Whitehorse, Yukon

Monday, May 14, 1990 - 1:30 p.m.

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

Prayers

DAILY ROUTINE

Speaker: We will now proceed with the Order Paper.

Introduction of Visitors.

INTRODUCTION OF VISITORS

Mr. Devries: I would like to introduce my daughter and one of my newest constituents, Loretta Devries and Kirin John Devries, my grandson.

Applause

Speaker: Are there any Returns or Documents for tabling?

TABLING RETURNS AND DOCUMENTS

Hon. Mr. Penikett: I have a legislative return for tabling and one other document.

Hon. Mr. Byblow: I have for tabling a number of legislative returns and supporting documents in response to questions raised by Members opposite.

Speaker: Are there any Reports of Committees?

Petitions.

Introduction of Bills.

Are there any Notices of Motion for Production of Papers?

Are there any Notices of Motion?

Are there any Statements by Ministers?

This then brings us to the Question Period.

MOTION OF URGENT AND PRESSING NECESSITY NO. 2 (STANDING ORDER NO. 28)

Yukon Pacific Forest Products

Mr. Phelps: Prior to going in to Question Period, I would like to rise under Standing Order No. 28, to request leave to debate the following urgent and pressing matter, by way of motion. The motion reads as follow:

THAT it is the opinion of this House that the Commissioner in Executive Council should cause an inquiry to be made forthwith pursuant to the Public Inquiries Act into a matter connected with the conduct of the public business of the Yukon and a matter of public concern, namely the involvement of the Minister responsible for the Yukon Development Corporation and the past and current board of directors and chief executive officers of the Yukon Development Corporation into:

a) the expenditure of public funds in the operation and management of Hyland Forest Products in Watson Lake;

b) the details of the sale of Hyland Forest Products to Yukon Pacific Forest  Products Ltd.;

c) the continued investment of public funds by the Yukon Development Corporation into Yukon Pacific Forest Products Ltd.; and

THAT the board of inquiry should report back to this House no later than December 31, 1990.

By way of background, with regard to...

Speaker: Order, please, on a point of order to the Hon. Government House Leader.

Hon. Mr. McDonald: Standing Order No. 28 makes reference to motions being put of an urgent and pressing necessity as put forward by the Member for Hootalinqua. However, it does not give the Member leave to explain or debate the motion.

Speaker: On a point of order, the Member is allowed to give a brief explanation as to why the motion should be moved.

Mr. Phelps: The issue before us, of course, has to do with the Watson Lake sawmill, which was shut down and is now apparently to be sold by order of the court. The order to sell the assets of Yukon Pacific came on Thursday. It is our respectful submission that the issue is one that falls under the intent of Standing Order 28(1).

The motion is of urgent and pressing necessity for several reasons. Firstly, we are about to wind down the session. Once it comes to an end, we will not be back in for a good many months, the practice being that we will not return for five or six months at least. Secondly, this is a matter that is having a devastating impact on the economy of southeastern Yukon, particularly in the centre of Watson Lake, and it has severe consequences for all those people who are owed money and who are dependent upon the mill and the operation of the mill for their livelihood.

The third point I wanted to make is that we have been having a great deal of difficulty getting information public and out to the people...

Speaker: Order please. I would ask the Member to please conclude his remarks.

Mr. Phelps: We do not have in operation any method, by way of a third party, to look into exactly what is happening there, and we are talking millions and millions of dollars - in the tens of millions. People are owed money and it is our respectful submission that because the Public Accounts Committee has been unable to delve into the situation with any depth at all, prevented by the bogus court case that has been initiated by the Yukon Development Corporation against a previous manager of the operation, and because we are losing witnesses and losing evidence about exactly what has been happening and is going to happen - for example one of the key players, Jack Sigalet, has died since the Public Accounts Committee was supposed to have its hearings - it is our respectful submission...

Speaker: Order please. Would the Member please conclude his remarks and I will deal with this motion.

Mr. Phelps: It is our respectful submission that this is an urgent and pressing matter and we know we can enjoy the support of people on both sides of this House, given the tremendous exposure that has been given Watson Lake sawmill from time to time by the Government Leader and his party members.

Speaker: A motion such as this one brought before the House requires unanimous consent of the House to be dealt with. Is there unanimous consent?

Some Members: Agreed.

Some Members: Disagree.

Speaker: There is not unanimous consent. We will now go to Question Period.

QUESTION PERIOD

Question re: Yukon Pacific Forest Products

Mr. Phelps: I have some questions for the Minister responsible for the Yukon Development Corporation with regard to the sawmill, particularly with regard to the many issues raised in court last Thursday when the receiver obtained an order for the sale of the assets of Yukon Pacific. I would like to get some of the huge losses on the record.

Is it correct that Yukon Development Corporation lost $8 million operating the mill under Hyland Forest Products, prior to the sale to Yukon Pacific, made up of $1.8 million in 1987-88 and $6.2 million in 1988-89?

Hon. Mr. Penikett: The performance of the company during the period of our ownership and the losses incurred during the period when the company was wholly owned by the Yukon Development Corporation are a matter of public record. I know the Member is not seriously interested in an answer to the question, since he knows the answer. It has been much debated in this House.

Mr. Phelps: We are extremely interested in trying to get some totals of the money that has been squandered on this project.

Since it was operated under Hyland, the assets of the mill were sold to Yukon Pacific. That operation has been running up until the present. We now know that Yukon Pacific owes $10.4 million right now. In addition, T.F. Properties is suing and claiming an additional $6.5 million, for a total of almost $17 million. Are those figures accurate?

Hon. Mr. Penikett: I do not know whether the Leader of the Official Opposition is attempting to rehear the matter that was heard in the court for fear it did not have sufficient attention at that time. The Member mentioned some figures from the court record. He apparently feels that T.F. Properties, the company he was alleging was ripping off the operation and the people of Watson Lake, has not been paid by the owners of the mill and has a claim for $6.5 million.

It is worth noting that the claim by T.F. Properties is disputed by the receiver. I think that view is shared by the officers of the Yukon Development Corporation.

Mr. Phelps: We also understand that, back when the sale took place from Hyland to Yukon Pacific, between the assets and operating money that the Yukon Development Corporation was providing at that time, it is their estimation that they put $5.7 million into the operation last spring. Is that correct?

Hon. Mr. Penikett: Since the Member wants to discuss the liabilities of the new company, Yukon Pacific Forest Products, and so he has a complete picture, since I am sure it will expedite the matter before the House in this Question Period, in approximate terms of the $10 million liabilities of the new company, approximately $5 million is owed to the Yukon Development Corporation, $3 million is claimed by Shieldings and the Bank of Nova Scotia, about $2 million makes up the accounts of trade creditors, and we believe about $400,000 of that is for local creditors. I hope that will help the Member in his understanding of the issue.

Question re: Yukon Pacific Forest Products

Mr. Phelps: I thank the Minister for going out of his way in providing me with answers on these anticipated questions.

In addition to the $5.7 million, back in the spring of 1989, and up until the receivership when the receiver was appointed - in that period of time - were there any additional monies given to, paid to or transferred to Yukon Pacific Forest Products by the Yukon Development Corporation?

Hon. Mr. Penikett: I believe it is a matter of record, and I believe the Member knows, that beyond the investment that had been previously identified by the Yukon Development Corporation, there were not, in the period until the operation went into receivership, further investments by that Crown company.

Mr. Phelps: In addition to the monies we have been discussing that were put into Yukon Pacific, there have been various government grants given by government to Hyland and to Yukon Pacific, such as money for a reforestation program, grants to perform a study on supplying wood-fueled electricity and grants for road building, and the like. I would like the Minister to undertake to provide me with details of all grants given to Hyland or to Yukon Pacific by this government and jointly through the economic development agreements, as well.

Hon. Mr. Penikett: The Member is referring to programs that are available to all people in business in the Yukon Territory and I am sure that contributions under those programs that are not already a part of the public record shortly will be, so I am sure the Member’s interest in this question will be satisfied very soon.

Mr. Phelps: I would certainly like a copy. We know that since the receiver took over, the Yukon Development Corporation provided working capital to the receiver and that the receiver, as of April 30, had spent $192,000 above and beyond the working capital provided. It costs about $60,000 a month just to continue a holding pattern with regard to the assets in Watson Lake. I want to know whether the Yukon Development Corporation is going to provide any further working capital to this operation.

Hon. Mr. Penikett: Let me declare that that it is not our intention. I fear the Leader of the Official Opposition is attempting to put a different character, by virtue of all of the motions that he is presenting to the House today as well as his questions, or different complexion on the events that transpired last week.

Let me explain that following the losses, during the time it was under our ownership, we sought new owners for this company. A company that is extremely affluent and credit worthy, according to all checking, a company whose largest shareholder was the Bank of Nova Scotia, made an offer. A sale was conducted. That company made certain financial commitments, both to us, to the people of Watson Lake and to the company. Those commitments were not met. Accordingly, at the first opportunity, we went to court to have a receiver appointed with a view that if a negotiated agreement did not arise the assets would be put up for sale. The court has made a decision on Thursday. The receiver will now be entertaining offers from other potential investors and will go back to the court to finalize that matter.

Nowhere are we invited to participate in that other than cooperating with the receiver to try to see what we have sought for a long time, which is a reliable operator to come in and put the mill on a stable footing.

Question re: Yukon Pacific Forest Products

Mr. Devries: I would once again like to ask the Minister about the creditors in Watson Lake. Once again I would like to quote the people of Watson Lake in saying that he put us in bed with these guys. As their MLA, I would like to know if the Government Leader, who was involved in the decision that led to this fiasco, will accept responsibility for his actions and make it his personal undertaking that the creditors in Watson Lake and elsewhere will be paid?

Hon. Mr. Penikett: I was talking to someone from Watson Lake the other day who said it is a pity that Tories have nothing constructive to offer on this subject except jeering from the sidelines. So there is obviously more than one opinion on this subject in Watson Lake.

This question was obviously written out for him because he has asked it more than once. I have already indicated that in legal terms neither the government nor the Yukon Development Corporation is directly responsible for the liabilities of Yukon Pacific Forest Products. We remain committed to do whatever we can within our means to help the situation in Watson Lake, which is why we got involved in the first place. We did not do it because we would like to receive any hosannas from the side opposite. We saw a community in need, in desperate economic circumstances, and we responded.

It remains our objective to see that mill realize its potential, which we believe it has, and to see the forestry sector in that area realize its potential. What we can do in that area, we will do.

All I can say with respect to the creditors in Watson Lake is that we feel very strongly...

Speaker: Order please. Will the Member please conclude his answer.

Hon. Mr. Penikett: ...that they should be paid and the extent to which we will be cooperating with any new owner in terms of their venture will depend to a large extent on how much that new owner satisfies the obligations to the people in Watson Lake.

Mr. Devries: Every time I bring this up, the Minister goes on and on but we have nothing positive yet. The Minister has never come to me personally to see if I have any ideas to contribute.

In February, 1989, the Minister came to Watson Lake and announced the sale just prior to the election. His colleague had come shortly before that as well, and both had spoken in glowing terms of all the operating skills and financial stability...

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

Mr. Devries: ...of this consortium. Why did he not at that time announce that T.F. Properties was involved and warn the people that there could be some risk in getting involved with the venture?

Hon. Mr. Penikett: There are a couple of points in the Member’s question I would like to respond to.

First of all, as I have said many times in this House, we did not make any arrangements with T.F. Properties; we made them with Shieldings. Its largest shareholder is the Bank of Nova Scotia. As of this morning it is still a solvent company, as far as I know. Other major shareholders were large pension funds. We had every reason to believe that this was a company, not only with experience elsewhere in the forest sector, but also a company with the capital to put the plant on its feet.

The Member has echoed the complaints against T.F. Properties made by the Leader of the Official Opposition, but he will note the contradiction of the Leader of the Official Opposition also putting on record today the claim by T.F. Properties that it too has not been paid by the new owners of the company. There is on public record before the court some doubt as to the veracity of the charges made in this House against that company by Members opposite.

Mr. Devries: The Minister did not really answer my question. I believe it was in May of last year that I started phoning various people about people not getting paid. Why, once they realized that T.F. Properties were involved, knowing their reputation, did the Minister not warn the people of Watson Lake that there could be problems with this company?

Hon. Mr. Penikett: It is a very strange proposition. The Member is suggesting that because a company hires a manager who the Member opposite believes to be disreputable, we should somehow issue a public warning to people of buyer beware or some such warning. I think that would be a very strange proposition. We had good reason, based on the checking that we did, to have confidence in the investors. The people who did not put up the money they promised to put up are Shieldings, not T.F. Properties, but the matters between them are still to be worked out. The Members opposite have laid the blame at the door of T.F. Properties, but the problem we have of the obligations not being met is with the company we dealt with, which was Shieldings.

Question re: Yukon Pacific Forest Products

Mr. Brewster: On May 10, 1990, testimony of Mr. C. Rogers, representative of the receiver/manager for Yukon Pacific Forest Products, stated that when his firm took over the mill, “It was a disaster and a fire hazard,” and that this property was the worst case of insolvency that he had ever seen.

My question to the Minister: were regular checkups by the electrical inspector, the fire marshall’s office and the safety officers done on the sawmill ever since it started up?

Hon. Mr. Penikett: The Member read the question fairly quietly so I did not hear it all. I understand that he is concerned about a report or mention that was made in the court last week of a fire hazard at the mill. In checking that fact, I discovered that the fire marshall had drawn to the attention of the receiver a problem at the mill, and I am advised that the receiver is addressing it.

Mr. Brewster: He did not answer the question. I will try again. Was there any instruction given by Minister to keep this unsafe mill operating against the advice of a safety official of the Yukon government?

Hon. Mr. Penikett: Well the Member has gone from a complaint that I have not answered a question that I could not possibly be expected to answer without notice - in other words, who went and did inspections, when, which is not something that I would normally be expected to have in my memory - to an accusation that I gather he is now making, that I have issued some order that inspections not be done, in order to keep the mill operating. Now, if he is seriously making that charge, then he should stand in his place and make it, because it is ridiculous, absolutely false and without foundation.

Mr. Brewster: Could the Minister answer with a “yes” or “no”, instead of a long speech. Will the Minister table all reports of inspections by the electrical inspector, fire marshall’s office and the Workers Compensation Board as to the safety of this mill in Watson Lake since it started up?

Hon. Mr. Penikett: The government will obey all the regulations about the reporting and inspections regarding that mill. It was never the custom in the Member opposite’s day to make public safety or inspection reports, and I do not think the rules have changed since we came into office. We obey the rules that are in place, and have been in place since the day the Member opposite was in government.

Question re: Yukon Pacific Forest Products

Mrs. Firth: On numerous occasions, the Minister responsible for the Yukon Development Corporation has refused to answer questions about the total cost of supporting this mill. The Public Accounts Committee was neutralized by the court case, and the Minister subsequently refused to answer questions about the dollars being spent because of the court case. All that time, the government kept putting more and more money into Yukon Pacific Forest Products.

Our concern is with public accountability. We have here a government that is crying poverty and constantly blaming the federal government for their financial situation, yet they continued to put money into the mill at Watson Lake.

When is there going to be a full public accounting of all the money spent, and how much has been spent?

Hon. Mr. Penikett: Again, I have to deal with the Member’s preamble, which is unfortunately, as is often in the case of this Member recently, inaccurate in a number of respects.

All the facts around the sale and the contributions and investments of this government are, I believe, now public. The Leader of the Official Opposition earlier referred to bogus court cases. I take it he must have been referring to his own access to information, but that is before the court so I will not discuss it here, anymore than we will discuss any other court case.

The monies that the government has invested in the operation are a matter of public record. The Leader of the Official Opposition earlier asked for a listing of what other program funds from other programs have been made available by the government. I am sure that a large part of that information is already public. If it is not, it will be made public shortly as a matter of routine in this government.

If the Member is trying to create an issue by suggesting that we have not made that public, I am sure it will all be public and available to all Members of this House, to the Public Accounts Committee, and to the citizens at large.

Mrs. Firth: The ability of the government to manage money and public accountability are the issues here, not the accuracy of my information. What is at issue is the ability of this government to manage its money. Nothing has been routine with this operation right from day one.

When is the taxpayer going to know exactly how much money has been spent to support this adventure of the government?

Hon. Mr. Penikett: I believe that information is already a matter of public record - including, I am certain, monies referred to earlier in questions today that have been accessible under programs of the Department of Economic Development, or through federal/territorial economic development programs.

If there is anything that is not yet public, I am sure it will be public shortly.

Mrs. Firth: We are talking about millions, and millions, and millions of dollars. So far that is all the public knows: there has been millions and millions of dollars spent. There has been a great deal of concern raised in the public that this kind of thing does not happen again in the government or with the Development Corporation.

The Development Corporation has just gone into the construction business...

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

Mrs. Firth: I will Mr. Speaker. ...with old Yukon College. What policy changes, what direction or new initiatives is the Development Corporation taking to see that there is not an over expenditure of millions, and millions and millions of dollars for the Yukon taxpayer again?

Hon. Mr. Penikett: First of all, let us separate several issues here. First of all, the operations of Yukon Pacific Forest Products, during the time that  company was controlled by Shieldings, is an entirely separate question from the operations of the corporation prior to the sale during the time we were responsible.

I would say the issue of the operation of Watson Lake Forest Products has been extensively reviewed by the Development Corporation board and will be again. The question of the competence in various types of management of this operation has been subject to review. There is a litigation proceeding against the former managers who managed it during the time we owned it, so I cannot get into extensive discussion of that. That will ...

Speaker: Order please. Will the Member please conclude his answer.

Hon. Mr. Penikett: I am desperately trying to answer the question, but the question had at least four parts to it and covered everything from the old Yukon College to the sawmill, and I have not even had a chance to get to the old Yukon College yet.

Question re: Yukon Pacific Forest Products

Mr. Phelps: I am concerned about the future of Watson Lake. The town has been devastated by the closure of the mill, by all the bad debts that have been run up, and by the bad reputation accorded to the lumber industry in that part of the Yukon. What plans, if any, does this government have with regard to introducing some programs to soften the economic blow to the town?

Hon. Mr. Penikett: Let me remind the Member why we got involved in this project in the first place. We did so because Watson Lake was in desperate financial circumstances. We took a hard look at all the alternatives and made some tough decisions, knowing there were risks.

We took those risks for the good of the community of Watson Lake, not for the good of this government, not for the greater glory of the New Democratic Party, nor for the ennoblement of any Member of this House. We did it because a community was in trouble.

The Member asks about the bad debts and the bad reputation of the mill and the forestry industry there. Let me put his question in context. We are talking about a mill that had gone bankrupt twice before, about a mill that, even when it was in public hands, had private management. Unfortunately, the only time the bills have been consistently paid in that operation was during the time we owned it, and we were criticized for that by the Members opposite.

We believed in the future of that mill. We believed in the future of the forestry industry. Our efforts to attract new investors to that operation were to achieve its potential.

We are now going to cooperate to the maximum extent we can with the receiver, in the hope that, in the bidding that will take place for the assets of the mill, we will get a reliable operator who will put in the money to make that a stable, reliable operation. We will be looking for an operator who is willing to satisfactorily deal with the local creditors, to recognize the substantial aboriginal interest there and, through cooperation with the federal government, which will issue forestry leases, the aboriginal community there, who have an interest in this matter, the new owners and the people of Watson Lake try, at long last, to make a success of the mill...

Speaker: Order please. Will the Member please conclude his answer.

Mr. Phelps: My question was not answered. Concerning the mill itself, we are looking at a situation of it being $10.4 million in debt, according to the receiver. It is being sued for an additional $6.5 million. There has been $8 million lost prior to that by government. We are looking at assets, according to the receiver, worth no more than $1.5 million and probably considerably less than that. I am asking, not about what they are going to do about the mill, which was left in terrible condition - in fact the sorriest picture that the receiver, who makes a living going around looking after assets, has ever seen. What I am asking is: aside from talking about the sawmill, what other programs exist that can help this town out in its time of need - a condition brought about largely and primarily by actions of the government.

Hon. Mr. Penikett: Let me review the facts again. He talks about the sorry picture. This is the sorry picture left by Yukon Pacific Forest Products, a company controlled by Shieldings International, out of Toronto, not by the Government of Yukon - for a start. It is that company that promised to invest certain millions into this operation, which it did not. The Member talks about $10 million in liabilities: five million dollars of those liabilities are to the Yukon Development Corporation; another $3 million is to Shieldings and to the Bank of Nova Scotia; $2 million, as I said, is to trade creditors; $400,000 is to local creditors. For those local creditors, we are going to try to do everything we can to see that they get paid. That is a start.

The Member talks about the assets. Anybody will admit that the statement of the assets was a very conservative evaluation. It did not include two items that I know about: the receivables from the insurance company for the sale and the power plant. The value of the operation - the Members snicker. I am sorry that facts are so awkward for them, but I have just given them two facts. The value of the property will be established - if the Member has another question, he will have to wait to get up to ask it.

The value of the operation will be established by the bidding that will follow by a number of private interests who are interested in seeing the operation started again.

The Member talks about what else this government is doing. Members will know that this government is not only proceeding with a major capital work in that town, but we have also been working strenuously with the developer on the Mount Hundere operation. A considerable amount of effort is put in by government to see that operation get onstream and become a success. It is our hope that we will see, in the not too distant future, not only a viable mill but also a viable mine in the Watson Lake area.

Mr. Phelps: I am pleased to hear that this government is going to guarantee the $400,000 that is owing to the small businesses and help them get that money. I would like to ask the Minister if he is saying that Yukon Pacific Products owns the electrical plant at Watson Lake?

Hon. Mr. Penikett: I believe that, first of all, once again I must deal with the preamble, because I did not say that we were going to guarantee the $400,000.

We are going to use any influence we have on the new owners to see that matter resolved - even though we have no legal obligation for that $400,000.

The Member opposite says that we have a heavy moral obligation. I wonder if he would argue that every single business we support or encourage to come here by giving them program money under the economic development agreement or the business assistance program incurs on us the obligation to pay that business’ bills. It certainly does not. I remember the Leader of the Official Opposition making promises he knew he could not keep. We are not going to send him the bill for any of those.

The Member once again is interested in political profit here, not the development of the community of Watson Lake.

Question re: Yukon Pacific Forest Products

Mr. Phelps: I would like to know who owns the power plant.

Hon. Mr. Penikett: It is one of the assets of the operation, but we believe it is a valuable asset. The Member may know that Yukon Development Corporation has a lien against it.

Question re: Medical travel

Mr. Nordling: I would give the Minister a break, but he is also the Minister of Health and Human Resources, so my question is for him. It is with respect to medical travel. Last week I asked the Minister about a $63,000 study done by Price Waterhouse. The Minister said it was to do with transportation equipment, air ambulance and other emergency services and that he would check on when it would be made public. I would like to know when that will be and if there will be any changes in policy as a result of this report.

Hon. Mr. Penikett: First of all, I have not had a chance to have written confirmation of what I said in the house, but I have informally checked and I believe it has been confirmed that I was correct in stating that the consulting work was to do with the air ambulance service, the ground ambulance service, the kind of ambulance services that might be operated in the future and how they would be managed.

I know that I have had the chance some time ago to discuss the report with people from the medical profession. I would be happy to check to see if I can make it available to the Member immediately. I do know that the work on the medical travel policy, with respect to medical escorts, was done in house.

Mr. Nordling: The area I am interested in is the air ambulance services as I believe, last year, a contract for air ambulance services was not awarded after it had been tendered and services were requested on a monthly, rotating basis from operators here in Whitehorse. I wondered if this coming year the air ambulance services would be tendered or if the current method, which lacks policy, would be continued. I believe this is due at the end of the month.

Hon. Mr. Penikett: I will have to take that part of the question as notice. At least, in part, it involved the Minister of Government Services, who issues those contracts.

Let me tell the Member about the research that was done by the consultant involved in the operation of the ambulance services about the future, looking forward to the day when the hospital would be under our control. The report recommends hospital-based ambulance services and made certain recommendations about the kind of equipment that is required, including the kind of aircraft that should operate.

In the medical fraternity now, there is a feeling that the equipment we have, both in terms of its ability to accommodate stretchers - taking them in and out - and its ability to accommodate medical staff, as well as certain kinds of life-support equipment, is less than desirable. There is a trend in ambulance service provision now, an evolution that is going on dealing with ambulances not just as transportation systems but as treatment centres, so distance diagnostic tools will allow people in the ambulances, usually people who are called paramedics, to provide treatment the minute the person is in the ambulance. In other words, the ambulance functions as the front door of the hospital.

There are a lot of issues like that being debated now. The government has not made any policy decisions yet on those questions. That is what the report recommends that we deal with, and looks ahead to the day when the hospital would be under our control and the ambulance facilities might be operated through that hospital organization.

Mr. Nordling: I believe that answers my question: that policy changes will not take place until the hospital is transferred.

I would like to go back to the medical travel for mothers with sick children, and with the policy being reviewed in house over the past year. I received a copy of a letter I believe the Minister also has a copy of, from another parent who was adversely affected by the policy. Will there be any interim measures taken by his department before a new policy is announced and the financial implications dealt with in next year’s budget?

Hon. Mr. Penikett: Rather than introduc an interim policy - which is always complicated because any policy we arrive at still has to have regulations drawn, has to be communicated to the people who are going to be carrying out the policy, both the doctors and medical staff who may be under federal control and our own people - I would rather do what I indicated last week, which is to expedite the consideration of this policy. I am doing that and am going to try to have it dealt with very soon, so both the policy content and financial implications can be dealt with by Management Board and the Cabinet in the very near future.

On compassionate grounds, I understand the kind of representation being made in the recent letter to which the Member refers, and I am trying to address those kinds of situations in the new policy.

Question re: Kidney dialysis

Mr. Lang: I have a further question to the Minister of Health and Human Resources with respect to kidney dialysis. I have been communicating with his office and administration on this matter. It has to do with two Yukoners who are presently afflicted with a disease that requires this type of service. Further, for the information of all Members, kidney dialysis was made available to Yukoners up until 1986 and has now been discontinued. It has been provided for those people who needed it when it was necessary to use such a machine.

I understand the department is meeting with the federal department within the next week or so on this matter. Since the session is coming to a close fairly soon, I would like to ask the Minister if he can assure us he will take every necessary step to have this service put back into place so Yukoners can have this service and be taken care of at home rather than having to leave the Yukon Territory?

Hon. Mr. Penikett: I believe I have communicated to the Member our view that the dialysis machine that is in the hospital might be repaired so that procedure could be made available locally. There has not been ongoing demand for it, but at the moment there are two patients receiving this service outside the territory.

I would be less than frank if I did not indicate to the Member that there is less than unanimous opinion in the medical fraternity as to whether this service is best provided here or in a distant, more high-tech hospital. That may depend somewhat on whether the needs of every patient could be met by the machine that is here and the staff complement.

If the Member is interested in hearing further reports about the discussions we are going to have next week, I would be happy to communicate with him on that. I do not know if the issue will be finally resolved at that meeting. I hope so but I have no guarantee.

Mr. Lang: The situation is that it is easy to have this service provided outside the territory; meanwhile, the government “meetings” itself to death, and all the while there are Yukoners, who are in desperate need of this service, separated from their families, living in Vancouver at much added expense.

This is in reply to the letter the Minister provided to me with respect to the policy of providing some method of helping defray the cost of living for...

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

Mr. Lang: I assure you, Mr. Speaker, I am. ...people forced to go outside the territory to access this service. If you stay in the hospital, you pay the full shot in Vancouver General, but if you are outside the hospital and visit for the purpose of kidney dialysis, the resident has to find some place to live at his own expense.

Would the Minister undertake to reconsider this policy and, in legitimate cases such as this, help defray the cost of living. Right now we are in a situation where at least one individual ...

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

Mr. Lang: ...is facing astronomical costs.

Hon. Mr. Penikett: The policy issue is whether this government is going to pay for out-patient services for people. Out-patient services have never been covered by this government, nor by most provincial governments, as I understand it. The implications of a policy change that would have us bear all the out-patient costs are, in financial terms, massive.

In hearing the representation from the Member opposite, he must understand that, unless we are talking about extremely isolated and special cases, the policy proposal that this government cover out-patient costs is conceivably of such an order of magnitude that we could not escape tax increases if we were to underwrite such a policy. I want to make that clear because that has been the difficulty in trying to deal compassionately with such situations. The policy issue is: does this government take a position that we are going to cover out-patient services or not?

Mr. Lang: The point is that we are in a situation where some Yukoners have been forced to go outside, not from their own choice but because we do not provide the service here. That is the situation that we are dealing with here. No one is out in Vancouver because they want to be; it is because they have to be since we are not providing the service.

I guess that leads me to my next question. We have seen over the past three months various Members of the front bench telling Yukoners that they are going to cut back in various areas. We have a situation where we have a lack of service in the area of kidney dialysis, which used to be provided in 1986. It is no longer available to the general public...

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

Mr. Lang: ...and the representation that has been made to me is that some people are beginning to wonder if the reason for this cutback is perhaps because of the fact that medicare premiums are no longer in existence. I would like to ask the Minister whether the loss of that $3 million revenue that was provided to the government on an annual basis, whether or not this is a factor with respect to...

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

Mr. Lang: ...I am just concluding my question ...  replying in letters to people such as myself that there is no money available...

Speaker: Order please.

Hon. Mr. McDonald: As much as I would really love to hear another long speech from the Member who is trying to put the question, I would really insist that the question be put.

Speaker: Order please. I have asked the Member several times to please get to the supplementary question. It is just about the end of the Question Period and if he wants an answer he will have to conclude now.

Mr. Lang: I would like to ask the Minister if, in view of the fact that we have $3 million less in revenues to the Government of the Yukon Territory for such facilities, and to pay for such charges, is that why some of these things cannot be done?

Hon. Mr. Penikett: No, it is not. We believed the medicare premiums were an unfair tax, as do most provinces in this country. That is why they have been abolished in all but two jurisdictions. The question of the adequacy of the funding of the medical program should have been addressed when we debated it earlier this year. This year, we have added $6 million to the medical health insurance program, obviously much more significant in its consequences than the $3 million the Member is talking about.

Speaker: The time for Question Period has now lapsed.

ORDERS OF THE DAY

MATTERS OF URGENT PUBLIC IMPORTANCE NO. 3

Yukon Pacific Forest Products

Mr. Phelps: I rise under Standing Order No. 16(1) on a matter of urgent public importance. Mr. Speaker, under the provisions of that rule, I had delivered to your good offices a letter this morning, which outlines the request and reasons for it.

Very briefly, to paraphrase the reasons as set forward in this letter from myself to Mr. Speaker, we have the situation where the sawmill is in terrible  financial and physical shape. The court has ordered the assets of Yukon Pacific be sold. This is having a devastating impact on the Town of Watson Lake, and on all the many small businesses that are owed money and that face a bleak few months.

Once again, I would like to point out that we will not be back in this House for five or six months, once we stand down, and the people in Watson Lake have the right to hear an emergency debate on what can only be classified as an emergency that is being faced by that region of Yukon.

There is the issue of whether or not the creditors are being paid and the kind of obligation we feel the government has because of the political actions taken by the Minister responsible. There is the issue of the fire hazard and what is being done to correct that. There is the issue of environment: the claim we have heard several times that there must be a cut of timber two, three or four times what is allowable now under the tree farming licence, or the licences the operation has. It is our view that all these issues are extremely important, and that the citizens affected, those who live in Watson Lake and that region, those owed money, will have to make decisions soon about what they are going to do, whether they will have to uproot their families and move outside, whether they should be taking court cases, who they should see about any programs or assistance that might be offered. Those people have the right to expect this debate; they have the right to receive this debate; they have the right to read about this debate, and that is what I am basing this request on.

Hon. Mr. Penikett: I believe this day is notable in the legislative history of the Yukon Territory if only that it may be the first time in history a Member has moved two motions on the same subject on the same day.

It is our view that the request for leave to move for the adjournment of the ordinary business of the Assembly for the purpose of debating a Supreme Court order, namely, the one that the receiver/manager be empowered to sell the assets of the Yukon Pacific Forest Products in Watson Lake, does not meet the criteria set out in Standing Order No. 16 and therefore should be denied.

It is a matter of record that the order empowering the receiver/manager to sell the assets of the mill comes in the context of a court application brought by the Yukon Development Corporation against Yukon Pacific Forest Products. It is no surprise because it was an action that was discussed in the House.

This decision is not the final one to be made in this action. We believe that it would be precipitative to examine it and discuss it in isolation from the entire action. It is our opinion that the circumstances of the making of the order cannot be termed “urgent”. As stated before, the order is not the final decision on the action and the matter is in that sense still before the court. But we believe that the making of the order in no way created an emergency situation. The order probably contributes to reducing any sense of urgency and may contribute to the stability of a very difficult situation.

All the factors that led to the court order to grant the order requested by the receiver/manager have been in existence for some time prior to the application, yet the Opposition has postponed the leave of the Legislature in order to move the matter today. A number of the issues have been discussed, but we do not believe the same issues can be transformed into urgency by a court order over which the Government of Yukon has absolutely no influence at this point.

There has been plenty of opportunity for the Opposition to debate the issue outlined in the Opposition Leader’s letter during the normal business of the Legislative Assembly, and they have not chosen to do so recently. Some of the issues referred to by the Leader of the Official Opposition have been taken to the Public Accounts Committee. Some of them have been subject to questions in the House and, as such, would make the matter fall afoul of Standing Order No. 16(11)(b).

There are certain allegations or political statements included in the Opposition Leader’s letter to the Speaker, which I could dispute. He has repeated the ones about the liabilities and the fire hazard, which I addressed in Question Period. He then goes on to take press speculation of one potential purchaser in regard to a decision that has to be made by the federal government and suggested there is an environmental issue here for which the Yukon government has direct responsibility. This, of course, is not the case.

Speaker: Order please. I would like to remind the Member you have one minute to conclude.

Hon. Mr. Penikett: Thank you Mr. Speaker. That will be more than sufficient. All of the matters that the Member has addressed in his letter as being a requirement for an emergency debate have just been addressed in Question Period except for the one I have just mentioned, which is in the federal domain. It is my view that an emergency debate on the same issue has already been requested by the Opposition in this session. The circumstances surrounding the operation are essentially the same except that now that there is the prospect of a new owner we have less of an urgent situation that existed previously.

Speaker: Order please. The Chair recognizes the importance of this issue. On the other hand it is very confusing and I am supposed to try to find a place where this kind of issue can be discussed. Therefore, I have to ask for the assistance of the two House Leaders. Will this session be sitting Wednesday?

Mr. Phillips: I attended my regular House Leaders’ meeting at 10:00 a.m. this morning and the Government House Leader said the meetings of the House Leaders were canceled for this week. They do not want to talk to anybody, not even the public, and especially not the House Leaders.

Hon. Mr. McDonald: Last Thursday, the Opposition House Leader and I discussed the order of business for the balance of the session. We determined by agreement that the session would wrap up on Thursday. To my surprise, I found that the House Leader, or at least the caucus, had changed its mind. Consequently, the agreements that had been struck were then terminated unilaterally by the Opposition. Consequently, I found it fruitless to discuss the business of the government and to provide complete advance notice on everything the government was doing, and in fact even to indicate what the government was going to say in some cases, only to find the agreements being struck by House Leaders were going to be ignored or unilaterally denied by the Opposition.

Consequently, I felt the need and usefulness of meetings of House Leaders was somewhat questionable and asked that the meeting of the House Leaders not be conducted today.

With respect to providing you with assistance as to when the Legislative Session will wrap up, I have absolutely no idea because last week we were treated to two and one-half hours of stories of the childhood of the Leader of the Official Opposition. We may be listening to stories of the childhood of the Member for Porter Creek East, or anyone else, today. Whatever moves their fancy we will have to endure.

Mr. Phelps: Point of order, Mr. Speaker.

Speaker: Point of order to the Leader of the Official Opposition.

Point of order

Mr. Phelps: To the best of my recollection, I did not say one word about my childhood. The only references made to my childhood were made by the Member just speaking, so I would like to correct the record. The debate was on issues of extreme importance to the placer mining industry. If the Minister is saying that the placer mining industry is not of any importance at all to him, that it is not worthy of a speech, then I am very sorry indeed.

Speaker: Order please. I find there is no point of order but only a disagreement between two members.

Mr. Lang: Point of order, Mr. Speaker.

Speaker: Point of order to the Member for Whitehorse Porter Creek East.

Point of order

Mr. Lang: I  want to make a couple of observations in respect to the business of the House. It would appear to me, as a Member of the House, that in view of the fact of what is left on the Order Paper it would be very much a surprise to us all if we are still in here on Wednesday. I want to make an observation as far as the business of the House is concerned. The House Leader on our side had come to a tentative agreement that it looked like we would wind up on Thursday last, but as you know, the news of the Watson Lake situation came to the public’s attention, not by the government’s action but through the court, at 2:00 p.m. on Thursday afternoon. We made it very clear to the House Leader that we wanted to come in here Monday to discuss something of a very urgent and pressing matter. I find it surprising that the House Leader and the Government Leader would stand in their places and be so petulant toward our House Leader and not meet with him to discuss the order of business, when the public forum is here to discuss things that people in the territory should be listening to.

Hon. Mr. Penikett: On the question to which you were invited to comment, from the House Leaders, I would join the remarks by the House Leader of the government side and would make, if I may, sir, a representation to help clarify the decision that you have before you, on Rule No. 16.1.

With respect, sir, I wonder whether the question of whether the House is meeting or not on Wednesday - a subject that this side cannot predict - is germane, or not at all, to the question of whether there is an emergency or an urgent need for debate. You may well want to hear from the Leader of the Opposition, who has raised this question, on the call for the emergency debate, before - a matter that I may be forgiven for believing has been debated quite extensively. I would want to ask you, since you invited representations on this point, to suggest that the issue of whether or not there is an emergency constituted by a court order can be changed or coloured at all by the fact that the House may or may not be sitting a few days hence.

Speaker: Order please. I would like to inform the House, from  Beauchesne, annotation 287: “’Urgency’ within this rule does not apply to the matter itself, but means ‘urgency of debate’, when the ordinary opportunities provided by the rules of the House do not permit the subject to be brought on early enough and public interest demands that discussion take place immediately.”

This is why the Chair was asking for advice from the two House Leaders as to whether this House will be sitting Wednesday. If so, it could be dealt with at that time. The way it is right now, it is very confusing for me. I cannot rule.

Point of order to the Member for Whitehorse Riverdale South.

Mrs. Firth: On the Point of order, I appreciate the predicament you are in and the decision you have to make, but let us have a summary of the events that occurred here.

The court case was Thursday afternoon. That was when the information came forward, after arrangements had been made by the two House Leaders. We asked the government for an extension. We offered to finish business early that day. We asked to come back Monday, because we thought this was an urgent and pressing matter.

We were not even granted one more day, and we will not be sitting again for six or seven months, until Christmas. We asked, and they said no. The events that occurred then were available according to the rules for the Opposition to pursue. We pursued those events so that we were not breaking any rules or laws. We proceeded with that. We were asking for some time.

Then, when our Opposition House Leader went to meet with the Government House Leader, he told him to leave. He told him to go away, it is cancelled, they are not going to be meeting this week. We appreciate the decision you have to make. However, it is obvious that it is incumbent on the Government House Leader to say to the Opposition House Leader: Yes, I am prepared to meet with you. The Opposition House Leader is certainly prepared to meet with the Government House Leader.

The denial was from the government benches, so the question you have to put is to the government Members as to whether why are going to even sit down with the Opposition House Leader to determine the business for the next week.

Some Hon. Member: (inaudible)

Mrs. Firth: Talking about breaking his word. There was no word broken.

It is not a question of words being broken. We caucused two or three times that day after the court information came forward. Our Opposition House Leader was meeting with the Government House Leader to try to make a mutually agreed to arrangement. There was no cooperation coming from the side opposite; none, absolutely none.

We appreciate the decision you have to make with respect to the ruling. We think it is very important that we discuss this matter today. The question has to be put to the House Leader as to whether we are going to be here on Wednesday. My feeling is that we will not be, but I cannot make that decision on behalf of the House Leader.

Hon. Mr. Byblow: There appear to be two issues in debate here as you seek your advice. On the one hand there is the issue of the urgency of the debate. I submit to you that by your consideration that it could ordinarily wait until Wednesday as a regular motion has given you an answer as to whether there are enough grounds for that kind of a debate here today. On top of that, Members have already indicated the various avenues that have been made available for debate in this House on that question. I submit to you there is no issue of emergency requirement in this debate.

The second point that seems to be adding to the confusion on the issue surrounds the principle of House Leaders conferring with each other and laying out the order of the business of this House. Through generations of parliamentary tradition situations, House Leaders do strike by agreement on behalf of their respective caucuses an understanding of what will constitute the business of that day. That was agreed to on Thursday.

Nothing changed in the court case that has cast a new complexion on things. I remember distinctly on Thursday what the Members opposite said. They wanted one more Question Period, not an opportunity to debate a motion; they wanted another Question Period. We had 46 minutes of Question Period today. Forty six minutes of which 39 minutes were on Hyland Forest Products. That is what the Members opposite asked for on Thursday, and that is what the Members opposite got. The issue or urgency has fallen away, I submit.

Mr. Phillips: I think it is important for me to get some clarification on the record. When I met with the Government House Leader on Thursday we did agree that we would probably conclude Thursday afternoon. After the court case and considering all the issues that came to light with the Yukon Development Corporation, our caucus decided we needed another day to deal with the affairs of Yukon Pacific Forest Products. I approached the Government House Leader early in the afternoon on Thursday and suggested to him that we deal with it on Monday.

I am still of the opinion that we could have dealt with it today and concluded the session. I cannot give you any assurances, with the Order Paper we have now and with no House Leader’s meeting to know if there is any more business coming forward, whether or not we will be here Wednesday. Right now, it certainly does not look like it.

Hon. Mr. McDonald: On the point of order, if that is what it is, in assisting you in answering this dilemma you face, Mr. Speaker, on Thursday last, the Opposition House Leader is quite correct that we had made arrangements to wind up the legislative session that day, including determining the necessary unanimous consents to ensure that the business could be concluded. Following Question Period, in the afternoon, the Opposition House Leader came to me saying they would not be following that arrangement and would be looking for a Question Period on Monday to pursue the issue of Yukon Pacific Forest Products. At that time, the Member gave me no mention that there would be a call for emergency debates or anything else. They did not mention it today either. They simply indicated that there would be a need for another Question Period.

The desirability of an emergency debate appears obviously to be politically motivated, which is to be expected in this Legislature. It was not given to me as Government House Leader last Thursday when we were still meeting and when I had reason to trust the word of the Opposition. The reason why I, of course, made the decision, with the assistance of my caucus with respect to House Leaders’ meetings, was due solely to the fact that we could not trust the word of the Opposition with respect to House business, and it seemed pointless to continue meeting under those circumstances.

I would like to indicate to you that while there will be Wednesdays, as there will be Mondays, Tuesdays and Thursdays, I have absolutely no knowledge, based on my experience last Thursday, of when the session will wrap up. I can only tell you that, in the communications made to me, there was no mention of a need for emergency debate on Monday. They said only that they wanted to come back in order to conduct a Question Period.

Speaker:  The Leader of the Official Opposition on the point of order.

Mr. Phelps: On the point of order: the arrangements made between the House Leaders had to do with how we were going to operate on Thursday. We said we would waive the requirement for the appropriate notice to be given to the last minute Notices of Motion that came forward, tabled by the Minister of Justice and the Government Leader.

On Thursday, if we were going to break our word, all we had to do was say, “We are not going to give you unanimous consent to waive the notice that we said we would.” When we realized we ought to be here in the interests of the citizens of the Yukon, in particular the people of Watson Lake, we asked that we finish the business on Thursday and come back for Question Period today. The reason we spent all afternoon discussing in detail An Act to Amend the Income Tax Act was because we did not want to go back on our word. The word was that we would permit all these things to be discussed. In that context, House Leaders cannot say exactly when we are going to wrap up, but they can agree that certain rules will be waived, or only so many speakers will be used. We could simply have come back and said, “The deal is off. You do not have the notice.” One person could have voted against unanimous consent for either of the two motions, and we would be here Monday.

In my view, the attitude taken toward this is petulant in the extreme and completely ignores the real needs of Yukoners, particularly the average guy in Watson Lake.

Why do you think we spent the afternoon here, if we were going to break our word? Give me a break.

Speaker’s Ruling on Matter of Urgent Public Importance

Speaker: Order please. It appears to the Chair that the Opposition House Leader said we will be finished by Wednesday. Based on that, I am going to allow the debate today.

I would like to state, if we do come back on Wednesday, there is to be no more discussion on this issue in this House, but I will allow the debate to go on today.

Mr. Phelps: Thank you, Mr. Speaker. I am very pleased that justice has been done for the good people of Watson Lake and the citizens of the Yukon, because they have the right to expect some meaningful debate with regard to this emergency situation. It is an emergency situation. It is very clear that the economy of Watson Lake is suffering terribly. It is very clear that many families are very uncertain about their future and whether or not they can afford to stay in that area or have to move on, sell their businesses and homes, and find some place where they can make a living and meet their individual financial commitments.

We did, earlier, attempt, with absolute futility, to get unanimous support for a motion calling for a public inquiry into all aspects of the operation of the Watson Lake sawmill since it was purchased by Yukon Development Corporation and later sold, and during its operation as Yukon Pacific, right up until the present.

There are many questions that remain unanswered. There has been a coverup with regard to the Watson Lake sawmill. The government has twisted and turned and dodged and done everything it possibly can to sweep the grim truth and its responsibility under the carpet. An example was that the losses were unexpectedly high during the first year of operation, the fiscal year ended on March 31, 1988. The government waited six full months before it revealed the true extent of the losses. Those losses were $1.8 million. The government, in order to make things look better and to try to save its political hide, flew reporters from Whitehorse down to Watson Lake to make the announcement that it had lost $1.8 million and to tell them how great things were now, though, because they were over the hurdle, and there was a rosy future for the operation and for the people of Watson Lake.

At that time, they ought to have known that they were losing money hand over fist, that the losses had accelerated since the period covering the financial report, and indeed that they had lost $6.2 million that year. They had sold, for all intents and purposes, the sawmill before the full year was up.

A few short months after painting the rosy picture and finally revealing - it should have been a dance of the seven veils - the $1.8 million losses, they decided they had better do something in a hurry because the mismanagement was worse than awful; it was an absolute and utter disgrace.

They did not come clean with the people as to the amount of losses. They suddenly decided to sell it. They were panic stricken and sold it as quickly as they could. They called an election after they thought they had buyers they could live with.

We did not hear about the losses, which had accelerated, the losses for the year 1988-89, until after the election took place. With regard to the sale to Yukon Pacific, this government has refused to give us the details and the documents surrounding the sale. It has done that in a manner that must reduce its credibility to absolute zero. We are going to court to get those documents. That court case, as I understand it, is due to be heard this week.

Further cover up involves the role played by the Public Accounts Committee with regard to the Watson Lake sawmill. It was instructed by this Assembly, by unanimous motion, to scrutinize the details of the acquisition, sale and operation of Hyland. It prepared for the hearings that were to take place in January, and at the final hour, this government, in an effort to cover up the sordid details of its negligence and mismanagement, started a bogus lawsuit trying to recover monies from the very managers they appointed and who were just in place when they made their spectacular airplane trip to Watson Lake with the media in tow and announced the glowing future of the Watson Lake sawmill.

The Public Accounts Committee has been severely handcuffed by this most unusual method of cover up. One of the key witnesses, if not the key witness, has died since those hearings took place: Mr. Jack Sigalet.

As time goes on, the trail gets weaker. The government knows this. I believe most strongly that its court case has almost no merit whatsoever and it is quite willing to spend the money of the taxpayers to cover up what is happening at the mill.

We then come to the money that has been lost. By their own count, they lost $8 million in the operation of Hyland. We are now told the debts of the company right now are $10.4 million. We are told we will be damned lucky if the assets of Yukon Pacific fetch much more than $1 million, and a top figure was given in the court case of $1.5 million, and Yukon Pacific is being sued for $6.5 million. The Minister responsible says that is not a very good court case, we do not think they will have much chance there. After all, that is the very same person who is responsible for the court case against the previous manager, Carroll-Hatch.

Earlier today, we spoke about the environmental concerns facing the people of Watson Lake. We had a person from Vancouver in town, who was apparently interested in purchasing the assets, and he spoke about a vast increase in the allowable harvest that would be required to make him interested in submitting his bid for the assets. It was not just one prospective purchaser who gave that information to us. I have here the transcript of the hearings that took place on May 10, and the receiver says, in answer to this question, and I am speaking about page 39 of the transcript, “In your view, what type of annual allowable cut would be necessary to make this operation a viable operation?”

Answer: “I am an accountant. I am not a sawmill expert, but I have been told by experts that to make it a viable operation it needs 550,000 cubic metres of wood per annum.”

The present licence is for 150,000 cubic metres per annum. That is a huge increase in the logs that would have to be cut in order to make this a paying proposition.

When he heard the figures that were given by the receiver, the mayor of Watson Lake said they were not prepared to save the operation simply at any price: not at the price of the forest, not at the price of the environment of the southeast portion of the Yukon Territory.

We have a situation where $19 million or $25 million, if the court case by T.F. Properties is successful, has been poured into this operation, and we are lucky if we get back $1.5 million. This does not take into account all the grant money that was just given to the operation to build roads and start building a bridge - which was never completed, but photographed often. It does not take into account the fact that the inventory and the yard at Watson Lake is deteriorating because it is being sawn - even though the mill has closed down - because the beetles are boring into it and rapidly turning it into sawdust.

There are issues surrounding the alleged unsafe condition of the mill and the yard in that it is a fire trap, dangerous to Watson Lake. There are issues in regard to the predators themselves and how they are going to be dealt with.

The way we see it is that you had a situation where small businesses in Watson Lake were supplying goods and services to the mill while it was being operated as Hyland. During that time the losses were growing in leaps and bounds, yet they were submitting invoices and got paid in a timely manner. So the losses of the mill were something they were used to. Along came the Premier and said: I am the Premier of the Yukon and we just made it deal; it is a great deal. He spoke in glowing terms of Shieldings and led them to believe that everything was safe and they could carry on in the manner in which they were carrying on before and they would be paid. Most of them did not look into who the real Shieldings group is - the partners, T.F. Properties. If they had not had these assurances and had looked into the real people who had bought the mill and ran it, managed it and signed the documents...

Speaker: Order please. I would like to remind the Member you have two minutes to conclude.

Mr. Phelps: If they had not had these unfounded assurances from the Minister responsible for Yukon Development Corporation they would have looked into it and found out who T.F. Properties were and discovered what kind of a reputation the principles have.

When it came to light that the real buyer of the assets was T.F. Properties, when people realized who was going to be running the business and who was running the business, and when their bills were not paid on time, and not paid and not paid, and they received shoddy treatment indeed, they said, to anyone who would listen - and I am one who did - “If we had known that it was those people involved, we would have never have given them credit.” That is what they said. The mayor of Watson Lake said, “It is the government. It is the Minister responsible who put us in bed with these people.” These people being T.F Properties, not Shieldings.

These are some of the main points that concern us: the secrecy, the false assurances that were given. It was good politics but when it is abused, it is devastating to a community.

Speaker: Order please. I would like to remind the Member that he has 30 seconds to conclude.

Mr. Phelps: I just hope that this government takes into account the sorry plight that the small guy, the small businesses have been placed in, and that it finds some way of assisting the businesses and paying the debts owed to the businesses in Watson Lake.

Hon. Mr. Penikett: Mr. Speaker, we are extremely surprised at your decision because nothing that was decided in court or heard in court last week would, in our opinion, constitute anything of an emergency and as I said earlier, it is quite the opposite situation. The very unpleasant facts of the new owners of the sawmill not living up to their obligations has come to a head. It came to a head when we went to court to request a receiver/manager, and it was only a matter of time before the court decided the matter. Given the unwillingness of the new owners to meet their obligations, I think the outcome of the court case was probably not much in doubt, in terms of the decision Thursday. Even the decision Thursday, in terms of the matter before the courts, is not yet final because, as I believe the Leader of the Opposition knows, the receiver/manager still has to come back to court to obtain final approval for a sale to a new owner.

Now that the Leader of the Opposition has painted his somewhat politically-biased version of the events, at times a comic version of the events, he has thrown out once again his wild charges of a coverup and suggests that because the board of the Development Corporation decided to take the previous managers to court upon an evaluation of the facts surrounding our losses, that somehow that constitutes a politically-inspired coverup. He then goes on to suggest that his court case to obtain information, all of which is already public, is somehow a great noble cause, a great quixotic tilting at windmills, and so it may seem to be, to anybody who knows anything about the subject.

The Member has said we refused to give documents, which is not true, that we have not made the information about the sale public, and he has criticized us even when we made information public before the legal requirement, even though we qualified the information by saying it was unaudited and, therefore, incomplete - he attacked us for that. Then when the audited information came out and proved to be slightly different from the information that had been made available earlier, he criticized us because we had been covering up something, even though I recall on the days I announced the major losses of the worst year, I made that information public on the same day I received it.

He criticized me for going to Watson Lake. That was an interesting position, because he criticized me for going public, going with the reporters to Watson Lake to discuss the issue with the people of Watson Lake at a time when we felt there would be great uncertainty, in order to reassert our confidence in the possibilities of the mill. Somehow that is characterized by the Member opposite as covering up because I went with a plane load of reporters to the site of the mill to discuss the issue - a somewhat exhibitionist form of covering up, I would think.

The Member said we refused to give documents. I do not think there is any substantial fact about the matter that is not already public. He has tried in this spurious emergency here to again debate or reargue matters that have been heard by the court or are about to be heard by the court. He said we should have investigated the real buyer - not the people to whom we sold the mill - but the people with whom the new buyers did business. I suspect, notwithstanding the posturing of the Member - a ridiculous notion at the best of times - somehow it is a bit like trying to find out the character of a person who is going to buy the house from the person I sold it to, or that somehow I am responsible for a car accident that happens to the purchaser of my automobile sometime later. It is an interesting argument, but one I think is wanting in terms of its logic.

I would like to briefly - since the Member introduced no new information, no new facts, but a lot of allegations on the record - review some of the facts of the situation. It was back in the early 1970s that Watson Lake sawmill amalgamated several small sawmills in the area. They were amalgamated by a company called Cattermole Timber Limited under the name of Yukon Forest Products.

In 1983, that sawmill went broke and had rather huge debts and a lot of creditors. That was private ownership and private management.

The sawmill was reactivated as Watson Lake Forest Products with the same owners in 1985 - private owners and private management. In August 1986, Watson Lake Forest Products went bankrupt for a second time - private owners and private management.

The mill was in the courts and the receiver was offering it for sale. We had been lobbied strenuously by all sorts of people from Watson Lake to do something: the Indian band; the mayor, who the Member opposite described a moment ago; the Chamber of Commerce; and many, many other people. They were desperate. A number of people looked at buying the mill then. Very few were interested, but we were persuaded by the people in Watson Lake. We had a lot of other things to do, but we were persuaded by Watson Lake that the community was in serious enough economic trouble that, at that time, the mill presented the best possibility for creating employment. We did believe the forestry industry in the territory had significant potential, and we wanted to see it realized.

The Yukon government made an offer, based on a private consultant’s report confirming reasonable prospects of commercial success of logging and milling in Watson Lake. We did it, based on a report from a private consultant, a private expert.

From the beginning, after the Supreme Court approved our bid, we said it was not appropriate to try to run the mill from Whitehorse, it was not appropriate to even have the YDC board of directors run it. What was appropriate was to try to hire a private manager. Even though it was then publicly owned, we tried to hire a private manager.

We had a private manager and, under private management, it lost money. We changed private managers. We had another private manager, and it lost more money. The day-to-day operations of that mill were never run by this government. They were never run by the board of the Development Corporation. They were run under contract with a private manager.

Throughout the operation, in spite of the losses, we believed the mill had potential. We believed the forestry industry in that area had potential.

In January 1989, we announced we had agreed to sell assets to the Shieldings Corporation and an Indian consortium, involving the Yukon Indian Development Corporation, the Liard Band and the Kaska Dena Council. We carefully checked into Shieldings, which had experience in the forestry sector and in mills. We checked them with creditors and established that the Shieldings company was a company whose majority shareholders were the Bank of Nova Scotia and a number of pension funds. We were told this was a sound company with a good reputation.

We made that arrangement. The sale was concluded in February. We went public with the statements of the losses, even though they were not audited. The financial information about the information was tabled. Last year the annual report of the operation was tabled, including financial statements audited by the Auditor General of Canada, and subsequently reviewed by the people.

In January of this year we filed action for a receiver/manager. We did so because the expectations we had of Shieldings had not been met. Promises that had been made to us and the people of Watson Lake had not been met. The commitments that had been made to us by this private company and its private managers in Watson Lake had not been met.

When we went to court, as we indicated in this House, to ask for a receiver/manager, there were two possibilities at that point. Either the Shieldings Group would live up to their obligations and put forward the money it had promised or, what happened on Thursday, something that was no surprise and no emergency and had been expected for a long time, and that was that the mill would be put up for sale.

We are now at a stage where we hope there will be a new owner. It is said that hope springs eternal, but our hope in this case will remain that this operation will attract the kind of investor who will bring the necessary capital and expertise and provide the necessary climate for a stable, ongoing operation to realize the potential that exists for a forestry industry.

The Member opposite today has restated in his version of the facts the claim that the Government of Yukon is responsible, even though we were a minor shareholder and our only representative on the board of Yukon Pacific Forest Products was a private businessman from Watson Lake and a member of the YDC board, for everything that happened and that we have a legal and moral responsibility to pay all the bills for Yukon Pacific Forest Products.

The Member opposite has talked about the liabilities of $10 million. Those are liabilities of a private company, a privately owned and controlled company. Half of that money owing is money owing to the Yukon Development Corporation. In this respect the Yukon Development Corporation is just as much or more so an injured party than the people of Watson Lake. Three million of the $10 million owed is claimed by Shieldings itself...

Speaker: Order please. I would like to remind the Member he has two minutes to conclude his answer.

Hon. Mr. Penikett: ...and by the Bank of Nova Scotia.

In terms of the money the public has at risk through the Development Corporation, there is absolutely nothing new. The amounts owing under the debentures remain owing. There is no further money owing or further liability of YDC.

The sawmill receiver, when the fire marshall identified that there was a fire problem and brought it to his attention, has taken steps. This is not a major emergency. The information the Member is demanding has been made public. He cited an environmental disaster, because he suggested that the receiver has indicated, to make the mill viable, an application would have to be made for additional harvesting rights. That is a matter that will be heard by the federal government. I am sure we will be consulted. I am sure the people of Watson Lake will be consulted. I am certain the application will go through the proper environmental review processes by the federal government. This is not our decision.

I repeat again that there is no urgency. The entire unhappy history of this mill, going back to the 1970s, has continued. I am an optimist. I believe sincerely in its potential and I believe this government has taken risks and constant endless abuse from the Members opposite. There has not been one constructive word,...

Speaker: Order please. I would like to remind the Member that he has 30 seconds left.

Hon. Mr. Penikett: ...not one constructive word, not one constructive initiative, one helpful or supportive role played by the Member opposite. This has been an extremely difficult situation and we have taken risks. We have acted. We believe in the interests of Watson Lake, in the interests of that industry, in the interests of the people there. We have tried our best to do what we can for that community, and we shall continue to do so no matter what jeering we have from the sidelines by the Members opposite.

Mr. Brewster: I think it is about time that the government gets down and tells the Yukon taxpayers exactly what happened. I think we have gone around and around this mess long enough, and I think it is about time things are laid on the table, so that the taxpayers of Yukon know exactly how much money they have lost.

I hear that the Government Leader stated that he went into the Watson Lake sawmill to help the people at Watson Lake. I believe that; I believe that with all my heart. However, at the same time, private industry wanted to go in there and this government, to get one of their little socialist schemes going, went to court and won the right to do it. Now they are trying to back out and leave everybody else. They also had to try to get private business back into it.

If they felt, when they took over in court, that the people on the other side, the private businesses, were not reliable - fine. I do not have a problem with that. I can say one thing: they have very, very poor judgment because they sure have poor bed partners in with them right now.

The Government Leader and all the Ministers on that side, when they cannot go anywhere and they get cornered, attack this side, or they blame the federal government or they blame Shieldings. Never, never once has anything that has been done ever been their fault; it is always somebody else’s fault. They do not even answer questions on that side, half the time; they turn around and attack us on this side.

There is something wrong with this whole setup and the longer it goes, the worse it is going to get, because rumours fly and as rumours fly, they grow larger all the time. It is about time that the government comes clean.

It bothers me greatly to see the Yukon get into such a mess because we had one of the greatest chances to advance and do something with the money we had from Ottawa. We took over one project; we squandered it and lost it all. I have seen Crown corporations and none of them have ever been successful, but this is the worst that I have ever seen and probably the worst in the history of Canada.

I came into this Legislature, and I have not been here too many years, but I thought this was a place where people could keep their word, where people would answer questions when they were asked, because each represents voters, whether one is in the Opposition or not. It is quite true that this is not happening. I think the Public Accounts Committee - the Government Leader was the man who introduced me to that - was, when these things came up, where the representatives of the people would be able to get the answers and get them out to the people. What has happened with the Public Accounts Committee is just a farce.

From what I can gather, this is a far worse situation than when Cattermole was there. Cattermole was a private business. When they went broke, they had to bail out. This outfit did not have to bail out, because they just went back to the taxpayers and wanted more money. This is a situation government continually allows. It does not matter how much money we spend, we can go back to those guys working out on the street. We can get some more money.

On March 9, the Government Leader said, “We have indicated to the House our intention to debate this matter at the earliest opportunity by Notice of Motion.” Then, if they had intended this, why did they fight so hard today to prevent us from coming here? What are they ashamed of? What are they hiding?

They knew there were only a couple of days left, but they did their best, hoping we would get out of here and everybody would forget this and it would be six to eight months before we got back. The people in the Yukon will not forget this one.

Mr. Devries: I would like to go back to when the sawmill was first put up for sale. The deputy minister who was in charge of YDC at the time, or the president of YDC at the time, whatever you want to call him, came to Watson Lake and told the Watson Lake workers of all the great opportunities that would take place, and that there would possibly be fewer jobs, but these jobs would be of greater quality.

At the meeting at the mill, when this announcement was made, the audience was basically subdued. For the past two years, they had watched broken promises and a forecast of stability and security go up in smoke and mismanagement. Only this morning, I talked to someone who was involved in management at that time. He mentioned to me one of the main reasons the managers were never successful was they would lay out a management plan in certain steps. Somewhere along the line, when they tried to implement one of these steps, there would be interference from government. This is one of the reasons why the ventures were so unsuccessful when government was managing.

When the speech of Utopia was delivered by the deputy minister of the YDC, he asked, “What do you think?” A big hush fell on the crowd. Someone whispered, “We do not believe you. It sounds too good to be true.” They were promised a $1 million high-tech mill. They were promised they would be working in controlled atmospheric conditions. They were promised there would be training jobs at high-tech mills in British Columbia. They were promised there would be more jobs in the forest. There was assurance that there would be continuous logging over the year.

They were promised there would be a silviculture program. I was sold on this. I actually complimented the Government Leader at a subsequent meeting. When it seemed nobody would believe the deputy minister, Mr. Penikett came down and basically gave the same spiel all over. I complimented the Minister and told him I thought this was a good move. It certainly was not working the way it was before.

About two months later, I got my first complaint from one of the truckers that something was fishy and he was not getting paid. It is regular practice that everybody gets paid every two weeks on an ongoing basis. At that time the company was maneuvering to have payments made on a monthly basis. This continued until May, and one day I phoned the office of the Government Leader and informed the secretary that I wished to talk to the Government Leader. She asked what it was about and I told her that it regarded the truckers complaining they were not getting paid. I hung the phone up and it was not two minutes later I got a phone call from the office of the Government Leader asking if Carol Kauppinen was there. Obviously they misdialed the number. I never did have a call returned to me. It was obvious they did not believe me; they had to get this information verified by someone who had run against me in the election.

The only avenue then was the press. I waited for about a week after that and then got accused of political posturing by various individuals who did not really give a hoot about the issue of whether the truckers got paid or not. I, too, was in the process and wrapped up in the promises of the moment. As the summer went on, I still gave this company the benefit of the doubt.

It was not until I went to the Shieldings office in Toronto myself in August and met with them for approximately an hour. As much as they did not directly say it when I talked to one person there, he basically said, “I am not going to put another damn cent into that mill.” Whereas another person gave me a slightly different picture and said they really did not want to put money into it as such, but they were looking for other financiers to get involved. So they thought once they got that money they would be paying these people.

The comments I heard from the local people while this was all going on was, “At least when Cattermole was here he would tell you if he did not have the money. He did not make a lot of fancy promises - ‘the cheque is in the mail - you will get paid on two weeks - you will get paid in one month - you will get paid in two months, you will get paid when Christ returns,’” which seemed to be the picture toward the end.

At the time of the sale, several announcements were made regarding the incentives that would be given to this new company, providing several different conditions were met. One of them we are very aware of was the $550,000 for the lease of a portable mill. Another was the $100,000 made available for continuity of operations. There was another one that was never announced. This was up to $250 per thousand that would be made available for the planing of some unfinished products that were made available at the mill. Anyone in the forest industry can tell you that it only costs between $40 and $100 to plane dry kiln lumber. Yet this sale document apparently indicated that up to $250 dollars per thousand would be made available.

People purchased equipment and quit jobs to move to Watson Lake and work for the sawmill. Most of these people have left now.

The question has arisen on whether or not this is an emergency situation. The emergency is that we do not want this government or the receiver/manager or whoever is in charge of the sale of this mill to go and sell it for big money and put the purchaser in the position of having to pillage our resources to make ends meet. By pillage, I mean asking to cut much more than is permitted under this present timber-harvesting agreement, which most people believe would have lasted only 12-15 years anyway before it would have had to be expanded. If the exploitation of our forests is the price we must pay for a sawmill, we do not want it.

I urge the government to keep this in mind. We want a forest industry managed in an orderly fashion so that people can be employed there, plan ahead and build homes knowing they will receive pay cheques. There were people who had no Christmas this past year because of the sawmill. It appears there are people who will have no Christmas next year because of the sawmill. That is not the way people in Watson Lake want to live.

Many of the problems of the sawmill are there because of decisions made by one or two people. Those people know who they are. I think most of the people in the Yukon know who they are. I do not have to point them out, and I am not talking about Jack Sigalet and Bob Craig and Barry Ferguson.

There is someone else who okayed these decision, and that person is responsible. The people in Watson Lake want to see that person talk to the people of Watson Lake and say: Yes, I made a mistake and I am going to take care of it.

Mr. Lang: I want to make an observation. I want to commend my colleague, the Member for Watson Lake, for his presentation here today. I think only a Member from the area could really tell it the way it is - if you actually live in the atmosphere that has been created and have to experience it.

The government certainly seems to be very concerned about this issue. All Members on the other side are jumping to their feet to discuss this issue. I can only say it is probably because they are very interested. Or is it because there is a responsibility, and they have been shirking it ever since it began, or is it because the government’s position is always: We will be there to cut the cake and eat it, but somebody else it going to have to clean up.

I could not help but listen to the Government Leader as he gave that feeble effort at defending the government’s actions in respect to this situation over the past four to five years. He indicated he was so brave to go down to Watson Lake to announce to the people there what a good management decision had been taken - they had only lost $1.8 million.

The records he took down were six months late in coming. What got lost in the debate, and what he did not tell this House, which the Leader of the Official Opposition pointed out, was that when he made that announcement much time had passed since the audited statements he referred to when he went down to talk to the people of Watson Lake. The position on this side of the House is he had to have known that that mill had to be losing thousands and thousands of dollars per day. Toward the end of that year, it was not $1.8 million; we were talking about $6.8 million. Yet, the Government Leader went down to the people of Watson Lake and, I submit, knowingly - unless he can prove otherwise - mislead the people of Watson Lake and the small business people of Watson Lake into believing everything was fine and there were no problems.

Yet, the side opposite stands and say: We are not responsible for this. I beg your pardon. Back on March 9, 1989, Mr. Penikett said, “I hope to be able to describe to the House and the public all the benefits that the territory as a whole, and the people of Watson Lake in particular, will be able to realize and appreciate from this transaction.”

The total employment as a result of this new investment by Shieldings Group would increase in that area. The number of jobs in the mill might indeed be fewer as a result of the change that the company is going to bring in."

If that is not a note of encouragement to the people in Watson Lake and the people in the territory, that this particular mill was going to be successful, I do not know what is. I do not know what you would call that other than an official endorsement on behalf of the government.

Mr. Penikett later on says, “Shieldings is making substantial investment of new money.”

Well, I would like to submit today that we would like to know: what new money?

Let us have a look and see what has actually happened to that mill. We were told there was going to be a mill built there, that it was going to be state of the art. We were told there was going to be a state-of-the-art mill built there that was going to take us into the year 2000, that would compete internationally with any other mill in the world. What do we get? We get a bucket of bolts. A bucket of bolts. The Government Leader stands in his place as the Minister of the Yukon Development Corporation and tells this side of the House that he has no responsibility for it. Then, he huffs and he puffs and he stands up in his place - and this is on the record because nobody is fabricating these quotes I am giving. He states, “We made our choices. They were tough choices. There were real costs to the choices, which I regret, but the result is that we will now have a viable mill. We will have a flourishing forestry industry. We will have economic vitality in the Town of Watson Lake. The new mill will be put into place and will be operated by the new owners of the mill.”

The Government Leader stands in his place today and says, “I never endorsed that mill. I never endorsed that transaction.” Well, the government only had a 15 percent interest in that operation. It was a private company, although of course one of the people on the board was appointed by the government and was supposed to report to the government and indicate to it if there was mismanagement. The mismanagement dates back to over a year ago. Over a year ago it was made public in this House that people were not getting paid. Over a year ago, it was raised in this House and pooh-poohed by the Government Leader when we were told that there were thousands and thousands of logs sitting there being infested by bugs and being wasted, timber that takes hundreds of years to grow. Yet, that side stood idly by and watched it happened, under the pretense that they had nothing to do with it.

Yet the taxpayer had lots to do with it. The taxpayer had lots to do with it, millions of dollars worth - millions of dollars. Yet, the Government Leader stands in his place and tells us that we cannot provide have kidney dialysis for the people of the territory. He stands in his place and tries to justify losing $18 million. As my colleague the Member for Riverdale South observed: “Blame the federal government for all of our problems.” We have just poured $18 million down the sewer - for what.

As the Member for Watson Lake said, we know people in Watson Lake who were badly hurt, people who provided a service on the strength of the words of the Government Leader. Shieldings was making a substantial investment of new money. “It is a new mill that has new owners. It is a mill that, I believe, has a great future. It is a mill that will continue to provide jobs for the people of that community.” This is from the one and only great economic guru of the Yukon Territory, Mr. Tony Penikett.

What are the results today? We are in this House discussing a motion and the state of a significant number of our population and a beautiful part of our territory. It has been mishandled, and the responsibility should lie where it started, and that is with the Government Leader’s office and the Yukon Development Corporation.

The other interesting aspect of this that boggles my mind is that the Government Leader can stand up and tell this House he never heard of T.F. Properties until the Leader of the Official Opposition raised it in this House. He did not even know they existed, he said.

That is unbelievable. That has to be stretching the truth so far that it brings into question the integrity of this House, when the Government Leader, a Minister of the government, stands and says he does not know what is happening to one of the biggest investments this government has ever made.

The Government Leader has a responsibility. Any Minister on that front bench, when they are in charge of the Development Corporation, has the responsibility to find out what is going on in the corporation, especially when we are losing thousands and thousands of dollars per day.

Yet, the question was put to him by the Leader of the Official Opposition as to who T.F. Properties was. His response was, “I am pretty sure we knew they were going to be involve other people. We took all prudent steps to check out that company in terms of its financial viability, reputation and dealings and operations in other parts of the country.”

That is not true. That cannot be true. Nobody could have checked that. We made two phone calls and we knew what had happened. Yet, the Government Leader stands and says that to the House.

Another question was put by the Leader of the Official Opposition, on December 12: “During the Minister’s meeting, was he aware that a company known as T.F. Properties was going to be managing the mill and would be a shareholder with Shieldings?” The response was this, “In the final stages of the negotiations, I was otherwise engaged.”

Of course he was otherwise engaged. He tried to buy the constituency of Watson Lake. He had done his duty, he had made his announcement, and we were right in the middle of an election campaign. It looked good, a sweetheart deal. No big deal: Maybe we could even get the riding of Watson Lake.

Of course, I would never impute political motives on the Government Leader’s office. I would be the last one to do that. You know that.

I am relating what some of the people of Watson Lake have said since they have seen the results of a crass political opportunity that put the lives and businesses of people in jeopardy at no political cost to the government at that time. All they were looking for was political advantage. We had some managers there that, bar none, have hit front page. The Government Leader talked about how he did not know about T.F. Properties and how that operation was faring. I am very pleased to report that, unfortunately, this mill has finally become number one in the eyes of somebody - it has finally made number one on the list. Do you know what that was? From statements of the receiver to the court, it was the worst run organization he has ever had to take over in order to assess. The worst one. And he does that for a living. He does this every day. He has the job of taking over companies that are bankrupt. We did not have number two or three or four; we had the worst case of mismanagement that he had ever witnessed or been involved in. Yet the side opposite has no comments to make. We have one feeble defence by the Government Leader, and I say “feeble”, as he tried to blame the Opposition for all his problems. We have nobody else rising to their feet. I find that surprising. I would have thought the Members of the side opposite would have thought more about and paid more attention to what is going on with regard to a financial commitment, not just the social commitment, in a situation of this kind.

Another area that concerns me is the obvious attempt by the government, ever since this purchase took place, to keep as much information as it possibly could to itself. It is obvious. Let us go through it very quickly.

We asked questions in the House. Every time we asked a question, the Government Leader attacked the side opposite saying that we were not in support of the mill in Watson Lake. We never ever did get any answers.

Then the sale took place and we could not get the documents although the government has put in $5.7 million worth of the taxpayers’ money. Shieldings puts up $775,000 and the government will not tell anybody what it sold. Or how it was sold.

We have a Public Accounts Committee that is struck to look into the situation of Hyland Forest Products. By pure coincidence, pure coincidence, two days prior to sitting, they take everybody to court. All of a sudden the Public Accounts Committee...

Speaker: Order please. I would like to remind the Member he has two minutes to conclude.

Mr. Lang: ...is in a situation that it cannot hear it. It has been neutered. The Public Accounts Committee, a committee of this House is rendered noneffective. It makes a mockery of the whole system. Yet we have the side opposite saying, “Oh, we are all for public disclosure.”

We called for a public inquiry today, which seems to be a legitimate request in view of the fact that the Public Accounts Committee has been rendered ineffective and in view of the information that has come to light. What do we get? We have the side opposite unanimously turning it down. They do not want the public to learn what has been said and to whom, who is responsible for those decisions and what really did take place.

I just want to conclude by saying it is a sorry state of affairs when we have the filibustering and the government using every parliamentary means it can to try and ensure the public does not see the true facts in a situation that has affected them so much. The effect is not only financial. People in Watson Lake have had their lives affected to such an extreme that, as the Member for Watson Lake pointed out, some of them did not have Christmas. I notice everyone on the side opposite had Christmas.

Mr. Phillips: I am pleased to rise in support of this motion today. The purchase and operation of the sawmill in Watson Lake has been mismanaged by this government since the very beginning. The time has come for the Government of Yukon to come clean with the people of the Yukon.

It started with a bidding war in Whitehorse in a Whitehorse courtroom. It looks now like that is where it will all end. This mill has undergone three management changes in as many years. The government, I believe, chose in the beginning a political route in the managing of the mill.

We commended the government for stepping in and assisting the economy of Watson Lake but that is where our credit stopped. The Government of Yukon was told by many experts that they should dig a hole, bury the old mill and start up again with a newer, more efficient portable mill. Unfortunately, this did not fit the government’s agenda. A new, modern mill would have to utilize fewer workers and was not in the cards. The word was to get the mill running, hire as many people as possible and, at the same time, try to make great profits. The Premier even forecasted a worst case scenario of great profit.

The experts told the government that making a profit in this very competitive business and, at the same time, hiring twice as many workers as you need to do the job, do not go hand in hand. I am convinced that if the government had listened to its highly qualified experts and put up a smaller, more efficient mill, the workers in Watson Lake would have jobs today.

The only thing working in Watson Lake today are the worms eating up the inventory.

I would like to talk for a minute about that inventory in the mill. Most of the logs that were harvested for that Watson Lake mill are over 200 years old. I would suggest to you that if the Yukon had an environmental protection act, or if we had a forestry act, like they do in other provinces in this country, that the Minister responsible for the Yukon Development Corporation would have been charged.

What happened in Watson Lake was a crime. We harvested all of those logs and the mill was in such poor shape that we used less than 50 percent of the logs and another large percentage of the logs sat there and rotted in the yard. They were logs that will take 200 years to grow back in this territory. This is the party that tries to herald itself as the environmental party. They have caused more damaged to the Watson Lake area with the harvesting of the those logs and the way that they did it than did three-quarters of the companies in British Columbia that are being questioned now for their logging tactics. Nobody said a word. Nobody said a word.

How many trees have been planted for the numbers that they cut down in that area? The Government of the Yukon, under Hyland Forest Products, was running the mill at that time. How many trees did they plant in that area? Maybe they planted a couple of test plots but I do not think they planted any trees. Nowhere else in North America can you get away with that, but the Government Leader did - but it is somebody else’s fault. We will have to wait 200 years to see what happens as a result of the inaction of this government. Instead, this government interfered, and look what we have today. The Hyland Forest Products fiasco has become the Sprung greenhouse of the north.

Millions of dollars have been literally thrown at this project. This government has done everything in its power to stifle information regarding the financial position of this mill. As a Member of the Public Accounts Committee, I was extremely frustrated when the Yukon Development Corporation conveniently launched a lawsuit against the parties that were going to provide information on the mill to the general public, two or three days before our hearings. All Members of the Committee were frustrated with that. That lawsuit literally tied the hands of the Public Accounts Committee. This was very unfortunate because I believe this Committee could have gotten to the bottom of this issue. Now that the heat of the hearings is off, it appears, in my view, that the Yukon Development Corporation is not pursuing the court case as aggressively as they should be, or as aggressively as they told us they would be.

Mr. Speaker, I am sure that you are questioned about the problems at the Watson Lake mill by your constituents, as all of us are on this side. Yukoners are becoming very cynical of government. On one hand, the Government Leader and the Minister of Finance tells us that the federal government in Ottawa are the bad guys. The Ministers on the side opposite are saying to us that we should tighten our belts because times are going to get tougher; at the same time, these same Ministers have squandered millions of dollars on the Watson Lake sawmill. No wonder the general public is getting cynical about this.

“We will spend like drunken sailors, but you people had better get ready to cut back.” Whether this government likes it or not, it is responsible to the people of the Yukon, and it does owe Yukoners an explanation of the money spent on this mill. It is time to find out what went wrong with this operation, and it is time to tell the taxpayers how much it cost.

I will be watching the vote this afternoon very closely to see what the Members opposite do. The people of the Yukon are very concerned about this issue, and they expect us to get to the bottom of it. If the government votes against this, it will show a lot of Yukoners that the government is trying to hide something. I urge all Members on the other side to support this worthwhile motion to get to the bottom of this issue.

Hon. Mr. Byblow: I am drawn into the debate by a number of statements from Members opposite that, to me, express a very contradictory and confused posturing on their part. They range from comments made about the Public Accounts Committee, to comments made about the role of government in business that ordinarily is that of the private sector. Let me speak to some of the Public Accounts questions first.

I am somewhat offended by the comments from the Member for Riverdale North when he says that the Public Accounts Committee was maliciously and deliberately stifled from acquiring adequate information to do its job and that, somehow, the court case that precipitated in January was a deliberate action to stifle the Public Accounts Committee. I believe the Member for Porter Creek East also made this allegation.

I find all that rather contradictory posturing. On the one hand, Members are saying things at the Watson Lake sawmill were in horrible shape, that the company who owned the mill, and that the operators or managers of the mill, were not doing an adequate job, that people in Watson Lake were suffering the problems of unpaid bills, that creditors were severely penalized for participating in the operation. In the next breath, Members are saying the attempts to put the company into receivership and generate some action and activity, so these things would no longer go on, was wrong. It seems to me there is a contradiction.

On one hand you want things to stop. On the other hand, when that action is taken it is criticized. On which side are you sitting? What do you want? I ask this of the Members opposite.

I submit that the Public Accounts Committee made a valiant effort to do its job. Yes, indeed, the court case precipitated it. The timing of that is a matter of public record. The timing of that, whether coincidental or otherwise is a matter of fact. That court case precipitated the action that we knew was inevitable. That is, a court case through legal means had to precipitate action to address all of the questions that were being raised. I should point out that the Public Accounts Committee received all the information that it sought. It is receiving regular monthly reports from the Yukon Development Corporation on an ongoing basis. The Public Accounts Committee, from all the evidence, information and background provided to it is not being stifled in any way with the procurement of its information. The Public Accounts Committee, jointly and collectively, made its decision not to proceed with hearings given the court case that was before the territory. The suggestions from the Members opposite that the action to go to court was a deliberate effort to stifle the Public Accounts Committee is just a bunch of balderdash. On one hand they argue that nobody should have gone to court, and on the other hand they argue that things whould be different if the private sector was operating the mill.

I have some difficulty understanding the whole issue of bogus lawsuits. I think the lawsuits that exist are a matter of public record again. The court case that concluded in part on Thursday is a testimony to the legitimacy of the suits that are occurring. If the Members opposite can explain the issue of bogus then perhaps I could understand better.

I have a particular sympathy for what is taking place in Watson Lake, largely because I am quite familiar with a similar saga that took place in Faro, where this government went to great lengths, as it did for Watson Lake, to regenerate the economic activity of the region. That, as pointed out by the Premier, is what took place in Watson Lake. Since the sale, this government was not in charge of the operations. I question Members when they charge this government with some responsibility for the operations of a private sector management, a private sector ownership and a private sector operation.

A comparison can be drawn to a situation I am very familiar with. If I, as a private sector operator of the Faro Hotel, get into deep and serious problems in my community and the hotel is a very important economic fabric of that community, such as if it has assets similar to those of Hyland, and I end up going under, should the government be responsible for bailing me out? Should the government buy the hotel and be responsible for paying off all the creditors? I do not understand the picture the Members are trying to draw with the Hyland Forest Products situation with regard to its business arrangements with the private sector.

The Members speak continuously of the mismanagement of Hyland Forest Products. Again, I submit there were strong statements from Members opposite that the government should not be in the business of running a sawmill, that it is inappropriate for the government to be involved in that industry and that it is more legitimate for the private sector to be there. That is the action of this government. This government took the steps to ensure that those interests in the private sector who were qualified, informed and credible were involved in the operation.

The fact that the operators chose to hire another party and that the operation did not function as was intended and as was promised is not the responsibility of this government or the front bench. This government has already made its commitment and stated it repeatedly. We will do everything we can to ensure the people in Watson Lake receive the best result possible in the court case that is taking place. In other words, we will ensure, to the best of our ability, that the small creditors in Watson Lake will be protected as much as possible in the outcome of the sale.

I am not sure what more the government is expected to do. If on the one hand the Opposition accuses us of wasting taxpayers’ money when the mill was originally bought, when Watson Lake was in crisis, when it was operated well, when, as the Premier pointed out, it was the only time in history the bills were paid consistently and on time while the government was operating it, I do not understand when on the other hand they say today that we should go back and perhaps buy and operate the mill again because it would provide consistency, strength and economic support to the community. The fact is that Watson Lake, with the Mount Hundere mine coming up, does have a prospect for economic support. I think Members will agree that Watson Lake has already received considerable benefit from some of the activities of the Mount Hundere operation. It stands to gain considerably more benefit very soon from the mine, from the transportation activity, housing and accommodation support for mine personnel and the spinoff support services that are expected to come from it over the next 10 years or so.

When Members opposite say we have an emergency situation and have a crisis in Watson Lake today, I can sympathize in the general sense. When you remove 50, 60 or 70 employees from a small community, you do have an impact. It is not the same situation as existed in 1985 and 1986, either in Faro or in Watson Lake. We have some additional economic support that is accruing to that community.

I will conclude my remarks. It remains to be said that the issue is not one of emergency. The issue is one of concern. I find the charges offensive, as well as erroneous, that a Public Accounts Committee was deliberately muzzled through court cases. I find it is totally contradictory for Members to suggest that to not go to court and get a receiver was the more appropriate action. In other words, they would have preferred the operation to continue running the way it was, for no one to do anything, and not to go to court so the Public Accounts Committee could conduct its open public inquiry, an opportunity that is still before the Public Accounts Committee.

Members opposite are contradicting themselves when, on the one hand, they suggest this government ought to be involved; on the other hand, they say we should not be involved. I am not sure what their position is.

Mrs. Firth: It is always encouraging to get those words of clarification from the Minister of Government Services. He somehow manages to completely misinterpret the intentions of most of the Members of the Legislative Assembly and state them that way. The Minister of Government Services had a question for us. He said he wanted to know what we wanted. “What do you want? ”he asked. What we want is no different from what the public wants, and that is some answers. All we are asking for are some answers to questions that have been put in this Assembly, as well as by the public outside.

All the Ministers have to do is take a walk downtown and visit some of the businesses, perhaps go into their constituencies and knock on a few doors and listen to the concerns raised by the public. Their requests are not complicated or complex. They do not want to know all the fine details of who did what to whom when, and who was part of what when. They just want to know what is going on with the mill at Watson Lake.

That is the question I get asked: we are spending millions and millions of dollars; what is going on with that mill at Watson Lake?

The Minister of Government Services raises a good point. He does not expect the government to come in and bail him out if his hotel at Faro were to go belly up, or if it were in great financial distress. That is what the business people in the community are saying as well. If my business goes under, it goes under. The government does not come and put millions and millions and millions of dollars into it, to keep the business going. That is the fine point of the issue that the Member for Faro raises.

The story here is essentially very basic. The public wants some answers. They want to know who is making the decisions and who was making the decisions with respect to money being spent at the mill and the direction that was going to be taken and how the mill was going to be operated. This is not just in the last year or in the last six months. The public wants to know the answers to who was making the decisions way back when it was first decided that this government was going to financially support the mill in Watson Lake. It goes back to the Minister of Economic Development, the Minister for the Yukon Development Corporation, his deputy minister, and some of the conflicting stories that we have heard. People want to know who was making the decisions, and I think that is a reasonable request for people to make. We would like to know who made all of these decisions. It was not just the private sector who made them; the government was involved with respect to making a lot of those decisions as well. Perhaps some of them were bad decisions and I think the public has a right to know that.

People want to know where the decision was made to keep putting more money toward the mill. This government has made financial commitments. Who kept saying, “Okay, we will put more money; we will put more money; we will put more money”? Was that decision being made by the Cabinet? Was it being made just by the Development Corporation, who had an unlimited source money, practically, with the revenues that they were making from the Energy Corporation?

The public has a right to those answers. How were the decisions being made? Was there a limit put on how much money we were going to spend or was the sky the limit and they could just keep spending and spending money, until somebody started to say, “Stop”?

There was also the question raised about where the money came from. Did the money come from the profits of the Energy Corporation? Did it come from another source of revenue? Did it come from the treasury of the Government of Yukon? That is a question that has never been answered. The government has never told the public where those millions of dollars came from in the context of the whole budget.

When you do not tell people where the money comes from, then every time you deny a request for money, the association is made that the reason the public cannot have some good service that makes the lives of Yukoners better is because the government blew all this money at the mill in Watson Lake. That is the conclusion drawn by the public. That conclusion has been drawn many times, even here in the Legislature by the Members who spoke prior to me.

You cannot trade off millions of dollars with things people feel they need in the way of services to make their lives better. You cannot justify that kind of trade-off. The taxpayers, the people who are paying the bills, have the right to know where the government got the millions of dollars it put into the Wa