Whitehorse, Yukon

Tuesday, March 28, 1989 - 1:30 p.m.

Speaker: I will now call the House to order.

We will proceed at this time with Prayers.



Speaker: We will proceed at this time with the Order Paper.

Introduction of Visitors?


Mr. Devries: I would like to introduce one of my constituents from Watson Lake, Harry Holmquist.

Speaker: Are there any Returns or Documents for Tabling?


Hon. Ms. Joe: I have for tabling the annual report from the Yukon Advisory Council on Women’s Issues.

Also, I have for tabling, the second in the series from the Women’s Directorate, the “Employment Law Handbook”, which follows “How to Find A Job: An Employment Handbook for Women”.

Hon. Mr. Byblow: I have for tabling two legislative returns that respond to questions raised by the hon. Member for Hootalinqua on March 14.

Speaker: Are there any Reports of Committees?

Are there any Petitions?

Introduction of Bills?

Notices of Motion for the Production of Papers?

Notices of Motion?

Are there any Statements by Ministers?

This then brings us to the Question Period.


Question re: Hyland Forest Products joint venture

Mr. Phelps: I have a couple of questions for the Government Leader with regard to the sale or giveaway of Hyland Forest Products. I understand that the Government Leader has stated that he will bring officials from Yukon Development Corporation into this House, to answer questions from MLAs in Committee of the Whole about the losses of Hyland Forest Products and about its sale. I would like that confirmed. Is that correct?

Hon. Mr. Penikett: A week ago I indicated my willingness, in answer to another question in the House, having considered the representation made by the Leader of the Official Opposition some time ago, to have officials from the Development Corporation appear before Committee of the Whole at the appropriate occasion under the Main Estimates debate, in order that Members of this House may pursue whatever line of inquiry they wish to with those officials.

Mr. Phelps: Perhaps the Government Leader could answer when the government will be tabling the full text of the agreement relating to this sale in the House?

Hon. Mr. Penikett: As I have indicated before, the operations of the company and the information provided to this House will be consistent with both our obligations to provide public information and accountability to Members, but also to the considerations of commercial confidentiality, which are normal for a company like this, operating in a commercial environment.

Mr. Phelps: I do not understand what the Government Leader is saying. Is he saying that he is going to keep the details - the facts - about this sale hidden from the members of the public in the Yukon?

Hon. Mr. Penikett: Not at all, but as the Leader of the Opposition knows, and I believe he has conceded on previous occasions in this House, when there is a commercial arrangement among several parties, all parties to that arrangement will have to concur with all the details being made public. That is the case that will operate here.

Question re: Hyland Forest Products joint venture

Mr. Phelps: The Government Leader has been covering this up for a considerable time. He covered it up prior to the election, when the assets were dumped, and he is covering it up now. We feel that the public has a right to see the books opened, so that it can tell what has happened. What we have is a scanty memo that raises more questions than it provides answers to. I guess we should look at that document and ask a few questions to get some clarification. The document states that the total selling price, for example, was $5.7 million. I would like to know how much of that money has actually been paid in cash to the Yukon Development Corporation by any third parties - i.e. Shieldings or the Indian consortium.

Hon. Mr. Penikett: Let me first of all respond to the preamble by the Member and his oft repeated charge, one of several wild and quite irresponsible charges he has made in the last several weeks and months, concerning this matter.

The first charge is there was a cover up. Let me remind the House that there is no obligation, legally or by convention, to provide the kind of information we have already provided the House about the financial circumstances of this company, until the required reporting date. We have done that in advance of the required time. We could not provide any information until the closing of the sale. That did not happen until recently.

Thirdly, we have indicated to the House our intention to debate this matter at the earliest opportunity by notice of motion. We have also given an undertaking to bring officials before the bar of this House to answer questions that they may be able to answer to Members opposite. The fact that the Members opposite have been consistently negative and destructive about this whole matter is a message I am sure will eventually get home to the people of Watson Lake who understand that we took some risks; we took some initiative to put that plant back to work, and I believe the majority of the people in Watson Lake understand that and support that initiative no matter how difficult it was, no matter how much abuse we took from Members opposite.

Mr. Phelps: According to the Government Leader, the closing took place a couple of weeks ago. I asked him a question and I will ask it again. To date, how much cash has been received by Yukon Development Corporation as part of the selling price for this operation from Shieldings or the Indian consortium? How much cash has been paid to date?

Hon. Mr. Penikett: In the document that the Member opposite referred to in his main question this round, the information about the sale is provided. If the Member wishes to ask more detailed questions or questions that require either an answer in writing or questions about dollars and cents and dates that would require me to respond in great detail, you will have to either put that question in writing or await the appearance of the appropriate officials before the Development Corporation.

Mr. Phelps: The Government Leader wants to debate this matter tomorrow night in the darkness of night. He wants to debate it without giving us any facts, reliable or otherwise, to base the debate on. Will the Government Leader answer this simple question? How much cash, if any, has been received by YDC from any of the third parties, i.e., Shieldings or the Indian consortium?

Hon. Mr. Penikett: The Member is interested in scoring political points rather than helping either the mill in Watson Lake, the forest industry, or the people in that community, and I understand that perfectly well. He does not give a damn about the people there; he does not give a damn about the jobs; he does not give a damn about the mill, but he knows very well from the information that has already been provided that there has been $400,000 in cash and the other amounts are payable over varying periods of time, secured by debentures.

Question re: Hyland Forest Products joint venture

Mr. Phelps: All we want to do is give the taxpayers of the Yukon a chance to see how extensive the mismanagement of their investment has been under this socialist government. They have every right to know. The Government Leader seems to feel they do not have any right to know anything except vague statements as contained in this thing that was tabled.

In answer to my last questions, and it took quite a few questions to elicit even a partial answer, the Government Leader said that there was $400,000 in cash paid to the Yukon Development Corporation by somebody. I suggest to the Government Leader that the $400,000 was simply a loan to the Indian consortium and that it has not been paid in cash to YDC by anybody. Is that the situation?

Hon. Mr. Penikett: I am now going to be asked accounting questions on the floor of the House. I will take the Member’s question seriously even though I believe it has no serious intent. He bootlegs these allegations into his preamble. I am pleased to see that the allusion, the charade of constructive criticism, the new positive alternative we were going to have from the Opposition has ended and evaporated almost immediately. It is interesting to see that.

Let us put the losses of the operation into proper context. That is what the Member’s preamble was about. The operation of Hyland Forest Products put $12 million into the community. It took people off the unemployment rolls and welfare systems. It contributed to the long-term potential of the mill and the forestry sector.

The Member wants to know how much cash was received. I have already taken that precise question under notice, and he will have that question answered. The Member has made his attack, and let us hope that the people of this territory and the people of Watson Lake understand the persistent, negative and destructive attitude of the Opposition toward the whole daring initiative of the government on this score for exactly what it is.

Mr. Phelps: The dictatorship that seems to be taking place in the Yukon is getting a little worse and worse as time goes on. I am asking very simple questions that are prompted by the lack of concise information that has been given to us as guardians of the public purse. The very reason I am asking these questions is simply that the government is covering up. It is a cover up of their absolute mismanagement of taxpayers’ money. It is sad to see this kind of arrogance displayed.

Perhaps we can move on to try to get some clarification. So far I do not think we have seen that any cash has been paid. In going through this document, I am interested in the nature of the up to $2 million that Shieldings is going to be investing. Is that $2 million going to be a cash payment directly to the Yukon Development Corporation for equity in the operating company?

Hon. Mr. Penikett: I believe the Member already knows the answer to that question from the information already provided. He is playing games here and not seeking information.

Mr. Phelps: Does the Government Leader feel his voodoo economics and whitewash, as displayed in this pathetic memo, is sufficient to answer the question? I do not have any answers . . .

Speaker: Order, please. Would the Member please get to his supplementary question?

Mr. Phelps: Is this $2 million going to be a direct payment by Shieldings to Yukon Development Corporation for equity in the operating company?

Hon. Mr. Penikett: I believe the first page of the document already provided to the Member, called “Terms of Sale of Hyland Forest Products”, answers the question he has asked.

Question re: Hyland Forest Products joint venture

Mr. Phelps: I submit it does not. Could the Government Leader go on the record and tell us the answer to the question. If I am misled by the contents, I am sure most of the public in the Yukon has been misled.

Hon. Mr. Penikett: The Member wants to ask questions in great detail about the financial transaction. The dollars and cents involved - the investment by the Government of Yukon in this operation - to put this mill and town back to work is documented. The numbers about the sale of the operation have been made public in answer to the question he gave last week. If they have further detailed questions that would require me to get back to them in writing, I will take them as notice. If he wishes to pursue those questions further with officials of the corporation when they come before the House, he can.

As the Member knows, from the beginning of our ownership, the operation of this mill has been under private management. His allegation about this government’s responsibility totally ignores that fact. It ignores the fact that there is a board of directors of the Development Corporation who are mostly private citizens and who have also been involved. That does not remove the accountability from this Minister and this government, but the numbers about the sale and the numbers about the operating losses are now public.

Mr. Phelps: I am sure the Government Leader has a copy of the pathetic document he tabled in the House and is relying on it in order to avoid answering the question. I am asking the Government Leader to read out the sentence or two from the document that answers my question. I cannot find it.

Hon. Mr. Penikett: I cannot read out the sentence the Member is referring to, but I will provide the information he has asked for in written form again and in a method that I am sure will be understandable to the Member.

Mr. Phelps: I will move on to a new question.

Question re: Hyland Forest Products joint venture

Mr. Phelps: The Yukon Development Corporation is not getting any cash and has not received any cash yet. I understand it is putting up $550,000 to assist in the continuity of the operation and maintenance of the employment while the new permanent mill is being built, as well as $100,000 for startup costs. It is putting up as much as $650,000.

Is that the amount it cost the Yukon Development Corporation to get this ugly mess off its hands just prior to an election?

Hon. Mr. Penikett: The tone of the question is offensive. I do not believe that the implied accusation in the question is well founded.

Mr. Phelps: Let us try that again. Six hundred and fifty thousand dollars was put into the operation. It is all from the taxpayers of the Yukon. In the event that no money is made by this operation and it closes down, it would seem to me that all the Yukon taxpayers have are some debentures against their own assets, which they have sold in a paper transaction. Is there any commitment by Shieldings to come up with their own money? Not the liened assets, but their own money to pay anything to this government by way of purchase for the assets of Yukon Development Corporation?

Hon. Mr. Penikett: The question raised by the Member in the event x then y is of course hypothetical and totally out of order. Doing away with Question Period was always the fondest wish of the Member for Porter Creek East who never answered any questions anyway.

The YDC, as the Member knows, is contributing to the costs of temporary mill equipment to assist in the continuity of the operation and maintenance of employment while the new permanent mill is being put in place.

Remember, the jobs and the operation of the mill were the reasons why we got involved in the first place, because no one in the private sector was willing to take any initiative to put that mill and that town back to work.

Question re: Hyland Forest Products joint venture

Mr. Phelps: I will go on to a new question. This is a real sham. The people of the Yukon are told that YDC was recovering $5,700,000 from the sale of the assets. There is not a nickel coming from anybody. It is all a paper transaction, a giveaway, with $650,000 thrown in to keep things operating in the meantime.

Perhaps we could move on and talk about the new mill. Who is actually paying for the construction of the new mill?

Hon. Mr. Penikett: As the Member knows, the makeup of the shareholders of the new company are 50 percent Shieldings and 35 percent by the Indian Development Corporation, and YDC will continue to be involved to the extent of 15 percent until such time as the employees can take that share. Shieldings is making a substantial investment of new money.

Let me again take on the preamble of the Member. Previously, Members opposite have made the charge that the mill was a worthless piece of junk. The Member opposite is now alleging that we gave it away. Either it was worthless or we gave something of substance away. I wish they would get their stories straight.

Mr. Phelps: That is not a very difficult conundrum for us to face. Either way, the negligence and mismanagement of the present government speaks for itself and will not be overlooked by the taxpayers of the Yukon who are victimized by this kind of extravagant waste of money.

I am just a little curious. It sounds to me like there is going to be a new mill assembled in Vancouver or somewhere and brought in here. I suppose it can be disassembled and moved . . .

Speaker: Order please. Would the Member please get to the supplementary question?

Mr. Phelps: I would like to know, once again, who is going to own the mill once it is set up in the Yukon?

Hon. Mr. Penikett: As I understand it, the new company will own the mill.

Again I have to respond to the preamble of the Member who talks about our extravagance. We had two choices. One was to take the position we did, which was to take action. The choice of the Members opposite was to do nothing, but let the mill and the town die. We made our choices. They were tough choices. There were real costs to the choices, which I regret, but the result is we will now have a viable mill. We will have a flourishing forestry industry. We will have economic vitality in the town of Watson Lake.

Mr. Phelps: I take it that the mill will be liened to the hilt, once it arrives here, and that the real ownership will rest in the financiers who pay for it. Is that not correct?

Hon. Mr. Penikett: Again, we have what is a veiled accusation in the question, about whether it is going to be liened to the left or liened to the left or be liened to the hilt. The mill will be put into place and will be operated by the new owners of the new mill.

Question re: Hyland Forest Products joint venture

Mr. Phelps: I will move on to this document. The people of the Yukon do not have the right to know the details of this wonderful transaction that paid back $5.7 million to Yukon Development Corporation, of the millions and millions and millions of dollars lost directly and indirectly.

I am looking at page two of this marvelous piece of work. It states that of the amount to paid, $1.65 million was for the purchase of inventory, which will be paid as the lumber is sold and the log inventory used. If the log inventory turns out to be largely worthless, if a percentage of the logs cannot be used, will the $1.65 million payment be reduced accordingly?

Hon. Mr. Penikett: It is my understanding that the log inventory has been evaluated by the parties to the sale and the value on the inventory is one that is mutually agreed to by the parties to the transaction. It has been assessed by - I am not sure exactly what party, but I believe - a third party.

Mr. Phelps: Does that mean then that if a lot of that material is useless and is never used because it is not worth putting through the mill, or, if put through the mill, does not sell, that the Yukon Development Corporation is going to be paid $1.65 million in any event?

Hon. Mr. Penikett: My understanding is that the evaluation of the inventory is a professional evaluation, and that is what we expect to see returned from that inventory, which was in fact done at the time of the sale.

Mr. Phelps: In the event that the inventory is not usable and therefore not used and sold, will the government nonetheless get the full $1.65 million?

Hon. Mr. Penikett: Again the Member is posing a hypothetical question, but it is our expectation that we will recover the money indicated in the document.

Question re: Hyland Forest Products joint venture

Mr. Phelps: I take it from the previous answer that if, as we are told, the inventory in the yard is largely non-commercial, useless, rotten, and riddled with insects of various kinds, and if the logs are largely unusable, then the Yukon Development Corporation will never receive the full amount of $1.65 million for the inventory. Is that correct?

Hon. Mr. Penikett: I can think of bodies, material and otherwise, that I might describe as non-commercial, rotten and useless, but I do not believe that is an accurate description of the inventory in the yard of Hyland Forest Products. Nor do the operators of the mill.

Mr. Phelps: Whether or not he realizes the true value of the inventory the Government Leader is admitting that if it is unusable then the Yukon Development Corporation would not receive the full $1.65 million for the sale.

Is that correct?

Hon. Mr. Penikett: That was not a question. It was an argument or assertion by the Member. I did not accept the proposition on any of the previous three or four times that he put it, and I am not sure that he has changed my mind with his repeated questions.

Mr. Phelps: Perhaps we could shorten this portion of the Question Period by having the Government Leader simply table the portion of the sales contract that pertains to the inventory so we can read it and determine what it means. Will he do that?

Hon. Mr. Penikett: I will check to see what documentary information is available about the inventory and what I can provide for the Member opposite.

Question re: Hyland Forest Products joint venture

Mr. Phelps: I want to indicate just how pleased I am that the Government Leader will actually consider releasing one or more of the details of this agreement so that the public of the Yukon might have a partially clear picture of what really transpired. I want to offer my public congratulations to him for this magnanimous gesture when really it is his money, in his mind, and his right to do with it as he pleases.

On page two, it states after it says, “of this amount”, “$1.65 million was for the purchase of inventory which will be paid as the lumber is sold and the log inventory used. In addition, it is anticipated that $l.6 million of this amount will be converted to equity over the next several months.” What does that mean: $1.6 million of what amount?

Hon. Mr. Penikett: I want to congratulate the Leader of the Official Opposition first of all on his mastery of irony in this Question Period and his rare demonstration of wit, since he is being so generous with his plaudits.

The statement as I read it says exactly what it says, that $1.6 million of the amount of $1.65 million will be converted to equity over the next several months.

Mr. Phelps: I would like to thank the Government Leader for clarifying that. It will be converted to equity if $1.6 million of inventory is capable of being sold and is sold. Is that what he is saying?

Hon. Mr. Penikett: I believe that to be the case.

Question re: Hyland Forest Products joint venture

Mr. Phelps: On page two it states that in addition Shieldings has arranged debt financing in order to pay for the balance of the new mill construction costs and start up costs. I take it this is in addition to the government doing a paper transaction and receiving nothing from anybody for the assets. What is meant by the balance of the new mill construction costs? Where is the other money coming from for the new mill?

Hon. Mr. Penikett: Presumably, the other partners to the operation, that is, Shieldings, in a transaction I am sure the Leader of the Official Opposition will concede is private, is arranging its own financing for its own participation in this venture.

Question re: Hyland Forest Products joint venture

Mr. Nordling: I have a question that does not deal with the agreement just signed with the new company. I would like to ask the Government Leader about the losses incurred by the Hyland Forest Products division to date.

The Government Leader, the Minister responsible for the Yukon Development Corporation and Yukon’s Finance Minister for the past four years, said in his press release on March 16 that the investment and the losses in the case of Hyland Forest Products was a price worth paying.

What price did Yukoners pay through the investment and losses to date?

Hon. Mr. Penikett: As the Member well knows, the estimated losses are interim numbers because we do not have the final numbers until we have audited financial statements. Over the two years of the operation, they were in the order of $6 million.

Mr. Nordling: We are not talking about the Yukon Development Corporation as a whole. We are talking about the Hyland Forest Products division. There must have been detailed financial statements prepared for that operation in order to close the sale on February 21. The sale was concluded on February 21, which is over one month ago. If there are not any documents available now . . .

Speaker: Order, please. Would the Member please get to the supplementary question?

Mr. Nordling: Yes, Mr. Speaker. When will the specific numbers and documents be available?

Hon. Mr. Penikett: I think the Member is confusing the fact that we have a sale of assets here. The company that purchased those assets was not purchasing the losses. The financial statements of Hyland Forest Products and the Development Corporation, generally, will be made public, according to the requirements of law once they have been properly audited. They have not been audited yet, and they will not be audited until after the year end at the end of this month.

We have provided an interim financial statement, which is the best estimate that the corporation’s officials can now provide on the operations of Hyland Forest Products. The other operation of the Development Corporation - Yukon Energy Corporation - is a highly profitable concern. Those numbers and the facts about its operation, to the extent that they are now public, will be the subject of public review and discussion before the Public Utilities Board.

Mr. Nordling: The Government Leader continues to hide behind these legal requirements and obligations. It is a sham. He does not have to do that. Right now, in this session, this government has the opportunity to be honest and open and provide complete financial statements of Hyland Forest Products. So far, the government does not qualify for that title.

Will the government take this opportunity to open the books so all Yukoners will see what happened in Watson Lake with Hyland Forest Products, in detail?

Hon. Mr. Penikett: Again, the Members opposite are playing political games and making their pretentious little political speeches. I understand it is alleged that the Member opposite is a lawyer, and he will know that the year end of this particular corporation is March 31. The financial statements cannot be provided until there is an audited financial statement. That cannot be done until the year end is completed.

Once the year end is complete and those statements have been audited, they will be made public according to the requirements of an act passed by this Legislature.

Mr. Nordling: The Government Leader is so full of baloney that he is bursting at the seams. Even a screen writer should know - or a poet or a philosopher, or whatever the Government Leader claims to be - that Hyland Forest Products Division is gone now. It does not exist. He cannot hide under the cover of private, commercial transactions. There are no big secrets that require protection. I would like to know if the Government Leader will take this opportunity, for a change, to be honest, to be open and to reveal to Yukoners and the public the complete and specific financial statements of the Hyland Forest Products division.

Hon. Mr. Penikett: Again, another little political speech by the Member opposite, not a very good one, but an effort from the straw man for Porter Creek West, who has his diploma but does not seem to know much about what is going on. He states that Hyland Forest Products does not exist. Hyland Forest Products exists. It exists in Watson Lake. It is a mill that has new owners, it is a mill that I believe has a great future, it is a mill that will continue to provide jobs for the people of that community, it is a mill I am proud to say this government put back on its feet, with the support of people from Watson Lake, but not of anybody in the Conservative Party here, under constant criticism, constant attack, constant negativity of us taking the risk to save a community, to put a community back on its feet. And we did it on the basis of the best advice we could get from the private sector. We did it with private management and we did it with the advice and assistance of a knowledgeable group of Yukon citizens on the board of directors of the Yukon Development Corporation.

I am not happy about the losses of Hyland Forest Products. Nobody could be. The losses are a matter of public record. We have already stated them. I am telling you I am not ashamed at all, that notwithstanding all the abuse, all the negativity, all the naysaying, all the destructiveness of the Members opposite, about the initiative we took to put people of Watson Lake back to work, that mill back to work, that mill back on its feet, and gave the forestry sector in this territory a chance, a prospect, some future, some potential for growth. All the naysaying, all the negativity from Members ...

Speaker:  Would the Member please conclude his answer.

Mr. Nordling: We are very pleased that the people in Watson Lake have benefited from the reopening of the sawmill there. The Government Leader has a new four-year mandate. He has just been re-elected. I would like to ask him why he is refusing to tell Yukoners how he is spending their tax dollars.

Hon. Mr. Penikett: We are refusing nothing at all. The mill was sold for a price that has been made public. The mill during its two years of operations lost an amount of money, which is now public knowledge.

Unfortunately, the Members opposite have not said one word about the jobs. They have not said one word about the $12 million that has been injected into the community of Watson Lake for the last two years. They have not said anything about the fact that that mill is now on its feet and going to grow. Nor have they said anything about their confidence and their faith in the forestry sector and the people of that community. They have been consistently negative, consistently destructive and they have made no positive contribution to the discussion of this item at all.

Their position was do nothing. We did something. When you do something sometimes you make mistakes, sometimes you take risks, sometimes it costs money. I am not afraid of that, I am not ashamed of that.

Mr. Nordling: I would like to ask the Government Leader where the money is coming from to cover the losses of the Hyland Forest Products Division to date?

Hon. Mr. Penikett: I believe the Member knows that it is coming from the operations of the Yukon Development Corporation that was provided money by this government initially to get involved in the Watson Lake venture, according to previous debates that happened in this House that I believe he was in attendance for.

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


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

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

Motion agreed to

Speaker leaves the Chair


Chairman: I now call Committee of the Whole to order. At this time I will declare a recess.


Bill No. 3: Third Appropriation Act, 1988-89 - continued

Economic Development: Mines and Small Business

Hon. Mr. McDonald: As Members can see clearly there is a net decrease in the vote requested. The departmental equipment under Administration is for mineral display cases.

On Capital Expenditures

On Departmental Equipment

Departmental Equipment in the amount of $10,000 agreed to

On Energy Conservation Fund

Hon. Mr. McDonald: The $53,000 is required for the Saving Energy Action Loan Program. Thirty-five thousand dollars has been dedicated to a comprehensive program evaluation of the SEAL Program and, because of the full uptake of this particular program and travel to outside communities for site inspections increased, the amount for funding has been increased to the balanced amount.

Mr. Phillips: What type of accounting procedures are in place to recover the money paid back? How are we doing with the recovery? Are people paying back their loans and paying them on time?

Hon. Mr. McDonald:  I will check more thoroughly with the department, but my understanding is that there is nothing perceived to be out of the ordinary with respect to the recovery of loans made under the SEAL program. The matter has been an item for discussion with respect to the recovery of loans generally, and the SEAL program was never cited to be a problem area. I will have the matter checked for the Member.

Mr. Phillips: I asked because I know several people who have taken part in this program. The program has grown significantly, and I think it is a good program that has worked very well. Some of the people have expressed concerns to me that they are not sure how much they should pay or when they should pay. What program does the government have in place for recovering the funds so we do not get too far in arrears?

Hon. Mr. McDonald: My understanding is that one of the reasons for the program evaluation for this year was to clear up such items as the Member mentioned with respect to the recovery of loans. There are a number of other things the evaluation is looking at, for example: the impact of the program on clients’ energy costs as a follow-up measure to determine the actual effectiveness of the program in real energy saving terms; how far the program has penetrated into various communities throughout the Yukon; whether or not there are certain groups that are being either left out or not attended to as they should be; and whether or not the program is achieving the goals that were established in the initial stages.

One element is that of cost recovery. There is every intention to pursue the loan recovery as per the program guidelines. That is expected. If there are any identifiable problems that the department knows about, I will communicate them to the Member. If the program evaluation turns up other areas that are worthy of review and correction, that will be another vehicle with which to pursue an analysis of this program.

Mr. Phillips: When will the evaluation be complete? Would the Minister make that available to all Members of the House?

Hon. Mr. McDonald: I understand the timing will be mid to late April for a final draft version of the evaluation. At this point, I do not see any problem with making it public.

Energy Conservation Fund in the amount of $53,000 agreed to

On Internal Energy Management

Hon. Mr. McDonald: The majority of these funds - $160,000, to be exact - have been transferred from the Department of Government Services to undertake periodic and regular reviews of the energy consumption of various public buildings. Given the expertise that is housed within this section of this department, that research is to be done here in Economic Development rather than in Government Services.

The balance of the funding that is required here is a joint study with the Yukon Homebuilders Association to do an indoor air quality study for $21,000.

Mr. Nordling: Perhaps the Minister could tell us a little more about the $160,000 transferred to Government Services. I recall discussing this line item before and it was such a small amount, because the other departments paid back the work done by the Department of Economic Development. I wonder why the $160,000 is not in the budget of Government Services?

Hon. Mr. McDonald: As I understand it, the reason for the expenditure being located here, rather than in Government Services, was largely that it was felt that, given the small size of the government, the government would want to house its expertise in energy analysis in one branch of one department, rather than try to split the responsibilities between a number of departments - in this case, Energy Branch, Energy and Mines, and Government Services’s Public Works. In many cases as well, the projects to be undertaken involved more than just a narrow focus on a public building. Quite often the area to be studied would include other buildings in an area. One I am familiar with is the Village of Mayo’s district heating system, which does involve public buildings but also involves municipal buildings, other governments’ buildings, plus other buildings in the area that may be privately owned. So, in order to achieve the maximum effectiveness for this expenditure, given that there is already considerable expertise housed in Economic Development, they were transferred here instead of having them remain in Public Works.

Mr. Nordling: I have no problem with the expertise being housed in Economic Development. I just wondered if it was a change in policy not to charge the department - in this instance Government Services - for the use of that expertise. So what I am asking is, have we changed the policy of what has been done in the past, with respect to charging for the expertise that is housed in Economic Development?

Hon. Mr. McDonald: I am not familiar with whether Government Services - I will have the matter checked - in fact charged back to the user of a particular public building the cost of any energy audit, study or research undertaken by the Department of Government Services, or whether they, in their own right, had exercised a charge-back system to client departments that were using public buildings. In this particular case there is no charge-back contemplated from any users for this expenditure, with the exception that there may be in the future, if there are joint studies done with other governments. If there is any joint work done, then any funding we might advance to another government may well be charged back to another government agency or another government’s agency. This is meant to be an expenditure without recovery, as I understand it.

Chair: Does $181,000 clear?

Internal Energy Management in the amount of $181,000 agreed to

On Yukon Energy Alternatives

Hon. Mr. McDonald: As I understand it, the Yukon Energy Alternatives Program, which was primarily designed to undertake feasibility studies and to provide loan funding, has faced an obvious decrease in uptake as there was less desire for feasibility studies and more desire to implement the results of feasibility studies already undertaken. Basically, direct expenditures under this program decreased because feasibility studies would be direct expenditures. Loan activity would increase, but is recoverable. That is primarily the reason for this decrease.

Mr. Nordling: Could the Minister explain this, because it does not look consistent. I am sure there is a rational explanation. Under the capital recoveries, Yukon energy alternatives, we voted to date $300,000 and it drops  $10,000. In the expenditures it is $450,000 and it is down $90,000. So what we have got under the revised vote is $290,000 recovered of $360,000 instead of $300,000 of $450,000 and those fractions are not consistent. I would have thought the capital recoveries would not have gone down by only $10,000 compared to the $90,000 in the expenditures.

Hon. Mr. McDonald: I may stand to be corrected because my knowledge of the details of the program is not perfect. That will soon change, of course. For the present time, as I understand it, there is a combination of things. The funding of direct expenditures for feasibility studies is down. The element of the program that is loan funding is relatively stable from what was anticipated, or a little bit up. Certainly, the expenditures for feasibility studies is definitely the reason for the decrease in the amount voted under the Supplementary.

Yukon Energy Alternatives in the amount of a recovery of $90,000 agreed to

On Exploration Incentives

Hon. Mr. McDonald: The expenditure here is primarily an increase in use in this particular program. It is a very popular one. The increase is to the tune of about $327,000. It was perceived to be a very worthwhile investment by the government in the area of mineral exploration.

At the same time, like the program we mentioned, the energy conservation fund, there is a program evaluation being undertaken for the balance of the funding this year to determine the effectiveness of the program and the targeting.

Mr. Nordling: Does the Minister expect this to be even more popular in the future, or does the Minister see it as an extraordinary year that we are $400,000 over subscribed?

Hon. Mr. McDonald: As I understand it, the potential uptake for this program would be substantially higher than the money voted. Even if there is an increase in exploration activity next year, or even a slight decrease, we could still expend to the limit of the budget, because it has been fairly popular. All I can say at this point is that the applications being received and approved have shown a steady increase since the program’s conception. This year, for example, we project approving 39 applications, whereas last year we had an actual uptake of about 30, so it is increasing. It also has a good deal to do with federal tax policy and that is an imponderable at this point until such time as the federal budget comes down. That will certainly affect exploration activity in the uptake of this program.

Mr. Nordling: That is my concern. We will get into it, I am sure, more with the Main Estimates for 1989-90. The minister says that the program has showed a steady increase since inception and we are up to almost $1.4 million in 1988-89, yet the 1989-90 budget is for only $1 million. I wonder if the Minister foresees any change or any limits put on this program for the next year?

Hon. Mr. McDonald: For the current year, we have budgeted in our Main Estimates $1 million and we did our best to try to find additional fundings where savings could be found in order to accommodate this program. There is a limit to what the government, obviously, can do. As much as it wants to encourage exploration activity, there is a limit. That limit has been at least expressed in the figure of $1 million both for the current year and for next year. If circumstances warrant a change then, I might be seeking a supplementary next year. It is at this point impossible to say, but we feel that the $1 million target level is an appropriate target to shoot for and clearly would not have anywhere near the impact of a federal taxation measure that would encourage much more exploration activity. This does help a certain type of prospector and we feel that it is, for that reason, worthwhile to pursue. As I said before, we could clearly expend more money but we feel that the $1 million is what we can afford at the present time.

Exploration Incentives in the amount of $387,000 agreed to

On Economic Development Agreement

Hon. Mr. McDonald: This is largely due to the uptake in the Small Business Incentives subagreement which had a lesser uptake because it has a fairly narrow focus and was restricted primarily to manufacturing and processing industries.

As I understand it now, there are efforts to try to expand the eligible activities for the remainder of the fiscal year and to make it a more relevant private sector activity than is being undertaken currently in the Yukon. There was a lesser uptake than was anticipated.

Mr. Nordling: I accept the lesser uptake than anticipated. In capital recoveries in the Economic Development Agreement, the capital recoveries are also down, but are down even more: $741,000. It appears to be an inconsistency. Can it be explained?

Hon. Mr. McDonald: I am sure it can be explained, but I cannot explain it. If the Member will give me a few moments, I will see what I can do to provide that explanation.

If the Members will give us a few minutes, we can come back to it. If we can deal with it at a later time, I can provide a more thorough explanation. I do not have any reason for the discrepancy between the recovery and the supplementary reduction for this line item.

Mr. Nordling: I am prepared to clear it as it is on the undertaking that the Minister will give us a note that explains the two figures.

Economic Development Agreement in the amount of a recovery of $649,000 agreed to

Hon. Mr. McDonald: I will undertake to provide a written explanation to the Member before the Main Estimates.


Hon. Mr. McDonald: The funding of $42,000 for NOGAP was an expenditure that was made without the presence of a signed agreement with the federal government for the Northern Gas Action Plan, largely because there were some projects underway that we felt were important to maintain. We expect there will ultimately be a recovery, but we do not have any guarantees with respect to that matter at this point. We felt the project was timely and worth pursuing, so we chose to continue to fund a NOGAP coordinator position while those projects were being finalized.

NOGAP in the amount of $42,000 agreed to

On Loan Assistance Plan

Hon. Mr. McDonald: The reduction here is largely attributable to two things. First of all, the use of loan guarantees allows the government to satisfy the financial needs of a particular transaction sponsored by a client, but it does not involve the expenditure of funds, as long as there is no default, so we can manage to make a transaction work without actually expending the funds, so there is a lesser uptake in this item than was anticipated. There were $395,000 in guarantees this year.

The other item that became more obvious during the course of the year was that private sector businesses were in a better financial state than was anticipated and, therefore, they were able to obtain their financial requirements through conventional lender sources to a greater extent.

There was a lesser uptake due to less activity this year than was anticipated through the Main Estimates.

Mr. Nordling: I am sure the Minister could anticipate this question. I am glad to hear the businesses were in better financial shape and, therefore, there was less uptake than before. From my reading of the budget numbers, the Loan Assistance Plan was voted for $2,700,000 and we budgeted to recover $2,700,000. Now we are voting a Supplementary to lower the expenditure of $304,000 and to lower the recovery by $500,000. Does that mean we have businesses in default of their loans of $196,000 for the year?

Hon. Mr. McDonald: To my knowledge, that is nothing out of the ordinary. What I am aware of is that under this program there is $196,000 that is attributable to administrative costs. They are not recoverable.

Mr. Nordling: Why do we not budget $200,000 less in recoveries and expenditures to account for that? Why would we budget exactly the same under recoveries as expenses?

Hon. Mr. McDonald: That is a good question. I am not sure what the rationale was for budgeting the exact amount other than there may have been an expectation that, due to the payback provisions of various loan agreements in previous years, they expected a higher amount in this particular fiscal year than they had actually loaned out for this particular year. That is the only plausible excuse. Another plausible excuse would be that it is a mistake. I will certainly undertake to find that out for the Member as well.

Mr. Nordling: I am prepared to clear it on the undertaking that the Minister will explain that.

Loan Assistance Plan in the amount of a recovery of $304,000 agreed to

On Renewable Resources/Commercial Development

Hon. Mr. McDonald: In the past year the Fur Harvest Enhancement Program was introduced, but the capital grant component of the program was not operational until October in the new year. That reduced planned expenditures under the program.

As I understand it, that is the sole reason for the $60,000 reduction.

Renewable Resources/Commercial Development in the amount of a recovery of $60,000 agreed to

On Venture Capital

Hon. Mr. McDonald: There are a number of elements of this program that have made it difficult for businesses to pursue funding. Those problems are to be rectified through the introduction of the business development fund, which will provide for greater flexibility. In any case, the actual expenditures are expected to be only $345,000 this year rather than the full $500,000 that was anticipated.

Mr. Phillips: I would like some clarification from the Minister. During the past three or four weeks, I have had several people call me who are interested in starting a small business or purchasing a small business, and I have advised them to go and see the Department of Economic Development in the small business area and look at the programs that are available. As late as this morning, an individual called me and told me that he was told that until the budget is passed there is no funding available. Now, here we are turning all this money back in this department. Is there money available for these programs now? What is the government doing? Why are we turning it back and telling individuals that we have to wait until the budget is passed before we can look at their proposals?

Hon. Mr. McDonald: It is not my understanding that proposals cannot be entertained until the budget is passed. In fact, my understanding is quite the contrary. Proposals can be entertained. There is the expectation that programs that are currently operated by the government will be maintained. The business development fund will be coming into affect in April and certainly that will make it easier through the one-window expenditure approach for individuals to have access to loan funding. If the Member is having a problem with a constituent who feels that in some way he is being held up because of the necessary passage of the Estimates, then it is my understanding, as we agreed in this Legislature, that funds would be released for programs that were well known to this Legislature through interim supply. In any case, the necessary up-front work could be done in order to expedite the passage of any particular application. It could still be done in the interim.

Mr. Brewster: I would also like to question the Minister. Two weeks ago, I phoned over and asked to get applications for loans and grants to take north up the highway. They are still not on my desk. I guess they can blame the post office, but this is about the third time this has happened. Are these applications so precious that they cannot be let out of that office? Do they have to come two or three hundred miles to town to get this information?

Hon. Mr. McDonald: I do not know the reason why there is a holdup. I will undertake to ensure that the necessary applications are forwarded to the Member myself.

Mr. Phillips: I did advise the constituent this morning that there should be appropriate funding there for the department that they could at least entertain a proposal now and that he should proceed with that proposal immediately, and I believe that is what he is going to do. I hope that was sound advice.

Hon. Mr. McDonald: Because I concur with it, I think it is sound advice.

Venture Capital in the amount of a recovery of $155,000 agreed to

On Opportunity Identification

Hon. Mr. McDonald: The request for $150,000 was due to an increased demand for feasibility and demonstration projects under the terms of this particular program. Because the private sector has shown increasing health, there is now more interest in new opportunities and more of an aggressive attitude by businesses and by Indian bands and others to pursue funding under this program.

Opportunity Identification in the amount of $150,000 agreed to

Capital Expenditures in the amount of a recovery of $435,000 agreed to

Chair: Are there any questions on Capital Recoveries?

Mr. Nordling: I think that we have covered just about all of them. The only question I have is on the internal energy management. We budgeted $12,000 to recover and are not going to recover anything. I would just like the Minister to provide a brief explanation as to whether or not there is a change in policy with respect to the internal energy management. We have discussed it in regard to it going from $30,000 to $211,000. I would like some indication from the Minister if it is a change in policy or a one-time big expense. I think in the 1989-90 Estimates we are budgeting in the area of $200,000 for internal energy management. We have not done that in the past.

Hon. Mr. McDonald: I will undertake to provide the information the Member requests.

Chair: We will now go to the Department of Education. Is there any general debate?

On Department of Education

Hon. Mr. McDonald: The budget covers both O&M and Capital expenditures, so I will begin by outlining some of the O&M expenditures of the Budget.

The finance and administration branch of the department is requesting an additional $93,000. Of this amount, $77,100 is for additional school busing to accommodate the increased enrollment and ridership and the balance is for additional school custodial help and a personnel clerk for six months.

The public schools branch requires a number of new allocations. The greatest expenditure, a total of $973,700, is required to cover the salaries of additional teachers and teacher aides hired from September 1988 to meet the increased student enrollments and the requirements under the Special Needs Program. Another $5,000 approximately is required to fund an additional Native Language Program instructor. The public schools branch provided $16,000 to the Educational Council and to school committees to review and report on the Education Act position papers.

An additional $37,000 is required to cover the increased costs for in-service training, a student summer program and appeal committee costs associated with the implementation of the new special education policy.

The public schools branch has allocated $73,000 additional funds to the Child Development Centre so they can provide necessary services for several additional public school children.

A further $77,000 is required to cover the costs of increased service requirements for school computers and support for the FH Collins basketball team to go to Alaska, the rental of the Takhini Recreational Centre for additional classroom space and the increased telephone expenditure.

That brings a total O&M request for public schools to $1,830,000.

The advanced education branch is requesting a total of $974,000 in supplementary funds. From this amount, $277,500 is requested for Yukon College cafeteria expenses, which should be offset by recoveries. One hundred and eighty-eight thousand dollars is requested for literacy training, which will be fully recoverable from the federal government.

There are a number of items associated with the operation of the new college. The opening ceremonies of the new college cost $51,000. The cost for training, honoraria and travel for the board of governors for the current year is estimated to be $170,000.

The implementation of the new Northern Studies Program required an additional $291,000 for program development. The college bookstore required a further $75,000 to provide program materials for the increased number of students. That would be, of course, in the main, recoverable.

Finally, the advanced education branch has been allocated $15,000 in supplementary funds for casual assistance to help out with office overload situations.

This branch under spent the budget allocated to one of its training programs by $59,000, due to the under utilization of the program by other government departments.

Libraries and archives branch showed a $27,000 expenditure due to a secondment of a libraries and archives branch person to Ottawa. This amount was and is 100 percent recoverable.

On the capital side, due to delays in the design of the Yukon arts centre, $330,000 of the funds allocated to the centre have been transferred to the construction of Yukon College. In the public schools branch a number of capital projects that were delayed last year required funds to be reassigned in this budget year for budget continuation. Robert Service school in Dawson has been allocated $1,684,000 in the budget to complete the construction of the new components of the school.

Mrs. Firth: Could we go through those line by line, as opposed to taking notes? What the Minister is essentially doing is giving a rationale for all of the over expenditures and under expenditures. It is quite easy to follow it through the Operation and Maintenance budget, but perhaps we could wait for the detailed explanation until we go through the Capital line by line, if the Minister agrees.

Hon. Mr. McDonald: I do not have any problem with that.

Chair: We will proceed line by line. Is there further general debate?

Mrs. Firth: If I may, I think that we are prepared to proceed on specific questions to the operation and maintenance information that the Minister has provided. So, as opposed to any general debate, we are prepared to proceed directly to line by line in the Operation and Maintenance.

Chair: Operation and Maintenance expenditures, line by line.

On Operation and Maintenance Expenditures

On Finance and Administration

Mr. Devries: Will the Minister be a little more specific on where the busing is taking place?

Hon. Mr. McDonald: As I understand it, the busing is taking place primarily in the Whitehorse area due to an increase in riders, under the busing policy and busing regulations. The exact bus routes I cannot identify at this moment but I could certainly secure that information.

Finance and Administration in the amount of $93,000 agreed to

On Public Schools

Mr. Devries: We would like the Minister to be more specific as to where the teachers have gone.

Hon. Mr. McDonald: The location of all the teachers in all the school system was established in September of 1988, with the exception of an additional teacher to Faro last fall. The allocation was set last September. If the Member wishes, I can certainly provide what is traditionally passed out from time to time, that is a student enrollment figure for a given month, plus the teachers allocated to a given school.

Mrs. Firth: The Minister said that $973,000 was identified for extra teachers. When we were previously in the House the Minister said there were to be 12 new teachers. Could he tell us where those 12 new teachers went after the teaching complement was made up for that year? These were for after September of 1988.

Hon. Mr. McDonald: No, the teachers did not go someplace after September of 1988. We were given Management Board approval to hire up to 12 teachers depending on the enrollment projections prior to September. The staffing was undertaken at the beginning of September in the traditional way with the addition of 12 teachers, based on the best guess scenarios that the public school system could produce. The majority of the teachers went to Whitehorse, I believe. I do not have the exact notes about where individual teachers went because they were rolled into the total and then allocated as per the staffing entitlement formula. I have the staff and number of students in every school and can certainly provide that information if you want.

Mrs. Firth: Perhaps the Minister can provide that for us when we do the Main Estimates debates on the 1989-90 Operation and Maintenance Budget. I understood from the Minister’s previous comments that it was for an additional 12 teachers, but I understand now that at the beginning of the school year they were given Management Board approval for 12 more teachers for the whole Yukon. If he can give us the break down then we can use it as a working document for the new Budget debate.

On the Special Needs Program there was an announcement made sometime before the election was called about the program having $580,000 identified for it. There was a news release issued. Can the Minister tell us if the $580,000 is part of this Supplementary Estimate? Is it a portion of it? Can he tell us what the funding went toward?

Hon. Mr. McDonald: The funding for this year is not the full amount. It is for a portion of the year and contained almost exclusively the expenditures for two things: the funding to implement the development policy for extra teacher aides required to meet the commitments under the policy - that was $256,500; the expenses to establish and implement the policy, manuals et cetera was $37,000. The balance of the funding for a full year would be the full year’s cost for teacher aides as well as the specialty people who are required to supplement the services provided under the program to provide the assessments and the work required to carry out the program once the assessment has been done. For example, specialists in hearing impairment have not been hired. They would come out as part of the full year’s program costs. Certainly the only people who were hired under this program to this point were the extra teachers aides required to support the guidelines. If I am wrong I will correct myself tomorrow.

Mrs. Firth: There was a concern expressed by people who had some interest in this program that the money that had been spent was for existing programs and that nothing new had been established or created. Is it a fact that the money was spent on existing situations and that no new dollars were really identified for any of the new policy implementation the Minister talks about having been developed?

Hon. Mr. McDonald: No, the situation is contrary. The expenditures being made enhance what the Department of Education is doing with respect to special education, but they also incorporate new services that were and are anticipated to be provided for children with special needs. It also enhances the service provided to individual students who require assistance, such as the teacher aides. The introduction to have a policy is a new event in the Yukon, and the resources to back up the policy are at least 50 percent higher than the funding that was already dedicated to special education requirements. I will check the exact percentage.

Mrs. Firth: When will the rest of the money be coming? Is the rest of the $580,000 identified in the new O&M Budget? If so, why was the announcement made that $580,000 was going to be spent if only $256,500 was spent?

Hon. Mr. McDonald: My understanding was that the press release did identify the annual costs of implementing the program. I used the word “annualized costs” to the press and was later told that “annualized” was not a word. The work that was to be immediately done was to hire the special aides, because that was relatively simple in the general scheme of things. The full year’s cost was meant to fund all the elements of the program that we had identified as part of the support for the policy. It was felt important to give the annual costs and, also, indicate how far the government was prepared to go to support the policy on an ongoing basis, and not give people the impression that we are going to stop with expenditures on teacher aides. As a government, we are committed to going further than that and providing the language pathologist and the teacher for the hearing impaired, et cetera, who were considered to be essential elements of the policy support.

Mr. Devries: Which area received the extra instructor for the Native Language Program?

Hon. Mr. McDonald: Is the Member asking where this individual will go? I do not know. I will ask and get back to the Member.

Mrs. Firth: The Minister made some comments about the Education Council and school committees getting some funding to do some work on the Education Act. When are we going to have the Education Act in the Legislature?

Hon. Mr. McDonald: I would like to see the Education Act in the fall sitting as probably the main piece of legislation. As the Members know,  a number of things have transpired to prevent the introduction of the legislation in this spring session. As unfortunate as that is, it is nevertheless the reality for me, but certainly I do not see, at this point, any reason why an Education Act cannot be brought before the Legislature in the fall.

Mrs. Firth: Just to refresh people’s memories, I believe we were supposed to have it in the spring of 1988 in the Legislature and all the printed material regarding the Education Act stated that, so we are going to be a year and a half behind.

Mrs. Firth: On the $73,000 for the Child Development Centre, the Department of Education still continues to pay for the operating and maintenance costs of the Child Development Centre. The Department of Health and Human Resources pays for contribution cost to the Child Development Centre. Is this portion additional because of the proposed move to the college? Perhaps the Minister could just tell us what that is for?

Hon. Mr. McDonald: My understanding is that there is increased use of the Child Development Centre due to the increased number of students in the school system of school age who make use of the Child Development Centre, beyond what was anticipated for this year. That is not an absolutely mandatory expenditure to make but it is considered to be generally speaking one that is uncontrollable, depending very much on the number of children with special needs who enter the school system.

The Department of Education has cost shared some of the operations of the Child Development Centre, but the Department of Education also pays, as I understand it, the Child Development Centre for children who are referred through the school system - not preschool, but those who are actually in the school system and who use the services of the centre.

Mrs. Firth: I take it then that $73,000 was additional referrals of school children within the system to the Child Development Centre and would really be part of the total cost of children requiring special needs.

I wonder if the Minister could give us any idea of the total monies he expects the department to be spending? Are we anticipating an increased use of the Child Development Centre by the public school system, and could he give us a rough idea of what the costs are expected to be just for special needs programs, in general? If he does not have that information at his finger tips, if he could  provide it during the budget debates we would appreciate it.

Hon. Mr. McDonald: I cannot speak conclusively for Health and Human Resources. I understand they provide a grant of $182,000 toward the centre. My understanding is that this year for Education there was $100,000 from Education and that was broken down the following way: $22,000 for two special aides; $31,000 for the teacher aide for the kindergarten referral; a $20,000 grant; $21,000 for school materials and $6,900 for coordinators’ materials, for a total of $100,000.

Public Schools in the amount of $1,183,000 agreed to

On Advanced Education and Manpower

Mrs. Firth: Could the Minister tell us what the $277,000 in the cafeteria at Yukon College was for?

Hon. Mr. McDonald: The cafeteria is the operation of the food services unit. I understand that it is, in the main, offset of recovery by sale of meals to students and staff.

Mrs. Firth: I would like to ask a question about the recoveries. I expect that the government is not anticipating recovering the total cost or the food services being profitable in any way. In fact, I guess it is going to be subsidized by the looks of the figures. Is that correct?

Hon. Mr. McDonald: To be perfectly precise, the expenditures that are made to provide food to the public is, in the main, to be recovered. There are costs associated with the cafeteria that are costs borne by the college to support college programming in the food services area. Those would not be recoverable. Some of those services that are provided would be borne by the college as core services, and those services would be used, primarily in the personnel area, to help with the food preparation. I cannot remember the exact formula. The costs of materials and a certain portion of the costs of the food served to students and staff is supposed to be recoverable. The price list is set by an Order in Council. That was changed a couple of years ago, and increased.

Mrs. Firth: What the Minister is really saying is that the cost of the meals to the students are being subsidized but if the general public comes in and just wants to eat at the cafeteria in the college that they pay a different rate or a different standard or a different amount.

Hon. Mr. McDonald: One of the changes that was made to the rate schedule was that everybody be charged the same rate. Perhaps I can give the Member a clearer sense of what the portion that is not recovered is dedicated to and that would help explain the matter.

Mrs. Firth: Perhaps the Minister could bring back that information and he could just give us the schedule of rates and I think that would help answer the questions.

Mrs. Firth:  The Minister mentioned the $291,000 for the Northern Studies Program. Again, that was an announcement made prior to the election through a news release. There was $600,000 identified in the news release for this program. Can the Minister tell us what this $291,000 was for and is the other half going to be coming in the next Budget? What will that be for?

Hon. Mr. McDonald: The Northern Studies Program was meant to be implemented over the course of three full years. The implementation and hiring of personnel was to take place for the northern justice and northern studies elements in the first year. The second year was to be dedicated to northern science and the third year was to be dedicated toward northern outdoor environmental studies. Those were the four main program elements. The full annual costs of the Northern Studies Program would be borne only when all four elements of the program come into being, but the first two were to be undertaken this year in program development.

Mrs. Firth: Has that happened, and is the full cost of the program going to be $600,000 on an annual basis? Is that what the government is identifying?

Hon. Mr. McDonald: I believe so. It is in that range. I am a little bit out in terms of scheduling. Apparently the scheduling for the native studies is for September of 1989. The northern justice concentration is for next year but is scheduled for January of 1990. Then northern science, northern outdoor environmental studies concentration were scheduled for September of 1991. There still remain three years for implementation, but there has been a slight change with respect to the northern justice concentration. The full amount that was announced in the press release is the amount that is considered to be the full annual costs of all four study concentrations.

Mrs. Firth: Can the Minister provide us with some detail about what the objectives of the Northern Studies Program are? What do they anticipate the full cost to be with the increases as years go by? What kind of person years are we looking at? What is the projected enrollment? I am looking for a general justification of the whole program. Could he do that for us on the Special Needs Program as well? I would like a copy of the policy, the time line on that, and what the Minister’s department is planning.

The reason I am asking for those two programs is that they were both new programs that were announced prior to any legislative debate on them. They were brought forward in a Supplementary Estimate with no identification made during our previous Operation and Maintenance Budget debate so we would like some information for the Legislature and the public regarding the two new programs.

Hon. Mr. McDonald: If the Member would like, I can provide some explanation with respect to both and supplement that with some person year dollar information later that would supplement the picture totally.

The special education policy was initiated as a result of there being a policy vacuum in the department in dealing with a variety of needs for special needs students. The primary objective was to not only provide an orderly, fair response to children who were facing difficulties in the school system as a result of a handicap or something else, but that the department provide a better response than had occurred in the past. There will be a more thorough response with less emphasis on the purchase of services outside, a greater emphasis on local assessment and the undertaking of a program responding to the assessment locally, preferably in the home community, whether it be Whitehorse or otherwise. There were clear limitations to undertaking a program that could be evenly applied in every community, but certainly we wanted, as a major policy objective, to provide further and more thorough service within the Yukon.

A number of needs were identified, especially with respect to speech and language pathology that were felt to be a special requirement. Those were the reasons for the initiative in the first place and the ultimate policy.

With respect to northern studies, there were a number of objectives to be pursued. The first was that we wanted to undertake a university transfer program that had the feature of being more Yukon and northern specific than were the generic programs that we purchased from UBC. The feeling was that Yukon College could provide a course of studies in the fields that I have mentioned, such as northern native studies, northern justice, northern science and northern outdoor education, that would have transferable credits under agreement with UBC and other universities with which we could secure bilateral agreements.

The program itself could also be used as an end in itself. It could be a program which, after two years of study - the first year being general university programming, the second year being the desire to concentrate in a specific field - could also be an end in itself and a job-getting prerequisite for jobs based in the Yukon and ultimately, we hope, for jobs with the Yukon government.

It was felt that, because there was a desire to not only encourage students to attend university but also to encourage university instruction in the Yukon, this approach, which blends a northernness to programming along with the traditional and respectable university programming, would be the best approach to take. Along with it, there were the objectives of ensuring that northern research, which is typical of university institutions, be undertaken and that Yukon be somewhat of a locus for that kind of activity. To that end, the Association of Canadian Universities on Northern Studies gave an overwhelming vote of support for ultimately what was to be the first centre for northern studies in Canada in the north and invited Yukon College to be a full member of this organization.

There were other objectives, such as to encourage the training of native people in instructor positions in both the undergraduate and postgraduate level at the college through this university transfer program.

This was so that more native people could be brought into the system as instructors. Those are a number of the objectives of the program. In terms of the student takeup, it has appeared that this is the fastest growing program at the college by far. The arts and science division has experienced rather significant growth in the last year. That was one other reason why it was felt that expenditures in this area, as opposed to other areas, would be wiser.

With respect to the dollars and cents and the person year specifics, I will undertake to provide those to the Member.

Advanced Education and Manpower in the amount of $984,000 agreed to

On Libraries and Archives

Libraries and Archives in the amount of $27,000 agreed to

Operations and Maintenance in the amount of $2,277,000 agreed to

Chair: Are there any questions on the recoveries?

We will recess for 15 minutes.


Chair: Committee of the Whole will now come to order. We will proceed with Education capital expenditures on page 29. Is there any general debate?

On Finance and Administration

On Yukon Arts and Cultural Centre

Yukon Arts and Cultural Centre in the amount of a recovery of $330,000 agreed to

On Public Schools

On Facilities Construction and Maintenance

On St. Elias School Residence

Mr. Devries: Could the Minister elaborate on that a little? I missed what he said earlier.

Hon. Mr. McDonald: The St. Elias student residence was meant to be a replacement, and still is, for the existing St. Elias student dorm, which is now beyond capacity and, as a building, is not capable of being expanded. The plan is to replace the St. Elias student residence with a facility that can take approximately 38 children who will come in and do their high school program at FH Collins High School, primarily.

The one element that has held up the construction has been the site location of an appropriate place. A rezoning application has been sought for a preferred application, which is behind Selkirk Street School in the greenbelt area. Until the site situation is cleared up, there will not be a residence built.

Mr. Lang: Could I ask the Minister what is intended for the present St. Elias dormitory that is located across from Christ the King elementary school. What is the government going to use that building for?

Hon. Mr. McDonald: My understanding at the present time is that it would be surplus and sold. I have heard nothing to the contrary at this point.

Mr. Lang: Is it true that this particular building has been empty all year?

Hon. Mr. McDonald: I do not believe so. I believe that the building has been housing the female students. The space that we do rent - I believe for a dollar, I will check that - from the old Nisutlin campus houses male students. I believe that there had been a request by the Yukon College to make use of the existing St. Elias dormitory, but there has been no decision, and there has been no decision to my knowledge made yet as to whether or not it would be used for that purpose. The plan was to surplus and sell the building.

This is purely hypothetical, but if Yukon College states a requirement for it, and it appears that their requirement is justified, and all factors are taken into account, then that would be a possibility as well - to use the existing St. Elias dormitory for overflow from the college dormitory.

Mr. Lang: Can the Minister tell us what is going to happen to the present facilities at Nisutlin Drive?

Hon. Mr. McDonald: They are owned by Northern and Indian Affairs and I believe they are being claimed by both the Council for Yukon Indians, which has expressed a need for them, and the Kwanlin Dun, which has also expressed its right to the buildings. I do not know if that has been resolved between Indian Affairs and the respective bands or not. Certainly it is property that is at least technically owned by Indian and Northern Affairs and will ultimately be disposed of as a federal asset.

St. Elias Student Resident in the amount of a recovery of $600,000 agreed to

On Robert Service School

Hon. Mr. McDonald: I believe that the funding here was revote funding that was necessary, given that the job initiation was delayed into this year, and certainly the amount of money that was expected to be expended in the 1987-88 year was not expended; therefore, the lapse of funds required revote.

Mr. Devries: I would suspect that this amount will be enough to complete the school, is that so?

Hon. Mr. McDonald: Yes. The contract is almost complete. The contractor was delayed by a month, but even though there may be project funds that are required to roll over into the coming fiscal year as a revote once again, no increases in project costs are anticipated at all.

Mrs. Firth: The multi-year costs for that school are listed at over $9 million. Perhaps the Minister could tell us what additional costs would bring it up to $9 million. In the Capital Budget last year, the multi-year projected costs for that school, I believe, were $9,131,000. Perhaps the Minister could give us an explanation.

Hon. Mr. McDonald: The total estimated project cost over the years is projected to be $9,131,000 and the funding has been undertaken for this project, certainly over the 1987-88 year. I believe there was some expenditure in the planning stage in the previous year, but certainly in the 1987-88 year and the 1988-89 year and there may be a small supplementary of a re-vote nature to carry us into the coming fiscal year. The total project cost is still estimated to be $9,131,000.

Mrs. Firth: Is that just for the school, then, for the classrooms and the new gym, or is it for any more additions to the complex?

Hon. Mr. McDonald: The only other element is the demolition or removal of the existing school that is experiencing serious difficulty. No other community facility is anticipated within this expenditure and any community facilities such as swimming pools or anything else that might be a feature of this complex would be borne by other than Education.

Mrs. Firth: I see in the new Capital Budget for public schools, Robert Service School has $761,000, and the 1988-89 forecast is for $6.8 million. That still does not account for the total expenditure of the $9.1 million. Is there more to come? That brings us up to about $7.5 million with the identification of the $761,000 for next year. I am just curious as to what the additional money is going to be spent on.

Hon. Mr. McDonald: The total project cost is projected to be $9.1 million. It is broken out into $7,663,600 for the construction and renovation. That was a contract that was awarded to Jaemar Construction. The design and review of the documents was $557,500. The administration was $348,000. Equipment $418,000 and there was $143,400 contingency. The total was projected to come to $9,131,000. That was spread out over a number of years as the project was being designed and ultimately constructed, this third year being the major year of construction. There is nothing more to the project, certainly on the construction side, other than that $7,663,000 construction contract to Jaemar Construction. That is it and it is for the reconstruction of the Dawson School, classrooms et cetera - the gym is being salvaged. The area that used to be administration, that relatively new section built in 1974, is to be salvaged. The older section, prior to that, is to be demolished and removed and the full cost, as I understand it, is in the $9.1 million.

Mrs. Firth: The Minister just recited a figure of $348,000 for administrative costs. What kind of administrative costs are we talking about?

Hon. Mr. McDonald: These are costs that are charged by Government Services to administer the contract and project from initiation through to completion. They provide for inspection through creation of the plans through construction, the full period of the project from beginning to end. They administer the project themselves.

Mrs. Firth: Why would the department have to pay Government Service’s administrative costs? The Department of Government Services is there to provide that administrative function. I do not understand why it is being done this way.

Hon. Mr. McDonald: In my previous life as the Minister of Community and Transportation Services, I do remember having charge backs that are charged against the Capital Budget by Government Services. That has always been the case. The administrative costs that are paid to Government Services are paid out of the Capital Budget as a capital expenditure in that they are tied to a project. Government Services provides a service to a client department to manage the entire construction project. They review the construction project with their clients. That is their role in the whole process. I do know that Government Services has been charging an administrative fee for the management, and it is charged against the Capital Budget, not an O&M expenditure.

Robert Service School in the amount of $1,684,000 agreed to

On Takhini Elementary Expansion

Hon. Mr. McDonald: As Members know, four classrooms were added to Takhini Elementary School and the tender prices came in lower than the estimates.

Mr. Devries: According to several people from the Takhini School Committee, they would have been very happy to have had five rooms. According to the figures at the time, they could have very well have had the five rooms and spent the full $500,000 where it would cost much more to come back and build another room at a later date.

Hon. Mr. McDonald: As I understand it, the project, as approved by the government, was to add four classrooms onto Takhini Elementary School. When the government and the Legislature budgets a particular fund amount in the budget, it does not necessarily mean that that money is absolutely dedicated to the public that it is meant to serve.

For example, if we budget $5 million for a school in Watson Lake and through whatever efficiencies the school comes in at $4.2 million, the funding is not necessarily approved for supplementary funds of $800,000 to be transferred to Watson Lake. The project itself is approved, an estimate is made, and if there are savings, they come back to general revenue. We had anticipated the project to be four classrooms and we proceeded with a four-classroom project. I would suspect that once the tender prices were in, it would be a very difficult proposition to simply add another classroom just like that to swallow the other $82,000. In any case, the government was pursuing a four classroom project and that is how it ended up. In this very rare case, tender prices came in lower than expected.

Takhini Elementary Expansion in the amount of a recovery of $82,000 agreed to

On Watson Lake High Upgrade and Expansion

Hon. Mr. McDonald: Just to anticipate the Member’s question, the school is still expected to proceed. The project cost estimates are roughly equivalent to the Robert Service School upgrade. The final working drawings and specifications are in progress at this point and the project should be tendered in July.

Mr. Devries: Can the Minister assure me about something. I understand that one of the reasons that the drawings have been held up is to try to get more local product incorporated into the school, which I am sure Watson Lakers appreciate, but can the Minister assure me that they are not going to go with the type of walls that they have in the Swift River Lodge or something of that nature?

Hon. Mr. McDonald: The finalization of the specifications in terms of what the government is pursuing with respect to the search for local materials is complete and the building will be certified by the people who are responsible for the design to ensure that it is deemed to be safe and meets specifications in every respect. I do understand that that was the subject of some discussion with the architect over a period of time but that has basically been resolved and I understand that the final working drawings are now being prepared and we should be going to work in July.

Watson Lake High Upgrade and Expansion in the amount of a recovery of $1,469,000 agreed to

On Whitehorse Elementary Upgrade

Hon. Mr. McDonald: The short answer is that the construction costs were lower than estimated. That is the reason for the decrease.

Whitehorse Elementary Upgrade in the amount of a recovery of $90,000 agreed to

On Gym Floor Refinishing - Various

Gym Floor Refinishing - Various in the amount of a recovery of $60,000 agreed to

On Christ the King Renovations

Christ the King Renovations in the amount of $55,000 agreed to

On Jeckell Gym & Upgrade

Hon. Mr. McDonald: This is a revote.

Jeckell Gym and Upgrade in the amount of $793,000 agreed to

On Carcross Upgrade

Carcross Upgrade in the amount of $5,000 agreed to

On Jeckell Special Education

Jeckell Special Education in the amount of $40,000 agreed to

On Faro Structural Study

Faro Structural Study in the amount of $12,000 agreed to

On Del Van Gorder Stage Renovation

Del Van Gorder Stage Renovation in the amount of $30,000 agreed to

On Instructional Equipment

On Teacher Furniture

Teacher Furniture in the amount of $15,000 agreed to

On French Language Facilities and Equipment

On Instruct Computers - French First

Instruct Computers - French First in the amount of a recovery of $3,000 agreed to

On A.V. Equipment - French Language

A.V. Equipment - French Language in the amount of a recovery of $8,000 agreed to

On French Language Upgrade - Shelving

French Language Upgrade - Shelving in the amount of $11,000 agreed to

On Advanced Education - Yukon College

On Contribution - Endowment

Hon. Mr. McDonald: The Member for Porter Creek East is referring to another expenditure. We are referring to a $1 million endowment fund for Yukon College. The terms of reference were presented to the college board in the form of a letter for use by the college as an endowment fund for the purposes of research into projects that would support the Northern Studies Program. The terms of reference were that the college would agree to accept the endowment for that purpose on the basis that it would use half the interest to supplement the fund and half the interest toward northern research and perhaps scholarships to attend Yukon College. At this point, the expectation is that the interest will realize approximately $100,000 annually of which half will be returned to the fund and half would be used for northern research and perhaps scholarships.

Mrs. Firth: I wonder if the Minister could provide us with some more detail about how the fund is going to work. Who is going to make the decisions? What will the policies be regarding scholarships or has this been developed yet? I understand that the college board of governors is going to be administering it. Perhaps we, as legislators, could be given more information. I think the public would like more information as to how the endowment fund is going to operate.

Hon. Mr. McDonald: The Member is correct in her assessment that the board will administer the fund. I can provide the letter that was sent to the board and the board resolution accepting the terms established in the letter and what plans the board has for the actual administrative detail of the fund.

Contribution - Endowment in the amount of $1,000,000 agreed to

On New Building Construction

Hon. Mr. McDonald: This expenditure does not change the total project cost of the college. It is simply a revote due to accelerated building construction that took place in this year. The funds were allocated as part of that revote.

Mrs. Firth: What will be the final bill on the Yukon College construction, landscaping, et cetera?

Hon. Mr. McDonald: The project cost by year is as follows: 1984-85, $170,000; 1985-86, $2,565,000; 1986-87, $16,999,000; 1987-88, $11,500,000; 1988-89, the estimated cost is $4,367,000. The total construction is $35,610,000.

New Building Construction in the amount of $2,655,000 agreed to

On New Facility Furnishings

Mr. Lang: It is my understanding that a good part of the furnishings that were purchased at the Yukon College never went out to public tender. I am referring to the dorm furniture. Is that correct?

Hon. Mr. McDonald: I am not familiar with how all the furnishings were secured. There would have been some that would have been secured under the normal process. There may have been some special equipment they may have been seeking elsewhere in the country that perhaps had only a few suppliers. I do not know. If the Member has a specific question about specific equipment, I will undertake to review the matter with Government Services.

Mr. Lang: It is my information that the dorm furnishings were just purchased directly from Ikea. Why did it not go out to public tender? The information we were provided with is that there was furniture worth in the neighbourhood of $75,000 purchased this way. I am amazed government would allow that to happen, and why it would not offer the opportunity to other people to put proposals forward so a fair selection could be made, not only on quality but also price.

Hon. Mr. McDonald: I will investigate that. I had presumed that the normal procedures for purchasing of equipment, supplies and furniture would have been adhered to in every respect for this college. I am not aware of a situation where Ikea may have been given a special contract. I will undertake to review the situation and get an answer back.

Mr. Lang: Could he also investigate whether there were any other purchases made that did not go out to tender, and where one particular company was contacted purchases made?

Hon. Mr. McDonald: I will acquire that information from Government Services and, I hope, it will be here in time for the Government Services Estimates in the Supplementary.

New Facility Furnishings in the amount of $1,267,000 agreed to

On Branch Library Equipment

Branch Library Equipment in the amount of a recovery of $9,000 agreed to

Education iCapital Expendituresn the amount of $4,916,000 agreed to

Department of Finance

On Operation and Maintenance

Hon. Mr. McDonald: There are no additional funds over and above the Main Estimates that are required by this department. As Members note on page 31 the department will be returning $34,000 to the Consolidated Revenue Fund after it has financed internally the allowance for bad debts. The allowance for bad debts expense is a calculated figure that is determined at the end of the fiscal year and is dependent upon the accounts receivable by the government at that time. The date we are referring to is approximately March 31 or April 1 of 1988, when the estimate was calculated.

Because the allowance is a function of unknown year end balances, it is a practice in the Yukon not to budget for the item in the Main Estimates because we do not know on March 31 what it is going to be for this particular year. We budget for it in Supplementaries when we have a better idea of what the receivables will be on March 31. In the Supplementaries, we have allowed $60,000 for this item. It is a high-side estimate and is likely to be somewhat lower than that when the final year-end accounts are completed.

Were it not to be for the $60,000 allowance the department would be lapsing $94,000, as opposed to the $34,000 that we see on page 31.

Members will be aware that the Deputy Minister, Mr. Fingland, was seconded from the department in 1987 and while various people were put into the acting position to fill the gap there was still a hole in the line that could not be filled on a permanent basis because the secondment and temporaries were there. That left openings, and consequently unused personnel dollars. Mr. Fingland’s shoes were very large to fill. The present incumbent is doing particularly well.

In addition, there were two term positions granted to the Department of Finance in 1988-89 in the Main Estimates for the purpose of devolution and land claims. The department had put off filling these positions in the hope that the functions could be filled by existing staff. However, a saving was realized for part of the year and this has contributed to the lapse.

These two items, combined with the standard vacancies due to staff turnover, et cetera, accounted for the lapse and favourable variance shown in the Supplementary.

That is about it.

Mr. Phelps: Perhaps the first question I would ask would have to do with the lapse. In regards to the $94,000 and the two positions that have been described, one for devolution, as I understand it, and one for land claims, are those permanent positions and fully staffed now?

Hon. Mr. McDonald: One position has been filled and the other is going to recruitment. I believe they are term positions and are not considered indeterminate person years.

Mr. Phelps: Perhaps we could be told which one was staffed and which one was not. Was it devolution that was staffed or land claims?

Hon. Mr. McDonald: I do not know which is which. I will undertake to secure that information.

Mr. Phelps: To move on to the allowance for bad debts, is there a particular policy that is being utilized to arrive at a figure such as $60,000? Just how was that arrived at?

Hon. Mr. McDonald: I believe that it is a best-guess projection for bad debts. The policy clearly is to have certain approval stages for the allowance for bad debts. Management board approves some debts and writes off some debts. The Minister is allowed to a certain limit to write off some debts. It is a best guess, based on their estimates of what they can anticipate by the year end of what it might be.

I do not believe it is a standard percentage of loans outstanding. I believe it is more thoroughly reviewed than that but it is nevertheless a best guess until the end of the fiscal year when we will know precisely what debts are outstanding and what the government management board or the Minister is prepared to write off.

Mr. Phelps: Going back to the first lapse monies, how long is each term position?

Hon. Mr. McDonald: I believe they are two years.

Mrs. Firth: To follow up on that, are these term positions near the end of the term or in the middle? How much longer are they going to go on and is the government considering extending the term? It is the same issue in the Public Service Commission with people for devolution and land claims. There seems to be term positions in all the departments. Those were three year terms and these are two. I would like to get some idea of how many people we are going to have and for how long they will be continuing to work in these capacities as term positions.

Hon. Mr. McDonald: I do not know precisely when the positions were approved by management board but it would have been term that started when the Management Board approval was given and not necessarily when the Main Estimates were approved by the Legislature. I can find exactly the termination dates for both positions for the Member.

The reason for the terms is that they are meant to project specific personnel who are meant to deal with devolution on the one hand and land claims on the other. The staffing depends very much on whether or not there is activity for them to undertake. With respect to land claims, the activity certainly heats up with band-by-band negotiations and when there are projects in hand. That is the reason primarily for the delay for those positions. It was considered to be important that there be a framework agreement, which would give the negotiators the assurance that there was going to be increased activities in the area of land claims.

Even though we anticipated a framework agreement coming forward in the year, there was not really a need to staff up until we were sure the framework agreement was in place and the band-by-band negotiations were going to be initiated.

Depending on the need, the terms may be extended, depending on how long the project takes. That would not be a decision made until the terms are close to expiry, at which time Management Board would initially make a decision as to whether or not they would seek approval on an extension of the terms prior to coming to the Legislature.

Mrs. Firth: Could we get copies of the job description of those term positions?

Hon. Mr. McDonald: Yes.

On Operation & Maintenance Expenditures

On Treasury

Treasury in the amount of a recovery of $94,000 agreed to

On Allowance for Bad Debts

Allowance for Bad Debts in the amount of $60,000 agreed to

Total in the amount of a recovery of $34,000 agreed to

Department of Government Services

Chair: Is there any general debate?

Hon. Mr. Byblow: The vote consists of two line items of supply services and property management. The supply services amount of $308,000 is primarily taken up by $165,000 worth of costs related to leases for photocopiers and supplies. Members will recall in the previous Supplementary we dealt with that in the year previous, 1987-88; some acquisitions were made. These do not constitute any acquisitions money. These are funds required to maintain those that were not purchased.

Historically, the budgets for photocopying supplies and leases is set low in order to induce economies into the system. Historically, also, the Supplementaries have been used to pick up the variance.

I also advised in the previous Supplementary that, in the coming fiscal year, departments will be responsible for their own supplies to photocopiers, thereby inducing a further economy. We hope we can get this item fully under control, partly through the purchase and partly through the individual departments.

Also in supply services, the remaining $143,000 is assigned specifically to increased costs unanticipated in the operation and maintenance of the car pool fleet. I asked the anticipated question I am sure Opposition Members are asking themselves, which is why was enough not budgeted. The explanation I am provided is that there was a deliberate attempt to induce economies into the system and budget low to keep the use of the service under a measure of control.

That explains the supply services line item. I could proceed to the property management unless there were further questions on the supply services side.

Mr. Lang: Madam Chair, I would recommend we just go into line by line as opposed to general debate if that is okay with you.

On Supply Services

Mr. Lang: I just have a couple of points here. I do not quite understand this, that you always budgeted less because then you would not have to pay more. That is the first time that that principle has ever been expounded or expressed in this House, to my recollection in any event. I have a question looking forward to next year. First of all the $165,000. I do not understand why you are asking for more money for leases and photocopiers when we allocated for the previous year a substantial amount of money - I forget the amount - I think it was $100,000 if not more, for the purpose of purchasing and buying out quite a number of leases. Yet, at the same time, for the remaining leases, you are coming to this House and asking for an additional $165,000. That does not add up.

Hon. Mr. Byblow: I asked the same question and the explanation afforded is that the leases that were purchased were long-term leases, which provided for substantial savings over the term of the long-term leases. The leases we are talking about here are the short term leases, the ones that had only two and three years remaining, because it was not economical to buy them out. You retain their lease status until they expire and then deal with purchase or some other approach.

Mr. Lang: Do I take it that the policy now in Government Services is straight purchase and very little leasing is going to take place in the future?

Hon. Mr. Byblow: I am advised that that indeed is the policy, to move towards acquisition as opposed to leasing, again for purposes of cost savings.

Mr. Lang: I have a question on the general policy. What certainty do we have as far as maintenance is concerned, because my understanding of the lease arrangement is that there is certainty of maintenance. With the acquisitions, is the government now going to be hiring people to maintain these photocopiers, computers and whatever else we have?

Hon. Mr. Byblow: The policy includes a maintenance service contract from the supplier. It is quite similar to any business that opts to buy as opposed to lease. It is much the same maintenance contract whether it is under purchase arrangement or lease arrangement.

Mr. Lang: Is it then safe to say that in the Main Estimates that we will be debating further along in the course of the session that there will be less money in the Main Estimates for Government Services for this area since the other departments are going to be taking care of at least a portion, if not all of, the costs for leasing and costs of doing business?

Hon. Mr. Byblow: If what I have been advising the Member is accurate, which it should be, yes indeed the next budget ought to reflect a reduced cost in this area. I agree with the Member, it better.

Supply Services in the amount of $308,000 agreed to

On Property Management

Hon. Mr. Byblow: Under the property management line item, I can enumerate the specific items that make up that amount of $905,000: $411,000 is made up of the elimination - and again we discussed this in the previous Supplementaries - of the charge backs for various projects by Government Services; $171,000 is attributable to the costs related for the maintenance and building engineering at the Yukon College.

Eighty-nine thousand dollars is attributable to additional lease costs of various buildings around the territory; $74,000 was required for additional personnel resources in the branch, particularly to provide additional accounting services and casual replacement for long-term illnesses; $86,000 is related to costs in-territory for maintenance and the related cost of that additional travel and maintenance; $74,000 is the transfer of ADM from finance and administration to property management. It would appear to be an organizational change. That totals $905,000.

Mr. Lang: Is the $171,000 for maintenance and building engineering strictly for Yukon College? If that is the case is it an ongoing cost to the government from here on in?

Hon. Mr. Byblow: I am advised that it indeed reflects the personnel cost for three building maintenance engineers and some additional maintenance costs related to the college.

Mr. Lang: Before we recessed a week ago, I asked the Minister whether or not the chief boiler inspector’s job was going to be revised so that when the position was advertised local people would have an opportunity to be eligible for consideration. Since this is tied in, could the Minister report whether or not he has had a chance to do that and eliminate the requirement for the two year inspection required by the advertisement?

Hon. Mr. Byblow: I respect the Member’s question and would like to provide a complete answer. Those notes are with my Community Services material. Yes, indeed, I have spent time with the department reviewing the job classification and requirements. I have been persuaded that the position of chief boiler inspector carries with it a statutory requirement of some very serious consequence. There is additional work anticipated by the department in the area in terms of facilities to be inspected, and that it is not an entry level position. I do not have all my notes here; I could speak further to it if I had them. Yes, I have reviewed the position. There is a junior level entry position that would permit the absence of experience in the branch, but this position is deemed to require the two-year experience qualification.

I have also spent time with representatives from the industry and a number of applicants, and I believe there is a general understanding of that requirement.

Mrs. Firth: Is there anything in this area for renovations to the Old Yukon College? I have not heard anything so it must be.

Hon. Mr. Byblow: To clarify, there is nothing mentioned in the O&M figures, nor did I omit them because they did not take place from the O&M Budget. Monies that were expended for Yukon College in the 1988-89 fiscal year were from the capital side. There are no new funds requested on the capital side. That is why I have not brought it up in the O&M. The $700,000 that has been spent on Yukon College came from the capital side; it was an internal reallocation and that is how the money was used.

Mrs. Firth: Is the Minister saying that they did not bring in a supplementary estimate for the expenditure of that $700,000? They should have, because it is a different program that the money has been spent on. All they have done is redesignated the money from one project to another project for the renovations at the Old Yukon College. I know that the government is not breaking the law if they shift the money around within their department, but they are if they do not come back here for a supplementary estimate realigning the expenditure of funds. In order to legalize the expenditure, they must include a supplementary request for funding and they have not done so for Yukon College. I would like to know if the Minister could provide us with an explanation of that whole Old Yukon College renovation expenditure.

Hon. Mr. Byblow: What the Member is raising is something that she did raise earlier in the session about the propriety of the expenditure on the Old Yukon College. I can provide an explanation. When the Member first questioned the matter, she raised the point that there was no line item specifying that money was to be spent on the Yukon College in the 1988-89 Main Estimates. In that regard, the Member is correct that it does not appear as if there is a specific line item for the Yukon College expenditure.

I am advised that the Department of Government Services’s Capital Programs were discussed previously at a fairly general level. By that, I simply mean that the department’s Mains were debated at a line item level as opposed to a specific project level.

In reference to specifically Yukon College, on page 46 of the Capital Estimates 1988-89, there is a Public Works Capital Program where there are three activities shown in the Mains but no project detail. There are numerous individual projects that comprise those activities. I am advised that it is necessary for the government to have some discretion in reallocating the monies between projects to meet the changing needs or the various requirements as they occur. This is consistent.

The Member raised the propriety of the expenditure and it is consistent with the Management Board directives that state only the Legislative Assembly may approve an increase in the amount of money in a vote, but that Management Board may approve a transfer of money between programs and Ministers may approve the transfer of money between activities that are within a program. In short, the legalities surrounding this are at a vote level. Each department’s total operation and maintenance dollars and each department’s total capital dollars are essentially what is voted. The debates that take place in the estimates generally occur at a much more general level than the specific vote line items and the government attempts to spend according to these sums. During 1988-89, Management Board opted to expend monies on the renovation of the Old Yukon College. The funds to finance these renovations were found internally within Government Services. The expenditure is being made in the program activity I previously mentioned. Specifically, that is in the capital maintenance, public buildings activity of the Public Works Program.

There was $700,000 set aside for that purpose. In short, there was a realignment of the department’s spending with no additional funds required from the Legislature for that purpose. Since no additional funds are required for Government Services capital vote, it does not appear in the Supplementary. I am providing the Member an explanation. The funds that were originally voted are sufficient for the activities in the current year, and the authority was granted.

The Old Yukon College appears in the Government Services vote now because the Department of Education no longer has responsibility for the complex with the opening of the new college. The legal requirements have been observed. There has been no transfer of funds between votes, no increase in funding, and I trust that will provide the Member with an explanation for the matter she has raised.

Mrs. Firth: I admire the Member’s efforts, but it is awful. When we debated this issue  when we were debating the Capital Estimates in 1988-89, the previous Minister of Government Services was purposely asked about this project. He was purposely questioned. I remembered he was because I did it. I asked why there was no identification made in the Capital Budget for renovations to the Old Yukon College. He told us that, because it was still under Education at that time, it was in their Yukon College renovations, old buildings, zero dollars. There was to be nothing in Government Services.

Now, the new Minister is telling us a completely contradictory story to what the previous Minister told us. I questioned why there were no multi-year costs. At that time, we were talking about this project being anywhere from $2 million to $13 million.

They brought in a new budget for 1988-89 with an asterisk saying there is funding of $700,000 included for the Old Yukon College in the 1988-89 budget. According to the debates on that budget, it was not there. We were specifically told by the Minister of the day there was nothing in this budget, which made sense because it was still back in Education.

The explanation has gone astray somewhere. It is not accurate. I appreciate what the Minister is saying about the legality of moving money around the department. The department has that ability to move money around according to the Financial Administration Act. Management Board has to make the decisions. It is not the Legislature that is approving it. The Legislature approves an amount of money based on information that has been given here publicly, and that is the last information we have.

We read two news announcements after we had debated this issue, after we had been told by the Minister there was nothing in Government Services for this. There was a zero amount of dollars identified in Education for renovations to the Old Yukon College.

We went through two public announcements talking about the renovations being $8 million, and the Departments of Renewable Resources and Community and Transportation Services moving in. Then, there was another public announcement that the renovations were going to cost somewhere in the nature of $5.5 million for the Child Development Centre to move in as well as the Department of Renewable Resources. There was a half renovation, half demolition project going on at the college. It was two separate contracts.

If they are going to put in a new line item for a new project in a department, which is Government Services, it has to come back in the Supplementary Estimates that you have done that, or I interpret it that you have done what the Auditor-General said the three departments had done a couple of years ago. They had broken their own law, the Financial Administration Act, because they did not come back with the Supplementary Estimates indicating there was a new amount of money identified for a new project.

I do not know if I am making myself clear, but Government Services estimates have come back with nothing in the Supplementaries for the renovations for the Old Yukon College. We were told that there was nothing in the 1988-89 Budget for renovations of the Old Yukon College under Government Services which obviously would be correct since it was still under Education at the time. What has happened? Where has this authority come from other than Management Board?

I understand Management Board having the ability to move money around within the department. I do not agree with that concept necessarily because then the Legislature does not have accountability or public scrutiny of the projects. I believe that the Government Leader was very firm about that when he was a member of the Opposition. He kept referring to it as all the decisions being made by the Cabinet. He found the whole process quite offensive when he was called to the Legislature to rubber stamp these decisions that we were never given the opportunity to debate. That is what has happened here. I question the legality of the department not coming back with the Supplementary for the expenditure of that fund. I would like a clarification about that. I agree that we were told one thing, not once but three times, that there was nothing in here in the Government Services on the renovations for Old Yukon College and that we were given one press release saying it was going to be $8 million and that we were told in another press release that it was going to be $5 million. What is going on? It cannot be a blank cheque. There cannot just be freedom to do whatever you want with the public purse. I think the public is going to be quite offended and outraged that the government would think they can get away with that kind of thing.

Hon. Mr. Penikett: I move that you report progress on Bill No. 33 and that Mr. Speaker 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 of the Chairman of Committee of the Whole?

Ms Kassi: The Committee of the Whole has considered Bill No. 33, entitled Third 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. McDonald: I move that the House do now adjourn.

Motion agreed to

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

The House adjourned at 5:28 p.m.

The following Sessional Papers were tabled March 28, 1989:


Women’s Directorate - the Yukon Advisory Council on Women’s Issues, Annual Report, 1987-88 (M. Joe)


Women’s Directorate - Employment Law Handbook, March, 1989 (M. Joe)

The following Legislative Returns were tabled March 28, 1989:


Regulations affecting and controlling discharge of chemicals into Whitehorse sewage system (Byblow)

Oral, Hansard, p. 42


Regulations regarding disposal of hazardous wastes from hospitals in Yukon (Byblow)

Oral, Hansard, p. 42