Tuesday, April 28, 1992 - 1:30 p.m.
Speaker: I will now call the House to order. At this time, we will proceed with Prayers.
Speaker: We will proceed with the Order Paper.
Introduction of Visitors.
Workers Day of Mourning
Hon. Ms. Joe: Today has been proclaimed a day of mourning in recognition of workers who were killed, injured or disabled on the job over the past year. The Canadian Labour Congress chose this day as an annual reminder of the ultimate sacrifice made by victims and their families. We are constantly looking for ways to help employers and employees develop safe work site practices. No one wants to lose a friend, family member or co-worker.
To provide greater coordination in accident prevention and risk reduction programming, the occupational health and safety unit will move from the Department of Justice to the Workers Compensation Board this spring. This is the time to pay our respects and increase our resolve to prevent accidental death or injury on the work site.
I ask your permission at this time to allow the Members gathered here today to rise and join in a moment of silence.
Speaker: Are there any Returns or Documents for tabling?
Reports of Committees.
Introduction of Bills.
INTRODUCTION OF BILLS
Bill No. 44: Introduction and First Reading
Hon. Ms. Joe: I move that Bill No. 44, entitled An Act to Amend the Liquor Act, be now introduced and read a first time.
Speaker: It has been moved by the Minister responsible for the Yukon Liquor Corporation that Bill No. 44, entitled An Act to Amend the Liquor Act, be now introduced and read a first time.
Motion for introduction and first reading of Bill No. 44 agreed to
Speaker: Are there any Notices of Motion for the Production of Papers?
Notices of Motion.
Are there any Statements by Ministers?
Supplementary conditions to Yukon government building construction contracts
Hon. Mr. McDonald: I am pleased to inform the Legislature of a new agreement that will benefit workers and encourage local hire on Yukon government construction projects.
Working with the Department of Government Services, which served as a facilitator, Yukon labour and contractors have developed a series of supplementary conditions to Yukon government construction contracts. The supplementary conditions support the goals related to local hire in the Yukon Economic Strategy. A working group representing the Yukon Contractors Association and the Yukon Building and Construction Trades Council jointly developed the supplementary conditions that will be included in tender documents for the 1992 Yukon government building construction contracts.
Contractors who bid on these projects must agree to fulfill the conditions that are in the contract. Supplementary conditions deal mainly with working conditions and local hire provisions on Yukon government building construction projects. One of these contract conditions is a local-hire incentive. It requires contractors to supply accommodation, meals and, in some cases, transportation to the job site for workers who are not residents of the community where the work is taking place.
Contractors are also required to make their best efforts to hire local workers and subcontractors in cooperation with the Chambers of Commerce and other community groups. The Department of Government Services has prepared an inventory of resources available in each community and is making these lists available to contractors who bid on Yukon government contracts.
The supplementary conditions attached to Yukon government contracts will enhance employment opportunities for qualified Yukon workers. They will also spur the growth of a skilled Yukon workforce by creating a demand for certified trades people and apprentices on Yukon government building construction projects.
This year, 60 percent of all work requiring skills of a trades person must be performed by certified trades people or Yukon-registered apprentices. This number may increase each year as opportunities for experienced Yukon trades people to obtain certification are made available.
To ensure that the contract conditions are met, reporting procedures are included as a supplementary condition. Before work begins, the contractor must supply a list of all subcontractors to be used on the project. The names of these subcontractors must be supported by other data: Workers Compensation Board numbers, business licence numbers, goods and services tax registration numbers, and an estimate of the number of employees on the project. As the job progresses, contractors and subcontractors must also supply regular, monthly payroll information.
I would like to emphasize that the successful development of these supplemental conditions represents the beginning. Soon we will see the benefits of these agreements in the form of increased local hire and improved working conditions on Yukon government projects.
Supplementary conditions are the product of talks that began last September and continued throughout the winter. The Department of Government Services continues to facilitate these talks. They are a fine example of how parties with different issues can reach an agreement on important issues that will benefit all.
Mr. Phillips: This particular process has only taken seven years of this governments mandates, and I think this is about the third attempt to develop an acceptable policy of bidding with local hire/local purchase. If this were a baseball game, it would be, Three strikes and youre out, so I hope this process is one we can actually live with and that it does the job it is supposed to do.
We look forward to reviewing the new agreements in the future and commenting on them at that time. I do have some concerns, though, when I read the ministerial statement about the extra burden that will be put on small businesses: the burden of paperwork to comply with the regular monthly payroll information and other information that is going to be required by this new policy change. One of the biggest complaints small businesses already have is about all the paperwork they are required to fill out when it comes to government contracts, and this just adds another layer to that burden.
I will be looking forward to reviewing the new policy and will be making further comments at that time.
Mrs. Firth: I have a copy of the new policy with respect to the working conditions and local hire and I have a great deal of concern about it, to the point that I wish to express on the floor of this House that I disagree completely with the policy direction the government is taking. I believe I have been consistent over the last seven years or so with all of the initiatives that this particular Minister has brought forward.
This working conditions attachment replaced, of course, the employee benefits package that was attached to the tender specifications of contracts. It not only asks for monthly statements and the issues the Minister raised, but it also asks for the rate paid each employee, the hours worked by each employee, the dollar amount paid to each employee and the overtime rate paid to each employee.
The reason the Minister and I disagree is because, unlike the government and the Minister particularly, I have confidence in the local contracting industry - that they do bid competitively and that they do do good work and that they treat their employees fairly.
I do not think that it is necessary for the Minister to send out our tender specifications to some seven construction associations across western Canada, which opens up the number of contractors that have access to our tender specifications - to over 2000 contractors; specificaly, 2800. I am referring to the last tender that went out marked Dawson Liquor Store-Red Feather Saloon, Dawson City.
My opinion is that the Yukon Contractors Association was probably pressed for more than these supplementary benefits. I suspect that the Yukon Contractors Association was probably pressed by some of the union allies of this government, who seem to have a great deal influence with this particular minister, and forced into accepting this as a compromise, as opposed to having a complete, negotiated union agreement, as was the employee benefits package attached to the tender specifications.
As I have heard from some contractors, it appears to be an attempt to unionize all contractors, and I am also in disagreement with that philosophically.
Hon. Mr. McDonald: I thank the Members opposite for their comments. Certainly, I thank the Member for Riverdale South for being so frank in setting out the differences between us. We certainly do have very different opinions on this subject, and presumably many others.
The purpose of this initiative, quite clearly, is to promote reasonable working conditions for Yukon workers, local hire for Yukon workers and training opportunities for Yukon workers.
The Member for Riverdale South has now demonstrated that she is opposed to each one of those provisions and consequently she and I are clearly of different minds.
The concern that the Member for Riverdale North expressed, with respect to paper burden, was a concern that was brought up during the discussions and it was because the information that was being required here was information that was already generated by the contractors in any case. We did not feel that this was an unwarranted or significant increase in the paper burden requirement. Certainly, that was something that was taken into account very carefully.
I think that the Member for Riverdale South has a very low opinion of the contractors association if she feels that when they came to an agreement with respect to the supplementary conditions, they did so because they were in some way weak. I disagree with her on that point and I have a lot more respect for the contractors association than does she.
With respect to the timing of this particular initiative, I would like to point out that it has been under discussion for approximately seven or eight months, and through those discussions, between all the parties who have an interest in building construction - both workers and the employers - it was felt that this was a reasonable set of supplementary conditions to promote good working conditions, local hire and training.
I would also like to point out that based on requests from both the contractors association and the Yukon Building and Construction Trades Council, the long-standing policy of the government to tender projects outside of the territory, was, as of a couple of weeks ago, cancelled, largely because there is a feeling in the department, and certainly I share this feeling, that there are sufficient numbers of general contractors in the territory. This was not the case a number of years ago. Last year and before, there were not the numbers of contractors in the territory to provide a good, competitive bidding environment.
That is something that I am sure that the Members opposite will be happy to hear. It is a policy that was initiated by the Conservatives; it continued with us and it has now been recently cancelled.
Speaker: This then brings us to Question Period.
Question re: Yukon Development Corporation/board appointments
Mr. Lang: It is nice to know that the Minister responsible for Government Services is no longer seeking contractors from outside the territory to come up here and bid on projects. It is nice to know that the Minister has decided to try to do things from a local perspective.
I have a question for the Minister responsible for the Yukon Development Corporation. At the outset, I want to express a very deep concern that is being expressed more and more by the public, and that is the question of political patronage on the boards and committees of the Government of the Yukon Territory. I want to make it very clear that I have no problems with the appointment of members to boards and committees who happen to be of the political persuasion of the side opposite, but I also ask that they be competent. Secondly, ...
Speaker: Order please. Would the Member please get to the question.
Mr. Lang: ... and just as important, I ask that they have the necessary qualifications and background to be able to speak to the board or committee they have been asked to serve on.
The Yukon Development Corporation has just seen two new appointments to the board: the ex-principal secretary of the Government Leader and the ex-president of the NDP. In view of the difficulties the Yukon Development Corporation has experienced from its inception, and is still experiencing, why were these two political appointments made?
Hon. Mr. Byblow: At the outset, perhaps I could correct a statement of alleged fact by the Member. There were not two recent appointments to the Yukon Development Corporation board; there were six appointments. There were six simultaneous appointments to the Yukon Development Corporation board in the past couple of months.
The Member has, essentially, answered his own question by his lengthy preamble in which he endorsed the principles of board composition that should subscribe to competence, a broad background of interest, and a broad representative of urban and rural. The board composition of the corporation reflects the principles we have developed during the last seven years in office, and those principles are reflected in the appointments made to the board.
Mr. Lang: In deference, the Minister must think the public is awfully stupid. The reality of the situation is that the two latest appointments made to the Yukon Development Corporation were strictly made on political grounds. That is the start and the end of it.
In view of the fact that the mining community is experiencing a major decrease in exploration - from $88 million in 1987 to as low as $5 million projected for this year - why was no one with mining experience appointed to that board so that there could be somebody speaking on behalf of our number-one industry in Yukon?
Hon. Mr. Byblow: I have no objection to the Members statement that mining constitutes our number-one industry in the Yukon today. I do, however, resent the suggestion that this government has not represented the interests of mining. When we reflect the support that the Member opposite gave to the mining industry when he was in office, it by no means compares to the kind of support that we give the mining industry today, through our programs, through our infrastructure support, through our expertise support to the industry, through our direct financial assistance to the industry. We have come light years in support for the industry and I might remind the Member...
Speaker: Order please. Would the Minister please conclude his answer.
At this time I would like to remind both sides of the House that the guidelines for Question Period are still in effect. Guideline 7 states, A brief preamble will be allowed in the case of the main question and a one-sentence preamble will be allowed in the case of each supplementary question. Further, guideline 9 states, A reply to a question should be as brief as possible, relevant to the question asked.... I would like to remind both sides to please try and follow these guidelines.
Since we have returned for this session, I have noticed that fewer questions are being asked during Question Period. At one time there used to be up to 12 questions asked; now only six or seven questions are being asked during the allotted time. I would like to see us get the most out of Question Period so please try to keep your questions and answers to the point.
Hon. Mr. Byblow: To conclude my answer, the majority of the board represents broad business interests. The chair of the board has broad mining experience.
Mr. Lang: I think it is interesting that we can refer to the chairperson and note his political involvement in the past, too.
In view of the fact that the Yukon Development Corporation and the Yukon Energy Corporation are facing major difficulties in the areas of energy supply and cost, why was no one appointed with an energy background so that they could contribute to the deliberations of the corporation in their dealings with matters of this kind?
Hon. Mr. Byblow: The Member knows that the corporation operates with a broad energy support staff. The Member knows that all Members on the board have an energy interest, as do all consumers. I should point out to the Member, as well, on the subject of energy, that the development and transmission of energy are outstanding matters relating to risk in development and are matters we have put to the public through our energy strategy review at this very instant, so the questions that remain outstanding are being raised and dealt with.
Question re: Appointments to Boards and Committees
Mr. Lang: Mr. Speaker, I have to agree with your observations about Question Period. One asks a question but never gets an answer. It makes it very difficult to have a good Question Period so that the public can be provided with information on various issues, as the public is ultimately going to have to pay for them.
I want to go back to the question of political appointments. I refer to the Boards and Committees Handbook that is published by the government. There is no question that the creme de la creme of the NDP is well represented throughout the boards and committees. I want to point out further that people are being paid a great deal of money to sit on these boards - up to $200 or $300 a day. It is becoming a preferred area of government for people to want to play a part in.
The concern I have is that the ex-president of the NDP has just been appointed to the Yukon Development Corporation. He is also a member of the...
Speaker: Order please. Would the Member please get to the question.
Mr. Lang: ...Council on the Economy and the Environment as well as on the board for curricula. I want to know why it is necessary for the ex-president of the NDP to be sitting on three different boards within this government?
Hon. Mr. Byblow: Again, I would remind the Member that there were six recent appointments to the board. The appointment the Member draws reference to was only one of them, and there was a clear desire to have a labour interest on the corporation board. The gentlemans name was put forward, and I think he represents not just a labour view but a broad public interest in the Yukon that spans many years.
Mr. Lang: It is not necessary to have a mining background nor is it necessary to have, for example, a background in energy; but if one happens to be of a certain political party, then all of a sudden one has a labour background and ones services are necessary to sit on not one board, but three.
My question is: in view of the fact that these board appointments are very well paid - $200-300 a day, plus - I want to know from the Minister why it was necessary to appoint this individual to the Yukon Development Corporation, in view of the fact that he is on two other boards.
Hon. Mr. Byblow: I would like to correct some of the inaccurate bootlegged information in the Members preamble. It comes to mind that I do not know of any board member who receives in excess of $200 - the bottom end is, I believe, $75. The Member implies that somehow our boards and committees in the territory do not reflect a proper balance of interest, political or otherwise. This is the Member who, during his time in office, barely had any women on boards in the Yukon; this is the Member who promoted the principle that the only way to get on a board was to have a Conservative party ticket. This is the Member who speaks out of both sides...
Speaker: Order please. Would the Minister please complete his answer.
Hon. Mr. Byblow: We have brought to the boards and committees in the territory a balance that truly reflects the broad interests that exist in the Yukon.
Mr. Lang: Just for the record for the Minister who is responsible for appointing people to the board: I will give an example - the Yukon Health and Social Services Council members were paid $300 last year.
Speaker: Order please. Would the Member please get to the supplementary question.
Mr. Lang: For example, the Yukon Health and Social Services Council now gets up to $300 for being the chair. I want to know why the ex-NDP president is on three boards in his government. Is there no one else out there who can represent labour?
Speaker: Order please. I have asked the Member to get to the supplementary.
Hon. Mr. Byblow: We searched high and low for a labour activist from the construction industry who was affiliated with the Tories, and we could not find one.
Question re: Chateau Jomini
Mrs. Firth: My question is to the same Minister with respect to the Chateau Jomini. In the Ministers report, he indicated he was going to be pursuing the reactivation of the Chateau Jomini through direct government means. Just this past Friday, the Minister was in his riding, having some discussions and meetings with people, talking specifically about a $500,000 one-time grant to the Yukon Development Corporation from the Government of the Yukon. He was also talking about the May 1 meeting the Yukon Development Corporation was going to have.
Could he share that information with this Assembly, so we know exactly what kind of information he has been providing?
Hon. Mr. Byblow: Here, we have the performance of the Member for Riverdale South, in her finest hour, bootlegging a number of inaccuracies onto the record, on top of which she dares raise more questions surrounding Chateau Jomini.
I take my place on a Point of Order. I do so in light of the statement you, Mr. Speaker, issued yesterday regarding the unparliamentary nature of allegations of conflict the Member for Riverdale South made last Thursday. The fact that the Member has not responded at her earliest opportunity - today in Question Period - to either withdraw those allegations, to apologize for those remarks, or to move a substantive motion making a charge and a proposal for dealing with them, prompts me to request that she do so now.
Mrs. Firth: I am simply asking a question. I never once ...
Speaker: Order please.
Mrs. Firth: There is no point of order.
Speaker: I would like to speak on this. I find there is no point of order. These matters should be raised when they occur. I referred to this yesterday, and I have to admit that I, too, was guilty. I should have put a stop to it when it occurred.
I find that there is no point of order.
Question re: Chateau Jomini
Mrs. Firth: I am trying to determine what the Ministers involvement is, so perhaps I could ask him the same question again. Could he share with this House the information that he gave to his constituents with respect to his involvement in this project, specifically with the $500,000 and the Yukon Development Corporation board meeting? Could he clear up the details for us?
Hon. Mr. Byblow: The issues surrounding Chateau Jomini were fairly clearly enunciated in response to questions, which were preambled with most inappropriate allegations, raised by the Member last week. The Yukon Development Corporation is currently undergoing a consultation process with the community of Faro to reactivate a dormant building. Those discussions are ongoing and the final plans are being formulated. The discussions that I have with my constituents surrounding outstanding problems are just that: discussions of options relating to problems facing the reactivation of the building. In conclusion, I might add that if the Member feels that there is some conflict that I am involved with, I challenge her to come to Faro and take on my seat.
Mrs. Firth: Well, I am not even going to respond to that. I am simply trying to find out the nature of the discussions. The Minister accuses me of bootlegging wrong information; then why will he not stand up and clarify it? If he discussed this with constituents, why can he not discuss it with the rest of the public here in the Legislative Assembly? What is so secret about the negotiations and the information he gave to his constituents?
Hon. Mr. Byblow: Here, again, we have the Member in her finest hour. In a public meeting there was a broad discussion of various options related to bringing Chateau Jomini back into a usefulness for the community. It was done in a public-meeting setting, over a six-hour period. There is nothing secretive. We were examining various financing options related to the building that would allow us to reconstruct portions of the building and make them available for various needs in the community, relating to housing, office space, possibly commercial space, and training. Those are the options that were discussed in a public meeting. They are not secret and remain just that: options being examined.
I challenge the Member again: if it is so important to her what is going on with Chateau Jomini in my community, she can come there and take on the seat that I represent, if it is such an objection to her and she feels I have some conflict in dealing with Chateau Jomini.
Question re: Litter
Mr. Phillips: My concern is the mess we drive by every day at the north end of Second Avenue. This government has spent the last two weeks patting itself on the back, and it has announced many times its new anti-litter programs. I commend them on those programs.
I am referring to the stalled Taga Ku project. Garbage and materials are strewn all over the site, and huge mounds of contaminated soil, partially covered with torn plastic, add to this unsightly mess. Tourism season is less than two weeks away, just around the corner. Many of these tourists will drive right by that terrible mess.
Has the Minister responsible for the environment written to the proponents of the project to ask them to clean the site up forthwith?
Hon. Mr. Webster: I want to inform the Member that, indeed, the hill of sand and gravel on Second Avenue is an eyesore and a hazard. I want to also remind him that it is not a project of this government, although we have lent the proponents of this project some money. I must clearly stress that. I have been informed that the proponents are taking steps to remove that eyesore and hazard.
Mr. Phillips: My understanding is that nothing will be done until September, at the latest.
In the new Environment Act, we have an order regarding unsightly property. Under this new act, the Minister can order ...
Speaker: Order please. Would the Member please get to the supplementary question.
Mr. Phillips: ... people to clean up unsightly property. The act has not been proclaimed yet, but we have passed it in this House. This is a responsibility; it is a hazard; we do ...
Speaker: Order please. I have asked the Member to please get to the supplementary question.
Mr. Phillips: Will the Minister now write to the proponents and ask them to immediately, or as soon as possible, remove that hazard, so it will not be an eyesore to Yukoners and tourists alike over the summer months?
Hon. Mr. Webster: I will be pleased to pass along the sentiments expressed by the Member for Riverdale North in a letter as soon as possible.
Question re: Taga Ku convention centre project, feasibility study
Mr. Devries: I have a question for the Minister responsible for Yukon Development Corporation. During the last few days we have heard several questions on the Taga Ku project. Among these questions was a matter of the feasibility of the project.
Could the Minister confirm that there was a feasibility study done by government or the proponents, prior to the financing being forwarded by Yukon Development Corporation?
Hon. Mr. Byblow: It comes to mind that there were a number of feasibility studies done in relation to what now constitutes the Taga Ku project. These studies go back as far as 1986 and 1987. Under the EDA, there was some sponsorship of a feasibility study of the need for various tourist facilities. I believe that there was an additional study done following that, and there would have been considerable analysis done in relation to the project itself. There are a number of studies on the record.
Mr. Devries: Could the Minister tell us if he reviewed these feasibility studies personally and would he be prepared to table them?
Hon. Mr. Byblow: I do recall reviewing a number of them. I do not know if I reviewed every single one. I believe that these studies have in fact been tabled. I seem to recall that the convention centre analysis, done back in 1987 or 1988, was part of a tabled document. Some of these studies have already been tabled, but I will certainly take notice on the question.
Mr. Devries: During the Public Accounts Committee review of Hyland Forest Products, the Minister sat on the committee and assisted in developing criteria and guidelines to prevent a similar disaster.
Could the Minister tell me if these recommended criteria and guidelines were adhered to in the financing of Taga Ku?
Hon. Mr. Byblow: As the Member recalls, during the Public Accounts Committee process, we were advised by officials of the corporation that they intended to finalize such guidelines. The Committee recommended that such guidelines be developed, and the corporation committed to their being developed.
I believe those guidelines are currently being finalized. I cannot fully confirm whether or not specific guidelines, as recommended by the Public Accounts Committee, were fully observed during any financing process surrounding Taga Ku.
Question re: Na Dli Youth Centre, escape
Mr. Phillips: My question is for the Minister of Health, and it is regarding the multi-million dollar young offenders escape facility at the top of the hill. It seems that youngsters continuing to walk away from this facility have our officials baffled.
In the last few years, we have spent hundreds of thousands of dollars on such things as new fences, training and new procedures to ensure that this new facility would be escape-proof.
What is the Minister going to do to stop this recurring event?
Hon. Ms. Hayden: I would be very interested in the Members recommendations. If he is asking if we are going to turn it into a maximum security penitentiary, the answer is no, we are not.
How are we going to ensure that the escapes do not happen? It has been suggested to me that we hire this one young person to act as a consultant, but that does not seem quite appropriate.
In serious response to the specific question of the recent escapes, I understand there will be more concrete put around the bottom of the chain link fence around the courtyard. I have asked the facility managers to give me several options. Of course, one of them may be that we will have to have something put around the edge of the roof of the building to also make it less accessible.
To answer your question, I do not yet know the full extent of the renovations, if any. I assume that there will be some.
Mr. Phillips: We were given the funds from the federal government to build a secure custody facility for young offenders. It appears the only thing we left out of the design of this facility was a revolving door. The young people just seem to walk in and out of the facility.
Can the Minister advise the House how much more it will cost the Yukon taxpayers to upgrade this facility to make it what we were supposed to get in the first place: a secure custody facility? Otherwise, how much will it cost to send this and other young offenders outside to a real secure custody facility?
Hon. Ms. Hayden: I am not clear on what the Members question is. Does he want to know the entire amount that has been spent on this, or what we are going to spend now? When I have it, I will bring the information on what we will be spending back to the Member. If these young offenders are sent outside, it will be for physiological and psychological assessment and treatment, as opposed to sending them to a penitentiary.
Mr. Phillips: I am, in fact, suggesting the opposite. In the first place, the purpose of the facility was so these children would not have to go outside, but could stay here. Now, every time we have a problem, we send them outside to a secure custody facility. The design was wrong from the beginning.
How many young people do we now have outside whom we cannot hold here because the facility is not secure? Is this young person going to be sent away from his family and community because we cannot contain him here?
Hon. Ms. Hayden: I will bring the information back on how many, if any, young offenders are outside.
The Member is confusing what I said. I said that we would be sending them out for assessment and treatment. That is not to a secure facility. Our own secure custody facility is not a treatment facility, although we do try to have as many programs as we can. That is one of the reasons why, in the foster care program, we have begun the planning process to have children in a therapeutic treatment facility before they hit the age of these young people.
I know the Member is concerned about young people. I am sure that is the source of his concern. It is also mine. We do want to be able to keep them here at home. These ...
Speaker: Order please. Would the Minister please conclude her answer.
Hon. Ms. Hayden: ... young offenders have asked for assessment. The facility managers have also asked for assessment. We hope it will be done.
Question re: Social assistance statistics
Mr. Nordling: I have a question for the Minister of Health and Social Services.
In 1984-85 the actual number of Yukoners receiving social assistance was 582. For this coming year, 1992-93, the projection is 2,155. I would like to ask the Minister if it is right that over 2,000 Yukoners must depend on charity to eat.
Hon. Ms. Hayden: Many of those people out there would resent the terminology depend on charity. They, too, at some time in their lives pay taxes.
I do not have the specific figures in front of me, but I certainly will obtain them. If the Member is asking whether there are 2,000 people receiving social assistance, I will obtain those figures.
Mr. Nordling: That is not what I am asking at all. I have the figures from the budget book, the Ministers budget, that projects 2,155 people to receive social assistance. I am asking the Minister if it is right that over 2,000 Yukoners a year must be assisted through social assistance programs.
Hon. Ms. Hayden: I do not know if the Member is advocating that we go back to the days of Christmas hampers - the rich providing boxes to the poor. Is it right that we have people on social assistance? If there are people who do not have either shelter or enough food - young, single parents, mothers who have no income and who have children to care for - I leave you to judge whether it is right that there is social assistance available. The Member is asking for a moral judgment to be made.
Mr. Nordling: Perhaps it does not bother the Minister that over 2,000 people every year have to go to social assistance. Would the Minister explain why the huge increases in government spending over the past seven years have not been successful in reducing Yukoners dependency upon social assistance?
Hon. Ms. Hayden: In a minute and one-half, I assume, Mr. Speaker?
Some of the realities of life in the Yukon are that there are people who are not well-educated, who come here with little education, believing it is the Shangri La of the north; some of us grow up here without all the skills necessary to earn a living; some of us find ourselves in positions we would rather not be in. As far as I can see, that is why we have people on social assistance.
Question re: Rural-residential building lots
Mr. Phelps: I have a couple of questions I would like to direct to the Minister responsible for land, the Minister of Community and Transportation Services. They have to do with the acute shortage of land available to people who want to build homes and, in particular, the acute shortage of rural-residential lots in and around the Whitehorse-Carcross area. We had 130 applications for three lots in the Mount Lorne hamlet area, which came onstream three or four years after they were earmarked to be delivered to the public.
Can the Minister give us the facts about his plans with respect to offering some rural-residential lots to Yukoners in the near future?
Hon. Mr. Byblow: The Member has accurately identified what I have perceived to be a shortage of a particular class of land for some time; that is, rural-residential land. The Member asks what we are doing about it.
In the area outside the municipality of Whitehorse, a number of steps are taking place, from a view of planning the necessary development. I believe the Member is familiar with those relating, for example, to the Hootalinqua North planning exercise and the planning exercise being undertaken by Mount Lorne right now.
However, the City of Whitehorse had previously not considered rural-residential land as a priority. With the new council, that has changed. I am quite pleased with the discussions we are having, the examinations that are being undertaken, and the investigations we are currently doing, in conjunction with the City of Whitehorse, in a number of areas. I believe there are six or seven possible areas where rural-residential land can quickly be brought onstream. There is a shortage of that class of land, and we are moving on it.
Mr. Phelps: Not only is there a shortage but there is an acute shortage. I am really concerned about the lack of progress. The Hootalinqua North planning exercise commenced in 1986 and it is still not completed.
Can the Minister tell us whether or not there are plans to resurrect and develop the infamous Flat Creek subdivision in Hootalinqua North?
Hon. Mr. Byblow: There are no current plans that I am aware of at this time. I have to qualify that statement in a reasonable fashion to the Member with respect to the Hootalinqua planning exercise.
The Hootalinqua planning exercise has been protracted over a substantial length of time. The creation of a hamlet in the area slowed down the process. Currently, we are finalizing some land claims matters that are affecting the planning exercise. I hope that we can very soon come out with an exercise that will finalize that document. To this point, we have been using it simply as a document for reference, as opposed to a document for specific direction. That exercise has to be concluded.
In respect to Flat Creek, should the Hootalinqua planning exercise reactivate that particular development, it would be a natural process of planning.
Mr. Phelps: It seems that Whitehorse is nicely boxed in with planning exercises - the Carcross and Mount Lorne areas are under planning exercises while the Hootalinqua North area is under a planning exercise of long standing.
When can we expect some progress to be made? When can we expect some lots to be made available to people who have been waiting for years for rural residential lots to build on?
Hon. Mr. Byblow: Specifically within the City of Whitehorse, that exercise is under way right now. As specific areas are identified and as the process required to free up the land and do the development takes place, that will occur. It could be as early as this year that we may even see some lots available, but that is being done in conjunction with the city.
Surrounding the city, Mount Lorne is in a one-year planning exercise that began last February. With respect to the Hootalinqua plan, I expect to see some public documentation of that finalized process this summer.
Question re: Hootalinqua North Plan
Mr. Phelps: We have the Hootalinqua North exercise; we have the Mt. Lorne exercise; we have some exercise going on within the City of Whitehorse itself, and in Carcross.
Some of my constituents, at least, are getting quite exercised about the exercises. Can the Minister tell us when we can expect to see some lots on the market for people who want rural-residential lots?
Hon. Mr. Byblow: I have to say to the Member that I appreciate the spirit in which he raises the question. The Member knows that to accomplish anything with the minimum of problems and conflicts you have to plan. Quite often any successful project is one that has gone through a lengthy planning exercise that eliminates the problems that could occur in the development.
I guess that the Member is correct. Within his riding of Carcross there is another planning exercise going on by the advisory group that we are all very happy to have been a part of helping to create. The short answer is that land will be available as the approvals take place in those communities in which the developments are occurring. They do require finalized planning and that is happening now.
Mr. Phelps: I am sure that this Minister is not responsible for the participaction advertisement that you see on television, because certainly around Whitehorse we get lots of exercise.
Again, can the Minister tell us whether or not there will be some lots released in this building season for people who want to build homes on rural-residential land?
Hon. Mr. Byblow: Because I think that the Member is raising a serious-minded question, let me undertake to the Member that I will review the current status of all the planning exercises that are occurring in and outside of the City of Whitehorse toward the Carcross area and report back to the House or to the Member directly.
Speaker: The time for Question Period has now lapsed.
ORDERS OF THE DAY
Notice of business
Mr. Phillips: Pursuant to the Standing Order 14.2(3), I would like to identify the order in which the item standing in the name of the Official Opposition are to be called on Wednesday, April 29: Motion No. 2, Motion No. 10 and Motion No. 11.
Mrs. Firth: Pursuant to Standing Order 14.2(3), I would like to identify the item standing in the name of the Independent Alliance are to be called on Wednesday, April 29, 1992. It is: Motion for the Production of Papers No. 2, standing in the name of the Member for Porter Creek West.
Speaker: This then brings us to Orders of the Day.
ORDERS OF THE DAY
Speaker: Government Bills.
Bill No. 2: Second Reading
Clerk: Second reading, Bill No. 2, standing the name of the Hon. Mr. Byblow.
Hon. Mr. Byblow: I move that Bill No. 2, entitled Economic Development Act, be now read a second time.
Speaker: It has been moved by the Minister of Economic Development that Bill No. 2, entitled Economic Development Act, be now read a second time.
Hon. Mr. Byblow: The second reading for the Economic Development Act that has been tabled before the House gives me considerable pleasure. That is largely because the purpose of the Economic Development Act is to enshrine in legislation the Yukon Economic Strategy. This act will record the goals of the Yukon Economic Strategy as guidelines to direct the governments efforts in economic development. This will enable us to pursue the development that Yukon people want.
This exercise goes back several years. It was a formidable task for this government to formulate a consensus on what direction economic development should take in the Yukon. As Members will recall, that task was undertaken through the Yukon 2000 process. Two years of public consultation on how Yukon residents wanted the future of the territory to unfold ensued during that discussion. Many people spoke, and the government listened. New ideas were put forward, there was much debate, there were many public sessions, there were many private sessions, there were seminars, there were workshops, and there were public meetings.
This effort culminated in the release of the Yukon Economic Strategy. The Yukon Economic Strategy sets out the guidelines on what responsible economic development should do for the territory and its people.
People told us they wanted development that allowed Yukoners to earn a living here. We all recognize that new jobs and business opportunities are needed to meet the needs of an expanding workforce. New industries are needed to diversify and strengthen our economy. Existing businesses must find ways to keep their operations profitable while meeting the demands of a changing world.
During our public consultations, we were also told that any development should also provide equal economic opportunity to all residents. Most emphatically, people told us that they wanted to have a greater control over their economic future. This meant more regional and more local decision making. This meant a higher level of Yukon ownership of developments within our boundaries, and it meant producing more things that we need in the territory and relying less on imports.
People also told us they wanted development that provided an acceptable quality of life. There is no question that development is necessary to provide things we need in our modern lifestyles. We were told, however, that it should not proceed at the cost of those things to which we do not associate a dollar value. We should not place our environment, recreation time or the ability this land has to sustain life in its natural state at irreparable risk. The example noted was the traditional native economy.
Outlining a strategy, with common goals for development, was really only the starting point. Each year, since 1988, a review and progress report of accomplishments toward the goals of the strategy has been prepared. This reporting will continue. In addition, entrenchment of these goals into this act will ensure that they are considered as a primary focus for development.
Government has been, and will continue to be, an important force within the Yukon economy. Our contributions are both direct - such as employing people and providing economic development programs - and indirect, through the provision of infrastructure, education and training programs.
Government and the private sector must continue efforts to ensure that our economic prosperity continues. By this act, we entrench in law our commitment to support and encourage economic development.
Increasing the involvement of Yukon First Nations in the territorys cash economy is a requirement of government under the land claims agreement - so is supporting the survival of traditional aboriginal economies.
Under the Economic Development Act before you, these commitments will be formally recognized as the responsibility of the Minister of Economic Development. They will also be coordinated with and be made part of our overall plan for our economic future. The act will also entrench the responsibility for promoting sustainable development through the Yukon Council on the Economy and the Environment. YCEE has an important role to play in providing independent advice to government on development.
Economic development and our environment are closely linked. Actions affecting one have consequences for the other, but economic development does not have to be a developers-win/environment-loses situation. The goals of the Yukon Economic Strategy favour development tempered with respect for our natural resources. The challenge given to YCEE is to examine ways of allowing development to proceed in harmony with a healthy environment. With a clear role of promoting responsible development, the council will be another means by which we can support economic development that meets the criteria, that meets the needs and meets the aspirations of Yukon people.
Recognition of the important roles that other departmental advisory boards play is also part of this act. To allow this important work to continue and to be expanded into other areas of economic development, the act will provide the Minister with the authority to appoint boards and recognize the role such boards play in economic development. The act will also establish the office of the Minister and the Department of Economic Development. In this way, governments roles to promote and assist with development will be the responsibility of a single Minister and department. Business managers will say accountability requires authority. No one can be held accountable for any action or lack of action if they are not clearly authorized as responsible for that action. This also holds true for government and this is recognized in the Economic Development Act. In the act, the authority to enter into economic development agreements will be given to the Minister. Such agreements include contribution and funding agreements; it will also allow for the signing of economic benefits agreements with developers - which present new opportunities for government and for industry.
In addition to clarifying authority for governments efforts in economic development, the act will also provide a mechanism for efficient, accountable programming. Under the Economic Development Act, programs can be created through passage of regulations under the act. The regulations will set clear program parameters against which program performances can be measured.
In the spirit of Yukon 2000, and the Yukon Economic Strategy, the public and industry will be consulted in the development of programs and regulations. All programs concerned with economic development will be enacted under this one piece of legislation, and this will ensure a greater coordination and development in adherence with the goals of our strategy.
Through this act, the government will continue to support and play an integral part in the vibrant economy of the Yukon. Establishing a strong base for our goals and governments role will help to ensure that the current health of our economy is maintained.
I think that it should be restated that the Yukon economy is currently in good health. Between the period of 1986 and 1991, almost 3,000 jobs were created in the territory. During 1991, the Yukon recorded the lowest number of personal and business bankruptcies in the nation. Even though our workforce increased by some 800 people, this shows to me that our economy remains strong, even though a recession is being experienced throughout the country. Our business community and people are optimistic about the economy of the territory and, with this positive outlook, we will build toward our future. The current health of our economy is due in no small part to our dynamic private sector.
The gross domestic product of goods-producing sectors of our economy increased by some 275 percent, between 1984 and 1990. The territory also boasts a vibrant service sector. Companies providing transportation, communications, construction and business services are our major employers. The entrepreneurial spirit is strong in the Yukon and it must remain so if we want to reach our economic goals.
The aboriginal community has contributed to the health of this territory and its people for centuries. This community has adapted to the influence of our forces and still remains viable today.
This act is the next step in realizing responsible development for this territory. It takes the views of people as expressed in the Yukon 2000 process and assures that these views are considered and that plans and programs are developed.
It assigns clear authority to those responsible for the economic development policies and its programs. It recognizes that the government has a role to play in supporting the development efforts of the private sector and the First Nations. It simplifies program creation and ensures program parameters. It ensures that these programs are developed through public consultation, and it ensures that all of these factors are clear from the beginning. I believe that this legislation will enable us to act responsible, as well as responsibly, in the area of economic development.
Mr. Devries: I thank the Minister for his speech. It was much longer than the act itself is.
This side agrees that the act is okay, although, by the same token, when I first looked at the act I really wondered what it was all about. I did not get all excited about it. To me, it was kind of a do-nothing act. As I read over the act a few more times, I started to realize there was a little meat in it. I am now able to see, from the Ministers speech today, what he was trying to accomplish. The act definitely has to be read alongside of the Yukon Economic Strategy and the Yukon Conservation Strategy.
If this act was sent to some entrepreneur who was contemplating coming to the Yukon to get into business, I think that he would question the Economic Development Act containing so many statements on sustainable economic development, environment, et cetera. I feel that some of the statements in the act could be shortened a little to make the economic aspect of the act appear a little more attractive and allow the environmental statements to remain more in the Environment Act and the Yukon Economic Strategy and the Conservation Strategy.
I also found it interesting that the Minister had to get back into patting the government on the back for the wonderful job that they have been doing on the economy. If you just look around the streets, everything seems to be going pretty good. If you look at the statistics on bankruptcies for 1991, they too, appear great; however, if you look at the statistics from 1990-91, the bankruptcies in the Yukon were double what they were in the Northwest Territories, which has three times the population.
It is great to fake statistics and take a few years to put things in your favour. It is similar to the statistics on energy rates the Minister likes to throw at me in Watson Lake. We may be paying a few cents less than we paid five years ago, but the fact still remains that we are paying 25 percent more this year. I guess that is billing, though, not rates. The final bill one gets in ones home for 100 kilowatt hours today is 25 percent higher than it was for 100 kilowatt hours one year ago.
Also, I have seen some inquiries from the Whitehorse Chamber of Commerce and I am still awaiting a response from the Yukon Chamber of Commerce, so I cannot anticipate what their recommendations are at this point. We will get into that when we get into Committee debate.
There are a few problems with the act. In section 12(2)(d), in several of the subclauses it refers to a person or organization. This is in the financial assistance of programs section. In section 12(2)(d), it says; ...render that person or organization eligible for financial assistance. Then, in section 12(2)(k), it only says person. Then, in recovering the funds, the act refers to misrepresentations and the inspection of financial records, but it only refers to person and forgets all about the organization. If one took the act at its word, I can only assume that if an organization got something under section 12(2)(d), there would be no recourse under the act to file for misrepresentation or inspect any financial records. Those who drafted the bill should have a look at that.
I find a little unclear the reporting procedure for the Council on the Economy and the Environment. I hope the Minister can clarify that part a little bit.
Also, again, we see the potential for another committee being organized. I think Yukoners are being committeeed to death.
The word I get is that some people are starting to feel that perhaps we should just have a permanent board that travels around the whole Yukon and addresses all of these committees because it seems like meeting after meeting after meeting and very few people are showing up. I think of the Workers Compensation group that came to Watson Lake the last time around and my wife and I were the only ones who showed up. The main reason I showed up is that I am sort of a beneficiary under the Workers Compensation Act and I was just curious about how they arrive at the pension increases that they give you every year and things like that. I just thought it was snowballing, that I was getting more than I really felt justified in getting.
Overall, this side supports the concept behind the act. I say again that I do feel that the act could perhaps have a little more economic punch to it. That is basically all I have to say at this time.
Mrs. Firth: Well, the first comment I want to make with respect to this piece of legislation is a general comment. It is my understanding that the legal services department of this government is probably the largest law firm in the Yukon and this kind of legislation will make it even larger.
I read this bill very carefully and I must say that I was not quite clear as to what the Ministers objective was with respect to the legislation. So, I made some inquiries and found out whether the department could continue to operate as it is operating without this kind of legislation. I was told, yes, it could. I also found out that this is what is referred to as departmental legislation and that we do have some in other areas: new areas in which we have brought acts forward in this Legislature; for example, the Health Act, the Education Act, Public Service Commission Act and Financial Administration Act.
I did some more investigating to find out if we could pursue development in the Yukon that people wanted without this piece of legislation. I was told that, yes, we could. I inquired to determine if the department could continue to operate, the councils operate, the committees operate, could the programs that were presently in existence continue to operate, could they have the person years and so on. I was told, yes, they could continue.
Then I had to investigate why the government was bringing forth this legislation. Why did we need this legislation in the Yukon?
I found out that other governments were doing this and that this was a new trend with other governments. The trend was to write the parliamentary legislation for all departments, and I suspect that this government is going to write the legislation for all of the departments. Every department is now going to have a departmental act.
The Minister gave a very long speech and talked about many things, but I do not think that he mentioned anything this afternoon that he could not presently do or achieve under the existing legislation and laws of the Yukon Territory. I am looking forward to hearing from the Minister as to why we absolutely need this legislation and need all of these examples of goals and objectives enshrined in legislation.
I do get very concerned, because I know that it costs us money to have this legislation drawn up. I become concerned when I hear that we are proceeding with legislation because other parts of Canada have this type of legislation and it is the latest, trendy thing to do. I think that there are a lot of Yukoners who also object to that kind of legislative mandate that some politicians seem to have. I believe the criticism I hear is that some politicians need to bring bills and laws forward in order to justify their existence. I hope that is not the case here, but I really have to seriously ask why we are proceeding with this kind of legislation. I am not convinced that it is necessary, and I will be looking forward to further debate on the matter.
Mr. Lang: I want to make a couple of observations with respect to the bill before us. I think that the Member for Watson Lake made it very clear. The legislation is mostly window dressing as far as I can make out. From my experience and knowledge of government, I think that the MLA for Riverdale South is correct; the Minister can do virtually everything that is being requested in this bill under present acts that are already in place, whether it be the Financial Administration Act or any other piece of legislation.
I want to express a significant disappointment that the Minister would spend all his and his staffs time and effort on a piece of legislation like this, when he has direct responsibility for the Yukon Development Corporation, and that we are not going to see any major revisions to that act over the course of this session. This is contrary to the commitments he made in this House to review the mandate of that corporation. We had hoped that he would bring something realistic back to this Legislature for deliberation.
Instead, we have a bill - basically an enabling piece of legislation - which says that everything that is going to be done will be done by regulation and that they will inform us after it has been done. If one goes through the various sections, it is clear that everything is going to be prescribed. Therefore, we are being asked to concur, in general principle, with giving the authority to the Minister to have the regulation-making power - which, in most cases, he has in any event, either through the budgetary process or, as I said, other bills that have been passed in this House. He is asking for us to go ahead and give him that authority through the bill we have been presented with.
I find it difficult to understand why we are making a law for the sake of making a law. That is number one. In some sections of the bill, it is so nebulous that it is going to be a question of the readers interpretation of what, exactly, it means. Some sections are perhaps going to give the government the right to discriminate against certain elements of our society. I am thinking of the economic development programs in subsection 11(3), which section allows the Minister, clearly and distinctly, to make preferences based on individuals or organizations, not only from a residential point of view as far as the Yukon is concerned but, also, from the point of view of the economic involvement of the organization, or individual, or investment.
That is a cause of concern to the general public, because it is becoming more and more evident that, if one does not meet certain criteria, then he or she is known to be a WASP, I guess, of not much use to society and, subsequently, ineligible for various programs being administered now by the government.
It is a tragedy when we are splitting our community along that basis. Within the social fabric of the Yukon, we have such a small community to start with and, if we start delineating them and us through our programs, the ultimate end is that people find they do not like each other very much.
The ultimate end of it is when people are gaining preferred status, and that those who are not on that particular list are told they may not be preferred, but they had better like it.
I am sure we will be discussing the bill in further detail as we go through it but, as the Member for Watson Lake has said, it is with some reservations that we are prepared to go into Committee of the Whole to go through it and find out exactly what the implications are going to be.
I do note that one section, section 18, is of interest. This section allows government, once again, to go into one of the largest and probably most prosperous industries that have been put into place since this government took office: the consulting business. I guess this gives legitimacy to all the papers and consultant contracts the Ministers department has gone into over the past years.
Perhaps the converse is true that, if one does not have this as a legal basis for a department, then you cannot hire consultants. If that is the case, then this young offender who is at the escape centre up the hill will not be able to be indirectly employed as an expert in his field by the Minister of Health and Human Resources.
There are some concerns, although, in many ways, the legislation is pretty airy-fairy, and many of the principles are such that it is very difficult to disagree with them, as they can be interpreted in so many ways.
Mr. Nordling: Because of the concerns raised by the previous speakers, I can be very brief. The Minister has said that the act is to entrench, in law, the governments commitment to economic development. To me that is legislation for the sake of legislation. This act may cause more confusion than clarification. I do not think the act is necessary. If it is necessary, I would like to ask Ithe Minister if the Department of Economic Development has somehow been acting illegally over the last number of years.
Mr. Phillips: I just have a few brief comments on the act. I took some time to read through it. I was left with the same impression that others were. I wondered what we were doing with the 12 pages of legislation. What were we changing that the department could not do now, or was not doing now? I was a little bothered by that.
Years ago, when I got involved in politics, one of the things I talked about doing was bringing a bill to the Legislature - just one law - that said that for every law we created in this Legislature, we would have to take five off the books. We would have to strike five laws.
Perhaps when we look at bringing legislation forward, we could examine a little more closely whether it was even needed. We have volumes and volumes and volumes of legislation, sitting in the offices of all the government departments, that are doing nothing. I believe that this legislation is going to fall right in with those other volumes of legislation that do nothing. I wonder why we put bureaucrats and civil servants to work for long hours to draft the initial act and to pull all this together, bring on all the expensive lawyers in the Department of Justice to put it all in the legalese. Finally we bring in the interpreters who interpret it all and translate it all into French for us, when it is not going to make a darned bit of difference in how the Department of Economic Development does business. It just does not seem to make any sense.
This is a government that, over the past seven years, has shown that, if nothing else, it loves legislation and it loves laws. I am extremely disturbed about that and it makes me think a lot more seriously about bringing in new legislation that says that for every law you make, you have to take five off the books. I think the Minister should think about that seriously and see whether we really do need this new set of laws that will do nothing.
Speaker: The hon. Member will close debate if he now speaks. Does any other Member wish to be heard?
Hon. Mr. Byblow: Let me say at the outset that I am a little taken aback by what appears to be a general consensus from Members opposite that this act is entirely unnecessary, has no reason for coming before the House and should not occur. I am taken aback, because it is my view that this act does precisely what Members, through their public posturing, through their questions in the House and through their debates on motions and comments surrounding budget debates, have asked for.
We constantly hear, from Members of the Opposition, charges about a lack of attention by this government to economic development in the territory. We have to put up with many criticisms that we are not doing enough for economic development.
We repeatedly listen to allegations that the economy is really not as healthy as we would believe. It seems to me that when the government takes an initiative such as the one before the House today, an initiative that enshrines in legislation a statement of commitment by this government toward economic development of the territory, Members opposite ought to be pleased with that. Members opposite ought to be pleased with this governments strong statement of commitment toward encouraging economic development to occur and toward the rules under which that economic development will occur. I am somewhat puzzled over why Members would undertake to criticize a statement of position by the government toward its commitment on economic development.
We are not making law for the sake of law. What we are doing is enshrining and entrenching the commitments that we have made toward economic development by legislating them into a legal framework that will require us to carry on that commitment. Essentially that is what we are doing. We are making a statement on behalf of the government, whichever party may be in power, that these will be the stated commitments of the government to develop the economy. We do this on a foundation of consensus from the Yukon people.
It was the Yukon 2000 process that established the desires and aspirations of Yukon people, and those aspirations, that consensus, is what is being enshrined in this legal framework before us today.
A Member suggested that if this is to provide the legal framework for the program delivery of the department, then it must be operating illegally. I apologize for the paraphrasing; that may not have been the precise question. I believe that it was the Member for Porter Creek West. The fact is that a number of the programs do exist.
The statutory base provided by the budget is the only legal basis by which they exist. I do not think that is good enough. It would be my preference to ensure that programs we have in place, which are working, providing funding for the economic development of the territory, ought to be attached to this framework in strict guidelines for its operation.
It seems to me that, if Members could criticize any aspect of this bill, it ought to be in the matter of the regulations not being attached. It is the regulations that will identify the criteria and guidelines for the program, as well as the eligibility and details pertaining to the specific program.
However, through my original statements on the public record with representative organizations, I have undertaken that interest groups in the territory will be consulted on those regulations. The Chambers of Commerce and the Chamber of Mines will review the regulations about the electrical support program we announced before they are attached. The Chamber of Mines will participate with us in drafting the regulations out of our current program guidelines surrounding the Yukon mining incentives program. That will yet occur.
The Member for Watson Lake made a complimentary statement, and I thank him for it. However, he had some concerns surrounding the labour statistics I have presented. He suggested that the bankruptcies that occurred in the territory were not truly representative. He also drew a comparison to the Northwest Territories.
In 1990, the Northwest Territories had no reported bankruptcies. In 1991, they had 13, so there was that substantial increase. In 1990, we had 15 bankruptcies, which is generally fairly standard. In 1991, we had eight bankruptcies. So, we had about a 50 percent decrease in our bankruptcies, where, across the country, there was something like a 21 percent average increase in the number of bankruptcies.
In that respect, our statistics were very positive, if you can think of a bankruptcy being in any way positive. The point is that our bankruptcies are decreasing; nationally, they are increasing.
Statistics can reverse themselves, but certainly from the indications we have of this years economy, they ought not to because there are many new businesses being established and there are many successful businesses in place. We have every evidence of a fairly positive year before us, particularly with the Alaska Highway celebrations and the abundance of tourists we expect.
Even though mining exploration is anticipated to be down somewhat from last year, in my last meeting with the Chamber of Mines they provided me some comfort by saying that it will only be marginally less than last year. Last year we had some $50 million worth of exploration; the year before we had $12 million, so actually last year we increased in our exploration expenditures. This year, the Chamber of Mines suggests that it may be marginally less, but that is according to a best-guess calculation.
I guess that even though the Member for Watson Lake reprimanded me for the suggestions that the economy is booming, I have to reassure him that all indicators are very good and the state of the economy is indeed one that we feel good about. Every indication is that it will sustain itself for some time to come, and I guess it has to be said that we must be doing something right. We must, in developing those building blocks, be promoting those programs. We must have that particular entrepreneurial spirit. We must be doing all the things substantially correct in order to have that kind of economy sustain itself.
What this act does is enshrine the commitments that we have made, the building blocks we have put in place, the programs that do currently exist, for the most part under the authority of the budget, to be a part of this legal framework. It is to ensure that they will continue to provide their present level of support to the community.
I would clearly say to all Members, and particularly the Member for Riverdale South - who may be running in Faro - that this is not a trend. This is not because other jurisdictions may be doing it. It is because we want to have a legal framework for our programs and we want to legislate the commitments that we have undertaken, which originated through the Yukon 2000 process, into the guiding principles for this government and any future governments.
It comes to mind that if legislation like this would have been in place in the early 1980s, we would not have seen things like the Yukon Housing Corporation rolled up into a department or attempts to have done the same with Workers Compensation, because our legal framework says what you can and cannot do. That is what this does.
I believe a couple of Members have raised issues about specific clauses. I thank them for that, because it does allow me to examine more closely whether the specific points that they raise about matters such as the role of the round table and the role of committees has some ambiguous wording, and we can deal with those in clause-by-clause debate. Let me say, though, that the round table guidelines are established here. A review shall be done of the economic strategy every year, and that review shall become part of the public record: how well the government is doing on the 234 commitments or recommendations that were made in the original strategy.
When we get to the specific clause, I will gladly debate any specific queries Members may have.
I will conclude by simply stating to Members that this act is not window-dressing. This act is not trendy, in the context of what other jurisdictions are doing. This act is our statement to provide a legal framework for our commitments to support the economy, and would bind any government to do the same.
Motion for second reading of Bill No. 2 agreed to
Hon. Mr. Webster: I move that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Speaker: It has been moved by the Hon. Government House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Motion agreed to
COMMITTEE OF THE WHOLE
Chair: I will now call Committee of the Whole to order and declare a recess.
Chair: I will now call the Committee of the Whole to order. We will be discussing Bill No. 6, Workers Compensation Act on general debate.
Bill No. 6 - Workers Compensation Act
Hon. Mr. McDonald: We had, in second reading yesterday, not only introduced the subject of Bill No. 6, but also had managed to find ourselves hung up on a number of the details, which I am sure that the Members will want to pursue today. The Members identified a number of things they would like to discuss. I responded to some of them, but perhaps it would be most appropriate for Members to identify what matters most to them and we can discuss them in the order they wish.
Mr. Lang: There are some concerns about the draft bill that we have before us. As I said at the outset, we were pleased with the effort that the Minister has put into the bill. I am a little concerned about the attitude that, because some suggestions are being put forward by this side, they are going to be discounted. That is the impression that the Minister gave last evening in his windup of the second reading speech when he said that the ideas and areas of concern we raised really were not of consequence, and that is of serious concern. Then, at the same time, he said that he is prepared to maybe look at the amendments we bring forward, but that he is going to give a lot of resistance.
At the outset I want to say that I do not see this bill as a partisan bill. Our job in the Legislature is to try to put together a piece of legislation that is a compromise in the employee/employer working environment and relationship. We have to be able to meet the financial obligations, if the unfortunate situation happens where a worker gets hurt in the workplace.
I want to impress upon the Minister that that is the way that we are pursuing this bill and we are not pursuing it from any other point of view. I want to reinforce that with the Minister; it is not a one-upmanship, and I hope that the Minister does not see it from that point of view.
I recognize that there is an election in the offing, and sometimes that influences how a particular piece of legislation is presented or how business is approached generally. I want to emphasize to the Minister that we do not see it from that point of view.
At the outset, we want to know what economic and financial implications the bill, as presented, is going to have on the fund.
I am wondering if the Minister could table that information, make it available to us, give us the comparisons what our costs are now and what the costs are going to be upon proclamation of the act, and a projection of how these costs are going to be met over the course of the next couple of years.
Hon. Mr. McDonald: I want to respond in kind to the Members comments this afternoon, because I think it is important that we get off to a good start in Committee, even though we may have let the train go off the rails a little bit last night with respect to the enthusiasm we put into expressing our opinions. I want to point out that, last night, when the Member suggested there should be amendments coming forward, they showed no amendments and did not even identify the areas where they would like to see amendments. They expressed some concerns about various areas; I explained our position with respect to those matters and indicated that, if they brought forward amendments that were well-reasoned, then we would consider them. Election or not, I think the Members will have to recognize that, based on the track record we have had in the House before, and certainly my own track record, when they have brought forward good ideas we have responded to those good ideas. I see no reason, whether there is an election or not, to change that practice.
It requires that Members identify the areas they feel are of significant concern, express those concerns as clearly as they can, and then I will respond respecting our position on those matters. If the Members make a good point in that discussion, then I will encourage them to put forward an amendment. If they do not make a good point, then I will discourage them from putting forward amendments because, clearly, I would disagree with those amendments. Is there anything strange about that? There should not be.
This act definitely is all about a balance of interests, and it is about providing coverage to injured workers; consequently, there are at least two principles on which we agree, and I am sure we can build from there over the course of the afternoon.
Last night, I passed around something that looks like this; it is the standard Workers Compensation pamphlet. I gave it to the Member for Riverdale North, I am fairly sure. I had forgotten about that - it was an oversight, but Members of the Independent Alliance should have received two copies as well.
I will get two copies for them. I had sufficient numbers of copies before.
The whole point of this rather convoluted explanation is that, in answer to the Members question with respect to the costing of the act, it is in the package.
The package contains the following items. It contains a highlights document of the Workers Compensation Act. It contains an organizational chart of the existing Workers Compensation Board operations and the board operations with the incorporation of the occupational health and safety program. That question was asked by another Member, previously. It contains an explanation of the operating budget for the Workers Compensation Board, both in general terms, which I am sure Members will recognize because it is designed similarly to the ones that are in the budget book, and it also incorporates a more detailed account by branch of the Workers Compensation Board, and an explanation from the Workers Compensation Board as to what those expenditures are for. It incorporates a document that details the cost of developing the new legislation - the cost of this process - that is the break-out shown. It also details the cost of the Workers Compensation building. There is also a document that details all the information with respect to the compensation fund - what the assets and liabilities are, what the contingency is and what the operating reserve is, which is the surplus of the operations. It shows, incidently, that the operating surplus is $17,240,000.
There is also a document entitled, Assessment Rates for 1991" and it tries to draw some comparisons even though those are difficult to draw because it is a fairly complex calculation. There is also a document called Cost of Proposed Changes to the Act". That responds directly to the question by the Member for Porter Creek East with respect to what the changes are going to cost and what new obligations there will be on the workers compensation fund.
There are two other documents: the annual report, which I am sure that the Members have already, and the basic principles for workers compensation that were first articulated by the Chief Justice of Ontario, William Meredith, in 1913. That is the package that I have handed out to Members, and I would be more than happy to try to answer questions with respect to the budgetary information. If I cannot do so immediately, I will ask the board to respond as quickly as possible to any questions it may have on the particulars.
Mrs. Firth: My first question is: could I get a copy of the package? Then I might have some questions.
Hon. Mr. McDonald: I will hand my copy to the Member.
Mr. Brewster: I would just like to get a couple of things straight on the record here. I know that the Minister sometimes thinks that we are out to lunch. He was very critical of us when we used a report that was prepared by a gentleman in Ontario. I think we have the right to use any report on compensation. That is what we are here for - to get views on compensation. He was very critical because the man was from Ontario. Well, I would like to inform him that Mr. Bill Johnson, who drafted the report, is from Ottawa, Ontario. I do not think that there is much difference between a gentleman from Toronto, Ontario or a gentleman from Ottawa, Ontario. I just would like them to know - look who is calling the kettle black around here.
I see the Minister has come in today and he is apparently going to listen a little more. I think it is the job of the Minister - to listen. He is not always right. He says he was right on the one subsection that I brought up, and yet the Whitehorse Chamber of Commerce, in its statement, apparently agrees with me. I think, from its statement, most of my party agrees with me. He wants to know which clause that is. We can go into the Financial Administration Act, clause 46, which is the one that is really stumping most of us. The report from the gentleman from Toronto, Ontario also agrees with us that it should be refined a little bit.
I like the looks of this new compensation and, Lord God, I should know - I have gone through enough of them; I have had enough problems. I remember that when I was first given this position I could not even get any information - period - out of Workers Compensation. You may remember the amendment I once introduced. I was attacked because I did not have the correct information because Workers Compensation would not give it to me.
Everybody on that side has condemned me because I did not have a whole bunch of facts and figures. I could not get them. After that row, I started to get information. I have to say that from that time on they have been very good and information has arrived very quickly. The one piece of information that did not arrive quickly - and I imagine they will blame the post office, and I guess I will, too - was a notice of a hearing last Friday. It took the letter eight days to come two blocks, even though it was double registered and cost $3.97. It was not my fault that I got it at 4 p.m. I do not know where it was for those eight days.
I agree with most of the principles in this thing. The only thing I am concerned about - and I pointed this out to the Minister in private and now again here - is that it appears to me that, with the way those sections are structured, the Minister is going to have more mind control over the board. He has tried to convince me differently. He has not done it yet, but I still have an open mind. I hope he keeps an open mind. As I pointed out, it is not only I who think this, there are quite a few other people. The Minister should look at this and see if perhaps they do not have a point. Just because one is a Minister and ones department has drafted something, it does not mean it is right. The department is going to look after itself. That is natural and to be expected.
There are a few other elected representatives who are questioning this. I am waiting for a logical answer to prove them wrong. There are quite a few. The Minister might say I am out to lunch, but I do not think we can all be out to lunch.
Hon. Mr. McDonald: I have not referred to the Member, ever, as being out to lunch. I am not about to do so now. What I would plead with the Member to do is to understand the points I made last night, perhaps aggressively, and the points I am going to make this afternoon, perhaps a good deal more soberly. Perhaps then he could try to understand how the elected Members on this side of the House and I feel about this, as well. We have considered this very thoroughly.
I would like to be able to convince the Member, because I am thoroughly convinced that this board is more independent under the proposed act than under the current act. They are much more independent, but I will explain to the Member what we are going to do.
I think I am the victim of a bum rap here. Every Member who stands up on the other side to speak seems to suggest that I have come in here with blinkers on and will not respond to anything the Members say.
All that I have said is that we have had a very through consultation process with the public. People who have an interest in workers compensation, both employers and employees, have given this consideration for literally weeks and weeks on end.
Consequently, I feel very comfortable that the compromise has been achieved - the compromise that the Member for Porter Creek East mentioned was so critical to the bill, and to which I agree. I feel very comfortable that this bill reaches that compromise.
I must say that I have nothing against people from Ontario. If I did, I might have something against myself; I am from Ontario also. There is nothing inherently evil about anyone from Ontario, nor is there anything inherently incompetent about anybody from Ontario.
The point that I was making last night - and I will not elaborate on it too extensively, because I know that I will cause the Members ears to grow red - is simply that the work that we have done here is not the work of someone who has worked in isolation of Yukon conditions. This is the work of people, Yukoners, both employers and employees, who have expressed their own opinions, spoken for themselves and commented. These people have reviewed this act in its draft forms and have passed judgment on every, single provision in the act.
All that I am saying is that what we have in this act is well-grounded in what Yukoners want to see happen. I do not think that holds a card to any independent analysis that has not had that grounding, whether it comes from Toronto - and I have nothing against people from Toronto - or whether it comes from Ottawa. I have nothing against people from Ottawa, or most of them anyway, or from Vancouver or Prince George. I was just trying to make that one simple point, and I did not mean to do it in any kind of confrontational way.
I will bring up a few of the points regarding control right now, and I will be identifying more as we go through the act clause by clause.
Under the existing act structures, we have got to appreciate that there is a confusion of authorities. Currently, there is a Workers Compensation Board, which is a corporate board that is established with some board members who are ostensibly in charge. Now, the person who is responsible for administering the board, essentially, the person who is the senior administrative officer, is now appointed under the Public Service Act, which means that, technically, they are appointed by the Cabinet, but, in practice, they are selected by the Premier.
That is what exists in the current act structures, both the Public Service Act and the Workers Compensation Act. What we are proposing to do here is to change that. Now we are also proposing that all persons who work for the Workers Compensation Board remain as public servants.
They can take advantage of all the public servants pension plans and benefit structures and everything else, and have all the rights and responsibilities of a normal public servant. They do now and they will under the new act.
In order for those people to be supervised by somebody who is essentially appointed by the Workers Compensation Board, we had to accept the fact that this person would still be classified or considered a deputy head under the Public Service Act, because only deputy heads can manage public servants. So what we had to do, in order to make this appointment and the revocation of the appointment clearly the responsibility of the Workers Compensation Board, was to say specifically that the Cabinet will approve an appointment that is recommended by the board. The Cabinet shall also revoke an appointment if the board wants an appointment revoked. Basically, it accomplishes both tasks.
Another alternative that was considered, however briefly, was to make the Workers Compensation Board employees employees of the board and not of the public service of the Yukon, just like Yukon College. That was a consideration. We decided against that because the operations of the board were so small and the cost of things like similar pension plans for such a small unit would have been so steep we decided it was not a reasonable or realistic alternative. We found, also of concern to us, that people who had joined the board, who were career public servants, wanted to maintain their association with the general public service of the Yukon and that is natural enough.
The point of the matter is: the president reports to the board; the president no longer reports to the Minister. The board reports to the Minister. That, in and of itself, is a significant change. That is the first point.
The second point is that, under the current Workers Compensation Act, the Minister responsible for the board may make appropriations out of the fund. To my knowledge, it has never been done, but nevertheless the power is in the current act and this seemed inappropriate given the length of the arms-length relationship we wanted to create with the Workers Compensation Board.
We do not want to divorce it completely. If we did, we would have to be thinking about an elected board. We felt there was some reason for there to be some government responsibility, however minute, but we wanted to clearly specify that there was a distinct relationship and we wanted to lay it out.
Given that the board is responsible for the fund and responsible for determining assessments and other expenditures under this act, including the administration, we felt it would be inappropriate for the Minister to have the power to step in and expend monies.
Incidentally, a Minister could come in and expend monies without ever coming to the House and explaining it. Nobody would need to know. That has been removed. It is another change, and an important one.
Another change has to do with Management Board directives. Under the current act and the Financial Administration Act, every Management Board directive applies to the Workers Compensation Board. Because the directives are administrative in nature, this creates an administrative headache for the board when it wants to do certain things.
There may be some areas where the board may want to incorporate Management Board directives, because it is administratively convenient for them. Under this act, we are proposing to start from a different perspective altogether. We are not saying that all Management Board directives shall apply, or even that all Management Board directives shall not apply, except those that are specified by the government. We are saying that no Management Board directives shall apply unless the Minister consults with industry and labour to have a directive apply.
I can tell the Member right now that I have no intention of seeking approval from industry and labour with respect to applying Management Board directives at this time. I see no need for it. There may be a need, and I do not want to preclude that possibility in the future. That is another significant change.
A third change is in the area of the investment policy.
Under the current act, the board can set the investment policy, but Cabinet can also set the investment policy. When Cabinet sets the investment policy, it takes precedence over anything the board might do. We are saying that is not appropriate. What we would propose - and I must stress this, because this is a comment that came out time and time again - is that we must have a secure fund. People like it to be secure. It is one of the best funds in the country for its financial health. I think that it is the best fund in the country for its financial health. It has an operating surplus, and people want to keep it that way. They like low assessments, and they like fair benefits, so they want a secure fund.
What we are proposing here is, firstly, that any investments under this fund, by anybody, have to meet the test of the Trustee Act. The Trustee Act lays out what is called a prudent, intelligent persons test. Basically, this means that you have to show great caution, as if you were spending somebody elses money.
The second point is that the board initiates the investment policy, and Cabinet can only consider changes being proposed by the board. Cabinet will consider those and give approval, so there is a two-stage process. What we have here is a $70 million or $80 million dollar fund, and this fund is very important to workers and employers alike. We have a process where the board - which is appointed by the government and represents industry and labour interests - will be initiating and deciding what the investment policy will be. We have a check on that opinion. Due to the importance of that fund, Cabinet should also approve a change to the investment policy. Cabinet is elected and boards are appointed, so there is still some collective, public accountability from democratically elected persons.
That is what I am proposing. I think it is the securest manner of maintaining the healthy fund we currently have.
Members may ask what the Cabinet has to do with this at all. I do not happen to apologize for being elected or being on the government side. Given that this is a very important part of the workers compensation fund, and is the only part that people are really concerned about because it has to do with long-term health. One can live with all kinds of loopy decisions made by the Workers Compensation Board from year to year, but if you sell off your long-term future and have a bad investment policy, that will affect people a long way down the road.
What we are saying is that not only the board has a responsibility, the elected people have a responsibility, but only the board can initiate change.
What is an investment policy? Investment policies do not determine how much is invested in any particular vehicle. Typically, investment policies set up the broad investment guidelines. One can invest in certain notes, securities, bonds and so on - so much of it can be private stocks, domestic stocks or international stocks, then one leaves it up to an agent to make the investments. That is typically what happens. That is what we would be doing here, too. I think we all feel very proud that we all have a healthy economy. We want to keep it that way. There are other provisions in this act that clarify the role of the board and the government.
I have mentioned my main points already, but I will do so again in Committee during clause by clause. They clearly demonstrate that what was a case of fudging responsibilities caused antagonism between everyone who has ever been on this front bench - including a number of people from the side opposite - and the board and government departments for a very long period of time. I am not referring to any particular event where the relationship soured over a particular move made be either party. I am talking about a general antagonism because the rules and relationships were not clear.
While I recognize that there has to be some accountability to the public through a Minister in this Legislature, there also has to be an arms-length regulation. There has to be, in my view, both. I think we have struck on such an arrangement in this act, based on our experience over a number of years - or at least the experience that was given us by the people who had worked or were still working for the board.
Ultimately, we have established a balance of interests between the government and the Legislature, which are ultimately responsible for this whole project, and the board, which is responsible for the administration of the project.
Mr. Lang: I want to touch on a couple of areas. I believe the Minister is sincere in the things he has said. I want to get back to the tenure of debate he mentioned. I do not think anybody here should be suspecting motives, unless something comes out in debate that we are unaware of, especially from the MLA for Kluane who, I think, spends one-third of his time as an MLA dealing with compensation problems and presenting them to the administration of Workers Compensation, as well as the board. I might add that he has been very successful on behalf of those people who found the system so overwhelming because they did not understand it. They got to the point where they just gave up.
I want to take some time in the House and specifically pursue the question of the investment policy and the investment by the Workers Compensation Board. The investment policy of the workers compensation fund, as it stands today, is primarily to invest in bonds and, in some cases, in public utilities, as well as what are referred to as AA or AAA stocks, such as Seagrams and things of this nature, which would be termed blue-chip stocks. In broad parameters, is that the type of investment the Minister sees this board investing the fund in presently and in future years?
Hon. Mr. McDonald: It is precisely secure instruments that the board should be investing its funds in. The Member put it on the record last night, so if the Member is asking me if it would be appropriate to invest in Taga Ku, no. If he is asking: would it be appropriate to invest in Watson Lake Forest Products? No. If he is asking: would it be appropriate to invest in the M.V. Anna Maria? No. If he is asking: would it be appropriate to invest in any high-risk venture project? No. If he is asking: would it be appropriate to invest in secure instruments? Yes.
I am not a financial person, nor do I know how to identify all the instruments, whether it be bonds, securities, or whatever they happen to be. I am not that practised.
However, maximum security is appropriate, and that is what we would be anticipating in any investment policy that I would personally have some familiarity with.
I hope that, in future, the board and the government would do exactly the same and provide for secure investments only. It is precisely that anxiety about what is going to happen in the future - whether it be an appointed board or elected government, even though the system has worked extremely well up until now, admittedly, and even with the system now that allows the board and the government to make investment policies - that is the reason we have also introduced the concept that any investments under this act must be done in accordance with the Trustee Act.
I have read the provisions myself, and that is another test to ensure that these investments are as secure as possible, and that there is a good and reasonable rate of return on those investments. After all, half the income the board makes is essentially from investment income.
Mr. Lang: I would like to make a couple of points. The way that it is written, the Trustee Act applies to the old act, as well as the provisions of the new one, as the Minister has indicated.
However, with all due respect, I think the Minister would have to agree that the Trustee Act is a very well-intentioned act, but it will be very much a question of interpretation when you start using the word prudence and things of this kind. The question of being prudent will be a question of the interpretation and who is interpreting it. This is not to say that it should not apply. I am just saying that is some consolation, but it does not give a real protection to the actual investment of the funds.
With respect to the sections that we are talking about with the Financial Administration Act, it seems to me that both sides concur that the investment of these funds could be done in a small c conservative manner, if you like, in securities that are not high risk, but which also give a very good promise of return.
If we accept that premise, then should it not be our responsibility to include, in broad parameters, the area within which the investment policy of the workers compensation can fall, so that we will not be in the worst-case scenario of having a government that does not share the view the Minister just expressed, and feels that high-risk investments, such as the Watson Lake sawmill or others, might be a valid way to invest that money in conjunction with the political appointments of the government. I stress that - the way the act is written at the present time, the government of the day has the prerogative, not the Legislature. It was pointed out earlier today, it is very easy to put friends of the government in high places without any scrutiny to speak of. My point is that, with the authority being vested in the legislation the way it is, that is allowed to happen. I submit that we would be remiss in our responsibility if we did not see whether or not we could incorporate the very broad parameters, similar to what is in the Financial Administration Act, which presently are excluded from the bill. That, I believe, is section 39, which gives clear direction to government regarding what the monies in the consolidated revenue fund can be invested in. I am talking of surplus dollars that the government has, from which, incidentally, the government has benefitted a great deal over the years.
We should be looking at sections 46 and 47 in a different way by saying that we do have political responsibilities. We do not want to vote, unwittingly, for sections in the bill that allow, perhaps, a total change in philosophy from what has been expressed by both sides of the House under the legal terms of the bill, which it does right now.
The Minister has to concur that it leaves it open.
I would like to back up before I pursue that a little bit further. Yesterday, the Minister made the point that the old act presently provides the legal foundation for the government to get involved in setting the investment policy of the fund. I concur. If one reads sections 65 and 66, one could only agree, but the point is that the government has never done it. Therefore, understanding that, if that is the case, I submit it should be here, and it should not be directly or indirectly incorporated. It is still the principle that the government is involved.
If, for the purpose of investment, we set in the bill wide parameters for the investment policy by the board, then the board has its direction from the Legislature and the government for investing the dollars. We would not have to worry about the political involvement by the government, for example. I understand where the Minister is coming from and I can sympathize somewhat with the argument he put forward that, if we leave it the way it is, the government has to be involved. What I mean by that is the Cabinet and the political arm of government.
I am proposing an alternative. With some thought, we could look at this section and say that, as a collective group and as elected Members in this House, we want low-risk investment on behalf of the funds. We could set the parameters similar to section 39 of the Financial Administration Act, and incorporate them in that section.
It is very clear where the government can invest money vis-a-vis the Financial Administration Act, and I quote, (a) securities that are obligations of or guaranteed by Canada or a province; (b) fixed deposits, notes, certificates and other short term paper of or guaranteed by a bank including swapped deposit transactions in currency of the United States of America; (c) commercial paper issued by a company incorporated under the laws of Canada or a province, the securities of which are rated in the highest rating category by at least two recognized security rating institutions.
I would have to try to get an interpretation of that, but I would assume that (c) would cover you for the purpose of investing in blue chip stocks, which I understand is currently are being done.
I want to provide that as an option for the Financial Administration Act and investment portion of the bill because I think that the way it is written right now gives us cause for concern. I appreciate how the Minister has put it, but it does not give me that much comfort. I want to make the following point. I would feel satisfied with the Ministers explanation if I felt that he was going to be here forever and a day in charge of workers compensation. I do not question the Ministers motives, and I really do believe that he would do what he just said. But, just like anyone in political life, the Ministers days of being responsible for Workers Compensation are numbered, in one manner or another, because things do change.
I just want to ensure that in this section, which is so vital to our workers compensation and the longevity of the workers compensation, we have taken the necessary legal steps to ensure that the parameters of how this investment can be made is decided prudently, as the Minister says, according to the Trustee Act, and that the investment policy is what I outlined earlier.
Hon. Mr. McDonald: First of all, I will respond to the main point that the Member is making. I will have to take the question that the Member is raising on notice because I want to consider all of the implications of what he is suggesting carefully before responding. Given the importance of this fund to the workers compensation system, I do not want to do anything on the spur of the moment that might be considered foolhardy.
At the same time, I want to ensure that the flexibility that the board currently has, in terms of what they are currently investing in, or what they may be intending to invest in, is something that is still appropriate and possible under these restrictions. Obviously, these are things that have to be considered very carefully. Not only the risk, but the rate of return on investments must be considered. I will put that to officials in Finance and ask them the questions that are obvious to me in making the suggestion and, presumably, we will be back with this during the course of this week, or maybe next week, and will then be able to decide the issue in the end.
The Member made some comments about friends of the government in high places. I think I will reserve my comments about that until tomorrow, as I have some things to say to that Member in particular.
Mr. Lang: I appreciate the fact that the Minister is not going to make a decision on his feet and neither should he. I think we are presenting a viable alternative to the situation, however, with the added protection that is necessary to give us the comfort that we are seeking.
I think that the main thing is to probably approach the administration and the board to find out what their investment policy and parameters are, and whether or not what I just cited from section 39 of the Financial Administration Act would cover that. Perhaps it has to be reworded; I do not know.
I would ask that the Minister give this undertaking to us: that he indicate to us in fairly short order, prior to even coming to the House, whether or not he intends to bring forward an amendment. I would prefer that the government bring the amendment forward because they do have a legal department at their disposal. But if the Minister is not going to do this, then obviously there is going to be a difference of opinion and we will have to provide the necessary amendment.
I am wondering if the Minister can make some commitment that he would be prepared to give us some undertaking fairly soon, prior to us getting to the actual section in the bill, so that preparations can be made.
Hon. Mr. McDonald: It may be necessary for further discussions to take place between us prior to the government making a commitment to introduce any amendments to this bill Consequently, I cannot guarantee when any amendments may be made.
If we both agree on the terms of the amendment, we will be more than happy to do all of the necessary work. If we disagree, then the Member is going to have to do the work himself.
Mr. Lang: That is fine. I do not have any problem with that.
Mr. Brewster: The Minister has said that he would like to listen to this soberly; I am always sober when I come in the Legislature. I do not think he has seen me any other way.
I think the Minister is very wise to go back and talk to the financial people. I would like him, at the same time, to look at the Trustee Act, under authorized investments. If one looks at the two clauses there against the financial one, there is absolutely no comparison. The Trustee Act is very loose and they could get into a lot of things where the other one puts them into blue chip investments. I would appreciate it if he could look at that at the same time.
Hon. Mr. McDonald: I will do exactly as the Member wishes. I would like to point out to him that I have never accused him of being intemperate in his ways or lacking in sobriety, in the House at least. I do not know why we are expressing such short feelings today. As debates go in this Legislature, this has been pretty tame. Even last night was pretty tame, as debates go.
I have a lot of respect for the Member. He is a great advocate for injured workers and the Workers Compensation Board. He has hit them up for a real passel, I understand. I will not say anything more. If I say anything at all, I do not want anybody to be hurt about it.
Mrs. Firth: I have some questions to ask the Minister about a different topic in this bill, but I want to ask one question about the investment fund. He mentioned all the projects the Workers Compensation Board would not invest in, such as the sawmill, the MV Anna Maria and so on. In the event that the government had, perhaps, overspent itself and was operating in an absolute deficit position, could the government then access the workers compensation fund through the consolidated revenue fund? Would they have the ability to do that?
Hon. Mr. McDonald: No, not under the existing act. I guess if they did some financial gymnastics, the Cabinet could pass a regulation that would specify what the investment policy would be. Presumably, it would be directing that the investment policy should be investing in the Government of Yukon, whatever they wanted to do.
That is one vehicle I presume they could use under the proposed act, but it is not possible. Even the provision respecting the Minister making appropriations out of the act is not possible under the proposed act. That would be highly unlikely and, in fact, I think impossible under the proposed act.
Mrs. Firth: I would like to ask the Minister some questions about the rationale for the changes to the wording surrounding eligibility for compensation. I understand that with the change in the wording now, compensation will be required for people employed on a casual basis. I believe this is referred to as the nanny clause - people who have full-time nannies are now going to be required to have workers compensation coverage. That was the indication I was given at the workshop meeting.
The other question I want to ask is about the rationale for changing the definition to include sole proprietors, directors, board members and so on. The concern I have is that there seems to be a feeling that self-employed individuals, directors and so on will be required to double insure themselves. I know it is a point that the CFIB raised and it is also a point that some business people have raised with me. I look at the information the Minister gave us with respect to the impact of benefit improvements, and I see that the mandatory inclusion of directors and domestic servants will have a positive impact on the fund and that it is estimated that the payroll will increase by 7.5 percent or $226,000 in revenue. I think that is a fairly hefty increase. I do not want it to look like they are putting this into some kind of money grab to compensate for the extra costs that are going to be incurred by some of the extension of benefits the government has proposed in other areas.
Perhaps the Minister could give us some explanation as to the rationale and why they are not leaving it as an optional choice as opposed to making it mandatory. I see the comparison to the unemployment insurance benefits for the self-employed. I do not know whether or not the Minister has any thoughts about that, but I would like to hear what he has to say about it.
Hon. Mr. McDonald: With respect to nannies, the act considers that nannies are workers and, essentially, if you are making deductions like Canada Pension Plan, unemployment insurance or federal tax for a housekeeper, as a worker, then that worker should be entitled to workers compensation like anybody else.
Presumably, that was an oversight in the past. I hope that it was because, in my view, if people are in domestic service and get hurt, they are deserving of support from the system.
To address the Members question in general terms, the reason for the all-inclusion of directors and sole proprietors is to ensure that anyone who is associated with the hazards of the industry and who has his own industry is covered under this act. It was considered to be a glaring error to have a situation where someone could opt out of the act because they were a director.
If you opt out of the act and work side by side with another worker, and if an accident were to occur between the director and that worker under the act, then the director could sue the worker, but the worker could not sue the director. The worker would get compensation through the board.
That is considered to be unfair and, when it comes to directors, the director is considered to be covered but, if they can show the board that they are not subject to the hazards of the industry, then they can opt out with the boards agreement, of course.
One of the reasons why our fund is probably the best funded and healthiest in the country is that it is all-inclusive.
This act is very comprehensive. Even the Members of the Legislature are covered under the act. We had to deem ourselves to be workers, because I do not think that anybody really believed it. We try to make it as inclusive and comprehensive as possible, so that the greater the protection through collective responsibility, the greater the protection to the fund and, ultimately, to the people who pay into the fund and the people who will take advantage of the benefits of the fund.
Those are the principles behind making the fund all-inclusive and not trying to allow for exclusions that may cause problems later.
Mrs. Firth: Is the Minister saying that people who are self-employed, or who are directors, who want to opt out of the plan can apply to the board to opt out?
The Minister made reference to the hazards of the industry. Who makes that determination? Is it the board? If you have individuals who are working in an office - lawyers or professional people, for example - their everyday workplace would not be considered to be hazardous, such as a mine site. Is there any provision for them to automatically opt out, or do they have to make application to the Workers Compensation Board to opt out and see whether or not their workplace comes under the proper definition of not being one of the hazards of the industry?
Hon. Mr. McDonald: The terminology may be somewhat misleading, based on the return comments from the Member opposite. I did not mean to make it seem as if a director could opt out simply because they were not working in a very dangerous environment.
The whole point of this is that, if you are working with other workers who are covered under the act in the normal course of business, and there is a potential for accidents - even an office atmosphere has the potential for accidents - it is not right, nor is it fair, that one person would be covered and have to respond exclusively to the board, while the other person can sue that worker, if that worker is considered to be, in part, responsible for an accident or some mishap.
That is what I am referring to in terms of being subject to the hazards of the industry. The industry could be the office work industry; it could be the mining industry; it could be truck driving. The board decides whether you are covered or not.
Some Hon. Member: (Inaudible)
Hon. Mr. McDonald: For the record, the Member said that you cannot really opt out, then. There would be instances where you could opt out. If you are a corporate director, and the only time that you are ever involved in this particular company is when you get together with other corporate directors, who are also not covered under the act, and you have board meetings, then you may not be subject to the act.
However, if you are a corporate director - for all intents and purposes, you are a corporate director when you sign the documents - but then you roll up your sleeves and start repairing a vehicle, because the company for which you are a director is a local garage or something, then you would be subject to the hazards of the industry. You would be working with other people who are covered under the act, and you should also be covered.
Mrs. Firth: Could the Minister tell us how much of the $226,000 revenue increase relates to the number of people actually affected? I am assuming that a lot more people will have to be paying workers compensation premiums who were not before - particularly professional people. Does the Minister have any idea how many people will be affected by that?
Hon. Mr. McDonald: No, I do not. I will try to get as precise information as possible after the break.
Chair: We will now take a short break.
Chair: I will now call Committee of the Whole to order.
Is there further general debate?
Hon. Mr. McDonald: A number of questions were posed by the Members opposite before the break. I will provide a few answers now. If the Members want further information, I will try to find it for them.
The amount of money that the Member for Riverdale South spoke of was an increase in the assessments to the board. They are largely due to the increase in the maximum accessible payroll to $43,000 from $40,000. That is the reason for most of that $226,000 or 7.5 percent increase.
I cannot really supply the information for the Member as to exactly how many corporate directors might be included that were not previously included. The actuary has determined that it would be a fairly small amount in the end.
I would like to point out one other thing, too, as there may have been a hint or suggestion that if a person was covered under the Workers Compensation Act and they were a director, then they would have to be covered as a director. In other words, they would be double assessed. That is not the case with the Workers Compensation Board. If they had private insurance, of course, then they would be double assessed and it would be their choice to give up the private insurance or change their insurance coverage so they would not have double coverage.
It is important to point out, also, that the private sector has indicated that they would like compulsory coverage for other directors in order to reduce their own exposure to suit and, ultimately, to court action. People do not want to be exposed to persons in the workplace, whether they be employer or employee, who are not covered under the act for fear that, should there be an accident, they would be subject to legal action.
I would like to say a couple of things about the investment fund to make it clear that not only am I going to continue to work on the problem presented by the Member for Porter Creek East, but I am also at this point convinced that a response that incorporates provisions of Financial Administration Act will not be suitable in the end, in order to meet the Members own needs.
Firstly, the provision in section 39 of the Financial Administration Act, refers specifically to short-term investments, meaning in the neighbourhood of 90 days for cash flow purposes.
Typically, the rate of return for those investments is inflation plus one percent. The reason for those short-term investments is that, typically, the government does not have the ability to make long-term investments; they need the money so they put it into short-term deposits and then redeem it after a short period of time.
Where the Financial Administration Act refers to long-term investments, investments that would provide the rate of return that the board would like to seek to meet its own investment policy, those investments must be made, under the Financial Administration Act in accordance with the Trustee Act.
The rate of return that the board is looking for is, according to the recent policy, 2.75 percent, plus inflation, and that only comes when they go into really long-term investments - and they have investments up to 30 years, but typically, it would be within the 10 to 15 year life.
I think what we will have to do if we are going to consider any changes is to ensure that the rate of return is sufficient, as well. We will have to ensure that the fund will not be in jeopardy or cause employers to face an increase in assessments, and consequently, the restrictions on what can be invested in, obviously cannot strictly be answered as found in section 39.
I will continue to review the situation over the course of the evening and the morning and if I am able to come up with more or better information, then I will do so.
Mr. Lang: I appreciate the fact that the Minister is taking all our recommendations fairly seriously. I also appreciate the interpretation of section 39 of the Financial Administration Act and the fact that it basically provides for short-term investments.
I believe that the power in section 39 should be part of the authority for the board, as far as investment policy is concerned, if the board wishes to do that. I also understand the need to broaden the authority for investments that are long term. How it would read would be up for debate, as to whether or not the question of a minimum projected rate of return becomes part of the section. If we were to include Section 39(a), (b), and (c) with a further-broadened section to allow for the long-term investments, then I think we would meet our objective. This would ensure that the integrity of the fund is met through legislation and that it cannot be tampered with.
If we go the route that we are suggesting here, I believe we will put the fund in such a position that we will never get into the situation experienced by some workers compensation funds; for example, British Columbia, to some degree, Ontario, and some of the others.
In order to meet our concerns in this area, we will continue to work on some form of wording in order that we can incorporate this.
Hon. Mr. McDonald: I am assuming that the Member is not suggesting that we follow the terms of the Financial Administration Act when it comes to the investment of funds for the Workers Compensation Board, because, if he is, then the only thing that we would be adding to the current act is to allow the board to invest in short-term investments at a low rate of return.
The Financial Administration Act says that the government may invest in long-term funds - trust funds. All that is required is that they abide by the obligations in the Trustee Act, which is already in the proposed Workers Compensation Act.
There is no greater test in the Financial Administration Act than is already incorporated into the proposed Workers Compensation Act. I think the Member is looking for something beyond that. I will not take up time here because I know we want to get on to other things, but after the break I will talk to the Member and try to get a secure handle on what it is he is saying.
It would be wrong to characterize the problems other boards are facing as a result of the investment policy. It is almost as if we are of the view that, if they do not get a proper rate of return, the fund can be in jeopardy.
That certainly may be one factor but it is a minor factor. What has put the other funds into trouble is that the assessments and the claim costs do not permit for a healthy fund. In Ontarios case, as I mentioned last night, they do not fund the cost of an accident in the year when it takes place, as we do here.
For example, if there is a cave-in in the mine in Watson Lake and somebody gets hurt and becomes a paraplegic, the costs of managing that claim until that person passes on is set aside in the fund, in that same year, in order to cover the costs of that person.
That is a very responsible thing to do and it is one of the main reasons why we have a healthy fund. We have also had a good investment track record overall over the course of the last 20 years and that helps; but the problem other funds are facing is that their claim costs are higher than the assessments and the investment income can bear and they often do not fund claims the way we fund them here.
So I think it would be a big mistake to leave the impression that it is the investment policy alone that will determine the health of the fund in the long term.
Mr. Lang: It is just one variable, but obviously how one invests the funds is a major variable with respect to the long-term health of the compensation fund.
Obviously, your assessments have to be maintained for your costs so they can balance out. It has to be managed properly, but the key is that the parameters of the investment fund be such that the return is relatively free of risk and a safe return for the investment for the dollars that we have in the fund: we are talking about multi-millions of dollars.
Could the Minister undertake to provide us with a copy of the investment policy presently in place by the board?
Hon. Mr. McDonald: I can. I feel compelled to point out here that the lower the risk, the lower the return. The fact of the matter is that there is going to have to be a balance. No matter how you cut it, there is going to have to be a balance so that you get the maximum return at a reasonable risk. Otherwise, as I mentioned before, because one-half of the income of this board is from investment income, if we go to no-risk investments we can expect a lower rate of return, and it will cost more. Consequently, to make up the difference, we will have to look to assessments. It is just a fact of life.
Mr. Lang: We are not talking about no risk. I should clarify that. I realize that, and I fully appreciate and agree with what the Minister has said. However, I think that the risk investment we are talking about here, and how they do it, can be incorporated into the legislation, and I will be looking forward to the investment policy to see how it is written and how it could play a part in examining the sections that we are talking about.
I would like to switch to another subject in general debate. It is my understanding that it is intended to bring the employees of the Government of Yukon under the Workers Compensation Act in another year. Is that correct?
What is that going to cost the Government of Yukon, as far as assessments are concerned? What are the projected costs, and where is the money coming from?
Hon. Mr. McDonald: First of all, for the record, I will have to explain exactly what happens right now. The government pays the exact cost of the claims plus an administration fee to the board for the cost of all accidents incurred by government employees.
This year, the Public Service Commission estimates that the actual cost of the claims will be around $500,000. These can fluctuate quite dramatically from one year to the next due to, for example, a fatality, or, if someone is permanently impaired and requires a lot of medical treatment; this would cause the claims to increase dramatically.
Under the proposed arrangement, the government would pay assessments. The cost of assessments would be approximately $200,000 or $250,000 more than the $500,000 a year. This is due to the fact that, right now, when we pay the cost of the actual claim, we do not put money into some of the reserve accounts. We just pay the cost of the claim plus the administration fee. If we were to pay assessments, we, like any other employer, would be paying into the reserve accounts the way others do, so the costs would be greater. This would benefit the government from this perspective: we would always be able to know exactly what our claims cost would be from year to year, based on our payroll. We would not be operating in a situation where we were trying to budget based on a projected number of accidents, which is a very imprecise arrangement.
Consequently, the government would be buying insurance, so, from its perspective, if it had an accident, God forbid, such as a plane going down with two or three government employees on board or a truck were to smash up on the highway and some employees were on board, it would cause the cost of the claims to go up dramatically, so we, too, would be buffered from any significant accidents, like any other employer.
From the Workers Compensation Boards side, it is preferable because it brings greater stability to the fund. This is the largest single employer in the territory. It is not participating in the fund; consequently, the fund is less stable than it could be. It could be if it covered all workers through a normal assessment process, where the assessments also contributed to the reserve accounts.
In my view, it is a reasonable arrangement from both sides of the equation, from both the Workers Compensation Board and the Government of Yukon perspective.
As well, it is a fair thing to do and I think that it would be the right thing to do in this act. Certainly, when I asked the public their response, clearly the response from virtually everybody was that the government should be paying the proper assessments.
Mr. Lang: I would like to ask the Minister if it is normal practice in the other provincial jurisdictions that the governments are part of the workers compensation fund as an employer?
Hon. Mr. McDonald: I understand that some governments are and some are not.
Mrs. Firth: I would again like to ask the Minister a question about his figures that were given, and perhaps this time I will ask him what these figures mean, because the last time that I made an interpretation the Minister told me that is not what it meant.
The question that I have is with respect to the cost of the proposed changes to the act, and at the last page it refers to the estimate that the surplus in the compensation fund will continue to grow at a rate of approximately $1 million each year. Can the Minister tell me if that means what I think it means, that the fund is going to continue to grow at a million dollars a year?
Hon. Mr. McDonald: In the current circumstances, with assessments and claims costs as they are, we would be putting a million dollars extra into the operating reserve, which is the surplus.
Mrs. Firth: I have communicated with him with respect to the operating and maintenance costs of the new facility and the new person years. The nine new person years are going to cost over $500,000 per year and the operating and maintenance for the new building is almost $400,000 per year.
I know that the Minister would deduct whatever the O&M costs were for the space. I previously calculated it at about some $70,000 per year. I am adding a figure of at least $800,000 or perhaps $900,000 that it is going to cost more than it did prior to the changes in the new building.
Would it be unfair to draw the conclusion the million dollars that they were expecting to get is going to be taken up mostly by the new costs that are incurred to maintain and operate the building and the new person years?
Hon. Mr. McDonald: No, that is not my understanding. I will get the precise information for tomorrow. My understanding is that the costs of administration have been factored into the calculation for determining what the operating surplus would be. This is the amount of money we would have available to us as the surplus. We have factored in the change of the operation and the cost of administration.
Mrs. Firth: Could the Minister bring that total amount to me? I would appreciate it, so we would know what the new total costs are, so we can get a better idea of how much money the Workers Compensation would be taking in, had they still been operating under the old space requirements and person-year complement. That would be an interesting figure.
Hon. Mr. McDonald: Yes.
Mr. Lang: I guess we will clear the principle of the bill.
I had some further questions. It has taken $400,000 to redo the legislation. Is it being taken out of the workers compensation fund? Who is paying for it?
Hon. Mr. McDonald: The Workers Compensation Board is paying for it.
Mr. Lang: With occupational health being transferred to the workers compensation fund, how is the money being transferred? Are there operation and maintenance funds accompanying the positions and responsibilities, such as mine safety? Is there a clear agreement, in writing, between the Workers Compensation Board and the government that they will continue to fund that, on an ongoing basis, so that, two years down the road, nobody has forgotten that, initially, it was funded by operation and maintenance, but it is being requested to be paid for out of the workers compensation fund?
Hon. Mr. McDonald: As some Members may know, currently the Workers Compensation Board pays some money to Justice for some occupational health and safety activities.
Right now, the money flows from the board to Justice. With the transfer of the occupational health and safety unit, from the director on down, to the Workers Compensation Board, the WCB will no longer transfer funds to Justice, of course, and the balance of the costs of providing for those positions will be transferred on an annual basis as a contribution or a grant, whatever the designation will be, to the Workers Compensation Board. That is an ongoing commitment, obviously subject to annual appropriations like anything else here. It will be an ongoing commitment and the funding would be coming from the Department of Justice.
Mr. Lang: I want to pursue that a little further. I am concerned about the long-term implications of the decisions being made here, unless there is an agreement or a contract in writing between the Workers Compensation Board and the Department of Justice. I can see a worst-case scenario happening three or four years from now, with somebody saying the workers compensation fund looks very healthy but we are short on the operation and maintenance side, so we should find it from within your budget and not worry about the Department of Justice. My good colleague, the Member for Mayo, with his riding disappearing, will be gone and there will be no people there to remind the Department of Justice of this understanding.
Can I take it from the Ministers comments that there will be a written agreement to clearly outline for the board and the Department of Justice the responsibility they are taking on and how the financing would work?
Hon. Mr. McDonald: Clearly there will be an agreement, but if the Member is talking about whether or not the agreement will be enforceable, it will be enforceable inasmuch as the Legislature allows with respect to the appropriation of the funds.
Right now, for example, we fund Yukon College, at arms length from the government.
We fund that institution and people expect that we will continue to fund that institution. I may add that we have funded that institution very handsomely.
This Legislature could, in one year, cut the grant in half and all the agreements that we may have struck would be meaningless because everything is subject to annual appropriation and to the budget exercise that this Legislature goes though. This would operate in the same manner. There is, of course, going to be an agreement that we fund these things, but there has to be an annual appropriation. It has to go through the budget process. The Workers Compensation Board has no more and no less security than anybody else in this territory with respect to what might be funded. We do not budget for more than one year, in the traditions of this Legislature - at least not to my knowledge.
Mr. Lang: I understand and appreciate the lesson on budgeting that the Minister just presented to me. As I stated earlier, there should be a written agreement. The Minister has indicated that there is an agreement.
Is the Minister in a position to table the agreement? If he is not, when is that agreement going to be reached between the Workers Compensation Board and the Department of Justice so we can get a copy of it?
Hon. Mr. McDonald: Right now, the agreement is in the form of a Cabinet minute, which details all the positions, all the costs associated with occupational health and safety and the fact that all the costs associated with the positions and all auxiliary costs associated with the Department of Justices responsibilities will be transferred to the Workers Compensation Board. That is the commitment as it stands right now.
There will obviously be a signed agreement between the administrators as to the turnover of the funds. It would be all of about a page long. Every single position will be outlined and all the auxiliary costs that are currently in Justices base will be transferred.
Hon. Mr. McDonald: I move that you report progress on Bill No. 6.
Motion agreed to
Hon. Mr. Webster: I move that the Speaker do now resume the Chair.
Motion agreed to
Speaker resumes the Chair
Speaker: I will now call the House to order.
May the House have a report from the Chair of Committee of the Whole?
Ms. Kassi: The Committee of the Whole has considered Bill No. 6 and directed me to report progress on same.
Speaker: You have heard the report of the Chair of Committee of the Whole.
Are you agreed?
Some Hon. Members: Agreed.
Speaker: I declare the report carried.
Hon. Mr. Webster: I move that the House do now adjourn.
Speaker: It has been moved by the Hon. Government House Leader that the House do now adjourn.
Motion agreed to
Speaker: This House now stands adjourned until 1:30 p.m. tomorrow.
The House adjourned at 5:29 p.m.