Whitehorse, Yukon

Wednesday, December 6, 1989 - 1:30 p.m.

Speaker: I will now call the House to order.

We will proceed at this time with prayers.

Prayers

DAILY ROUTINE

Speaker: We will now turn to the Order Papers.

Are there any Introduction of Visitors?

Returns or Documents for Tabling.

Reports of Committees.

Are there any Petitions?

Introduction of Bills.

Notices of Motion for the Production of Papers.

Are there any Notices of Motion?

Statements by Ministers.

This then brings us to the Question Period.

QUESTION PERIOD

Question re: Licence plates

Mr. Phelps: I have some questions about the controversial new licence plates that have upset so many Yukoners. The Klondike Visitors Association is rightfully upset about the plates as the members were not consulted. They posed some interesting questions that deserve answers.

My first question is for the Minister of Tourism. Since the gold panner logo is an already established symbol of the Yukon, why does the government see the need to change it, especially without consulting the tourism industry on the issue first?

Hon. Mr. Webster: As I indicated yesterday, indeed the gold panner is a recognized symbol of the territory; we have others, especially the Chilkoot climbers; and, as well, the fireweed. I think it is in our best interest that we emphasize more than one, to broaden our tourism appeal.

Mr. Phelps: The next question is this: if there is financial restraint right now with regard to government in this territory, why did the government waste money on the new licence plate design?

Hon. Mr. Webster: I take exception to the assumption that we are wasting money on the new design. The new design is an attractive one and will bring a lot of attention to our territory; it is introducing another theme in this territory, that being “The Magic and the Mystery”, which has been very well received in the last three years. It is also identifying another symbol, the fireweed, and together they will, in a very fine way, promote the wilderness character of our territory.

Mr. Phelps: Yet another question posed by members of the KVA is: why has the government spent millions of dollars to advertise the Yukon as home of the Klondike, only to throw away the Klondike and its well-known symbol?

Hon. Mr. Webster: I repeat: we are not throwing away that symbol. We are emphasizing another one at this time. I have also emphasized, at every opportunity, that we will be returning to that familiar symbol with the next set of licence plates, the period 1995 to the year 2000.

Indeed, it is recognized we have spent some money and I think we spent a lot of money, too, doing market research in major Canadian cities and American cities. We found that the slogan “The Magic and the Mystery” has captured the imagination of a lot of tourists, who have been contacting us to find out more about the Yukon.

Question re: Licence plates

Mr. Phelps: I have more questions on the reason for the change. One interesting question is whether the Minister of Tourism can tell us if this government takes the position that placer mining is not significant to the history of the territory? Is that why they made the change?

Hon. Mr. Webster: That is a ridiculous question and does not deserve an answer.

Mr. Phelps: These are questions being posed by people with the Klondike Visitors Association in his constituency, so I hope he would pay some attention to them, and try to treat them as serious questions.

The next question posed by members of his constituency, which used to be called “the Klondike”, but perhaps we will change it to “fireweed country” is: is the government taking the position that placer mining is out-of-date?

Hon. Mr. Webster: No. We are not taking the position that placer mining is out-of-date, and we will return to the gold panner scene again on the 1995 licence plate. I am sure it will not be out-of-date at that time either.

Mr. Phelps: Can the Minister tell us whether the change in the licence plate is related in any way to the government’s position with placer claim staking on the Tatshenshini River?

Hon. Mr. Webster: I am not surprised that on the third consecutive day of Question Period where the licence design has been an issue that they are really scraping the bottom for some decent questions.

Question re: Licence plates

Mr. Phelps: It is a good question in my opinion. Is there any relation between the canceling out of the symbol of mining of the territory and the announcement at the same time, taken without the consultation of the placer mining industry, of its position regarding no more placer staking on the Tatshenshini?

Hon. Mr. Webster: No.

Question re: Licence plates

Mr. Lang: I hope I am not seen as scraping the bottom of the barrel for a question when this issue is obviously on the minds of a lot of Yukoners. They are probably not at the same intellectual level as the present Minister of Tourism.

A number of years ago, some private individuals provided the government with some proposals for changing the licence plates, which the Minister alluded to yesterday in reply to a number of questions. Those people who came forward with proposals were told by the chief of staff, who I believe was Mr. Beebe, that if the licence plate was to be changed that there would be a process of public consultation.

In view of the fact the government made this commitment, will the Minister consider reversing his decision and go for public consultation prior to any changes to the licence plates?

Hon. Mr. Webster: I am not aware of any commitment that a Mr. Beebe made on behalf of government a couple of years ago in this regard.

Mr. Lang: If the Minister finds out that commitments of this kind are made within his government, is he prepared then to reverse the decision?

Hon. Mr. Webster: No, I am not.

Mr. Lang: I understand the proposed licence plate was professionally designed. Could the Minister tell the public how many different designs of licence plates the Cabinet considered prior to picking the one that is obviously out in the public and obviously becoming so unpopular?

Hon. Mr. Webster: I do not have the information as to how many designs were presented for consideration. I think that would be a question the Minister of Community and Transportation Services could provide an answer to in this House.

Question re: Licence plates

Mr. Lang: Was the decision to go with this design not made by Cabinet? At that time, were there not various designs presented to Cabinet with which to make the decision of which one to go with?

Hon. Mr. Webster: That is true. There were a number of designs presented to Cabinet. The decision was made by Cabinet. I do not know how many different designs there were.

Mr. Lang: How many designs were considered by Cabinet?

Hon. Mr. Webster: It was a process of refinement of a number of themes and eventually we narrowed the design down to two or three. They were improved upon and, finally, the decision was made among two or three. Of the original number that came before us for consideration, I do not have a specific number.

Mr. Lang: We know how expensive design work is, so perhaps the Minister could give us this information: how much did the total design cost the taxpayer for all the work that was done? Secondly, could the Minister provide us with how much more the printing of this type of plate, with so many different colours on it, is going to cost the taxpayers over and above the present plate we now have?

Hon. Mr. Webster: I will be pleased to come back to this House with the information as to the total cost of the design work and, also, the cost for the printing of the new plate.

Question re: Licence plates

Mr. Phillips: I would like to direct my question to the Government Leader, and it is in regard to the new licence plate, as well. The Minister of Tourism has just told the House again today that he will not reconsider the decision to do away with the Yukon gold panner and the Klondike on Yukon licence plates. Many Yukoners have expressed their outrage at this decision by signing a petition, phoning their MLAs, writing letters to the editor and, as well, one individual is walking up and down the streets of Whitehorse today with a sign asking the government to save the gold panner.

In light of the upsurge of opposition to the new change, will the Government Leader exercise his authority and ask the Department of Community and Transportation Services to delay ordering the new plates so that Yukoners can have a chance to be consulted in a proper way on this significant change?

Hon. Mr. Penikett: Let me congratulate the Member as I think, for a change, most of his preamble was factually correct.

There are people who do not like the new plates. I am sure there are many people who, once they get a chance to see them in all their glory, colour, and attractiveness and see that they are consistent with the tourism promotional campaign that we have developed after much consultation with people in the industry and the public, will find them very appealing. The Member is making a representation that I intercede in the work of another department and cause the government to reconsider a decision. I see no reason to do so at this point.

Mr. Phillips: I would like to remind the Government Leader that he is the leader of the government that is imposing this new licence plate on people. Yukoners are asking to be consulted and are not on this issue.

I would like to ask the Government Leader if he will permit the petition that is circulating around the territory to be placed at the front desk with the new licence plate that he has placed there so Yukoners have the option of looking at the new plate or choosing the old one. Will he permit the petition to be placed at the front desk so Yukoners can at least send their message to the Government of Yukon?

Hon. Mr. Penikett: I am sure the Member is aware of the rules governing petitions in this House. He is perfectly at liberty to circulate any petition he wants with anybody he wants. The government is not endorsing the petition and therefore will not be circulating it.

Mr. Phillips: I would just like to make the point that tomorrow this topic that is not so hot, at least in the government’s mind, is going to be the topic on a local CBC phone-in show. It will be interesting to hear the comments on that show.

I would like to ask the Government Leader again, as the leader of the Government of Yukon and the person who has the authority to make the change, or at least direct the Minister to do so, if he will delay the ordering of the new plates so that the people of the Yukon can properly be consulted with respect to any changes to the Yukon licence plate?

Hon. Mr. Penikett: I think the Member has the most peculiar idea of Cabinet government. As leader of this government, I am first among equals. I am not a king or dictator. I do not intend to function in a way which is greatly at variance with the best traditions of Cabinet government.

The Member points out that there is going to be a radio show tomorrow at noon. It is interesting that he is already assuming great political consequences as a result of that radio show. He is already assuming the nature of the calls that are going to be made. Perhaps he is planning to make some himself.

This government has a better record than any government in the history of the Yukon or Canada in consulting on major policy issues. With the greatest of respect, the choice of a licence plate, which reflects a tourism strategy we adopted after much consultation, is not in itself a major policy decision. It is a logical consequence of a policy decision we have already made after much consultation with the community. I believe that once Yukoners get a chance to see these plates, they will come to know...

Speaker: Order please. Will the hon. Minister please conclude his answer?

Question re: Licence plates

Mr. Phelps: I have a question of the same Minister. I would like to know whether or not the government has any policy with regard to YTG employees signing the petition to bring back the gold panner on the licence plate.

Hon. Mr. Penikett: I would be extremely surprised if we had a policy about government employees signing petitions about gold panners on license plates. The Member for Porter Creek West says he is surprised. It continues to astound me what surprises him. I am on record, as is this government, as to the political rights extended to public servants, which are much better than those available to employees of the Conservative government. The employees of this government, as long as they are engaged in political activity on their own time and are not involved in betraying confidences of the department they work for and are not involved in public criticism ...

Speaker: Would the Member please conclude his answer.

Hon. Mr. Penikett: I hope the time for heckling will be deducted from my answer. As long as the people are conducting themselves properly, they have all the rights of free speech of any citizen. I am sure they will continue to exercise it as they have throughout our time, unlike the time of the previous government.

Mr. Phelps: The Minister’s answer is, I take it, that the employees of this government can exercise their freedom of speech and sign the petition without fear of retribution from the government.

Hon. Mr. Penikett: Absolutely, other than the people who are in the department that are directly responsible for the thing. The Leader of the Official Opposition knows full well what constraints people who are working directly with some public business ought to exercise over themselves. Public servants are citizens and they have the right to free speech, the same as any other people. We are not in a situation here of ordering people to turn up to party conventions or to vote for anybody, like some of the horror stories that happened before we came in.

Mr. Phelps: The answer to that is that what they do is make sure that they only hire party hacks. Getting back to the issue at hand, I want the employees of this government to be reassured that when they sign the petition that there will not be any sanctions taken against them. I understand that some people have been threatened within the department by their employers.

Hon. Mr. Penikett: If the Member will give me any direct evidence that anybody has been threatened with discipline or dismissal as the result of signing a petition, I give him my undertaking that I will act on that.

Question re: Mickey Mouse Day Care/busing

Mr. Lang: I want to go into another area of major concern. I was listening with great delight as the Government Leader was saying to one and all what a good government was and how it consulted with people. There is an issue that has come up within Whitehorse that is affecting quite a number of people in the area of education. It has come to our attention that instructions have gone out that the school bus service for the Mickey Mouse Day Care is to be discontinued. Could the Minister of Education tell us why he made such a decision?

Hon. Mr. McDonald: Once again, the assumptions that the Member is making are wrong about who made the decision and at what time. It is not incumbent for the Member to make mistakes in assumptions, but nevertheless, I am aware of the issue that the Member mentions. It is as a result of a decision by the school busing committee, which consists of one representative from each school committee, that other than more students going to the regular school programs should not be allowed on school buses any further, because it is causing the school buses currently in place in Whitehorse to become overcrowded. The committee made the recommendation to the department and the department has communicated that decision to the respective day cares.

Mr. Lang: Could the Minister of Education tell us if these instructions apply to all day cares?

Hon. Mr. McDonald: My understanding is that all services that have been provided to day cares would be affected by this administrative decision. The respective day cares were informed of the decision approximately one week ago.

Mr. Lang: I have very serious concerns about this being done in the middle of the school year. Parents have made plans, and decisions have been made. A lot of single mothers are affected by this and how their days are going to be affected over the course of the winter. In view of the seriousness of such a decision, why was the decision made in the middle of the year as opposed to the beginning of the year?

Hon. Mr. McDonald: Well, this is a fundamental problem that occurs now and again when people make the common-sense argument that if there is space on the school bus, why not let other people use that space on that school bus. The argument has come forward from various communities and in this particular case it came forward from the City of Whitehorse. The request was made that if there was available space on school buses, it should be made available to children going to day care. The school busing committee and Department of Education considered the request, knowing the potential difficulties they could get into if the buses became overcrowded, but nevertheless made the decision that they would permit the spaces to be used by the very young students. The decision was based on the assumption that, should the school buses become overcrowded, the people who had first right to travel on the school buses would, of course, be the children going to the public school system. Unfortunately, the situation, as the Member outlined, is that the school buses have become overcrowded and, consequently, the school busing committee, after considerable deliberation, made the recommendation that the school buses not continue to allow day care students to ride on them, in order to ensure that there is sufficient room for the students going to the public school system.

Question re: Health act

Mr. Nordling: I have a question to the Minister of Health and Human Resources, with respect to the proposed health act. In answer to my question about the consultation process regarding the proposed health act, the Minister said the principles in the ministerial statement would be elaborated on further in letters that will go to citizens and interest groups. Has that letter been drafted and sent out?

Hon. Mr. Penikett: I have approved a draft of the letter. I cannot for a certain fact say whether or not it has been mailed to anyone yet. I would have to check on that information.

Mr. Nordling: Shortly after the policy statement was made, the Minister could not say what consultants may or may not be hired. Does he now have an answer to that question?

Hon. Mr. Penikett: No, because unless someone has been hired since the Member asked the question, I am pretty certain that no consultants have been taken on, other than the people who are already available to us inside the public service.

Mr. Nordling: The Minister also said that some jurisdictions have done major studies in the health policy field. Has the government received copies of those studies and if so, could they be made available to us in this House?

Hon. Mr. Penikett: I think that most jurisdictions have done studies and I am sure that the ones that are public are as available to the Member as they are to me. The ones that we have in our files presently, as long as they are not so large that they would require us to do a lot of xeroxing, I am sure we could make available, but it may be just as easy for the Member to write directly to those jurisdictions and get the studies as it would be for us to put our copying machines work. If we have spare copies of studies that have been done, particularly by Ontario, - I think it has done more work than any other jurisdiction, and I think probably, secondly, Quebec -  I am more than pleased to make them available to the Member.

Question re: Judge/land claims negotiator

Mrs. Firth: I have a question for the Minister of Justice. We understand now that the land claims negotiator, Mr. Stuart, will be staying on for another three months, until March 31, 1990. In debate in committee yesterday, the Government Leader expressed concern about the settlement of the umbrella agreement and said that we were not so optimistic at this point, referring to a completion date of March 31. My question is directed to the Minister of Justice. How long is she prepared to extend the secondment of Mr. Stuart from the Justice department to the land claims department?

Hon. Mr. Penikett: I do not know whether the Member was here at the moment yesterday when the Leader of the Official Opposition was asking questions on the progress of land claims negotiations. As I indicated to him at the time, Mr. Stuart will be devoting his time to completing the umbrella agreement and the final deadline for doing that is March 31. We had earlier hoped to do it somewhat sooner than that. It is still possible it will be done very soon, but the time available to us now is basically the first quarter of the new year. It is certainly our hope, and I believe the hope of the other parties, that Mr. Stuart will be able to be with us to see that important work completed. That is what he will be devoting his time to in the new year.

Mrs. Firth: That did not answer my question, with all due respect to the Government Leader’s good intentions. I stated there was new information; the land claims negotiator is going to be staying on for three months. His contract expires in three weeks. How long is the Minister of Justice prepared to allow Mr. Stuart to be seconded from the bench to work on the land claims process?

Hon. Ms. Joe: The Yukon knows that land claims is a priority with this government. Mr. Stuart has been the chief land claims negotiator for four years or more. He has indicated that he will be staying on for an additional three months. As I said, land claims is a priority with us.

Mrs. Firth: Again, with all due respect, I cannot believe that a government would make land claims a priority over justice, particularly in light of some of the things that have been happening in the justice system.

Could I please just have an answer to the question - no rhetoric, just an answer to the question - how long is the Minister prepared to allow her department to have the secondment carry on as the land claims negotiator?

Hon. Mr. Penikett: Clearly the Member for Riverdale South and this government have fundamentally different notions of justice. For us the most important issue of justice facing this territory in our generation is the issue of land claims - the most important question of justice.

Mr. Stuart is devoting himself to completing the umbrella agreement for a Yukon land claims settlement. He will be trying to complete that in the first quarter of the new year. He will be leaving us at the completion of that to take a sabbatical, following which it is his announced intention to return to the bench.

Question re: Judge/land claims negotiator

Mrs. Firth: I am not being combative in these questions. I am asking very real, rational questions. It is not my opinion, as the Government Leader has directed the criticism at me, that one system should suffer because of another. I simply want to know because time is passing. This was to be an 18-month secondment. It is now four years later. There is a year with pay - special leave - outstanding. There is an additional six months without pay. This is another three months that is being added. That is almost six years the justice system will be without the third judge. How long is the Minister of Justice prepared to allow this to go on?

Hon. Ms. Joe: The Member again has stood up and made a long speech prior to asking a question. The fact of the matter is that the justice and court system is not suffering. We do have deputy judges who are coming in to deal with cases in the court. That is a fact, and that will continue to happen.

Mrs. Firth: Even if she cannot tell us, could she just stand up and say she does not know so at least the public knows this could go on for six and one-half or seven years? Let us face it. There is not a lot of optimism out there about the land claims. The Government Leader expressed that himself. Could she just tell us whether it is going to go on for a long time or it is not?

Hon. Mr. Penikett: If I may, once again, the Member is putting words into people’s mouths that could not be further from the truth. The Member says there is not a lot of optimism for the land claims. The settling of the land claims, the aboriginal claims of the people of the Yukon, is the most important public business before this government and, also, before the people of the territory. I am fundamentally optimistic, not only about the purpose but the desirability of doing it. The Member’s constant personal attacks on Mr. Stuart have nothing to do with the conduct of the justice system.

Point of Order

Mrs. Firth: Point of order.

Speaker: Order please. Point of order to the Member for Riverdale South.

Mrs. Firth: I have not been combative. I have asked a simple question, requesting the length of time this person is going to continue to be seconded from a department. I have had personal attacks on me, which is not going to stop me from asking the question. I would simply request, Mr. Speaker, your patience and tolerance in helping the Government Leader to recognize that he is abusing the privileges of the House when he makes those kinds of speeches and attacks. Could I just please have an answer to my question?

Speaker: Order please.

Hon. Mr. McDonald: On the point of order.

Speaker: Minister of Education, on the point of order.

Hon. Mr. McDonald: On the point of order, I was just looking through the rules respecting points of order, and I did not find a rule permitting rude interruptions, which is what the Member has just inflicted on the Premier in the Premier’s attempt to supply accurate information to the House. So, of course, there is no point of order.

Mr. Lang: On the same point of order, I would ask you to consider Rule No. 8, which all Members of this House have supported. It states as follows, “The question must adhere to the proprieties of the House and it must not contain inferences, impute motives or cast aspersions upon the persons in the House or out of it.”

If you analyze the record, you will find the Member has just done that in the beginning of his speech.

Hon. Mr. Penikett: On the same point of order, the Member for Porter Creek East is absolutely right. The Member for Riverdale South has been imputing motives and doing those other things he referred to in Rule No. 8. Therefore, her question is out of order, and I agree with the Member for Porter Creek East.

Speaker: Order please. After all this debate, I find there is no point of order. There is a place in this book where it says that, “A Member must not interfere when someone is speaking in the House.”

So, we will carry on. Final supplementary.

Mrs. Firth: Could I have a new question please, Mr. Speaker?

Speaker: New question to the Member for Whitehorse Riverdale South.

Question re: Judge/land claims negotiator

Mrs. Firth: I would simply like an answer to my question. The Minister of Justice and the Minister responsible for land claims have not answered the question. I would like to know - and I know the people within the Department of Justice would like to know, the people in the court system would like to know, the RCMP would like to know, the lawyers would like to know, everyone would like to know - how long the third judge position is going to be kept open and how long the Minister is prepared to allow this individual to be seconded to another department, leaving us one judge short in the territory?

Hon. Mr. Penikett: The thesis of the Member is that the court system is suffering, because a judge is on leave to conduct very important negotiations on behalf of the people of the Yukon Territory.

Firstly, the court system is not a department of the government. Secondly, she knows full well what the arrangements are with Mr. Stuart. He will complete the negotiations on the umbrella agreement, we hope, between now and March 31 of this year. Following this, he will take a sabbatical. After that sabbatical, it is his stated intention to return to the bench.

The Member knows the answer to the question she has now asked several times. She is leaving the impression that she just wants to put the question on the record and is not interested in the answer, which she already knows.

Mrs. Firth: In this House yesterday, and I know the public had the same impression, we felt that the land claims negotiator contract would be terminated December 31, the year on sabbatical would pass and he would then return to the bench. That has changed. This is another three months. Is it going to change again? Will there be another and then another three months?

The words of the Government Leader were that we were so optimistic...

Speaker: Order please. Will the Member please get to the supplementary question.

Mrs. Firth: Yes, I will. His words were that we were not so optimistic at this point. I just want to know if this is going to go on for another and then another three months. Can the Minister of Justice tell us?

Hon. Mr. Penikett: If the Member had been attentive to the debate yesterday, she would know that there is a deadline to complete the umbrella agreement by March 31, 1990.

I do not know what her representation is. I do not know what the visceral basis of her continuing attack on Mr. Stuart is, but it is fundamentally important to the completion of the land claims negotiations that the person who has been part of the process for four years be encouraged to complete those umbrella negotiations, for the sake of the negotiations and the sake of the territory. Her representation is that somehow this person should be cut off now and sent home, - I do not know if her perception is that perhaps he should not even be returning to the bench - which would do profound damage to the land claims negotiations. It would do nothing whatsoever...

Speaker: Order please. Would the hon. Member please answer the question.

Hon. Mr. Penikett: ...to benefit the service or the conduct of the criminal justice system or the court system.

Mr. Phelps: The Government Leader himself said that deadlines change and that was one of his concerns.

Perhaps I should put the question another way. Is this just an open-ended secondment? In other words, the Minister cannot give us an answer. It will just be for as long as it takes. Can you answer that? Yes? No?

Hon. Mr. Penikett: As any sensible person knows, if you make arrangements with someone to do a job, and you also make arrangements for a time period in which you expect or hope the job will be completed, at the end of that time period, if the job is not complete, you do not suspend your relationship with that person, whether they are building your house or fixing your car or doing something as profound and important as settling land claims. Your hope is that, having a talented and able person assigned to the task, he will stay with the job in order to complete as much of it as he can.

Question re: Emerald Lake

Mr. Phelps: I have a question of the Minister of Tourism regarding the most photographed scene in the Yukon. Of course I refer to Emerald Lake near Carcross on the Klondike Highway. There are a number of old 45-gallon drums in the lake at the south end. These drums are in plain view from the road. My question for the Minister is whether his department will look into the feasibility of removing these eyesores from the lake.

Hon. Mr. Webster: Yes, we will.

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

ORDERS OF THE DAY

Mr. Phillips: The House leaders have agreed that the Motion for Production of Papers No. 5 should be called first today. This is to be followed by Motions Other Than Government Motions, with the motions being called in the following order. Motion No. 58, Motion No. 54, Motion No. 51, Motion No. 60. I would request the unanimous consent of the House to proceed with our business in the order agreed to by the House Leaders.

Speaker: Is there unanimous consent?

All Members: Agreed.

Speaker: There is unanimous consent.

MOTIONS FOR PRODUCTION OF PAPERS

Motion for the Production of Papers No. 5

Clerk: Item No. 2, standing in the name of Mrs. Firth.

Speaker: Is the hon. Member prepared to proceed with Item No. 2?

Mrs. Firth: Yes, Mr. Speaker.

Speaker: It has been moved by the hon. Member for Whitehorse Riverdale South

THAT an order of this Assembly do issue for copies of all contracts signed between the Government of Yukon and Barry Stuart for the years 1985 to 1989 inclusive.

Mrs. Firth: I bring this motion forward in a non-controversial way. The purpose of debate is to indicate why the papers requested should be tabled. I have brought this motion forward because I have not received a response nor commitment from the Minister of Justice or the Minister responsible for land claims with respect to the request I made in Question Period for the specified contracts. Neither Minister has indicated in a positive sense so in the parliamentary context my next alternative is to request contracts through this motion.

On previous occasions the government has made contracts available to us upon request, as I understand it has and continues to be its policy to do so.

We still operate under the principle that expenditures of taxpayers dollars or public funds on all contracts is considered public information and am looking forward to the government’s support of this fundamental principle in producing for me the contracts I have specifically requested.

Hon. Mr. Penikett: I welcome the opportunity to debate this matter.

I find it in passing strange that the Member opposite is so interested in Judge Stuart’s contracts being made public, particularly when we know that she already has access to the information.

I also find it fascinating that she is demanding that the contract be made public, something that the government of which she was part, refused to do.

Let us put this clearly on the record at the outset of this discussion. When Members of the New Democratic Party opposition in this House asked for the information that the Member for Riverdale South is now demanding - the very same information - we were told by the Government Leader of the day, the then Member for Riverdale North, that we could not have this information, that it could not be made public

The invitation was made to the then Member for Whitehorse South Centre to observe the contract in the privacy of the Government Leader’s office, but they would not agree to public access. We were allowed only to view them in the former Government Leader’s office.

Once again, we have this incredible double standard from these wonderful champions of freedom of information and democracy on the other side of the House. One rule for a New Democratic government and another rule for a Conservative government; open access to information from a New Democratic government, no damn information from a Tory government - nothing.

The Member for Porter Creek East would have sneered and sniffed at the kind of demands now made regularly by him in this House. He would have sneered at even our right to ask such questions when we were in opposition. How convenient are their memories. How wonderfully convenient are their memories. How incredible are the moral and ethical double standards that they demonstrate in this House.

Let us realize that times change, things improve, reforms do happen with a new government. Consistency has never been a strong point with the other side. I know that the Leader of the Official Opposition has shared with me - I think it was Thoreau’s statement - that consistency is the sign of a weak mind. I think that has been demonstrated here.

I want to take up a couple of minutes to clear up a few misconceptions that have been bootlegged into the record in the past few days of debate, particularly by the Member for Riverdale South. The facts are as I am going to indicate them in a minute. I want to correct the record and some impressions that have been made.

Throughout the lurid preambles to the Member of Riverdale South’s questions over the last few days, we have heard some incredible allegations. We have heard that friends of the government are given incredible privileges and pay and benefits beyond that available to other people.

It is a matter of fact that Mr. Barry Stuart was appointed as a deputy magistrate on the Territorial Court on March 30, 1978. This was long before the NDP got elected. Mr. Barry Stuart was appointed a permanent magistrate on August 9, 1979, when there was a Conservative government in office. The New Democrats were not within a whiff or a scent of power in this territory. He was appointed chief territorial court judge on December 23, 1983 by a Conservative government. That is not to impute that he was a friend or a crony or an alley of the Conservative government. He was a person supremely well-equipped to sit on the bench by virtue of his learning, experience and judicial character.

Clearly, the Cabinet of that day, or at least four-fifths of the Cabinet, or five-sixths of the Cabinet, had sufficiently high regard for this person’s qualities and character that they were prepared to see him appointed to the bench, and even made chief territorial court judge.

It is a fact that Judge Stuart took leave from his judicial duties to do a very difficult and challenging job for the people of the Yukon in August, 1985. At the time he took the job, he had been a judge in the Territorial Court for a period of six years. We asked Judge Stuart to take the position of chief land claims negotiator because we felt he possessed a quite rare combination of abilities that suited him for the job. I remember, shortly after the election in 1985, having a discussion with the Leader of the Official Opposition. I betray no confidences to say that we all understood, at that time, how difficult it would be to find the right person to take on the job of negotiating the Yukon land claim on behalf of the people of the Yukon.

He was suggested to us, and he was appointed by us, because he was highly regarded in the legal community, both nationally and in the Yukon; his academic skills was undeniable, and we were confident that he would be able to deal intellectually with the issues of land claims and the emerging legal discipline. He was trusted by the aboriginal people of the Yukon, and we believed, and still believe, that this negotiation must be one of all parties, in which all parties have faith in the sincerity and the integrity of the negotiators. Of course, Judge Stuart was free of all partisan political connections.

We felt those were admirable and desirable qualities in a land claims negotiator, and this appointment would serve the objective of making the land claims negotiations as free as possible of partisan considerations on a daily basis.

It is a matter of fact that Judge Stuart had no allegiance, except to the land claims process itself. I would argue that the fact land claims has proceeded this far, to a point much farther than any other time, is, in itself, a telling commendation of Judge Stuart’s abilities as a negotiator. I would also point out, and this should not be necessary, that Judge Stuart took the position at a lower rate of pay than was enjoyed by the previous chief negotiator. I would not point this out if the Member for Riverdale South, in the last few days, had not made a sustained and brutal attack on the income of the chief negotiator, an income which, I am certain, is less than, as the Leader of the Official Opposition would say, he would earn in private practice, and less than the negotiators of all the other parties. I am certain of that.

The attack on pay by the Member for Riverdale South is perhaps somehow also a subliminal attack on her own leader, because he was also paid handsomely by most ordinary working people’s standards when he was the chief negotiator. It is a very important job. If I want to take into consideration the question of inflation over the past five years, it is a matter of fact that there has only been one year in which this government paid Mr. Stuart an amount higher than the largest amount charged by the former chief negotiator, the now Leader of the Conservative Party in this House.

I do not want, even here, to make any implied attack on the Leader of the Opposition of this House; I do not do that. I only want to put in context the attack on the pay of the chief negotiator that we now have.

It is true that Judge Stuart plans to take a sabbatical before he returns to the bench. We know that as a judge, and as a Chief Judge, he began discussions with officials in the Department of Justice about sabbaticals for judges, a long time ago. The discussions of those terms and conditions we know for a fact have continued through a succession of Chief Judges. We know that the bench has been perfectly consistent in their view that these were desirable arrangements to be made for judges in the Yukon Territory. If we wish to retain people of ability on the territorial bench - and he is quite right that there has been a significant turnover of people on the territorial bench, but one of the reasons, I suspect, is because there have not been arrangements before now that would permit judges to take a sabbatical and renew their legal learning.

It should be stressed that a sabbatical is not free time; it is not a holiday. During a sabbatical, the recipient is charged with following a course that will improve his or her understanding, or proficiency, of his or her vocation. Most commonly, a person taking a sabbatical will attach his or her self to an institution that educates either academically or through hands-on, practical experience.

It is interesting that the dictionaries, including the dictionary on the table here in this House, define a sabbatical as “interval of time for study or travel”. I want to say that it is obvious that in the Yukon, the government’s collective agreement with the Yukon Teachers Association provides for the taking of sabbaticals.

I want to also say that the idea of sabbaticals for judges is not new and did not originate in the Yukon Territory, nor did it originate with Mr. Stuart. Judges in Prince Edward Island have explicit provisions in their contracts for sabbaticals. The provincial court acts of Manitoba and Ontario both allow for judges to take leave, either with or without pay, at the discretion of the Attorney General. In the Northwest Territories, judges are covered under the same terms and conditions as to leave, as are government employees, so there is a discretionary right to educational leave.

Many believe in the legal fraternity believe, and we in this government share this belief, that judges should have access and recourse to academic settings so as to periodically re-acquaint themselves with innovations in the law. I am sure that Members opposite realize the difficulty in keeping appraised of legal jurisprudence that might not present itself in the case the judge is actually hearing.

It is also important to understand that judges, in a place like the Yukon Territory, operate in considerable professional isolation. There is not a large bench here. There is not an accessible law school. There is limited prospect for them to socialize and participate in the community; it is the nature of their work. It is important that a territory like ours, at this stage in our development, not only be able to attract judicial talent, but to keep it if we can. It is a matter of record that we have not been able to do that. We have had a very high turnover in judges and we believe that timely sabbaticals for judges who have served five years on the bench is a good idea.

At the time Mr. Stuart took leave from his position as chief territorial court judge he had already been a judge for six years, a much longer period of time than most territorial court judges. On that basis he would have qualified at that time for the sabbatical provisions in our regulations. Since then, as all Members know, he has spent four years as a negotiator. The terms of Judge Stuart’s contract certainly do not confer on him a benefit that he would not qualify for under the regulations, as do other judges who meet the same terms.

It could also be pointed out that while Judge Stuart’s contract was prepared in anticipation of the regulations for sabbatical being approved, it was considered by all to be a good idea to ensure a break between his time as a negotiator and his return to the bench.

I am left with some regret as to the reason for the attack by the Member for Riverdale South, as I am left with some questions as to the nature of the documents that the Member opposite has in her possession, and the manner in which they arrived there. I say I am curious on that point because Members on this side in Cabinet know we did in this last while have a government break-in, and I would be extremely concerned if documents in possession of a Member of this House were obtained in any illegal manner. That is a serious concern; it is a serious concern to any government.

The precise issue before us, as to the contracts relating to Judge Stuart, is one I will now turn to directly. I would like to make it clear that neither this government nor Mr. Stuart objects to the information about his working arrangements as chief land claims negotiator being made public. I would extend to any person about whom private information was going to be made public the courtesy of seeking their consent. I want to tell you as a matter of record that Mr. Stuart has no objection to making those documents, and the information contained in them, public.

It is regrettable when there is a sustained personal attack on a person of great character and great qualities in this House, especially if the nature of that person’s position prevents him from replying, and certainly would prohibit him from replying in kind.

I am not sure what the basis of the Member’s animosity towards the chief land claims negotiator is. It does strike me as a motiveless malignancy. Perhaps the tabling of the documents to which we referred will satisfy her - perhaps not. We shall see.

Motion to adjourn debate proposed

Hon. Mr. Penikett: Since I believe that by tabling these documents the terms of the motion will be met, I would like, therefore, to table the documents and to move

THAT debate on this motion be adjourned in order for Mr. Speaker to consider whether the terms of the motion have been satisfied.

Speaker: It has been moved by the Premier that debate be now adjourned.

Motion to adjourn debate agreed to

Speaker: Motions other than Government Motions.

MOTIONS OTHER THAN GOVERNMENT MOTIONS

Clerk: Item No. 20, standing in the name of Mr. Phillips.

Speaker: Is the hon. Member prepared to proceed with Item No. 20?

Mr. Phillips: Yes, Mr. Speaker.

Motion No. 58

Speaker: It has been moved by the hon. Member for Whitehorse Riverdale North

THAT the Yukon Legislative Assembly is opposed to the Goods and Services Tax as proposed by the Government of Canada.

Mr. Phillips: I rise today to speak to what we, on this side, consider to be an extremely important issue. This motion is one that I believe all Members in this House will strongly support. It is quite simple: the GST is bad for the north. It is clear, again, that a new law for tax has risen from the south with very little understanding how it will affect northern Canada. This lack of understanding began when the Blenkarn Commission, that was to travel across the country, decided initially that it was, and I quote Mr. Blenkarn," too expensive to travel to the north." I am sure that if the members of that committee had listened to those words of Mr. Blenkarn they would have realized that this new tax on almost everything would have a much larger impact on northern residents, simply because, as Mr. Blenkarn said, things are much more expensive in the north.

I was pleased to see that because of the enormous pressure put on by northern residents and politicians the committee changed its mind. Unfortunately, it seems that this new understanding of the north evaporated when the committee only visited Whitehorse. We can all imagine what effect the GST would have on food prices in some other Yukon communities. What about Old Crow, for instance? This could be devastating to this community and, certainly, it would be unfair.

By just coming to Whitehorse and no other northern community, for example Yellowknife, this commission illustrated its ignorance of northern problems and the differences between the various areas of the north.

Too often, southern politicians refer to the Northwest Territories and Yukon as just the north. I am saying the time has come to tell the south we are tired of putting up with that lack of understanding about our region.

Many who have been proponents of this tax explain it as being a more fair and equitable tax for all Canadians. I would venture to say that not one of those Canadians understands or knows about the higher cost of living in the territory: it is some 20 to 30 percent higher than other parts of Canada.

It seems ironic that the Government of Canada spends millions of dollars solving the problem of regional disparities and then with one signature and the implementation of this tax will increase those disparities.

A tax such as this will affect our low-income earners and people who have a subsistence lifestyle. It is fine to say that they are at the lower level of taxable income and will get a rebate, but many of these people cannot afford to pay this tax in the first place. That is where they will have to pay it, when they buy such things as skidoos or other products they need to carry on their lifestyle. I ask you, is that fair?

Yukon manufacturers will suffer as a result of this tax. Transportation of goods to outside markets is already high, and another nine percent can simply make them uncompetitive. This is simply not fair.

Because of our geographic location, Yukoners are forced to travel greater distances for business and holidays, and already pay the highest air fares in the country. Another nine percent will add an extra burden on the Yukon family or business person. I do not believe that is fair, either.

I am extremely concerned about the added costs and the red tape that small businesses will go through under this new tax. Small business is the backbone of Canada and the last thing it needs is an unacceptable burden.

Every area of Yukon life will be affected, but one that comes to mind that will suffer greatly under this tax is tourism. Transportation costs to Yukon are already among the highest in Canada. Because of the seasonal nature of the tourism business, hotels are expensive in the north. Gas, food and other services also reflect the higher costs of doing business in northern Canada.

Simply put, our tourism industry can ill-afford a nine percent cost increase at this time and expect to be able to compete in the marketplace. The Canadian dollar is on the rise and spending by tourists in Yukon is decreasing. This new tax could have a devastating effect on Yukon’s tourism industry. I do not believe that this could be described in any person’s mind as being fair.

Many groups and individuals have spoken out against this tax; some have been in support of our northern concerns. The Canadian Federation of Independent Business routinely polls its members on issues of importance to business. No single issue has united small business in opposition to this move as much as this. In the last questionnaire they sent out, they received the highest response they have ever had to a questionnaire. That questionnaire was related to the GST.

Government simply has to listen to what people in Canada are saying about this new tax. Everyone appreciates the need to get rid of our deficit, but it should be done equitably and fairly. The GST, as it is now designed, does not do that. The GST, as it is now designed, will force Yukoners and other northern Canadians to pay a much higher price than southern Canadians and, at the same time, receive fewer benefits.

Put bluntly, Yukoners cannot afford the GST. I would ask all Members to join with me in sending this clear message to Ottawa.

Hon. Mr. McDonald: I very much appreciate the remarks made by the Member for Riverdale North. I share many of his views and perhaps will enter the discussion by providing a few background notes to complement, and perhaps repeat, some of the more significant points made by the mover of the motion.

As Members know, the GST proposed by the federal government is to be levied at a rate of nine percent and will replace the existing federal sales tax. With the exception of food and a few other relatively minor items, every purchase of a product or service by consumers will include the payment of this new tax.

The general sales tax is essentially a value-added tax. All purchases, whether they be made by the consumer, the manufacturer, a provider of a service, or by an intermediary in the change of distribution, will include an additional sum for this tax. When the product is sold, the tax is added to the selling price and a credit is claimed for tax paid on the imput. Therefore, prior to the final sale, the tax is levied on the value added at each level of production.

Unfortunately for the end consumer, it is he or she who bears the brunt of the tax, because he or she is purchasing the product or service for the purpose of consumption, and not to resell.

There is no doubt that the existing federal sales tax is a poor tax and should be replaced. It is complex to administer, due in no small part to the multiplicity of rates it encompasses, it discriminates against the manufacturing sector, it is subject to avoidance and it is almost impossible to calculate the amount of tax hidden in the selling price of the product.

The small base upon which the tax is levied skews both business and consumer decisions. Perhaps its worst feature is that it taxes domestically-produced manufactured goods and is therefore biased against exports and in favor of imports. Clearly, such a tax regime is in need of serious overhaul.

The new tax, as it is presently designed, is flawed in several important respects and is not sensitive to the unique circumstances that prevail in Canada’s north, and in the Yukon is particular.

The current sales tax would raise approximately $18.5 billion for the federal government in 1991 were that tax to continue in its present form. The new general sales tax will yield roughly $24 billion in 1991. The $5 billion difference is to be refunded to lower income consumers through the income tax credits, a lowering of the middle income tax rate and by increases in family allowances and other transfers to individuals. Most commentators believe the yield from the new tax will be higher than the $24 billion predicted by the federal government. Even if the estimates were accurate, it is clear that the consumers will be facing a net tax increase of considerable proportions on their purchases. It is predicted that the increase will work out to over $210 for every man, woman and child in this country. While the federal government has made a brave attempt to refund and advance a portion of the tax paid by lower income individuals and families by enhancing the tax credit system, we believe that people who do not presently file tax returns will not do so in the future and thereby will miss the benefit available to the credit. In a nutshell, we believe that the federal government will raise more money through this new tax than they are currently estimating and will not pay out as much under the credit system as they are predicting. We believe this tax will become what is colloquially referred to as a “cash cow” for the federal government. In the end it will be the average consumer who must bear the burden of these additional taxes. This is the same person who already carries a heavy tax burden, a burden about to be made even heavier when the new tax comes into force in 1991.

Excepting the credits for lower income earners, the rate of tax paid by all will be the same. A person earning $40,000 will pay the same rate of tax on the purchase of a $15,000 vehicle as will a person earning $60,000. This is a consequence and a problem with all flat rate sales taxes. Given the magnitude of the revenues to be collected under the new tax regime, it appears the federal government is increasing the importance of the concept of graduated taxation based on income and ability to pay. This is a matter of concern to us and appears to have received little attention in the national debates surrounding the goods and services tax. Unfortunately, the two consumers I just mentioned - the $40,000 and the $60,000 earners - may not be fully aware of the amount of tax contained in the price of the products they purchase. One of the original goals of the new tax regime was to be visibility. Buyers would know how much tax they were paying when the spent their money. However, as a result of a number of technical difficulties associated with the tax, total visibility will not be achieved in all cases. This, too, is a concern, because we believe that an informed consumer is a wise consumer. The federal government admits to a one-time increase in 1991 of the Consumer Price Index of 2.25 percent as a result of the new tax. This is almost certainly too low.

On average, private sector forecasters, including the conference board, the economic council and the University of Toronto Institute of Public Administration predicted an inflationary impact of 2.7 percent in 1991, with continuing additional inflation through 1993. The reason for this difference of opinion is that the federal government, in drawing its conclusions on inflation makes three crucial but unlikely assumptions. These are first of all that all benefits flowing from the elimination of the existing federal sales tax will be fully passed on. The second is that wage earners will not attempt to demand higher wages in response to higher consumer prices. Thirdly, the monetary policy should fully accommodate the one-time increase in inflation. That is, the Bank of Canada should not raise interest rates in response to the increased price of goods and services. In my view, these assumptions are unrealistic. In a large measure, I believe the opposite will occur and prove the predictions of the private sector forecasters.

An increase in the rate of inflation, even if it were to be only one time, is unwelcome news for the hard-pressed citizens of the country who will be squeezed between paying higher taxes with inflation-induced lower incomes. Canadians have borne higher interest rates for some time now as a result of the Bank of Canada’s attempt to control inflationary pressures through a restrictive monetary policy. Having borne this burden, they are now being asked to accept a higher rate of inflation, intentionally encouraged by the federal government, without seeking compensation in the form of higher incomes. I believe that all Members of the Legislature would admit that this would be an undue hardship to ask the citizens of the country to bear.

The imposition of the goods and services tax will not leave the budgets of the provinces and the territories unscathed either. There are a number of reasons for this, and I will only mention a few of the most important ones.

The reduction of the middle income tax rate from 26 to 25 percent will cost these jurisdictions many millions of dollars, because their taxes are expressed as a percentage of the basic federal tax. As that tax decreases, so does the yield of provincial/territorial income taxes. While the federal government has promised to make special provisions for municipalities, schools, colleges, universities and hospitals, all of which are institutions we fund, there is no guarantee it will be sufficient to cover the extra tax that will be levied on them.

There will also be a lag between the time the claim for tax paid is made and a refund of that tax that will have to be financed at very high interest rates.

The federal government further intends to abrogate a reciprocal taxation agreement it has in eight of the provinces. These agreements commit both parties to paying the others’ commodity taxes and duties. The effect of the cancellation of these agreements will be a net reduction in revenues for the affected provinces. Almost assuredly, the tax will probably increase the wage demands of employees of these governments and our government.

Some federal payments to the provinces and territories will increase once the new tax is in place, but this benefit is greatly outweighed by the cost impacts that will accrue to these governments.

The net cost of the new tax to provincial/territorial budgets for the period of 1991 to 1992-93 runs into many billions of dollars. Based on conference board data models, the cost to the Government of Yukon for the same period could run from $10 million to $15 million, depending on the assumptions made for the tax’s impact on the economic activity here.

This is a high cost and equates to roughly $325 to $500 per person in this territory. You have to remember that this is only the impact on our government. To this, we must add the increased taxes and reduced real spending power of our citizens.

For the most part, the comments I have made so far have been generic to all of Canada. As the Member for Riverdale North mentioned, the tax will not impact equally on all Canadians, and we, as Yukoners, and others living in the north, are being asked to bear a disproportionate share of the burden this new tax will impose upon the citizens of the country.

One of the principal features of a good tax, if we can call any tax a good tax, is said to be fairness. Few would argue this principle, but in its  very unfairness, the goods and services tax, as presently structured, fails to meet the test of a good tax.

The tax is unfair to northerners, because it is a tax upon the final selling price of a good or service. It is common knowledge both here and in the south that living costs are far higher for the two territories and some of the more isolated areas of the provinces than they are elsewhere in the country.

There are many reasons for this state of affairs. I am certain most of us here would  be well aware of most of them. Obviously transportation charges and heating costs, both of which have ripple effects on the economy, are two of the most significant reasons.

The goods and services tax ignores this most basic fact of northern life and ostensibly treats those living in the north the same as all other Canadians. The problem is that in treating us in the same manner we are, in fact, treated differently to our very great detriment. The imposition of a nine percent tax on the sale of all goods and services in the Yukon, even with a total savings from the elimination of the existing federal tax to be passed on to consumers, we believe, will have a devastating result on our citizens and our economy.

If higher costs will hurt Canadians in general, they will hurt northerners to a greater extent. If the tax will result in inflation for Canada as a whole, its effect will be felt more in the north. If provincial budgets will suffer because of the tax, territorial budgets will suffer more. Yukoners already bear a heavy tax burden. Our analysis shows this burden to be at or above the national average and all taxes paid to all levels of government are taken into account.

Our tax burden is even heavier than these analyses would indicate. This occurs because our cost of living is so high, and a disposable income in the Yukon does not buy nearly the same quantity of goods as does the same income in the south.

Despite this, the income threshold for phasing out the sales tax credit will be the same here as it is in the south. Low income Yukon families face higher living costs but will pay more GST than similarly disadvantaged families elsewhere; however, the current proposal for the sales tax credit takes no account of this anomaly. Furthermore, because the relative number of individuals living subsistence lifestyles is almost certainly higher here than it is in the south, more of our citizens will receive no refundable tax credit whatsoever, because they do not file tax returns. This will occur despite the fact that they will pay tax on virtually everything they purchase. The new tax, with its higher prices and inflationary impact, will further decrease the already limited purchasing power of Yukon incomes.

These comments ignore the effect the tax will have on our economy. The Yukon is an expensive place to do business; it will become even more expensive once the general sales tax is in place. We believe this will have dire consequences for all sectors of the Yukon’s economy, especially our tourism industry.

One of the principal thrusts of our tourism strategy has been to increase the length of time visitors spend in the Yukon; the reasons for doing so are obvious. One of the facts of life we have to confront regarding the tourism strategy is that it costs a great deal to get to the Yukon and it can be an expensive place in which to spend any length of time. The effect of this new tax will be to make this even more true, to the detriment of an important segment of our economy. While there is provision for non-Canadian tourists to claim a refund, I think we all know that the vast majority of them will not bother to, or they will not remember to do so.

The end result of the tax may well be the raising of a significant barrier to economic development in the Yukon in particular, and the north in general. Reaction by the federal government would seem to move counter to the expectation of the federal government contained in their 1988 policy paper, entitled “A Northern Political and Economic Framework”, that the territories are expected to find ways to generate more direct revenues.

The final issue I would like to speak to concerns the administrative load the general sales tax will have for businesses, and most especially and most importantly, for the small business sector. The Canadian Federation of Independent Business released a brief on the general sales tax, entitled “A Paper on the Goods and Services Tax: A Nightmare on Main Street”, and I am afraid that this description may turn out to be all too accurate. In those parts of Canada where a retail sales tax already exists, merchants will now be collecting two separate taxes, taxes with no common base and in most instances with differing rates. That this will increase their administrative burden and costs goes without saying. The small administration fee the federal government will pay will probably not cover these costs in most instances.

For many businesses, and especially those operating in the territory, where already high costs mitigate against there being a local retail sales tax, there will probably be a requirement for new cash register equipment. The federal government has promised to provide assistance for such purposes, but once again, it is doubtful that it will cover the full cost.

It is a motherhood statement to say that small business is one of the principal engines of economic growth. Its contribution to economic well-being and job creation cannot be overstated, yet this is the sector that will bear the bulk of the administration burden and the cost of the new tax. Instead of encouraging people to begin small businesses, this general sales tax may well end up making this a less viable option for those who wish to do so.

The goods and services tax as a concept has merit in reforming the tax structure in Canada. However, as it is presently structured, it has many negative aspects for Canadian people and the economy. These negative aspects may well nullify the very real gains in national wealth that a properly structured tax could achieve and which the federal government is predicting. Most importantly, the tax is insensitive to the northern reality.

The Member for Faro had hoped that he could be present this afternoon to present a few comments about the goods and services tax and its impact on transportation, communications and community services, ministerial responsibilities that he holds in the government and for which he is responsible in this House. I know he has taken a very direct interest in the issue of the GST as it relates to such things as air travel, the cost of freight and transportation and communications.

Perhaps what I will do on his behalf - not quite so eloquently or as forcefully as he would make the arguments - is simply state a few things for the record that are noteworthy.

In the area of transportation, it goes without saying that many Yukon families spend more on air travel than families do elsewhere in the country, especially in southern Canada. It is partly because air travel is the most practical means of transportation; it is probably because it is the most practical means of transportation, even within the Yukon. According to Statistics Canada, from which I have some figures here, the average Whitehorse family spent $662 on air travel in 1986, while the average Canadian family spent only $211. Of course, residents outside of Whitehorse generally pay more and of course Old Crow residents take the prize because they need to use air travel in order to have access to any of the world outside of Old Crow.

The federal government, in response to concerns put forward about the general sales tax, has promised to reduce the cap of the air transportation tax, from $50 to $40. Even with that reduction, the average increased cost for air travel for Yukon families would be at least $40 more than the increase for the average family in southern Canada. Just to provide for Members a slight comparison, the regular adult return fare between Whitehorse and Edmonton or Vancouver will increase - or would under the general sales tax proposal -by $55 and the excursion fare would increase by $22.

In terms of the general transportation system, the general sales tax will add about 7.8 percent to the cost of freight transportation. Of course the federal sales tax will be removed when the GST is applied, but the effect of the federal sales tax on freight is now only about 1.7 percent and the general sales tax is nine percent, so the impact will be a cumulative 7.3 percent. The general sales tax on transportation is probably rightfully considered a tax on distance.

Yukon people already have to pay significantly more for goods because of the extra cost of freight. Now, we can expect the extra cost of freight will be 7.8 percent more expensive in the future. There will be similar penalties for shipments of goods out of the Yukon, except for exports, which will be exempted from the general sales tax. That will obviously have the impact of putting Yukon businesses at a worse advantage in competing in the Canadian market.

The role the general sales tax could play on the transportation sector and the cost of doing business and running a business in the territory will be significant and noteworthy.

In communications, we have made mention in the Legislature and expressed concern about the application of a new telecommunications tax, which was introduced in 1987 at a rate of 10 percent. We were concerned about that, and this has now been raised to 11 percent without much fanfare. When it was first announced, that tax was disputed by northern residents because it placed a disproportionate burden on the Yukon because of our use of long distance telecommunications, particularly the telephone. Telecommunications will be subject to the nine percent general sales tax, and we still have yet to hear any word as to whether or not the old/new telecommunications tax will be reduced or removed altogether.

The general sales tax will have a greater impact on the Yukon than it will have in southern parts of the country. Again, we have a tax that is really a tax on isolation.

With respect to the areas of municipal and community services, it is important we make mention of the level of government we respect in this Legislature, what is commonly referred to as a junior level of government, but nevertheless an important one, that of the municipalities, and the effect the sales tax will have on them.

The GST paid by municipalities will be offset, in part, by the elimination of the federal sales tax. At this point, it is impossible to determine the net effect on any individual community or Yukon communities as a whole, for the following reasons: The federal sales tax burden now varies widely from municipality to municipality, from town to town, because of differences in goods and services bought and services provided in each municipality. However, the federal government intends to offer rebates to municipalities based on national average expenditure patterns. Clearly, some municipalities, based on the way they do business, are going to face a greater or lesser impact as a result of the general sales tax than will others.

This is something municipalities should be aware of and be prepared for if the general sales tax comes forward as originally conceived.

Municipalities, as well as the Government of Yukon, will also face a more significant administrative burden to calculate the rebates and the net taxes owing. I will give you an example of the kinds of complications a typical municipality will be faced with.

Rebates would apply to user fees for tax-exempt municipal services, such as recreation centres, but there would be no tax rebate on revenues from a concession stand inside the recreation centre. So, there will be rebates for the general operations of a community hall but, if the community were to set up a small concession stand to sell hot dogs and coffee, there would not be any rebates for that, yet the municipality would be expected to draw the distinction, of course, and provide the necessary taxes owing to the federal government, should they be applied.

The Federation of Canadian Municipalities advocated what they called an exemption with certification approach, whereby there would be a separate rate of tax for goods and services supplied to municipalities on the production of a certificate at the time of purchase. This would clearly be a fairer and easier system to administer than the proposed system of rebates.

There are a couple of other areas I think I should make brief note of before I conclude, and that is the application of the GST on the sale price of lottery tickets. As far as we know, the portion of the lottery ticket proceeds allocated to prizes will not be taxed. However, the portion that is provided to sports, arts and recreation organizations, who depend on the funding, will be taxed. Consequently, the revenues they receive in order to provide their good services will be lessened by the tax.

The case has also been made by the arts community in this territory about the impact of the tax on the artists attempting to make a living here, operating in a high-cost environment. The sales tax on cultural goods will be expensive for patrons, the purchasers, and it presents a significant administrative problem, as it would for any other small business operator in the territory. Artists claim, and there is good reason to believe this, that they face special challenges here in the north because there is a limited market for their goods and the costs are high. This further hardship would only serve to inhibit the development of cultural industries.

I think I have covered many of the points, although certainly not all of them. When the Blenkarn Commission travelled to the north at the urging of the government and many people of the Yukon, they indicated that in the time they had their hearings, they had never received better researched or more eloquent submissions as they did when they were in Whitehorse.

We were all given hope, of course, that these kind words of praise to the many people who made presentations before the committee would result in some modifications being recommended by the committee to the proposed tax, which would have the effect of easing its impact, in a fair and equitable way, on northern residents. That did not happen, as Members know. It is of considerable concern to me that northerners who had made such well-researched presentations were basically ignored in the final committee report.

This is not to say that their efforts were wasted. It did cause everyone in the country to have a greater understanding of the effect of the tax on isolated regions and the submissions that the members have made consequently are on record with the Standing Committee on Finance.

The only concern I have with the motion, and I communicated this to the mover, is that the motion communicates a message that is, at least in my view, incomplete. I believe strongly that the motion we send should explain some, if not all, of the concerns that Yukoners have expressed in the past few months on the federal proposal. I believe it is essential that the federal government is aware, without having to read through long-winded speeches like the one I just gave, of the basic intent of this Legislature with respect to the motion and to better understand the concerns that this government, this Legislature and the people of Yukon have with the GST proposal as it is currently conceived.

I would like to move an amendment that I believe enhances the wording of the motion and incorporates some of the more significant points that I have put on the record in my speech. This will serve to better explain to the federal Minister, on the basis of a quick read, where the concerns are.

A few weeks ago, I had an opportunity to speak with Mr. Wilson, the federal Minister, on the subject of the general sales tax. The Minister indicated that what he wanted most of all was to understand why people were concerned and not that people simply wanted to reject the tax. He felt, given the work he had put into the tax and that the federal government had put into the tax, that the public owed him some expression of the reasons for the concern. I believe that we do owe them that. Consequently, I feel that a motion that is more descriptive of our concern is in order.

I will end by moving an amendment and indicating that I think we should, in the most positive way possible, encourage the federal Minister to understand the concerns we have expressed. I believe that we should be indicating to him that any proposed tax should be equitable and fair and that the federal Minister should take into account, even though we are not numerically significant in terms of the overall population of this country, the concerns of regions and in particular, the concerns of Yukoners who have taken the time to express themselves on this matter. With your permission, I will move an amendment:

Amendment proposed

Hon. Mr. McDonald: I move

THAT Motion No. 58 be amended by adding the following:

THAT it is the opinion of this House that:

1. The federal government’s proposed goods and services tax will impose an undue tax burden upon the citizens of the Yukon;

2. The federal government’s proposal to secure additional revenues by the use of a flat rate sales tax and movement away from the concept of proportional personal and corporate taxation based on income and ability to pay is unfair and inequitable;

3. The goods and services tax will cause undue hardship to those residents of the Yukon who live a subsistence lifestyle or who have low or fixed incomes;

4. The tax will result in an unacceptable increase in the level of inflation for all Canadians but particularly the people of the Yukon because of already inflated costs for goods and services in the north;

5. As a result of the imposition of this new tax, the provincial and territorial governments will lose revenues and incur increased costs;

6. The goods and services tax will result in residents of the Yukon bearing a disproportionate share of the tax’s burden because of the significantly higher cost of living in the North;

7. The tax will result in an unacceptable administrative burden for Yukon businesses, most especially the small business sector; and

THAT this House urges the Government of Canada to consider and act upon the concerns raised by this Legislature, the Government of the Yukon and Yukon people as expressed in submissions and presentations to the Standing Committee on Finance concerning the goods and services tax.

Speaker: It has been moved by the hon. Minister of Finance that Motion No. 58 be amended by adding the following:

THAT it is the opinion of this House that:

1. The federal government’s proposed goods and services tax will impose an undue tax burden upon the citizens of the Yukon;

2. The federal government’s proposal to secure additional revenues by the use of a flat rate sales tax and movement away from the concept of proportional personal and corporate taxation based on income and ability to pay is unfair and inequitable;

3. The goods and services tax will cause undue hardship to those residents of the Yukon who live a subsistence lifestyle or who have low or fixed incomes;

4. The tax will result in an unacceptable increase in the level of inflation for all Canadians but particularly the people of the Yukon because of already inflated costs for goods and services in the north;

5. As a result of the imposition of this new tax, the provincial and territorial governments will lose revenues and incur increased costs;

6. The goods and services tax will result in residents of the Yukon bearing a disproportionate share of the tax’s burden because of the significantly higher cost of living in the north;

7. The tax will result in an unacceptable administrative burden for Yukon businesses, most especially the small business sector; and

THAT this House urges the Government of Canada to consider and act upon the concerns raised by this Legislature, the Government of the Yukon, and Yukon people as expressed in submissions and presentations to the Standing Committee on Finance concerning the goods and services tax.

Mr. Phelps: On the amendment I want to take this opportunity to make a few points about the GST, as it is known.

Our party has consistently made it very clear that we can stand up and be counted to oppose measures coming from the federal government no matter what political party may be in power. Members argue that their position has a negative impact on the Yukon and its future. We have been consistent in this stance. All Members in this House will recall we firmly opposed the Meech Lake amendment to the Constitution. We prepared briefs and appeared before the Joint Committee of the House of Commons and the Senate. We lobbied throughout this great country against Meech Lake because of the adverse impact it has on Yukoners in having the potential to make us second class citizens in our own country.

We also opposed, publicly and openly, the imposition of the tax on communications, which, unfairly again, mitigated against Yukoners who depend so much in their personal, private, and business life on telecommunications.

Once again, we join with all sectors of Yukon and people of all political stripes in opposing this tax. As some of those present will know, I attended, as Leader of the Official Opposition, to make a presentation to the Standing Committee on Finance on the goods and services tax when they came to Whitehorse and heard from so many Yukoners about the tax and the negative impact it would have on us.

At that time I put forward views, in many ways consistent with the Member who just spoke in this House. At that time I echoed the view held by most people who live here that because our high cost of living is 20 to 30 percent higher than that of southern Canada, Yukon consumers will be paying more sales tax on goods and services than consumers in southern Canada. We do not believe this is fair.

It is not just the Yukon consumer that will be unfairly treated by the imposition of this tax: the business sector will suffer injustices as well. For those businesses that compete with businesses in the south, the sales tax will impose a larger burden and unfair cost on doing business.

At present our two main industries are mining and tourism. Mining and exploration costs are higher in northern Canada than in southern Canada. Northern mining companies will be paying more in sales tax than companies located in southern Canada.

The same unfair burden will be placed on our tourism industry, which competes with other regions in Canada as well as with destinations throughout the world for business.

Since goods and services to the industry cost more here than they do in southern Canada, the tourism industry will be paying more sales tax and will suffer the consequences of being forced to pass higher costs on to tourists.

What is truly frustrating and puzzling about the proposed tax is that it runs contrary to one of the longstanding and fundamental tenets of federal government policy, that of reducing regional disparities in this country. This tax exacerbates regional disparities, ensuring that consumers and businesses in remote regions, such as Yukon, will pay more for goods and services than those in central Canada. Not only that, but this tax will go a long way toward freezing Canada into the past and present economic reality, whereby Ontario and Quebec have the secondary industries, while the regions are the hewers of wood and drawers of water.

Not only will the proposed tax penalize businesses for setting up secondary industries in remote regions, such as Yukon, by building a higher tax base into the cost of production - it will do that because we pay to transport the raw materials to Yukon and, thus, pay a higher tax on those materials - but it will also result in more tax being paid on the product once it is transported to market. After all, for secondary industries the market is central Canada, and the consumers there will be paying the tax on the cost of transporting manufactured goods for any product manufactured in Yukon from Yukon to the market place in southern Canada.

I think that is an extremely important point and, in due course, I will be proposing an amendment to the amendment to reflect what I have just said.

I want to go on, though, before I introduce that amendment, which I have only partially written out before it came to be my turn to speak. I would like to  finish off what I have to say generally about the tax.

When I appeared before the standing committee, I asked it to take a message back to the Minister of Finance that, in trying to sell this tax proposal to Canadians, this government should dispel any claim the tax is revenue neutral. Canadians are not gullible. They know this tax will raise more money than is currently taxed and that it is, in fact, intended to do so. Canadians also know that, once in place, this tax will be about as temporary as income tax, and subsequent governments will have a tremendous temptation to raise the tax just a wee bit whenever they are strapped for money or the national books do not balance.

It is my view, and the view of my party, that any imposition of a goods and services tax must be accompanied by a cutback in government spending. Yukoners, like their fellow Canadians, are prepared to pay more in tax to help reduce the deficit, but only if government cuts back on its spending. We do not want to pay more tax only to see the government continue to flagrantly waste money on programs of questionable merit. This is the message we are hearing from Yukoners, and I believe it is generally reflective of the feelings of all Canadians.

I want to stress that we agree with everything that has been said here today about the tax, but we do feel that the motion ought to be amended and therefore, we will do this in time. I will try to finish the writing I commenced to amend the amendment to the motion to reflect my concern about regional disparity and the fact that it will make it even more difficult for the regions, and particularly the Yukon, to ever see secondary industry here that would have as its marketplace the vast majority of those who live in Canada. Those people, of course, live in the south and are concentrated particularly in central Canada.

I was prepared to carry on speaking until my good friend, the Member for Riverdale North, asked me if I would let him speak in my place for a couple of minutes. I was stunned and rendered speechless, but I am recovering.

Subamdendment proposed

Mr. Phelps: I move

THAT the amendment to Motion No. 58 be amended by adding the following after paragraph 7:

“8. The tax will penalize businesses for setting up secondary industries in regions such as Yukon by building a higher tax base into the cost of production and will also result in more tax being paid on the product once it is transported to market;

9. The tax will exacerbate regional disparities; and"

Speaker: It has been moved by Leader of the Official Opposition

THAT the amendment to Motion No. 58 be amended by adding the following after paragraph 7:

“8. The tax will penalize businesses for setting up secondary industries in regions such as Yukon by building a higher tax base into the cost of production and will also result in more tax being paid on the product once it is transported to market;

9. The tax will exacerbate regional disparities; and"

Mr. Phelps: I think that these are points that are important and we made them to that committee. At a time when federal government policy has been to reduce regional disparities on the economic front, it is important to note that this is a tax that runs contrary to that general theme that guides so many federal policies.

I support the amendments made by the Member for Mayo. However, I do think these two important points ought to be added to the motion.

Hon. Mr. McDonald: On the subamendment, I thank the Member for making the suggestion to add the two points. The latter point with respect to the increase in regional disparity is a point that all Members who have spoken so far have referred to. The cost of doing business in the north will increase over the cost of doing business elsewhere. For those people, whether it be the tourism industry or a small business that is trying to compete, even in the domestic Yukon market, they will be faced with a cost that is more significant than will their counterparts elsewhere in the country.

With respect to the first point the Member made, I am not sure I recognize all the jargon the Member is using, but I understand the point the Member is trying to make and feel fairly comfortable with the Member’s point of view, and feel it would also be a worthwhile addition to the amendment to the motion. Consequently, I believe we can support the subamendment.

Mr. Phillips: On the subamendment, I will be supporting the amendments made by the Member across the floor and the Leader of the Official Opposition. I am batting 500 on this issue. It seems that every time I bring a motion into the Legislature, it does get accepted by all Members, and they all agree with exactly what the motion says, but they always add something to it. I was debating a moment ago whether or not I wanted to add paragraph nine and just append my speech to the motion. When I read all these amendments, I think I said all that in my speech. I suppose it has to be a little clearer than the way I put it in the speech, and I will go along with that. I would like to thank the Members for putting the motion forward. I am not going to give you my trying-to-steal-my-thunder speech, but I do thank the Members for the friendly amendments.

Subamendment agreed to

Amendment agreed to as amended

Ms. Hayden: Much of what I want to say has already been stated by my colleagues, but I believe we need to emphasize our concern over and over again in the hope the government in Ottawa will eventually hear our concern and act to abolish the GST.

I join my colleagues in the House in support of this motion as amended.

While Ottawa is spending millions of dollars in taxpayers’ money to promote the goods and services tax there are thousands of Canadians - Canadians on fixed incomes, Canadians with disabilities, Canadians living on old age pensions, Canadians living in remote regions of this country, working Canadians living on minimum wages, thousands of Canadian citizens - who will suffer if this tax proposal is allowed to continue.

The tax will effect the Canadian north, the Yukon and our smaller communities more than anyone else in this country. It will have a larger impact on low- and moderate-income people than it will have on wealthy people and the large corporations.

Many single-parent women and middle-aged single people, in particular, fall into the low-income category. Although the tax proposal as written calls for a rebate scheme, make no mistake about it, many people with low incomes cannot or do not file forms necessary to get rebates. Worse still, some people living on low incomes just cannot afford to wait for rebates.

If the rebate schemes are an attempt to make the tax more palatable, let us be realistic and acknowledge that any rebate scheme would fall short in its ability to benefit those who will need it the most.

This is an outrage that will not soon be forgotten by the Canadian people. We have a tax system in Canada that panders to the few and hurts the many. The notion of fair taxation seems to have escaped most federal legislators. What is fair about a system about which forecasts indicate that by 1990 individuals will pay $4 in personal income tax for every $1 paid by big business. What is fair about a system that requires many bank tellers to pay higher taxes than the banks that employ them? What is fair about a system that has many gas station attendants paying more in tax than the oil companies?

Since the Conservatives took office in 1984 personal taxes have increased by a whopping 46 percent while corporate taxes have risen by only 21 percent. Seniors in this country are faced with a claw-back. Old age security is a social program that is supposed to work for seniors, not against them. We hear that the claw-back will effect only those seniors who have an income of more than $50,000 a year. With inflation it will not be too long before the indexed pensions of many people, along with savings, will hit that mark.

Working Canadians cannot continue to carry the burden of revenue creation for the federal government. Working Canadians demand, and have a right to expect, a fair tax system based on the ability to pay. Here in the Yukon, people will be even harder hit. Canadians have been told that the GST will mean lower food prices, but here in the Yukon, where we already pay significantly more money for food, higher transportation costs as a result of the GST will result in exorbitantly higher food costs.

National statistics show that a basket of food that costs $104 in Vancouver will come to $141 in Whitehorse. In Ottawa, that same food basket costs $103. Compare it: we pay $38 more in Whitehorse for the same amount of food than it will cost a government Member in Ottawa, and that is not even counting an additional tax on transportation to Whitehorse. If we are paying more for food in Whitehorse, just think what it will cost in the communities.

Let us do some more comparisons. The statistics review produced by the Yukon Bureau of Statistics shows that food that costs just over $71 in Whitehorse is valued at close to $86 in Carmacks, around $78 in Faro and in Watson Lake, over $80 in Ross River and an overwhelming $121.14 in Old Crow. When we are told not to worry about food prices, we will know better. We have a lot to worry about.

So what can we expect? The GST will bring an overall increase in the cost of living for everyone in the Yukon. The GST will affect food costs; it will affect vehicle costs; it will affect fuel costs. When my granddaughter wants to buy a book at Mac’s or Books on Main, she will pay more because of the GST. When seniors in my constituency want to travel to visit their children who live in other parts of the country, they will pay more because of the GST. When tourists come to the Yukon for a holiday - or if they come - they will pay more. In fact, the tourism industry in the Yukon may well be seriously damaged because of the GST. Who wants to pay more to come to the Yukon when you can get to Europe for less money? Who wants to drive to the Yukon when fuel prices will be higher than just about anywhere else in Canada or Alaska?

How will the GST affect the hopes and dreams of first-time home buyers? I submit that it seems to me that people who have been saving to buy a home and are almost there will be put on hold once again. When the family vehicle needs repairs - and goodness knows, that is often enough - expect to pay more. When a trapper’s snowmobile needs repairs, he or she can expect to pay more.

In its presentation to the finance committee of the House of Commons, the Canadian Federation of Independent Business called the GST a “Nightmare on Main Street”; that has been referred to before this afternoon. “The two-tiered structure creates the ultimate compliance nightmare for small businesses and confusion for consumers.” That was the federation in its presentation. It called the GST “a massive tax grab ... a triumph of greed and politics over reasoning and sound tax planning.”

The Champagne Aishihik Band has also stated that the GST will increase the administrative burden of small businesses. They also note that the GST will have a major negative impact on costs in communities, resulting in increasing pressure to locate small industry in larger centers: a double blow to Yukon communities.

So, Mr. Speaker, the GST is bad for small business and it is certainly bad for non-profit societies. It is bad for seniors, single parents, tourists, low-income earners, and kids.

Who will benefit? It appears that too few will benefit, except perhaps the corporate giants, which already take advantage of tax breaks available to no other Canadians.

Housing is not a luxury commodity. Food is not a luxury. For many people, owning and maintaining a vehicle is a necessity; it is how they earn their living. Even the ability to visit with friends and relatives is necessary to a healthy lifestyle.

The GST is wrong. It is regressive and threatening to many Canadians - to Canadians who are already struggling to make a living.

The amended motion before us states very clearly the message we must convey to the Government of Canada. We must say no to the GST.

Mr. Lang: I hope we can see our way through the debate so we can pass this motion by the end of the day. I think it is important and very timely that we expedite the feelings of this House and the feelings of the people to Ottawa as soon as possible, since they are getting to the point where a decision will be made, and it will be a final decision with respect to what is going to be presented to the Parliament of Canada.

I want to express my grave concern about the inflationary pressures this is going to put on the economy generally here in Yukon. There is no question, whether it be a seven percent or nine percent tax across the country, that there is going to be an inflation felt by all of us. Subsequently, we in junior levels of government are going to feel the consequences thereof, both in our negotiations with labour and with labour in the small and large business sectors because there will be requests for more money for the working man. You cannot argue the principle they should not get paid more. It is going to have an effect on our ability to be competitive internationally. If we are not competitive internationally, the short and the long term will mean fewer jobs. That is going to have dire effects on a lot of fellow Canadians.

When the present government was voted in, it was voted in on the strength of one principle. That principle was that they were to manage our affairs well. There is no question there were some basic principles outlined at some given time with respect to what was going to be done to the tax system if the present government was elected. The public was never informed that, in order to revise the tax system in Canada, it was going to cost us an additional 5,000 civil service jobs to administer this new tax regime. That is a startling statistic, when you take into account that that is 5,000 new jobs within the civil service, and all their responsibility will be to collect more money. It will not be to provide one more service to the general public, not one more program that will assist people who need it. All it is going to do is collect for this tax regime. That, in itself, is a basis for any politician to  pause and reflect on what they are doing.

The Leader of the Official Opposition made a point here, and I think it should be emphasized. The Government of Canada, the Government of Yukon, all governments at this stage in Canada have a responsibility to review their expenditures. Programs that are not working, or are not meeting the objectives of 1989 and 1990, should either be eliminated, revised, modified or added to other programs, and the program be administered more efficiently. There is no question we have some very significant problems in Canada when it comes to the deficit. No matter what political party was the Government of Canada, it a major problem. It is one we and all Canadians have to confront.

It is my opinion that, prior to a tax of this kind coming in across Canada, let us first manage what we have well and then assess what tax changes should be taking place.

The other area I am concerned about is that, once this tax is put into place - which was initially going to be nine percent and is now going to be seven percent, and  we are supposed to feel better about that - I know what is going to happen. It will be brought in at seven percent for the first year. The next year, it will be eight percent and, the following year, it will be nine percent. Even in our little jurisdiction of Yukon, when liquor taxes were first brought in, they were brought in for the purpose of a recreational tax. Over the years, it got lost, and it is one of the easiest areas to tax. It is a luxury tax, and it is no big deal. Look at the sales tax in our neighbouring jurisdictions, such as British Columbia. There was a provincial election, after which they increased the sales tax. Two years prior to a provincial election, they decrease it.

It is another way of milking the public through taxation, and that causes me concern.

The other area I want to touch on is the amount of taxation Canadians are prepared to endure. It is getting to the point where all the working man does is pay, pay, pay - up to 50 percent of his income goes to the tax man. This is before he buys shoes for his kids, or before he has the luxury of buying a second-hand vehicle or before he pays his mortgage. We are fast approaching the stage where it is becoming less and less an incentive to work, or if you do work the incentive is to work on the black market. In other words, quid pro quo, you do this for me, I will do this for you and there will not be any tax receipts. Then we are all happy and the Prime Minister or whoever does not know the transaction took place. It is not a very good way to run a country. It takes the incentive away from our young people to meet their obligations to our country. It is our country. I believe that politicians, whether at the federal, territorial or municipal level, have to start assessing whether some of these things are needed. I question some of the programs that the Government of Canada is coming out with and some of the initiatives taken by this government and how useful they are. And rightfully so, they should be questioned. The usefulness of the programs should be scrutinized. That is what this forum is for.

I want to say that I am pleased to see the Member for Riverdale North bring this motion forward. I want to commend the Leader of the Official Opposition who put our position forward to the finance ccommittee when they were finally  coerced into coming to Yukon. I want to express a little disappointment that no one from the Cabinet appeared before that committee. I think it was important that the various political parties appear and state their positions. It is going to be the body politic that is going to make the decision. I think it is important for it to be on the record that we all, as political parties, should have been there.

With that, I am pleased to see that the Member for Riverdale North, once again, has a motion looking as though it is going to successfully pass through these Chambers.

Hon. Mr. Webster: I want to thank the Member for Riverdale North for bringing forth this motion on the proposed federal goods and service tax. I would like to thank the Member for Mayo for proposing an amendment and the Leader of the Official Opposition for his subamendment. It is rare for us in this House to be unanimous on subamendments and amendments, let alone motions.

I think it is important for this Assembly to recognize that the goods and services tax, which has been referred to by my federal colleagues as the grief and suffering tax, is a bad idea. It will be a nightmare for small businesses and consumers to contend with. It is unfair and symptomatic of the general Conservative approach to what they call tax reform. Since the Conservatives came into office, corporate taxes have dropped. The taxes on low and middle-income earners have climbed. The rich in this country, whether it be individuals or corporations, are paying less than their fair share to run this country.

In the Yukon, corporate income taxes paid to the federal government have dropped from $13.2 million in 1984-85 to $9.3 million in 1988-89, during a period of time when Yukon prospered. In contrast to this decline in corporate taxes paid, personal income taxes increased over the same period from $37.3 million to $46 million last year. It should also be noted that over the same period of time, which coincides with the term of the Conservative government in Ottawa, the total of all taxes paid by Yukoners to the federal government has increased year-by-year-by-year from $74 million in 1984-85 to $96.5 million in 1988-89.

Discussion of a goods and services tax should not be isolated from a general discussion of the fairness of the federal taxation policies.

Although the taxation burden has shifted away from corporations more rapidly under the Tory government, the trend to load taxes on individuals is one that is well established with both the Liberal and Conservative parties.

In 1950, individuals and big business each paid about half the total tax load. Today, individuals pay almost 80 percent while big, profitable corporations pay only 20 percent.

Over that time, low- and middle-income people have had to spend an ever greater percentage of their income to pay for their government. With the addition of the goods and services tax to the tax burden already borne by low- and middle-income earners, they will be forced to spend a greater proportion of their incomes on basic necessities than rich people. This is not fair to low- and middle-income earners, wherever they live in Canada. It is especially unfair to low- and middle-income earners who live in the Yukon or elsewhere in the north or in the Maritimes or, in fact, anywhere distant from the major manufacturing and population centres of this country.

The goods and services tax will pyramid the cost of living for people in more remote parts of this country. We already pay more for our daily needs. The nine percent consumption tax on top of our inflated cost of living means that we will pay proportionately more than our friends and relatives living in the south. Similarly, my constituents in Dawson will individually pay more because of the goods and services tax than will people here in Whitehorse, simply because they are a little farther still from the larger centers that ship us household furnishings, groceries and many of the basic things we need to live our lives. Transportation services will be taxed, not to mention most of the products being shipped.

A moment ago, I mentioned our friends and relatives in the south. Many of us on occasion maintain contact by telephone. In 1987, we saw the government impose a 10 percent telecommunications tax, which was subsequently raised to 11 percent. This is a point raised by the Member for Porter Creek East. Once a new tax is put in place, gradually the rate of tax is increased and we suffer the effects. The goods and services tax would add an additional nine percent to this taxation. Essentially, Yukoners are being taxed on isolation, as was a point made by the Leader of the Official Opposition.

Having said that, I would like to spend a few moments to discuss the impacts of the goods and services tax on tourism. Tourism is a highly variable and sometimes fragile industry. Right now Canada’s competitive position has already been hurt by the rising value of the Canadian dollar, courtesy of the Conservative high interest rate policy. Just today, the value of the Canadian dollar rose to 86 cents U.S.

Growing uncertainty about the future of the United States economy has also affected our biggest group of tourists: Americans. In Canada, as a whole, the number of American visitors during the first seven months of this year dropped by 5.3 percent. In the Yukon we managed to hold that drop to 4.1 percent. Although national visitor figures are down by three percent, Yukon tourism visitations actually increased by a modest 1.2 percent. When the “grief and suffering tax” hits Yukon and the country in 1991, despite our department’s best efforts to market the Yukon and the industry’s ever more sophisticated attempts to satisfy tourist demands, we may see a major downturn in this industry. It is anticipated in British Columbia, for example, that the tourist industry is expected to be hit by a loss of 130,000 to 200,000 visitors a year. This will cost the service industries in British Columbia as much as $43 million a year in lost business and lead to the likely elimination of 5,300 jobs in 1991 alone.

The consequences for the Yukon will be more drastic. Tourists wishing to visit the Yukon will have to pay a nine percent premium on the airfares to reach northern and Yukon destinations. This means higher air fares in this era of deregulated air travel, which was supposed to be a Tory boon for air travelers. A regular adult return fare between Whitehorse and Edmonton or Vancouver will increase by $55, or, from $734 to $789. Psychologically, this moves the cost of return airfare to Whitehorse from the $700 range to the $800 range.

The same nine percent will peel bills from visitors’ wallets as they eat in Yukon restaurants, sleep in Yukon hotels, and visit the Yukon’s attractions. I suspect that most of the Members in this House realize that the majority of Yukon visitors already find Yukon prices for accommodations and meals uncomfortably high when compared with the south. A nine percent increase is not going to improve their attitude.

Contrary to what the federal Minister of Finance appears to believe, our ability to pay taxes is not infinitely expandable. The average tourist just cannot print money the way the government can. Tourist dollars are not elastic, but they are portable. If an RV tourist from the western states cannot get the bang for his buck that he wants from the Yukon, he will spend it somewhere else.

The Tories celebrate a world of international competition; a product that cannot deliver at competitive rates is dead in the water. The grief and suffering tax has a potential to make Yukon tourism a dead duck.

My government and officials in Tourism Yukon fully recognize that the double blow of Tory high interest rate policies and the Tory grief and suffering tax will heavily impact our ability to compete for American and international tourists. Unlike the federal government, that put most of its eggs in one basket with the American trade deal, we have recognized that we may be able to do better by dealing with our fellow Canadians who are more likely to see the Yukon as a destination but will have to be prepared to spend more than Americans.

Our new $295,000 program, Destination Yukon, is directed at the Canadian market and designed to build on the growth that we saw this past year: a 38 percent increase in Canadian visitors to the Yukon. It is interesting to note that we also enjoyed a 22 percent increase in overseas visitors in 1989, despite the unfavorable exchange rate caused by the federal high interest policy.

It is sobering to realize that our best efforts to market the Yukon to attract visitors here may be sabotaged by the goods and services tax. I have been speaking until now of the general effects of the GST, the effect it will have on the territorial tourism economy and its potential for growth and development.

I would like to take a few minutes now to move the discussion a little closer to home and talk about the impact of the tax on our neighbours and friends. The people who operate the small businesses in the Yukon provide services to Yukoners and visitors alike. Most businesses in the Yukon are not international corporations with hordes of accountants and tax lawyers on call. They are not anything like the federal Department of Finance, ready to add thousands of people to the payroll to administer this nightmare new tax. Many Yukon businesses are family oriented, with limited resources, already struggling to meet the requirements of Revenue Canada and the Unemployment Insurance Commission. Tourism oriented small businesses recognize the bookkeeping headaches that the GST will mean and expressed their concerns to the subcommittee of the House of Commons standing committee, which reluctantly visited Whitehorse.

June Hampton, representing Yukon members of the Alliance of Canadian Travel Associations, and David Philpott, executive director of the Tourism Industry Association, cited a number of specific problems that the goods and services tax will cause. Mr. Philpott pointed out, for example, that Atlas Tours, based in Whitehorse, will have to levy a tax for booking tours into the Yukon while Westmark Tours, based in Seattle, will not have to charge any tax for booking the same tour. Ms. Hampton cited other local examples, such as ferry bookings for the Alaska State Ferry System. Yukon travel operations would have to charge a tax for booking passages, while a tax would not apply if someone was booking directly with the ferry service. This distorts the market and provides an artificial incentive for people to bypass Yukon travel services.

I have seen studies that claim that the mining industry will not suffer from the imposition of the goods and services tax, that in part, tax credits will reimburse mining companies for the taxes paid on materials purchased to do business. Those findings might be true for the multinational mining industry, but for a family placer operation, it would be an entirely different story. Small businesses will need full-time bookkeepers to keep track of the taxes they have paid and make applications for the refund.

It is no wonder the Canadian Federation of Independent Businesses finds itself at odds with the goods and services tax.

There is much more I could say. I could point out the Chamber of Commerce’s opposition to the goods and services tax but, as we are running out of time, I will let other Members take the floor.

Hon. Ms. Joe: I am pleased today to have the opportunity to debate the very urgent concerns I have with the proposed goods and services tax. There are a number of areas within the Yukon that will be severely impacted by this proposal. It is our responsibility to ensure that we do what we can to bring the concerns of Yukoners to the attention of the federal government.

With the many concerns we have received, and with the urgency and anxiety associated with these concerns, it is increasingly evident that the hardships that will be created by this proposed tax are unacceptable by the residents of the Yukon.

I, for one, am very concerned about the hardships that will be created for single parent families. The Yukon has a much higher proportion of single parent families than all of the other provinces. Single parent families make up 50 percent of Yukon families, and 75 percent are headed by women. If you add the cost of raising children to the lower incomes generally earned by women and then consider the burden of an additional nine percent sales tax, it is easy to understand the extra impact this tax will have not only on single parent families but also on women themselves. Because Yukon women earn 58 percent of the average male income, it is reasonable to assume women will pay a significantly larger portion of their income to the goods and services tax.

Many of the tax services, such as the accounting fees, legal fees and dental fees are already too high to be easily accessible to lower income earners, the majority of which are women. The proposed tax would make already costly services inaccessible to many women in single parent families.

While there may be credit due to those who may find this tax a financial hardship, nevertheless, people will be required to pay this tax during the year, when oftentimes many people have a difficult time making ends meet with their present resources.

Will we have created an even larger gap between the haves and the have-nots? I suspect, in the long term, we will create a very serious gap between those who live either below or barely within the poverty level and those who continue to reap all the benefits money can buy.

While we looked at the hardships of those residents of the Yukon who live a subsistence lifestyle or have low or fixed incomes, we need to also look at small businesses, which are an important part of the Yukon economy. Approximately 30 percent of Yukon businesses are owned by women. Most of these businesses employ fewer than five people, and almost 60 percent of Yukon women-owned businesses have startup capital of less than $10,000; 45 percent start up with less than $5,000.

Almost half the women who own businesses are in the retail or service areas and will be tax collectors for the proposed goods and services tax. The cost of computerized cash registers, accounting costs and time spent on administering the tax will be a greater hardship for the smaller, women-owned Yukon businesses.

Most of the foreseeable problems that will be created by this tax will undoubtedly affect the lower income and small business people the most in the Yukon. The increase to transportation costs that affect all of us in the Yukon will be the final straw for many of our residents who already have a difficult time making ends meet.

It is simply not true to us in the Yukon that some things will not be taxed, because everything in the Yukon is dependent in some way on transportation costs. We need to work together to ensure that the federal government is made aware of the hardships that will result to residents of the Yukon.

The implications of the hardships of this tax will be felt in a number of different areas that we may not even realize at this point in time. We can expect that there will undoubtedly be an increase in consumer complaints as product and service costs rise. We can expect that landlords will pass on any increased costs due to the proposed goods and services tax to their tenants. Certainly we can expect that all fee costs, particularly those associated with professional services, such as consultants, lawyers and accountants, will pass on their tax increases through higher fees. These hardships will be felt most by those small businesses that utilize these services on a contract basis.

This government will be forced to collect and pass on to the federal government the proposed nine percent tax that will be incurred when the federal administrator manages the estates of deceased persons. The people most affected by this will be those Yukoners who presently live within a subsistence lifestyle or are in a lower income level, for they are the ones who would most need the services of the public administrator.

In the area of labour services, there most certainly will be additional pressure to increase the minimum wage to offset the proposed tax. Employers, especially those in marginal operations, may find the extra nine percent simply too high for their operations and may be forced to close down or abandon their operations. In case of a legal battle between taxes and wages, we know the taxes will win out over wages.

We can also expect that employers will resist increases in minimum wages and other wage rates, because they may have just increased the cost to consumers to cover the goods and services tax, and wage increases would require a further increase to the consumer. The cost of Workers Compensation Board assessments may rise because of the increase in medical costs, thus placing a further burden on employers.

Employer impact will obviously cause a further impact on employees and, in the case of the proposed goods and services tax, these impacts are all negative.

Employees will ultimately bear the brunt of the pressures that this proposed tax places on the employers. There is a segment of our population, mainly the seniors, who will be hit hard in the Yukon. We want the Yukon to be a place where not only we can enjoy the lifestyle while we are young or working, but also where we can retire and enjoy all the benefits that the Yukon offers and that we are so proud to share with the rest of the country. Can we expect our senior citizens to be able to understand this financial hardship? Can we stand before our seniors and tell them that Mr. Blenkarn, the chairperson of the House of Commons Finance Committee, feels that this tax is okay because seniors do not spend money in the same sense that others do?

We need not only be compassionate toward those who have less, but we need to be very strong in our stand to have the impact on seniors of the goods and services tax, which is unfair, inequitable and a severe burden to Yukoners, considered carefully, and also the impact on all the residents of the Yukon. I would like to support this motion as amended, and I would also like to thank the Member for Riverdale North for bringing this mot