member fails to realize that the pre-engineering - we are talking about providing water and sewer to this place. It is not simply the slashing of roads and the laying down of roads. We are talking about design and soil testing, which you have to do when you put in water and sewer systems, so that they do not fail when the project is complete. If the pre-engineering work is done and the designs are ready, and there are construction fees left, then we will proceed with the Granger Subdivision.
Mr. Lang: I hate to belabour this, but the Minister still has not given us an answer.
Has the information provided to the Minister given every indication that planning and construction for phase two can be tendered out, constructed and completed this year? Since he gave the marching orders, he should know whether or not it can be constructed.
Hon. Mr. McDonald: The Member is not listening to the answers. I indicated that the government is going to proceed with phase two. I indicated last year that the government proceeded with phase one, pre-engineering. Given that all the documents are ready now for Granger phase one, and given that the lots will not go on sale until August, that will give the Member an indication of how long it will take to construct a new subdivision.
It is at this point we are developing the design for phase two, soil testing and the survey of the area. That is going to take time. Nevertheless, the direction that has been given to the department is to proceed with phase two in an orderly fashion. Do the pre-engineering work, do the soil testing, do the site analysis and, when it is complete, tender the project for the construction season and proceed with phase two. That has been the direction. If there is no construction season left, then it may make sense to delay tendering until next year.
Question re: Land availability
Mr. Lang: That is my concern. The government has only planned to go ahead with 116 lots. The prices quoted to this House have been between $25,000 and $35,000 per lot. It would seem to me if we went for a larger quantity of lots for the purposes of tendering, perhaps those costs could be significantly cut for the people buying the land, if it was one tender as opposed to two.
In view of the fact that they are going with only 116 lots, is the Minister having anybody independently evaluating the proposed cost of this development to see perhaps whether or not some costs can be cut in order to keep the cost of these lots down to a minimum. They are getting far too costly for the individual out there to buy.
Hon. Mr. McDonald: I have agonized over whether or not we can keep the costs down as low as possible. I have asked the department to proceed with great care in determining the costs. Apart from Yukon Electrical, the bids are not in so there is no way of knowing with surety the actual costs that would be associated with the overall development. With respect to tendering two subdivisions at once, I can only say that there are no tender documents prepared. There is no site analysis done. It would be impossible to tender Granger phase one and Granger phase two at this point. If the Member is advocating that we delay phase one until such time as phase two documents are ready, I would say that we are opposed to that. Right now we have moved with respect to tendering phase one and, when the bids are in, we will not only know what the costs will be and the prices we must charge, according to policy, to the purchasers of the lots, but by the time the engineering specifications are ready for Granger phase two, we will have a better understanding of what the costs will be for that subdivision as well.
Mr. Lang: We already have a delay. We have a delay to the point that an individual cannot come in this building and purchase a serviced building lot for any price. The Minister should be really proud.
In view of the projected costs the Minister has quoted in this House - and they have been as high as $40,000 a lot quoted in the local press - has he got anyone evaluating and looking at the specifications required for these lots to see if there are any areas that can be cut back, in order to decrease the cost to the consumer? It is getting to the point where a young couple cannot afford to buy the lot, let alone build the house.
Hon. Mr. McDonald: The assertion the Member has made about delays is completely out to lunch. The government has been moving aggressively this year, as well as last year, in terms of getting land on the market.
The demand for lots has far outstripped what the government has experienced in the past. When the Member was sitting in this chair, he did not have to experience the very aggressive demand for lots, so he does not know what it is like to try to keep ahead of the demand in an aggressive market.
With respect to the cost of the lots and the desire to keep the price down, we have been discussing the matter with the City of Whitehorse. They have requested lots of a certain service quality, and we are responding to that demand. We are also trying to respond to land development that has fewer services and, consequently, lower cost associated with the purchase price. Those are all things we are trying to respond to to meet the need for residential building lots.
Mr. Lang: The aggressive approach of the Minister is so good we cannot buy a serviced building lot in the Whitehorse area. He informed this House yesterday that he was aware last year that the present serviced building lots were all being sold. With the indicators he had last fall, why did he not initiate the necessary policy direction to get phase two in the planning and engineering stage, so we would be in the situation to tender it and have more lots available?
Hon. Mr. McDonald: This government is not going to engage in the same land development nightmares that that Member was responsible for between 1982 and 1985. For the first two years of my term of office as lands Minister, I was dealing with the public on country-residential subdivisions where the proper planning had not been done. I was trying to justify and account for the fact that the government was selling lots that were clearly substandard.
The government is going to try to aggressively meet a demand that has never been experienced by government before. We are going to do so with subdivisions where the proper planning takes place.
Question re: Land availability
Mr. Lang: This debate is becoming very interesting. This aggressive Minister has been in office for three years. Could the Minister tell me how many serviced residential lots he has developed? Zero. Could he explain why?
Hon. Mr. McDonald: I realize that it is unparliamentary for me to suggest that the Member is lying. I know that the situation is not true, and I know the Member knows that this government has developed lots in the City of Whitehorse. I know that he knows. Maybe the suggestion of lying, which I will not make, is the case here.
In 1985-86, there was a large surplus of land and practically no take up of lots. The actual take up and the aggressive purchasing of lots started taking place last year. The government has been trying, not only to deal with the incredible surpluses, but also the incredible demand all in the space of a short period of time because the economy has increased so rapidly.
Mr. Lang: There are two issues here. The fact is that there have been no serviced residential lots developed by the Minister. The fact is that there have been none. We can ask anyone who is interested in buying one. Phase one and phase two of plans on general concepts in conjunction with the City of Whitehorse have been in the works for years. Why can the Minister not expedite it and put more of a policy direction forward to get phase two to the point where we can tender later this spring so that we have a surplus of lots so that we do have this debate this time next year?
Hon. Mr. McDonald: I answered the question already with respect to the Granger Subdivision, phase two. I have indicated that the government is already proceeding with pre-engineering design of phase two. I have already indicated that once the proper design is finished, the lots will be developed.
The Member has no credibility left - with me, at least. The Member is saying that the government has not developed any serviced residential lots anywhere in the City of Whitehorse. Last summer 20 serviced lots were developed in Riverdale South. I have listened ever since to that accusation. It is simply not true. I cannot say it is a lie, but it is not true.
Mr. Lang: I apologize profusely to the Member so that I can regain my credibility. It is true that he has developed 20 lots since he took office. That was done through the City of Whitehorse. The fact that the Minister developed 20 lots in the City of Whitehorse will probably be on his gravestone. Last year we discussed getting a surplus of lots available ahead of demand. That does two things. It makes land available and keeps prices down to a minimum. What is the policy of the government on surpluses? Does his government agree that, at any given time, there should be 50 to 100 lots available above demand?
Hon. Mr. McDonald: It is the governments policy. It also happens to be the New Democratic Partys policy to have a surplus of lots. Every other community in the territory has a surplus of lots. The Member has not regained his credibility with meThe Member for Riverdale South was kibitzing that because the government had a private contractor do the work, that the government was not doing the work itself. I will inform the Member for Riverdale South that a contractor will be doing the work for the Granger Subdivision as well. One will be doing the work for all other land developments, as well. We do not have people who do the construction work as permanent members of the civil service. We always contract these things out. The Member for Riverdale South has also lost her credibility with me as well.
Speaker: Order please. Would the Minister please conclude his answer?
Hon. Mr. McDonald: There was a request by the City of Whitehorse to develop the Riverdale lots, and it was something that the Government of Yukon wanted to do.
Question re: Land availability
Mr. Lang: If a policy of the government is that there should be a surplus of lots available in all communities - and if the Minister checks Hansard he will see that he just informed us that there is a surplus of lots available - how come one cannot purchase a lot in the community of Watson Lake? Why are there not lots in the community of Carcross, either? Is that consistent with the policy of the government?
Hon. Mr. McDonald: Again, the Member has a made an accusation, which I cannot call a lie, but with respect to the present availability of lots in Watson Lake, there are eight lots available in Watson Lake for purchase, over the counter, right now. That is a fact, and they are serviced lots in Watson Lake. The Member just made the accusation that there are no lots available in Watson Lake, and I am telling you that he is wrong.
Question re: Mayo dam
Mr. Nordling: I have a question for the Government Leader with respect to the Mayo dam. In the Throne Speech delivered by Commissioner McKinnon in Dawson on March 23, 1988, stated, and I quote: The Yukon Development Corporation will rebuild the Mayo hydro dam over the next two years.
When will that construction start?
Hon. Mr. Penikett: As I indicated in an answer to a question from, I believe, the Member for Faro a day or so ago, I hope to be making a Ministerial Statement on that question very, very shortly, and providing a number of pertinent details that I am sure will be of interest to all Members of the House about the cost of the project and the scheduling of it.
Mr. Nordling: The Minister said that, in order for this government to make a commitment about the actual construction, understandings with Unite Keno Hill Mines are necessary. I would ask why the project was announced in the Throne Speech without qualification?
Hon. Mr. Penikett: If we put every single qualification, that might be necessary in the Members mind, for every project identified in the Throne Speech, it would be probably 700 or 800 pages long, and I suspect the Commissioner would be quite annoyed. Of course, if you are going to build a dam, or replace a dam, you have to have customers. There is one main customer for that dam, and, as I indicated in the House, the Yukon Development Corporation and the government would have to be satisfied that that customer will be around for awhile, in order to proceed with the project.
Mr. Nordling: It would have taken four more words in the Throne Speech, provided we have customers.
In addition to negotiating this agreement with United Keno Hill Mines, will this project be discussed with the Yukon Utilities Board before the project goes ahead?
Hon. Mr. Penikett: I am sorry, but the Member may be asking me something that, in one way or another, is a form of a legal opinion. I forget what the requirements of the act are in respect to consultations with the Yukon Utilities Board. I will consult with my colleague, the Minister of Justice, on that, but I can give the Member this undertaking: the Yukon Development Corporation will behave according to law.
Speaker:The time for Question Period has now elapsed. We will now proceed with Orders of the Day.
ORDERS OF THE DAY
Hon. Mr. Porter: I move that the Speaker do now leave the Chair and 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 House and the House resolve into Committee of the Whole.
Motion agreed to
Speaker leaves Chair
COMMITTEE OF THE WHOLE
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. 50: Second Appropriation Act, 1988-89 - continued
On Executive Council Office - continued
Chairman: We will proceed with Public Inquiries Branch, page 40 in the Estimates book.
On Public Inquiries
Hon. Mr. Penikett: I was going to try to answer questions that were outstanding when this item was stood over. I will have documents to table that provide answers that I have obtained from the inquiry at the request of Members. I would like to orally go through some of the outstanding questions. We might then established where the Members would like to clear the item today or want it stood further.
With respect to question asked about the completion date of the inquiry and the regulations establishing the inquiry, I have an Order-in-Council that establishes September 1, 1988, as the date for the receipt of an inquiry report, and I will be tabling it in a moment. These are schedules set out regarding the dates and times for public hearings. I have received a tentative schedule from the chair of the inquiry that indicates a completion date of September. However, details of the timetable and the procedures have been directed at the judge, at his request. I understand he has written to each MLA offering a briefing for Members, which he believes is consistent with the practice of independent inquiries, in terms of providing that kind of detail.
Rather than speaking through me about the internal administrative procedures of the inquiry, it is the judges wish the inquiry speak for itself.
With respect to the question whether the inquiry will provide grant funds to nonprofit organizations or hire lawyers, consultants, economists, et cetera, by invitation of consumer groups, I indicated that we have not established a policy on providing funding to interveners. The inquirys budget does not include any funding for such intervention, and we do not intend to increase the budget to allow for funding groups to prepare their interventions for the inquiry. The inquiry includes many staff members who can provide the competent analysis and legal counsel, who will be able to question on behalf of all Yukoners, the witnesses who will be appearing on behalf of the oil companies and other interests.
The question was asked: will the inquiry travel to Dawson City, Old Crow or other locations outside the Yukon. We understand that the judge has tentatively set a schedule for visiting rural communities, especially Dawson City and Watson Lake. I believe there has been a specific request from Dawson City for an appearance by a group there. Through contacts he intends to make with all the communities and interested parties, the inquiry is making those scheduling arrangements.
The question was asked about the advertising about the formal hearings and I understand the chair of the inquiry intends to make public announcements, and again intends to advise MLAs at a briefing he is scheduling about internal operations.
I was asked if the budget amount includes salaries for those who were seconded to the inquiry. In a breakdown I will be tabling in a moment, which was submitted by the chairman and approved by Management Board, the budget does not include salaries for the two officers who are seconded from the Department of Economic Development. Their salaries are part of the budget of Economic Development, since they are permanent employees of that department. That is Mr. Duncan Knowler, who I indicated to you is an economist, but there is also a clerical or administrative assistant on staff who has also been seconded.
As to what instructions have been given to the inquiry on its mandate, the mandate of the inquiry and other matters related to the procedures to be used, and methods of holding hearings are outlined in the Order-in-Council 1988/01. I will be tabling, as soon as the copying is done, a copy of that Order-in-Council, which should already be in the possession of some Members. The other Order-in-Council establishes what we believe are clear guidelines for the inquiry while maintaining the required independence for its operations.
A question was asked about the money and accountability procedures with respect to the inquiry. I can advise Members that the following procedures will operate. The Departments of Economic Development, Finance and Executive Council have developed a set of procedures subject to the Financial Administration Act and accepted accounting and audit principles. The specific procedures are as follows: the commission has opened a bank account for payment of expenses; cheques require two signatures of officers of the commission, one of whom is to be the coordinator. The accountable advance is $45,000. I had previously told the House it was $50,000 but it is $45,000. It was provided to the commission by the Department of Finance. Reimbursement will be made on a periodic basis by the commission submitting invoices and proof of payment to the Department of Economic Development: Mines and Small Business, which will check and authorize the same. Two claims for reimbursement have been processed to date. All payments will then be charged to the account of the Executive Council Office, which has the budget allocation for this project. A bank reconciliation for each month is to be forwarded to the Department of Economic Development by the 15th of the following month. An independent audit of the expenses of the inquiry will occur at the end of the inquiry.
I apologize to Members that the photocopies of the material, including in the Order-in-Council, are not here yet. I hope they will be with us momentarily.
Mr. Phelps: I thank the Government Leader for coming back promptly with the answer he has given. We look forward to receiving the photocopies of the material. I think we are prepared now to clear the item and the department budget.
Public Inquiries in the amount of $200,000 agreed to
Chairman: Anything further in public inquiries? The amount of $200,000 carries. That concludes the Executive Council Office.
Mr. McLachlan: Were there not some more answers that the Minister was going to bring back on executive assistants?
Hon. Mr. Penikett: There is more information from outstanding questions, but the other items were all cleared and I will be bringing back more information, perhaps this afternoon, as we go through the estimates. This was the only line that was not cleared.
Executive Council Office in the amount of $4,650,000 agreed to.
Community and Transportation Services - continued
Hon. Mr. McDonald: The question was asked as to whether or not there was any agricultural land sales in the Klondike Valley planning area since the planning had been initiated in the past. The information that I have is that there are 10 agricultural applications within the area, of which two have been approved, and five deferred pending more information coming from the land use plan, particularly the information collected through the planning study and public input, because of resource conflicts. Three applications have not been reviewed. One is very recent, one is a grazing lease and one application is on hold because the applicant has two applications. There have been 10 in the year. Just outside this particular area, there have been three applications;, two have been approved and one is yet to be reviewed.
Mr. Lang: Is that the Klondike Valley area study?
Hon. Mr. McDonald: Yes.
Mr. Lang: Perhaps the information has changed. As of February 19, 1987, there was a letter sent to me under your signature that stated there were 18 outstanding applications for agricultural land in the Klondike valley. Did some people withdraw their applications? I am referring to a letter sent to me on July 21, 1987 with respect to one particular application.
Hon. Mr. McDonald: Applications may have been withdrawn. My information from the department is that there are 10 applications in the planning area and three just outside the planning area. I am not sure if they are in the Klondike Valley, but they might be. Of those 10, I have indicated how many have been approved and how many have been deferred and how many have not yet been reviewed.
Mr. Lang: I appreciate that. Could the Minister provide me with the names of the people who have been approved and those who are deferred? The reason I would like that is because I know at least one individual, about whom I wrote to the Minister, whose application has been in for many years. I would like it to be processed, because we are all getting a little older - even the Minister is. As time goes by, we can never recover that. These people have the financial capabilities to get on with the job. Could the Minister respond to that?
Hon. Mr. McDonald: I will get an update on the Members letter, as well as the other applications and table it.
Mr. Lang: I will send this letter to the Minister so that his staff does not have to spend an hour going through files looking for correspondence. I would appreciate if the Minister would double check that for me. Sometimes individual applications get lost, and all of a sudden two or three years have gone by. It is not news to the Minister or the Chairman, and it is worthwhile following this up to see if something can be done to accommodate the situation. It is not as if we are dealing with people who are trying to fulfill a dream without the financial capabilities.
Hon. Mr. McDonald: I agree with the Member. I can tell the Member exactly how the applications stands. The North Hootalinqua Steering Committee has recommended favourably for these people in any case.
Mr. Lang: I will correct the record. It is the Klondike Valley Planning Committee. The Minister said North Hootalinqua Steering Committee, unless they have applied elsewhere.
The Minister has announced a land freeze. When does the Minister expect that to be off? When does he expect that he can let people know when a decision is going to be made on the North Hootalinqua situation?
Hon. Mr. McDonald: I expect that the signing process will be completed at the end of this month. That is what my people say. The plan will be submitted immediately to the government. At that point, the agricultural land freeze in North Hootalinqua will be off.
Mr. Lang: When that plan is made available to the government will it simultaneously be made available to the public?
Hon. Mr. McDonald: Absolutely. It is meant to be a public document, and the draft of the final version will be going through public hearing and general debate through public meetings in the North Hootalinqua area. The final plan will be publicized.
Mr. Lang: I would like to move on to another area of concern. Last time we sat, the Minister was talking about contract principles and documents being drawn up for the municipalities. It was close to conclusion at that time, and that was a year ago. I would ask the Minister where that is and if he could table those documents that have been forwarded to the municipalities.
Hon. Mr. McDonald: I have not seen the draft contract, but if it is complete, I will deliver a copy to the Member. I assume that it is complete, but I will stand to be corrected if I am wrong. I will check on that.
Mr. Lang: This area is of concern to this side - I do not know about my colleague from Faro. It is a concern for continuity and to ensure that tenders are being issued at the municipal level, as well as the territorial level, fairly and are perceived as being done fairly. You cannot do that unless you enforce rules and regulations and everybody tenders according to those rules.
I understand that there is an overlap between the Minister of Community and Transportation Services and the Minister of Government Services. I want to say to the Minister that more and more people are coming to me, knowing that I am the critic in this area, expressing, most times privately, concerns about how this money is being authorized. It involves, once again, the legitimacy of the government and the legitimacy, therefore, of the Legislature. It is being alleged that money is being granted, through whatever avenue, strictly to friends of friends. I am not making allegations that it is happening; it is the perception that it is happening.
My concern is this, and I want to voice it again: I could see the reason for transferring $10,000, $15,000, or even $20,000 to a community club in a small community, for the purposes of doing renovations. I am prepared to accept that, but what concerns me is the situation of $250,000, half a million dollars, or three-quarters of a million dollars being transferred, with no terms or conditions tied to it, as far as how it is going to be tendered out, to do a major public work. That is my concern. I would like to hear the Members comments on that. I am putting a flag up. I waved it last time, and it is starting to flutter in the wind. I bring it to the governments attention again. I think it should be of major concern, because it is taxpayers money, and it should be allocated in a fair manner. Can I hear the Ministers comments on that, please?
Hon. Mr. McDonald: The perception of being fair is a very important consideration. I know the Minister of Government Services has been very sensitive to that, and he has mentioned it many times.
We will separate the municipalities from other communities and societies and clubs, because I think there is a difference. The government has transferred the responsibilities for contracting and capital works to the municipalities. In those communities, it means the contracting regulations and bylaws are the responsibility of the community. In many cases, we have helped the communities draft their bylaws at their request, because they would like our assistance. It is not a command to the municipalities; it is a draft bylaw that they can consider. We have devolved the responsibility for contracting to municipalities.
With respect to community clubs, it is a different story. The Community Services Branch is very sensitive to whether community clubs and Indian bands, et cetera, are capable of undertaking the work. There are strings attached to that money, largely because we do not want the projects to fail. There is a desire by both the government and the community to see a project completed. There are times when we do exercise our prerogative to undertake the project ourselves, because we do not believe there is any group in the community that has the administrative competence to undertake the work. That is quite often the case.
There are many times when a community feels they can and, after analysis by civil servants, there is a definite view of the government that they cannot. Therefore, the government undertakes the project, in consultation with the community club, or society, or whatever it happens to be. There are very few times when we have actually faced confrontation on that front, I am happy to say.
There are differences between bands and community clubs, with respect to their administrative competence that allows the various organizations to undertake capital works. Some bands and community clubs do have the administrative competence to undertake projects of a considerable size. We also take that into account.
A case in point is the Pelly community hall, which was undertaken under a capital grant with the Selkirk Indian Band. Through the band administration, they took the project and did a first class job of construction. They employed a lot of local people on the project. They had a project manager do the work of running the project. That cannot be done in every community. Administrative competence is required for any project to be undertaken by a community group.
There are communities, like Elsa, that are sort of half municipalities and half societies. In the case of the curling club for Elsa, the hamlet council has undertaken to do the work. We have guided them through the tendering process and demonstrated what it means, even though we are transferring the money to the hamlet. Nonetheless, we have handled a review of tender specifications, a review of the design specifications, and watched over the tendering of the project.
The tendering has gone through trouble free except for the fact that all of the bids are all over budget. The situation can vary between communities depending upon the capability of the community to undertake work and whether or not they have the administrative competence.
Mr. Lang: The Minister still has not answered by question. I do not know if it is artful dodging or if he misunderstood me. There have to be some clear and unequivocal rules set down by law because we are dealing with public money. If the policy of the government is just to hand out money in big buckets and hire someone to just talk about it and guide it, there will be corruption. It cannot help but be if you do not have a system that ensures that there are rules.
I do not have any problem with the transfer of dollars to Dawson City or Watson Lake, but it is incumbent upon us, as the mother parliament of the municipalities, that be guidelines and a bylaw in place so that the people in the business community or otherwise who tender on public works have clear definitive rules to go by for project tendering. The municipalities are asking us to transfer millions of dollars. Therefore, one of the conditions should be that each municipality establish, within a period of time, some contract bylaws.
It is incumbent upon the government and upon the Minister to get together with the Association of Yukon Communities and set a time frame by which contract bylaws will be in place for the various communities. The government has already indicated that there is some concern. The rural MLAs may be able to bring up some situations that questions the whole system. That question can be averted. It brings the whole integrity of the system into question. When does the Minister expect all the municipalities to have contract bylaws in place?
Hon. Mr. McDonald: Many of the municipalities have contract bylaws in place right now, or will have them in place shortly, or will have amended bylaws in one way or another if they feel that provisions of the model bylaw are sufficient. It boils down to a difference in approach. The Member has been very clear and forthright about how he feels about the matter. I have indicated exactly what the governments position is on this. We believe that this matter should be resolved in the communities.
It is not simply a transfer of monies. It is a devolution of the responsibility for the money and how the money is spent. We do differ on this matter. We are not prepared to put a command in legislation that the contracting is to be done exactly a certain way according to specific guidelines. We are not prepared to do that. We will encourage the municipalities to be aware of the features of the model bylaw and to help them in any way we can. We will be doing that for months and years.
The act of devolution is complete. We have devolved the responsibility to municipalities. It is very clear and we are not prepared to renege on that. We have the support of the government. The analogy would be between the federal and territorial jurisdictions. The federal government provides a substantial sum of money to the territorial government to undertake territorial work and has not burdened us at all with DPWs contract regulations. We have our own contract regulations and we have a preference clause for northern contractors, which I am sure is mildly irritating to federal authorities, but nevertheless we have responsibility for our own contract regulations and for spending the money, which through the largess of the federal government is complete. That responsibility has devolved to us. Likewise, the responsibilities for comparatively much less money is devolving to the municipalities. We have devolved the responsibility for establishing contract bylaws to the municipalities; those municipal councils are responsible to their taxpayers and if things are not going properly according to the will and intent of the taxpayers then taxpayers will speak at election time.
We have undertaken the devolution, and I indicated that before. I understand the Members position. He made it very clear to me. I hope I have made the governments position with respect to this matter very clear to Members. On this particular matter there is a structure. In some respects we agree for the need or desirability of contract regulations; the difference is whether or not the government is prepared to put them in the form of a command, in legislation.
Mr. Lang: I think that the government is not standing up to its responsibilities. I can see what the Minister is saying. I do not think that he has to legislate it. My concern is that a year ago I asked where the update for contract bylaws was. I was told it was almost completed. That was a year ago, on April 7. Here we are a year later and nothing has been done, or if it has been done it has not been completed. That is my concern. I want to stress to the Minister, and I hope he conveys it to his administration, that we are very concerned that this be done. In those communities that do not have the contract by-laws that they at least be given the option of putting them into effect. I think they would. The last thing a politician would want is to be accused of is porkbarreling. At least I think so; I would like to think so.
I want to move on to the transfer of dollars to organizations. I think that is a crucial area. Who determines the administrative capabilities of a band or an organization to tender a project? Is it the Minister?
Hon. Mr. McDonald: No. It would be the Community Services Branch. I am sure that the model of contract bylaw has been developed. I do not know if the bylaws have been adopted by communities. I can provide that information. I believe that at the last AYC meeting, when I was talking about this to those officials, the finishes touches had been applied to the model bylaw. I know that the municipalities, jointly, between their administrative sections and the Community Services Branch, with the support of the Department of Government Services, have been working on the bylaw over the course of the past year. I am certain they have come to conclusions. I do not know with any certainty which municipalities have made changes to the by-laws that they have.
Mr. Lang: Who in Community and Transportation Services makes the decision whether the organization has the administrative capabilities?
Hon. Mr. McDonald: I indicated that the Community Services Branch does. The people that we have in government review the track record and administrative competence of the organization to determine whether the project can be undertaken.
Mr. Lang: Is the Minister telling me that he has nothing to do with who makes the decision as to whether or not the dollars are transferred?
Hon. Mr. McDonald: I have never passed judgment on the administrative competence of any organization, directly or indirectly.
Mr. Lang: The major concern I have is that there seems to be a situation developing as to who does or does not get the money. I have been approached by a number of contractors with respect to what has taken place here because the rules, or lack of rules, are becoming evident. Could the Minister tell us what tenders came in on the curling rink in Elsa? How much over were the estimates?
Hon. Mr. McDonald: There is a provision in legislation that allows for the government to provide capital assistance grants for communities. It has been used for a long period of time. We are not proceeding outside legislation nor are we proceeding outside past practice. A careful analysis has been done to see whether or not the sponsoring group has the capability. As I indicated before, when the department has come to me and said it did not feel some group has the competence, I have never said that they do and you are going to have to allow them to undertake the project themselves.
In the past, I have never done anything other than follow the recommendations after they have done the analysis of whether or not the community organization can undertake the work.
In the case of Elsa, the situation is different in the sense that the government is holding the hamlet councils hand, in terms of following through the tendering procedure, making sure the tendering is done in the appropriate and fair way, and that sort of thing. It has passed judgment on the plans, and the review has been done collectively with the engineering consultants, the hamlet council and Community Services Branch. When advice has been requested, with respect to keeping the costs at a respectable level and within budget, Community Services has been able to provide the expertise they can get throughout the government to be able to provide the assistance to the hamlet council.
I think the lowest bid was $980,000 for the curling rink in Elsa. That is $180,000 over target. So, the hamlet council and Community Services are cutting back the tender specifications to bring it in on target.
Mr. Lang: Are you going to have to cut that back more than 10 percent?
Hon. Mr. McDonald: I have asked them to try to bring it in on target and on budget. They are going to do their best to cut back to bring it back to $800,000. I cannot guarantee that they will. They will cut it back as far as they think they can, and as far as Community Services thinks it can be reasonably cut back. If it is still over target then, like every other project, they will come back to the government and ask if we are prepared to consider a supplementary for this project. The decision will be made at that time after myself and Management Board are assured that all the cut backs have been attained that are reasonable, and that they have the necessary resources and that it remains a priority of the government.
That is the procedure that happens on every capital project. I can assure Members that it will happen on the project in Elsa.
Mr. Lang: The hamlet is following the contract regulations for that particular contract, then?
Hon. Mr. McDonald: Yes, they did.
Mr. Lang: I would like to bring to the Ministers attention that, if you change the value of a tender by more than 10 percent, I believe it is incumbent upon the government to retender the project. Perhaps the Minister would like to check that out, because I am going on memory.
How many people in Elsa curl?
Hon. Mr. McDonald: I will check that figure for the Member. My understanding of what they are doing currently is that they have been talking over changes to the contract with the low bidder to bring the bid down to a level that they think will be palatable to the politicians. That exercise is being undertaken right now. I will check the 10 percent figure.
With respect to the curlers, let me say that there is a difference between the curlers and those who use the curling club - there is a pretty dramatic difference between the curlers and those who use it as a club. This year at the latest bonspiel, there were eight teams from Elsa. I am not sure exactly how many curlers are active in terms of the clubs membership, but everyone in the community uses it as a club; not everyone in the community curls.
Mr. Lang: I would appreciate it if he would check out the requirements and the contract regulations for me. I am just going on memory, and I think that it is something that ought to be pointed out to the Minister.
Does anyone else have any questions on contracts while we are on the subject? I will have a lot more for the Minister of Government Services.
I have one further question: we budgeted $10,000 last April for the purposes of not only looking at contract bylaws but also to look at the contract documents with the idea of condensing the contract documents to a more acceptable level. I agree with the Minister that sometimes those documents are an inch thick. Could the Minister report to the House exactly what took place?
Hon. Mr. McDonald: The Department of Community and Transportation Services budgeted that much money as their contribution for the project. As a major construction agent, the lead agent was the Department of Government Services and perhaps a better answer would come from the Minister of Government Services.
Yes, the Member is right, the contract documents are going out of date. I do not know the size of the project but I will check. The Department of Government Services, as I say, was the lead agent and was reviewing the contract documents. They were out of date, and a lot of the sections were crossed out because they were no longer applicable. I will check with Government Services.
Mr. Lang: I prefer not to ask the Minister of Government Services, because I know what kind of answers I get. I would like to ask the Minister: are the documents that he still has to sign an inch thick?
Hon. Mr. McDonald: I have not had to sign any yet this year. The large projects have not yet been awarded, so the contract documents have not come to me for signature; I will let the Minister of Government Services respond.
Hon. Mr. Kimmerly: I will respond partially. The project is near complete but is not complete. During the estimates for the Department of Government Services, I will give a statement of the progress in some detail.
Mr. Lang: That definitely clarified the situation for all of us. I would like to move on to the issue of the VHF system. The Minister, in his Ministerial Statement, gave a figure of $9.1 million. He did not tell us, however, what this major change in the system is going to cost. I understand it is being totally replaced. Could the Minister give us a projected all-encompassing cost for the system?
Hon. Mr. McDonald: The total project cost will be $17 million, of which $9.1 million will be considered government contributions. We have an emergency planning application, and there is every indication that we should expect 50 percent of our $9.1 million to come Emergency Measures Office, Canada, given that the new system will have linkages into the Beaufort and down the Mackenzie Valley, which will provide for a circle system in communications. This has been something that the Emergency Measures Office has been looking for for some time. The government contribution will be $9.1 over five years. We expect 50 percent of that to be an EMO Canada expenditure.
Mr. Lang: It is an interesting figure. It is amazing that it was not announced in the Ministerial Statement, but that is a question in itself. Seventeen million dollars is a fairly major initiative for any government.
Does the Minister have a commitment in writing from EMO Canada that they are prepared to pick up 50 percent of the $9.1 million?
Hon. Mr. McDonald: No. We do not have that commitment in writing. We have assurances that the funding is almost 100 percent. There is every expectation, given EMOs response to us in the past, that we can expect a minimum of 50 percent because of the strategic nature of the system.
Almost $8 million of that will be an investment by Northwestel to upgrade the system to provide for increased access to public users. The capabilities of the system will now allow people, in privacy, to access the public phone system and the switchboards. It will also allow more area to be covered than before through this arrangement.
Mr. Lang: I am a little concerned that we do not have a firmer commitment than what the Minister has said. It sounds like the situation that happened with the Mayo damn, then we tried to get a commitment from Keno Hill Mines to use the power. These things have to be in place. I do not disagree with the Minister of Health and Human Resources that she wants a commitment in writing for the new hospital prior to taking over the responsibilities for the hospital.
I want to point out that I see a real inconsistency in the government. On one hand, the government is saying that we are going to protect the taxpayer and will ensure that we are not taking over fisheries or federal health until we get a firm commitment in writing from the government of Canada for the major obligations we are going to be undertaking. That is a reasonable and logical position. It concerns me that we just have Emergency Measures Canada saying maybe we could get over 50 percent. When does the Minister expect to have a firm commitment of actual dollars that he can produce for this House that Emergency Measures Canada is going to contribute toward the system?
Hon. Mr. McDonald: I want to make it clear that the government intents to proceed with a replacement of the VHF system whether we get the money or not. There were two potential bids. One was unrealistic as the bidder recognized themselves. There were two alternatives. The government could do it themselves or through contract with Northwestel. If the government did it, it would cost more in the long term with less public benefit. So we went with the Northwestel option.
During this period we have had a very close relationship with EMO and they have indicated their desire to contribute. They contributed to these projects elsewhere in Canada - 50 percent and greater - depending on the value to which they see this project serving their interests. For them, this project is considered to be a project of significant value, given our strategic location in the country and to the north and the Mackenzie Valley in particular. There is every expectation that they should contribute more than 50 percent but it would be manifestly unfair for them not to contribute under the circumstances, given their participation in other parts of the country.
I do not know exactly when we are going to get a response. I do remember a date being mentioned, but my memory fails me. It is this spring but I will have to check the actual date for the Member.
Mr. Lang: I want to go on record that it is a concern for this side. It points out an inconsistency with respect to principle in negotiations in general. I take it the decision by Management Board and Cabinet to go with VHF was that we, the people of the Yukon, will supply that $9.1 million in total if EMO decides not to contribute. Is that correct?
Hon. Mr. McDonald: That is correct, over five years.
Mr. Lang: Do I take it that Northwestel is contributing a total of $8 million?
Hon. Mr. McDonald: I believe it is almost $8 million for this project, yes.
Mr. Lang: How is that going to be paid for by the consumer?
Hon. Mr. McDonald: Ultimately it will have to be taken out of the capital account. I am not sure of the details about how it may affect rates, if it will affect rates at all. It is this governments position that, given the amount of money that Northwestel has taken out of this territory, and given the investment people in the territory have made to keep Northwestel through numerous hikes to subscribers, they are deserving of having some capital infrastructure improvement.
We also feel, given the fact they have taken very much out and put very little in, and given the fact the return on the investment in the north has been so significant, the news justifies this type of funding from Northwestel for this project.
Mr. Lang: I appreciate the Ministers comments. Is he telling this House that Northwestel is putting $8 million in and will not be recovering it through rate increases? Is that correct?
Hon. Mr. McDonald: The Northwestel plant only has one set of customers and one revenue supply area. There is an issue as to whether or not the money they currently take from these subscribers is invested back into the Yukon, the way it ought to be.
If the Member is suggesting that rates have to climb, I am saying they do not have to climb as a result of this project. If the Member is saying the money is ultimately going to have to come from subscribers, well, of course.
Mr. Lang: I have to take exception to the way the debate is going. The Minister stood up in this House and gave a ministerial statement implying $1.9 million is what the VHF system was going to cost. If you will recall, I stood up when the ministerial statement was given and said I noticed there was no bottom line, and could the Minister tell us what this system was going to cost?
The Minister decided he was not going to stand up and tell us exactly what the cost of this system was going to be. I believe the Minister is not being totally forthright with respect to this particular project. If Northwestel is contributing $8 million, are the subscribers in the territory going to have to pay for that infusion of capital?
I did not need a harangue about the multi-nationals, or an NDP philosophical, ideological lesson on how a person should not make a profit. That was not the point of my question. I want to know if my people in Porter Creek East are going to have to pay for the $8 million infusion into that particular system through their telephone rates?
Hon. Mr. McDonald: I have said nothing with respect to whether or not a private company should make a profit.
I very much resent the inference that the government is hiding the cost of this project. I have myself indicated to the press exactly what the cost of the project is.
With respect to the $9.1 million service contract, I think that is a viable figure to give to the public. I have also indicated to the press that it is $17 million. I have indicated to the press what the break-out is between government and Northwestel. I resent the implication that the government, and this Minister, is hiding something from the public. It is not. This is a significant project for the future of the territory, not only in dollar terms, but in the effect it is going to have on the communication system in this territory. It is going to cost this kind of money in order to produce it.
The point I was making, and I will make it once again, was that Northwestel returns a very significant amount of profit to its parent company and pays taxes to the parent company as part of this relationship. I have also indicated they have not lived up to the capital commitments they have to provide to the territory, in my view, because they have been siphoning off so much to the parent company.
It is my view that some of that, over a course of five years, ought to be returned to Yukoners through that communication system. That is the case I will make at any regulatory hearing when anybody tries to increase rates; it is also the case I have made to Northwestel in the past.
This project is a good one, and I think the economics of this project, and the future benefit to the territory, are very significant. The costs are all on the record.
Mr. Lang: A portion of the costs is finally on the record. Does the Minister have, in writing, that the $8 million contribution from Northwestel will not cause an increase in anybodys rates?
Hon. Mr. McDonald: The $9.1 million that we are contracting with Northwestel is our contract portion. Northwest has, independently of the government, said that they want to invest another approximately $8 million into this system to improve public access to the VHF system that the government intends to place in this territory. Because we went this route, it allows Northwestel to spend further monies on the project.
The Member asked what the project total would be. I indicated that it would probably be $17 million. The total of the governments provision for the VHF for the governments purposes is $9.1 million. That is our contractual commitment to Northwestel. That commitment will affect Northwestels rates in no way. Northwestel indicated to us that they wish to use the system and to upgrade the services to the public over five years and to invest approximately $8 million on that exercise.
It is their decision to enhance the public service using the basic system that we will have put into place, and it will help the new project. That is the relationship that we have with them. If Northwestel goes ahead with their $8 million investment into the Yukon, it will improve the direct phone service to the public. If there is an attempt to seek rate increases because of this capital investment, the government will resist it. The Member is asking whether or not their plans, in the future, will increase the rates and whether a commitment exists between us that they will not do this. There is no such agreement. Our contractual agreement with Northwestel ends with the $9.1 million.
Mr. Lang: Any increase in rates by Northwestel after their commitment of $8 million is between them and the regulatory body, and it was never discussed between the government and them. Is that correct?
Hon. Mr. McDonald: During the period of our discussions with Northwestel, the proposal to enhance the public telephone system in rural Yukon was considered in the overall plan. It was this feature of this system, the access to the public switch telephone network, that we found very attractive in terms of its future potential for the Yukon.
They have indicated that, once we have the basic system in place for VHF, then they can provide further service which will enhance - at a cost of $8 million over five years - the public access to the system through mobile radios, to the public switch telephone network. They have given us indications that they intend to go in that direction. Our contractual obligations with Northwestel end at $9.1 million.
Mr. Lang: I keep dancing around the bush here and I am sure that you are finding it amusing, but I would like to ask the Minister this: was there any discussion with Northwestel of what implications it would have on the rate structure - any at all?
Hon. Mr. McDonald: I am not sure whether there or not there were discussions with Northwestel on the impact on rates. I have indicated publicly to the general manager of Northwestel, and I have indicated publicly in this House, what I feel about the capital investment that Northwestel has put into the territory, in comparison with what they removed in terms of dollars from the territory. I have also consistently felt that the amount of capital investment, given the extraction of money from the territory, has been minor indeed. It is my view that more capital investment has to be ploughed back into the system that is supported by subscribers in the territory, rather than in the BC and the NWT. I have put that position on the record many times here.
Mr. McLachlan: I am not sure if the Minister has the technical background to be able to answer this but he has made reference to it today. The Ministerial Statement delivered last week also made reference to it with this statement: It will provide user access to the public telephone system. The public does not use VHF for telephones. That is related strictly to the government system, EMO and the RCMP."
Is the Minister telling us that this large expenditure of money, this $8 million that they have a bit of a problem to account for, is for a brand new type of telephone system that will allow the public - we have had debates in this Legislature about getting rural telephone service - through the use of this system, be able to get telephone service through VHF? I do not understand that statement because we do not use VHF now for public telephones.
Hon. Mr. McDonald: The Member has hit the nail right on the head. That is exactly the significance of this project. It will allow people with a mobile telephone to pick up the telephone, dial 1-667-5955, and get a private line through to the governments information desk. The conversation that is held - and they can do it anywhere on the highway, off highway, on rivers - is a private conversation, not a public one, as currently exists. They can hold a private conversation with the governments information desk.
Mr. McLachlan: I guess the next question that those people want to know is, if they are in rural Yukon and they are asking for this telephone, is it going to take them to the far end of the five-year period that the Minister referred to, or is work starting immediately? Will some of these people be able to see results during the last half of 1988, or what is the timing that will affect a lot of rural dwellers?
Hon. Mr. McDonald: We are going to be moving immediately, in the year 1988-89. Believe it or not, the Alaska Highway is going to be given the benefit of the system for the first phase.
Hon. Mr. McDonald: The second phase, in 1989-90, will cover the Klondike Highway through to and including the Campbell Highway to Ross River and the Silver Trail. The third phase will include the Dempster Highway. The fourth phase will include the remainder of the Campbell Highway, being Ross River and Watson Lake, and the more remote section of the route. The last phase will include those areas off-highway.
Mr. McLachlan: Does the Minister mean both sections of the Alaska Highway, south to the Watson Lake border as well as north to the Alaska border?
Hon. Mr. McDonald: Yes, right through from BC-Yukon to Alaska-Yukon.
Mr. Lang: Everybody is appreciative of the increased service. What is the cost going to be to the user? If I have a telephone and I want to dial 1-667-5955 and get through to the man that knows everything, I want to know what it is going to cost me for the phone call.
Hon. Mr. McDonald: I have no indication that it would mean there would be an increase in rates. There would probably be a change on the radio. I am not familiar with the rates and I am not sure what the actual cost of buying the radio would be. It has never been indicated to me that there would be a change of rates.
With respect to users of the system, there will be a charge to the RCMP and to the federal government, as there is now. Some of those organizations have indicated interest in setting up their own systems for their own purposes.
Mr. Lang: Would the Minister undertake to do a number of things for us. Firstly, what is going to be the general capital cost to the consumer with the upgrading of this system? Surely that price must have been brought up somewhere in the discussion. If not, we were remiss in not asking. Secondly, is it expected that it is going to cause an increase in rates?
The way the charge-back system is set up, is it going to mean an significant increase in budgets for territorial government users?
Hon. Mr. McDonald: I could answer a couple of those now, but I will wait until I can give the Member a package of answers.
Mr. Lang: While we are on the question of VHF, in the area of communications, could the Minister update us with respect to the question of the communication policy and what plans the government has?
Hon. Mr. McDonald: A communications policy has been adopted by Cabinet. There has been no policy change. This is a brand new policy. It is going to the printers now, and I will have a statement when I have the document in hand. I am not sure exactly when it will be, but it should be shortly.
The Cabinet has adopted the policy. It is a comprehensive policy that covers broadcasting and telecommunication services, which are telephone and data transmission. It includes the discussion of what the appropriate role of the government is with respect to the discussions that have been held nationally on the role of the territories and the deregulation of territories, provinces and the federal jurisdiction, and the role of regulating the telecommunications industry. It will also refer to the role of the government with respect to the provision of other television channels to communities. All those things will be covered under the comprehensive communications policy.
Mr. Lang: Are there any monies identified in the budget for this policy?
Hon. Mr. McDonald: There is one item identified in the budget, and that is the personnel. The Capital Budget from last fall indicated a projection with respect to capital expenditures.
Mr. Lang: We will be getting into that further. Are we expecting an announcement this coming week?
Hon. Mr. McDonald: When the policy gets back from the printers, there will be an announcement on the policy and the tabling of the policy document. I think it will be within a few weeks. I will ask when the printing is expected to take place and let the Member know. I have every intention of making a statement. The policy and the ministerial statement is in Cabinet right now.
Mr. Lang: I want to move over to the question of the airport transfer. Can the Minister update us as to where that sits?
Hon. Mr. McDonald: Last fall, we negotiated at the administrative level. I had an official mandate from Cabinet for negotiations. The Deputy Minister of Community and Transportation Services and the Manager of Airports negotiated an administrative agreement last year that apparently was too good for the federal politicians to accept. Some site modifications were made that we found acceptable to the negotiators. We felt it was a good program for the Yukon, both on the operationa and maintenance and capital side, taking future initiatives into account. We finalized an agreement administratively, which was federally signed by Mr. Crosbie in the last couple of weeks. We have been trying to find out what has happened since then. We were told that the document was going through to the relevant cabinet committee for approval. We have been trying to find out what has happened to it. We do not know why it is not proceeding. We feel that the administration of Transport Canada supports the negotiated agreement and we certainly feel very comfortable with it. We simply do not have federal Cabinet approval for it and I do not know why. All the elements are there; all the background work has been done. I intend to announce an air transportation policy in July, assuming that the transfer will take place any day. We are prepared to get a comprehensive air transportation policy ready. The department has been working on it for some time and it is just a matter of seeing the transfer take place.
One element that was not in the transfer negotiations was the Dawson City airport relocation because it was a project that was of such a size that we simply could not get agreement right now that they would put the dollars in the agreement for it, which could be in the neighbourhood of $15 million, or more. For that reason, we made a pointed effort to leave that relocation exercise out of the agreement on the consideration that the federal government will pay the costs of upgrading the airport at some future time. We know we cannot get final agreement from the political level now with respect to the upgrading, but there is no reason in our minds why that should hold up the Arctic B and C transfer. So we hide that one element of the negotiations and we have an administrative agreement on every other element. It is just a matter of the federal politicians to say yes or no.
Mr. Lang: I know this has been a major priority of the Minister and I do not see what the problems are, because you are effectively administering the B and C airports anyway. It is just a question of coming to an agreement for a formal transfer. It is not authority that you are looking for because you are running it in any event.
I am a little concerned about the question of the Dawson City airport and waiting for a rainy day down the road to come to an agreement. Is it clearly spelled out in the agreement that the Dawson City airport relocation is going to be subject to negotiation and the federal government will have an obligation after you have had formal transfer of B and C airports?
Hon. Mr. McDonald: The agreement will state that the Dawson City airport relocation will be considered separately from the B and C negotiations. We know that we cannot get that kind of capital commitment out of the federal government now. That has been made very plain. We had to make the decision as to whether or not we would wait for that ultimate commitment, whether or not it comes. We will wait to maintain it as part of our B and C package.
We decided that if we can hive it off into negotiations, to a clause in the agreement, we could still get the devolution to take place and do some of the things that we want to do with our airport system. That would include the Haines Junction airport and the Carmacks airport. Administratively, that makes all the sense in the world to be responsible for our airport system.
There was every indication from the federal transport department that, irrespective of the fact that that element and that the state of devolution negotiations between the Government of the NWT and the Government of Canada were different, we could still get an agreement in the Yukon. We are well ahead of the NWT is on this matter, and we are prepared to go it alone if the federal government is prepared to go it alone, and I think they are. I think the federal Minister is.
We have negotiated two agreements now; both of them are acceptable to the administrations. The latest is acceptable to the federal Minister, so it is a mystery why this has not been approved.
Mr. Lang: It is nice to see that the Yukon is ahead in one area at least of the NWT. It must make the government feel very good.
In the Capital Budget of last fall, the Minister indicated that the government was going to go ahead with an airstrip costing $1 million at Eagle Plain. Could the Minister update us on that?
Hon. Mr. McDonald: We did discuss that in the Capital Budget. The other partners in the equation, Eagle Plains Lodge, McGavin Construction and the federal government, have not come to an agreement about the cost-sharing arrangement. We have chosen a site, the old Tuttle strip. Once we can tie down funding commitments, construction will proceed. We do not have funding commitments from the federal government at this time, and we do not have anything firm from the construction company either. These are the people who originally wanted the airstrip reconstruction to proceed.
We have indicated our interest. We have tried to encourage, not only the federal transport department but also the Department of Indian Affairs and Northern Development. Ministry of Transport has been involved in terms of site selection and the technical aspects of the site identification. We expect the Department of Indian Affairs and Northern Development to be involved as a funding agent. At this point we have no firm commitments from either DIAND or the construction company.
Mr. Lang: I believe we were looking at a contribution by the Government of Yukon in the neighbourhood of $500,000. Could the Minister clarify what our capital commitment is going to be?
Hon. Mr. McDonald: We anticipate our capital commitment will be $150,000, and that is what I have budgeted. The construction costs of the airport are going to be significantly more than that but, from day one, the significant contributor were going to be the federal government McGavin Construction. We intend to keep that cost-sharing arrangement alive as long as we can. As much as we feel the airstrip is very important for Old Crow, we also feel there is an obligation of the federal government to provide funding for the project and, also, from McGavin Construction, who will also benefit from the project.
We have been pushing it along. Unfortunately, the partners have been out of sync and have not been able to come to a final agreement yet. The first element of delay was the site selection, which took some time to do.
Mr. Lang: Time is passing us by, and we are into April. If a decision is not made this month, or the beginning of next month, the season is effectively gone by the time you tender or go through all the steps that are required. I hope we intend to tender out a contract this time.
I would like to go back to the debate with respect to the upgrading of the Haines Junction airstrip. We had quite a lengthy debate in here that had some effect on the Minister, because he mentioned it a little earlier when we were talking about airports. Can the Minister update this House on what representations have been made to Transport Canada to re-evaluate the priorities to see whether or not we could get some further work done this year on that particular airstrip?
Hon. Mr. McDonald: I will have to clarify something I think may be a misunderstanding. The funding was provided for the Tuttle airstrip by the Yukon government. It has nothing to do with the B and C airport program. The Tuttle airstrip will be classified as an emergency airstrip and will not be recoverable through the program.
The Member is right. If we do not come to some conclusions shortly, there will not be any airstrip this year and the money will lapse again. It is not for lack of trying. I can bring forward the numerous times when we have tried to touch base and all the problems associated with trying to work with three partners who are not always in sync.
With respect to the Haines Junction airport, that is a B and C airport. We have indicated our desire to have the Haines Junction airport upgraded to more than visual flight rules. I do not have the details in front of me. That will also relate to the Carmacks airstrip. During the B and C negotiations, those were the two significant capital projects, beyond the regular capital work that has to be done every year to service the airports. We insisted they be part of the negotiations and, should the transfer take place, the money would flow to us and we would be able to undertake the work on these airports.
To my knowledge, the Ministry of Tranports plans, with respect to upgrading the Haines Junction airport have not changed. They intend us to do the technical design work this year and the construction for the Haines Junction airport next year, and that has not changed. We, through negotiations, have got an agreement which basically assures that the money comes to us to do that project.
Mr. Lang: Going back to the agreement that has been lost between Cabinet shuffles and things like that in Ottawa: is the Haines Junction upgrading clearly spelled out in that agreement?
Hon. Mr. McDonald: Yes, it is. The necessary capital to upgrade that airport is a number one priority after the transfer takes place. We will be proceeding with Old Crow this summer, as per the Ministry of Tranports capital plan, and we will also be proceeding with the technical design in Haines Junction. Irrespective of whether or not there is a transfer, we will be constructing the airport at Haines Junction next year. No matter how you cut it, we will be constructing it in Haines Junction next year.
Mr. Lang: Better late than never. The Minister referred to the question of air transportation policy. Could he inform this House who is preparing that policy?
Hon. Mr. McDonald: The person responsible for preparing the policy is Mr. Casselman in the Airports Branch. A number of studies were done, prior to devolution of B & C airports, which formed our position in the negotiations, and we are pulling together that information. There is no reason why I should not have a air transportation policy by July.
Mr. Lang: There was discussion a number of years ago about an extension there. Is that part of the agreement with the Ministry of Transport? I know that it has been a problem.
Hon. Mr. McDonald: I have to check the capital plan and the negotiated agreement; I am not familiar with that detail. I will check to see if it is in the capital plan.
Chairman: We will recess for 15 minutes.
Chairman: Committee of the Whole will now come to order. We will continue general debate.
Mr. Lang: I would like to move onto the announcement that was made by the Minister and missed by a lot of people, and that was his statement with regard to the number of positions that were being transferred to, or created in, various communities. Are these new positions or are they transfers?
Hon. Mr. McDonald: These are transferred positions, except for the regional inspector. That is a new position, but the others are reallocations.
Mr. Lang: As far as the administration is concerned here, what is it going to do with respect to their overall duties? What are the projections? What information was provided to the Minister when that decision was made?
Hon. Mr. McDonald: I do not quite understand the question. There is a full time, term building inspection position allocated to Dawson, given the amount of building activity we expect in northern Yukon and in particular Dawson. Given the load that was put on building services last year, it will allow for proper allocation of time for the inspectors who are currently in place. Whether or not the position will continue will depend entirely upon the capital projects to be undertaken in the future in northern Yukon. If capital construction drops off, the position will be removed.
Mr. Lang: Are there any other positions being considered for transfer?
Hon. Mr. McDonald: I did indicate that the Area Superintendent for Highways Maintenance will move to Ross River or Faro, and that mechanical positions would be moving to Watson Lake and Dawson from Whitehorse.
Mr. Lang: Will that be the present incumbent, or is that position coming open and someone will apply for the position with the idea that they are going to be proceeding to Faro or Ross River or Watson Lake?
Hon. Mr. McDonald: I believe the position will be coming open and there will be a competition.
Mr. Lang: Was there any consideration of the area superintendent going to Watson Lake as opposed to Ross River/Faro?
Hon. Mr. McDonald: An analysis was done comparing the two locations. Given the capital plan for the Campbell Highway increasing significantly over the next five years, and given the increasing emphasis on mining activity along the Canol Road and the increased traffic flow, it was felt that it would be appropriate to put that person in Ross River or Faro.
Mr. Lang: Would the Minister provide us with that analysis?
Hon. Mr. McDonald: I gave you the analysis. If you want, I will write you a letter, explaining in more detail, the reasons for locating the superintendent in Ross River or Faro.
Mr. Lang: I was wondering about the analysis done by the civil service, not done by the Minister himself. I would like to see what was actually recommended to the Minister with respect to this position being shifted to one or the other locations.
Hon. Mr. McDonald: I am not going to betray everything that is advised to me by the civil service. I will not write the letter myself; I will give the indications why we have chosen Ross River/Faro over Watson Lake. We will be transferring another position to Watson Lake. The answer will be more detailed than the one I am able to give now.
Mr. Lang: What other positions are going to Watson Lake?
Hon. Mr. McDonald: We would like mechanic positions to go to both Dawson and Watson Lake.
Mr. Lang: I would like to switch back to land. The Minister indicated earlier that the composition of the Yukon Land Advisory Committee had changed. Could the Minister indicate to us how it has changed? I think it was in reference to land claims.
Hon. Mr. McDonald: In my opening remarks, I indicated that the bands would be invited to participate in a Yukon Lands Advisory Committee. That is consistent with moves of the federal government with respect to FTLAC. We indicated earlier that we were prepared to allow the bands to monitor and to comment on applications as they pass through the land advisory committee. That is what we mean by inviting the bands to participate. They will be invited to comment on applications.
Mr. Lang: What is the composition of the Yukon Land Advisory Committee at the present time. Is it just strictly the two governments that have representation on that committee, or is to be extended to other organizations?
Hon. Mr. McDonald: I do not have the composition here, but I will get it. Two Yukon departments are on the internal Yukon committee. We will be asking the bands to give an opinion, depending upon where the applications are, and to participate in an advisory capacity to the committee. I do not believe that any plans have been finalized as to what the roles or the participation will be, but it is our intention to move in that direction.
Mr. Phelps: I am sure the Minister heard the news the other day that there was an election for chief in council in Carcross. The outgoing chief made a comment that champagne bottles would probably be popping in the government buildings. Has the Minister thought of doing something like that at the time?
There has been an ongoing problem regarding land availability in Carcross, particularly the Chooutla Subdivision.
I would like to make representation to the Minister that he have his officials enter into negotiations with the new band government so that, hopefully, the impasse can be resolved. There is a need for good building lots by the band, who could put themselves into a position similar to that of Kwanlin Dun, and build some very fine houses on their share of the Chooutla Subdivision lots. There are all kinds of individuals and families in Carcross who have been trying to get building lots for some time.
I would ask the Minister, that once the champagne is all gone, that he have his officials get in touch with the new administration, on a priority basis, to try and resolve the Chooutla deadlock.
Hon. Mr. McDonald: It is no secret that ex-Chief James and I have expressed public differences in the past. I understand the political position that he is taking. Prior to the election for the chief in council, we had to have discussions with Chief James and the ex-council regarding land needs in Carcross. They had indicated a desire to seek government support for specific land needs. We indicated that there were some historic needs that the Government of Yukon had expressed, and a shortage of residential lots was one of them. We also expressed the fact that we would like to roll those discussions into one round.
Unfortunately, just as we were getting meetings together and coming to some conclusions, the band elections occurred, and I was not interested in swaying band elections one way or another through government actions. We, therefore, played a cool role for a period of time.
The government will resume discussions with the band to try to resolve the needs of the band, the Government of Yukon and the people of Carcross. I am hoping that those areas that have been stumbling blocks in the past can be resolved with the new chief.
Mr. Phelps: Mr. James apparently does not believe in band elections so if he had his way, perhaps there would not be all of this discomfort and breakdown in negotiations every two or three years when elections are held. Mind you, he is not the first who has been rather perturbed by the outcome of elections, and I am sure that he will not be the last.
I wonder if I could ask a couple of questions, while I am on my feet, about television installations for Tagish, Marsh Lake, and Carcross. The Minister has been very good about answering my questions with regard to these receiver and rebroadcast stations - one to be on Jubilee Mountain, near Tagish, where the Northwestel facility is, and the Carcross station will be moved down to where it will be accessible by motor vehicle, near the community of Carcross.
One of the reasons for interest in the new facilities, aside from the fact that the reception has been pretty terrible from the repeater station up on the mountain, is that there is an understanding that it will be possible to receive more than just CBC, that it would have the capability, at least, of receiving and transmitting CTV or the CANCOM package or whatever. I would just like to confirm with the Minister that the facilities will be like facilities in other communities, so that it will be possible to pick up other stations from satellites and rebroadcast these other stations, as well as CBC. Is that a fair understanding?
Hon. Mr. McDonald: To community groups and societies who wish to provide another television channel in the area, to date, we have allowed that to happen by allowing the community group or society to come up with the capital for the additional channel and also to pay the relevant CANCOM fees in order to provide the service. As I indicated to the Member for Porter Creek East, a communications policy, which will detail more clearly our position with respect to that matter, is coming forward within a few weeks. I will have a detailed statement to make on the matter but, generally speaking, what will be available in Carcross and Tagish will be the same as what is available elsewhere in our system, because I know how important it is for the Clerks office to have television reception in Tagish.
Mr. Phelps: I will be very pleased to pass this information along to the community clubs and the bands. There are well-established community clubs in Carcross, Tagish and Judas Creek. I am sure Judas Creek and Tagish will be interested in working together once they have the details and new policy.
Mr. McLachlan: In light of the fact that land prices are escalating toward $40,000, has the government had any thoughts of allowing a private developer - given conditions such as lot size, size of piping, size of main arteries, pavement and curbs, a general description of what the government was after, and either putting it out to tender to a private developer, or selling a large chunk of land for one dollar to make it legal - a crack at developing 116 or 120 or 200 lots themselves in a phase one, two and three scenario such as the Minister has outlined? That precludes the fact that most of the value of the lot is due to services required to develop it. It is a nonspeculation issue. Has the Lands Branch had any thoughts in that area? I do not see how we can do much worse than $35,000 or $38,000, but we might do better.
Hon. Mr. McDonald: I do not want Members to allow prices to go higher and higher the more we speak of this. I indicated the bottom range would be $25,000 and the top would be $35,000. Through the rhetoric of the debate, depending on your point of view and prospectus from which you are attacking the situation, it is quite easy to encourage the price to climb to $35,000 or $40,000 and upwards. It is easy to do that, but it is important to keep reality in tow here.
The government has never prevented land developers from developing lots. They do that in the territory. There has just been an expectation to this point that all the serious land development will be undertaken by the government. That does not have to be the case. A municipality or a private contractor can undertake land development. They can make application for a piece of raw land if they wish to develop it. There may be a cause for initiating financial incentives to encourage it when lots are tight. There has been nothing to date to prevent private developers. As a matter of fact they do, and I would encourage them to develop property. They have to abide by zoning bylaws, but there is no regulation, apart from environmental health standards, which would determine the configuration of a subdivision.
They can do those, and road access provisions to the subdivision have to be taken into account. Apart from that, there is nothing that would hinder a private contractor from doing the job themselves, apart from their own drive and resources.
Mr. McLachlan: That is gratifying to hear. The belief is often left that government and Community Services will interfere and specify a number of conditions they would want done on any land sale.
Can the Minister advise if the government monitors a number of sale agreements that have been in effect for one year and have no starting improvements made on them, the number that have been in effect for two years and have nothing done on them, as well as three, four and five years?
Hon. Mr. McDonald: Is the Member asking whether or not I can provide information on how quickly people have developed lots they have purchased?
Mr. McLachlan: Eventually, that is leading to the question. What happens when the government signs a conditional sales agreement for the land, and the individual does not do anything in two years? I realize that regulations have changed. For example, those who bought land in the Member for Riverdale Souths constituency last year at $23,500 may now see a similar sized lot on the market for $33,500. It will not take much figuring for a smart land owner in a tight land situation to flip the lots at almost a $10,000 profit. We have no regulations guarding against speculation of that nature. It has come up before that there are a number of pieces of land under agreements for sale in the territory upon which nothing has happened, and upon which we no longer have any say.
Does the government watch that situation and monitor the sale agreements that have been in effect for a while that have nothing happening on them? Some private people, as well as developers, have been complaining. There is no land available to carry on their trade during the off months. It may be one of the problems where the Minister finds himself having to rapidly develop 116 lots and wondering if that will satisfy the demand. How much land is tied up under agreements for sale that have nothing being done with them?
Hon. Mr. McDonald: The Member is quite right that there are a lot of vacant lots in Whitehorse right now. There has not been very much in the way of significant in-filling in the city in the past. To a certain extent, market forces will take care of some of that. We are hoping that will be the case this coming summer.
With respect to land sales late last year, it did occur to us that land speculation might be a problem. We indicated in the agreements for sale for the Riverdale lots that house construction must take place within a certain period of time. The house construction must take place for personal reasons, so it was not there for the speculators.
There was an attempt to encourage the speculators to stand aside and the home builders to come forward. The point that the Member for Porter Creek East was making this afternoon during Question Period is a valid point. It is ideally good to have surplus lots on the market in every community no matter what the situation is so that we can prevent speculators from creaming unreasonable profits from those people who legitimately want to build homes. That is ultimately what would be nice in every community.
There are many lots, even in the downtown area, that are not built on. I am hoping that market forces will encourage people to sell and in-filling to take place. About 90 percent of the lots that we sold last year have nothing on them. There was a feeling late in the season that some of the people who were purchasing lots were doing it for speculative purposes and not for legitimate purposes. They had no intention of building their own homes on those lots.
I would count, as having legitimate purpose, a building contractor purchasing a lot to build a house to sell. That is legitimate. Those people who simply want to purchase the lots so that they can take advantage of the market situation is illegitimate. The way we dealt with the Riverdale lots last year ought to continue until such time as we get surplus lots on the market again.
Mr. McLachlan: That sort of thing is probably one of the things that keeps a private developer from getting interested. There are 25 or 30 lots on which no building has taken place, and it cannot be sure when it will occur.
Has the department had any thoughts, if 116 lots in the Granger Subdivision go up for sale in August or September, of developing a policy that would allow those to go, in 10 block units to developers or builders who want to continue to work with their people over the winter. They would then have 12 months of gainful employment instead of eight or nine. This is another complaint that the Home Builders Association is making. They do not have access to any more than one lot at a time. They would like to have more than that and sometimes feel restrained by the conditions of sale. Yet, they can see lots not being built on in various situations. It may be a fair request, but I am wondering what the Minister has to say on that.
Hon. Mr. McDonald: I think that the idea has merit. The bottom line is that we would like - given the housing shortage, which is what we are talking about - to encourage housing and new construction to take place. We want to give the first crack to the person who wants to buy a lot and build their own home. There are, obviously, economies of scale to be had when the contractor comes in and builds a number of units. That does not prevent that contractor from cutting a deal with the people who purchase lots to build their houses, but certainly it would be made easier if they had a number of lots in place. There will also be four areas where multi-family residential apartment buildings can be built, as well, to encourage the construction of multi-units.
Depending on the take up, the suggestion that the Member made makes some sense to me, at least, and we will consider that. That is not a bad suggestion, at all.
Mr. Lang: Regarding the statement of land, I want to get back to the statement that was made earlier. The point that I was trying to make earlier today was the economy of scale. There should be some possibility that we can get the cost of our lots down if we went, for example, with a contract for 200 lots versus 116, which offers basically the same subdivision. What concerns me is that perhaps we are doing it in perhaps too small blocks, as opposed to going ahead in a much larger capacity and trying to cut per lot cost down.
One advantage that we have had up here, until now, is that the policy of the government has been that the value of the land was never considered in the selling of the lot. Subsequently, what we were paying for, as a homeowner, was the services that were provided to that piece of land: survey, electricity, water, sewer, and in some cases curb, gutter, pavement, telephone. It worked out well because our prices and values here were lower than comparable lots in other parts of Canada, in major centres. In many cases, prices here were comparable if not lower, depending upon where the lot was. Unfortunately, now we are getting a situation where the land is similar in value to land down south, whether it be in the southern mainland area, or the Edmonton or Calgary area.
My recommendation to the Minister was this: why do we not go ahead and tender out both phases? Try it this way: go ahead with your phase one, tender that, but tender, simultaneously, phase two, as well. You may get a better price if the contractor knows that he or she has a two-year period, or a two-year commitment, as far as development is concerned - or maybe start the development that much earlier, if it is possible as far as the dollars are concerned.
That is one area that I think could be looked at. The other area is that I think that we should be getting somebody to independently assess what it is that we are actually asking the contractors to do, as far as putting in these services. I am beginning to suspect that perhaps you are over engineering, and our standards might be getting too high, and that is the reason the prices are coming so high.
There has to be a reason when you start dealing with $35,000 for a lot, and not charging any value for the land. Why are these services costing that much?
Suppose the Minister goes ahead with 116 lots, and you are telling this House today it is $30,000 or $35,000 per lot? A young couple that is trying to put together the necessary financial package is going to find it very difficult when they are paying this much money for the land and have not even got to the footings yet.
We should go back to looking at the actual reasons for this cost. Otherwise, you could wind up with a subdivision that you cannot sell, because the lots are too expensive. Has the Minister had anyone go in - even a successful builder from outside - and take a look at the standards we are asking for, and maybe we can learn something and cut the costs down. This is a situation that is going to adversely affect everyone involved, except those who are already living here with a lot, land and house. Their values are going up, not down.
Hon. Mr. McDonald: I am happy to discuss this matter in this forum right now. It allows for some give and take - Question Period does not. With respect to the standards that are being set, there are a variety of needs within the city boundaries of Whitehorse. We would like to develop land that is as cheap as possible, land with minimal requirements and land with full services. In the case of the Granger Subdivision, we are talking about land with full services.
I will check the Lands Branch because, as the Member spoke, an interesting question popped into my mind with respect to the City of Whitehorses expectations with respect to a major neighbourhood. If I remember correctly, there was a request for certain lots in the area with certain services. We provide that through the construction ourselves. They ask for a certain type of lots with a certain level of services, and we provide that. We also are looking at country-residential lots coming on sale. We have 45 of those within the city boundaries for this year.
We are trying to respond, not only to the actual demand that we can anticipate we will encounter, but also to what the City of Whitehorse wants.
The reality is that the cost of constructing fully serviced lots is expensive. For some people it is a problem; it is a problem we do not like to see happen. There is a demand for various classes of lots. We are trying to meet the full rage and maintain the integrity of the city zoning plan, the citys community plan and the zoning by-laws. The Member for Faro asked what the cost would be for developing lots in other cities. I was able to check only with respect to the cost in Yellowknife. The cost there is $33,000 to $37,000 per lot, without electricity and pavement. The costs are significant there. The proposal the member made with respect to tendering Granger. phase two, is something I will broach with the department again. My initial thoughts were because tender specifications were not prepared, it would be difficult to tender anything. It is my understanding that the soil testing would not be complete. It would be difficult to ask a contractor to bid on the provision of piped water and sewer without some type of design to work from. If there is any way we can swing it more economically, I am certainly prepared to see that happen. Even at the Cadillac end, which is the fully serviced lot, the lowest cost lots are desirable. I think the government in its land development ought to encourage that to happen, and private developers ought to bring in lots as low cost as possible. If there are private developers out there, I will give them every assistance I can. There are places in Whitehorse where people have land that is adjacent to services that can be subdivided. The City of Whitehorse now has subdivision authority and can encourage private land development, depending on their zoning requirements. If there are any land developers out there, I would encourage them to seize some of the action as well.
Mr. Lang: You are going to have to have soil sampling done and you are going to have to have those basic engineering things done for a person to put a cautious bid in, or else you are just wasting your time. A person would not be able to tender unless they know what the engineering designs are. I find it surprising designs are not done. It has been known for years that this is a subdivision that is going ahead. There should be some questions put on how far ahead they are on the design phase and where we are at.
With respect to standards, why are we now paying $35,000 a lot? I cannot compare it to Yellowknife, because the terrain there is all rock, while ours is mostly a granular base. So, there are no comparisons, as far as construction technique and costs are concerned.
We seem to just accept the escalating price and not question why. We should take a hard look at what we are asking contractors to do. I have had at least one contractor say to me that, between the city and the government, the specifications are so high that it is a requirement that one comes in with those values. It would be interesting to look down south, see what their standards are, and compare and see whether or not there are some areas we are asking for the Cadillac only, when we could maybe be driving a Ford or a Chev, and having the water and sewer working just as effectively.
It may serve everyones purposes to see how we do compare, as far as what we are asking for on a technical side, which then goes into the question of economics of what we are dealing with.
Hon. Mr. McDonald: I have had a number of discussions with the department on the lot prices for Granger Subdivision. I do not see any harm in trying to draw comparisons. If there is some valuable information that can be achieved from the comparison, I am prepared to go through that exercise.
In breaking down the components, there are areas where the department has been surprised at the projected costs. The provision of electricity is one of these areas. We have figures of what the projected costs will be for electricity to be put in place by Yukon Electrical, and it is almost double what we would normally expect to see. This is even with a subdivision the size of 110 lots, all in one go.
So, there are areas where sharpening pencils are necessary. Even in the situation where the utility is a monopoly, I think there is an obligation to sharpen pencils and for the government to review the cost estimates that are being put forward by the utility.
I will certainly look at the comparisons between that which is expected in a subdivision and what is required in other jurisdictions to see if we are over designing. The initial indication is that we are not but it might be worth review. There are certain standards that have to be met in northern conditions that may be unique. We may want to keep those in mind.
One thing I will check is the extent to which the design is requested by the City of Whitehorse. They do not relish going into subdivisions a few years after the development and dealing with taxpayers over whether or not it should be paved. I am sure they commented on this in the design stage. I will check on it.
Mr. Lang: Could the Minister supply us with exactly what land is available in each community for serviced lots, country residential and rural residential? I am sure he has a breakdown. If he could sent it around I would appreciate it.
With the general breakdown as projected, is the increase largely due to electrical and TV as opposed to water and sewer? Are we seeing a major increase in the actual construction portion of the water and sewer? I am told the paving contracts coming in this year are considerably less than the projections.
Hon. Mr. McDonald: I have no complaints about the paving contracts. The City of Whitehorse may be more surprised than the Yukon government, but we have benefited as well. The indication is that the extension to the existing infrastructure in the city is one of the things contributing to the increased cost.
Apparently, the planning and design work for phase two of Granger was included in the phase one contract. They were to be done together this year, as was the road construction. What was not included were the water, sewer and hydro for phase two. The detail design is yet to be completed. The roads were in for both phases this year.
Mr. Lang: The projected cost for the increase in the value of these lots is as high as $35,000, and it is not because of the paving, but because of the installation of the electrical and TV. What are the projections for the water and sewer? I understand the City of Whitehorse advertised throughout western Canada because of the magnitude of the job, and got five or six bidders. With respect to the water and sewer, maybe one of the things that has to be approached is to ensure there are enough knowledgeable people in the business bidding. We do not have a lot of people in that business to start with. Is it the intention of the government to advertise extensively down south that these tenders are becoming available, and that they are looking for tenders? That might get the price down.
Hon. Mr. McDonald: The City of Whitehorse did more than advertise in western Canada. They held meetings with contractors in the south, asked them to bid and gave them the specifications. They were encouraged to come to the Yukon to bid. That is alleged, and that is a major contributing factor to the character of the bids that were received.
One other contributing factor was that the amount of construction in BC has dropped dramatically, and there was really nothing else to do but come to the Yukon to get what jobs were available.
The question the Member asked about contracting is more of a global government question, so I prefer to leave that matter for the Minister of Government Services to respond to. I am sure he will give Members a very clear expose of government policy on that matter.
I will have to ask the department to give me a breakdown of what are anticipated to be the costs at this stage. I do not feel comfortable talking about all the reasons why the costs are higher than we expected. The cost provision of electricity was well beyond what was anticipated, and that was after a first cut blush of the project. There is every opportunity for the Lands Branch to sit down with Yukon Electrical and to work on the details. Hopefully, for the sake of the lot purchasers, they will bring the costs down.
Mr. Lang: I do not know why the Minister feels uncomfortable. He should not. We are trying to see what we can do to reduce the cost of the lots for the ordinary working joe, and so that we can have a continuously growing community at reasonable costs. It concerns me that I have to be turned over to the Minister of Government Services, who is notorious in this House for not answering any questions. If he does, it is in such a manner that you can interpret it in four different ways. Then, a week later, you find out that it is not one of the four different ways that you were supposed to interpret it; it was his way, which was the fifth.
I am not about to plead the Fifth Amendment either.
Is it not true that, for water or sewer projects for lots, the Business Incentive Program does not apply as far as the issuing of those tenders?
Hon. Mr. McDonald: I am not aware of that. I will check with Lands Branch to get the reading on that. With respect to the general matter at hand, the Member has asked for a general policy, as well, and the spokesman for the general policy is the Minister of Government Services. He is the person who will be answering the questions the Member is asking. The Minister of Government Services, in his usual fashion, will be clear and concise in providing answers.
Mr. Lang: I noticed the Minister of Community and Transportation Services smiling as he sat down. I would like to say this for the everybody in the House, the Gallery and for the media, if they were here: I have never heard anybody who has ever been happy with the answers given by the Minister of Government Services because they have never been to our satisfaction.
Over the weekend, will the Minister verify that the Business Incentive Program or the Northern Preference Program do not apply to water and sewer jobs for the purpose of building service lots? Will he also spend some time over the weekend with his people to see what can be done with respect to encouraging a number of organizations to bid on this particular subdivision to see if we can keep the cost of lots down.
I have given three ideas that could be looked at to try to bring the cost of these particular properties down. This is a major concern, as far as the growth of the community is concerned. If you were looking at it from a selfish point of view as a person who owned property in the City of Whitehorse, it could be looked at as a windfall. Over the long term, I think it is going to be very injurious to the well-being of the City of Whitehorse if we get into the situation where it is acceptable to have $35,000 lots. It is a discouragement for people to settle here. The whole idea of the land development policy to date has been to keep the price of land and the services of land down to a minimum to encourage people to build and provide their own homes.
With those comments, I move we report progress on Bill No. 50.
Motion agreed to
Hon. Mr. Porter: I move that the Speaker do now resume the Chair.
Motion agreed to
Speaker resumes the Chair
Speaker: I will now call the House to order. May the House have the report from the Chairman of Committee of the Whole?
Mr. Webster: Committee of the Whole has considered Bill No. 50, entitled Second Appropriation Act, 1988-89, and directed me to report progress on same.
Speaker: You have heard the report from the Chairman of Committee of the Whole. Are you agreed?
Some Hon. 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 5:28 p.m.
The following Sessional Paper was tabled April 14, 1988:
Draft Regulations pursuant to Motor Transport Act, Motor Transport Licensing Regulations (McDonald)
The following Legislative Return was tabled April 14, 1988:
Traffic congestion at the Yukon Alaska Terminal, recommended improvements (Takhini Area Transportation Study) (McDonald)
Oral, Hansard, p. 132
The following Filed Document was tabled April 14, 1988:
Regulations, costs and general information related to the Public Inquiry Respecting Fuel Pricing in the Yukon (Penikett)