Whitehorse, Yukon

Tuesday, March 23, 1993 - 1:30 p.m.

Speaker: I will call the House to order. We will proceed at this time with Prayers.



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

Introduction of Visitors.

Are there any Returns or Documents for tabling?


Hon. Mr. Ostashek: I have the following documents for tabling: the annual report of the Yukon Public Service Staff Relations Board, the annual report of the Yukon Teachers Staff Relations Board, and I have a legislative return.

Hon. Mr. Phillips: I have for tabling the Employer Needs Survey summary report.

Hon. Mr. Brewster: I have for tabling the Canadian Heritage Rivers System report.

Hon. Mr. Phelps: I have for tabling two legislative returns.

Speaker: Are there any Reports of Committees?


Introduction of Bills?

Are there any Notices of Motion for the Production of Papers?

Notices of Motion.

Statements by Ministers.


Employer Needs Survey

Hon. Mr. Phillips: It gives me great pleasure to table the Summary Report of the Employer Needs Survey, completed by the planning and support branch of our advanced education division.

Last August, phase 1 of the survey canvassed all employers in the Yukon, with the exception of senior and First Nations Governments. Information was collected on such things as: all positions filled; those unfilled; those difficult to fill and why; whether they were full or part-time, seasonal or year-round, the position type; the industry sectors they were in; and whether they were filled by Yukoners or people from outside the Yukon.

Because of the excellent cooperation of employers, and the dogged persistence of the surveyors, an exceptionally high response rate of 86 percent was achieved. This summary report is the aggregation of the responses of 2,394 employers.

The summary report, which we provided to all the survey participants and other interested parties, is but the first of a continuing series of analyses that will be conducted on the wealth of data provided by the survey.

However, this is only the starting point. Further work will be conducted this year to keep information current and to follow up on more specific areas. The great majority of Yukon employers surveyed in phase 1 indicated that they were willing to participate in follow-up studies, indicating the value placed on labour market information and its role in labour force development at all levels. It was also a clear indication of employers’ willingness to work in partnership with government for these purposes.

Mr. Speaker, the government has a commitment under the labour force development agreement with the federal government to produce this information. The government also has a commitment under the memorandum of understanding with Yukon College to produce this information so that planning for the training needs of the Yukon can be conducted on an informed basis.

The government has extended this commitment to provide this information to the employers and workers of the Yukon so that in partnership with them we can better plan training requirements, and make informed decisions on developing the labour force of the territory for the benefit of all the Yukon.

Mr. McDonald: It goes without saying that we support this useful initiative. Too often governments make programming plans and commit to certain expenditures in the name of employment training under the assumption that they are doing something inherently good. What has been increasingly clear is that government initiatives can be better targeted, consequently allowing money to be more efficiently spent. Sometimes people do not understand why this kind of work is necessary. However, if their work leads business and government to better understand the value of training, the kind of training that can improve economic performance, and how training can increase a person’s ability to find and keep work, then the surveys are useful. I believe that we can now work with more reliable information and constructively cooperate with the business community to reach a mutually agreeable objective, which is a better trained and job-ready workforce.

Hon. Mr. Phillips: I would like to thank the Member for his support of this document. I would like to also thank the Member for the work that he did while his government was in office in instigating this document. We plan to continue with that. When one reads through the document, one will see that there are some very significant areas that stand out. One area that I am particularly interested in is the area where they ask the question of what basic skills were lacking. The most common answer from 66 percent of the respondents was the lack of basic skills of people entering the workplace was the problem. I think that speaks to the education review that we are going to be embarking upon. Some employers, or most employers in the territory, are concerned about individuals coming to them with at least the basic skills.

In closing, I would like to again thank the businesses that participated in this review. I think in great part they are responsible for the success of it, as well as the great work that was done by the Department of Education staff and the people carrying out the survey.

Thirty-six percent on any survey is commendable. Lately the government of the Yukon is embarking upon new programs to work with business and we all have to remember that education is preparation for life, of which work is a very major part.

Bonnet Plume River: Canadian heritage river nomination

Hon. Mr. Brewster: I am please to inform the House that, on January 11, 1993, the Bonnet Plume River was officially nominated to the Canadian Heritage Rivers System. The project was carried out in consultation with the Mayo Renewable Resources Council and DIAND.

The river’s nomination was the culmination of a two-year project identified in the Na-Cho Ny’ak Dun land claim agreement.

In the past year a background study was completed that identified the river’s natural, cultural and recreational values as a Canadian heritage river.

Following the completion of the background study, a nomination document was produced and presented to the Canadian Heritage Rivers Board. I am pleased to table copies of these documents for your information.

In the new fiscal year a management planning working group will be formed consisting of members from Yukon government, DIAND and the Na-Cho Ny’ak Dun First Nation.

We have been successful in receiving $20,000 in cost-matched funding from the Canadian Heritage Rivers Board to commence work on the management plan. It is anticipated that the management plan will take between two and three years to complete, with extensive interest group and public consultation proposed. The intent is to fully involve all the affected interests, including the mining industry. All affected mineral-claim holders will be fully involved in the planning process and will be consulted during each planning stage.

The Canadian Heritage Rivers Board will officially designate the river as a Canadian heritage river upon presentation of the river management plan.

I look forward to a future reporting to this House at the time of the river’s official designation as a Canadian heritage river.

Mr. Joe: I would like to say that it is important to set aside rivers like this so that everyone will be able to enjoy them. To become a heritage river, it must follow some tough guidelines so it will remain a clean and natural river for future generations.

When the Minister talks about consulting with the people, I hope that he means he will talk with more than just the mining industry. He mentioned miners in his speech, but he did not say anything about wilderness outfitters, recreational groups, or other people who might use the river.

I am glad to see this government is following in the footsteps of the past government’s belief that certain areas are important to keep in a natural state.

I look forward to hearing more about how the work is going on this river.

Hon. Mr. Brewster: I would like to thank the Member opposite, and I can assure him that the First Nations will be consulted at every move. The trappers will be consulted, the outfitters will be consulted, and the wilderness and travel groups will be consulted.

Speaker: This then brings us to the Question Period.


Question re: Economic strategy

Mr. Penikett: The government’s Toward Self-Sufficiency by the 21st Century document contains a map - map 1 - indicating the Yukon’s proximity to tidewater and the Pacific Rim. The paper indicates how the expanding Pacific Rim region is hungry for the raw materials we can provide.

As the map indicates exports to a number of new markets in the Pacific Rim, such as China, Australia, Peru, Nicaragua and California, apart from lead and zinc, can the Minister of Economic Development indicate exactly what products he believes can be exported to these particular locations indicated on the map?

Hon. Mr. Devries: The map was intended to show the Yukon’s proximity to the Asian market and the world marketplace and show that the Yukon can provide them with any products we have available through those shipping lanes.

Mr. Penikett: My question was about what products can be sent to the locations identified on the map.

Let me ask the Minister if he could be specific and tell us exactly what the Yukon will be exporting to the Kamchatka Peninsula in the former Soviet Union or the country of Burma - which is now called Myanmar - and what particular steps has he taken to let these countries know that the Yukon is, in his words, “open for business”, and what business is open for them.

Hon. Mr. Devries: Again, I would reiterate that the intention of that map was to show the Yukon’s proximity to tidewater and that we have the ability to deliver products economically to many areas of the world.

Mr. Penikett: We are still waiting with bated breath to know what products the Minister is talking about. I believe the federal government was reasonably aware that the Yukon is close to the Pacific Rim already, before the publication of this map.

Let me ask him about map 2 in the document, which indicates a new road called “tidewater accessible transportation corridor between Old Crow and the Yukon/Northwest Territories border and the Pacific Ocean”. My question is: when did the government consult with the people of Old Crow about this road and what was their response?

Hon. Mr. Devries: I must apologize: I do not have the map at my fingertips. I would not want to comment on that without having the map here.

Question re: Economic strategy

Mr. Penikett: Perhaps I could change the subject to this Minister. I will ask him about something he has spoken publicly about. The Minister has travelled to a recent conference in Vancouver to promote the Yukon as a place open for business, particularly for mining.

What new firm contracts have resulted from his attendance at the conference in Vancouver? In other words, what firm commitments has he received that did not exist before?

Hon. Mr. Devries: As the Member very well knows, there was a recent announcement from Pacific Sentinel that there was drilling happening at the Casino property this year. As much as I do not have any firm contracts, the general message at the Cordilleran roundup was that they were happy to see a breath of fresh air here. They were referring to the Yukon.

Speaker: Final supplementary.

Mr. Penikett: Mr. Speaker - I think it should be first supplementary.

Speaker: Did the Minister start a new question?

Mr. Penikett: Yes.

The Minister mentions one property and how his breath of fresh air had produced this. Can the Minister indicate to the House when the announcement was made about this new initiative by the mining companies mentioned by him? Can he tell us, with certainty, that it was a result of his visit? And can he tell us what specific commitments he might have made in Vancouver other than attending the hospitality suite wearing his “Open for Business” badge?

Hon. Mr. Devries: I did not make any specific commitments. The message I indicated to them was that we wanted to see mining in the Yukon. Mining is Yukon’s number one industry and, as much as I agree that it is all part of the overall picture, the previous government seemed to place much more emphasis on the environment and gave the indication that support for the environment was confrontational to mining. The message we put out was that we feel we can work with the environmental lobby groups to make mining happen in the Yukon and we can make mining happen in Canada.

Mr. Penikett: I fear the Minister is in danger of being confrontational, speaking out of both sides of his mouth on the environment question.

Let me ask him about another conference. Next week, the Minister travels to yet another meeting in Toronto - not, I understand, to get any contracts or do any negotiating. Can the Minister tell us why, when Yukon’s most important mine is now negotiating its very future in Toronto - that same town - there is no representative from his department at the negotiating table. As a matter of fact, there is no YTG representative or even a Yukoner at the negotiating table, yet he is going to the same town at the same time for a far less consequential purpose.

Hon. Mr. Devries: I would like to thank the Leader of the Official Opposition for bringing that up. The fact remains that on Monday morning, I and the deputy minister and some people from our department, will be meeting with the Burns Fry people to address that very question.

On Tuesday, I will be following up on work that was begun by the Leader of the Official Opposition’s colleague, Mr. Byblow, on the Whitehorse mining initiative.

Question re: Ombudsperson

Mr. Cable: I have a question for the Minister of Justice. The Yukon Party, with whom I understand the Minister has some loose affiliation, during the last election published as part of the party’s platform a document entitled Our Commitment for Social Change.

Under a paragraph, entitled Making Government Accountable, the Yukon Party, now the government, made the following commitment: that they would, and I quote, “establish the office of ombudsperson to protect the individual from the power of the government”.

During the December session I questioned the Minister about the creation of the office of ombudsperson and he indicated that he did not know if it was an issue of top priority with the government.

Has the Minister, some three months later, established whether the creation of the office of ombudsperson is a top priority with this government?

Hon. Mr. Phelps: Minutes after the question was asked in December I made a point of ascertaining the true stature of the commitment, and I am pleased to announce that it is one of the top priorities of this government.

Mr. Cable: My recollection is that the Minister also indicated that the office would be created some time during the mandate of the government, whatever that might be.

Can the Minister indicate a more precise time line?

Hon. Mr. Phelps: I am not really sure as to what the question is. He said we better hurry. Is he asking about the time line for this government?

Speaker: Final supplementary.

Mr. Cable: I was going to rise to clarify the question. The Minister seemed to have some doubt as to what I was asking.

Speaker: All right, proceed with your first supplementary, very briefly.

Mr. Cable: It was a time line on the establishment of the office of ombudsperson.

Hon. Mr. Phelps: I am sorry for the confusion, but I did not think that type of question would provoke much laughter in the House. We hope to have legislation ready within the year.

Mr. Cable: During the December session I also asked the Minister whether the government had a projected annual cost for the office of ombudsperson, and he replied that his officials were working on it and that he expected an answer within the next few months. As the next few months have expired, has the Minister yet been able to determine the annual cost of the office of ombudsperson?

Hon. Mr. Phelps:  No, Mr. Speaker, we have not. The reason is that a lot will depend upon what functions of the ombudsperson’s office might be done in conjunction with other offices, such as things of an investigative nature, for example. It depends on exactly how we proceed, and whether there can be an economy of scale with some of the functions that such an office might provide.

Question re: Economic strategy

Mr. Harding: I have a question for the Minister of Economic Development. My riding of Faro is very interested in economic diversification initiatives. I have written the Minister to ask if there was potential to develop the Grew Creek mineral deposit on the south side of the Campbell Highway, to which his reply was, and I quote from a letter he sent me dated March 1, “A feasibility study completed in 1989 showed that the project was not economic.”

The project in question forms part of the Toward Self-Sufficiency by the 21st Century document. Could the Minister please tell me why the government saw fit to include this project, which they say is not feasible, in a document presented to the Deputy Prime Minister of Canada, as a realistic venture?

Hon. Mr. Devries: I am fortunate that I just had a meeting with the proponents of the Grew Creek property last week. He has indicated that they are still interested in pursuing this property and that more drilling is going to take place. He has proposed to do more drilling to show the viability of this project and, if he can come up with the financing, that will be done this summer.

Mr. Harding: I would like to delve a little bit further into this document. In order to become feasible, the Toward Self-Sufficiency by the 21st Century document says, and I quote from the document, “An underground development program is the infrastructure required to work toward the feasibility of the Grew Creek deposits.” Since the government is committed to infrastructure development, when can my community expect this infrastructure to be completed, as it was proposed to the Deputy Prime Minister of Canada?

Hon. Mr. Devries: In these discussions that took place last week, we discussed various aspects of the development of that property - training, the underground development - and again, I would reiterate that the company has been experiencing some problems raising the financing. They hope they can raise the financing and proceed with the exploratory work and have it completed by this fall.

Mr. Harding: I would just like to ask the Minister of Economic Development if there are any initiatives within his ministry that he is undertaking at the present time, or will be in the near future, to encourage the development of this project with financial commitment through the form of a development agreement of any kind whatsoever, or is it more of the same rhetorical support for the project? Is there any defined, concrete initiative being undertaken by his department, other than the meetings that are being undertaken right now?

Hon. Mr. Devries: Yes, I have instructed my department to see if there are any ways in which we can assist in the development of this project. They will be getting back to me very shortly.

Question re: Economic strategy

Mr. McDonald: I would also like to ask a question or two about the document Toward Self-Sufficiency by the 21st Century, which appears to be a loose jumble of ideas that may or may not be viable. As we have learned today, there may be another one that is not viable.

I have a question about the training component in the document. There is a very low-key commitment to job training in this particular document and only for a very few specific jobs, which may or may not exist by the year 2000.

Given that the training requirements of Yukoners must be met in order for the Yukon to take advantage of any economic activities, can the Minister of Economic Development tell us why there was so little attention paid to this particular area of the Yukon Party’s economic plan?

Hon. Mr. Devries: The Yukon Party is very open to training, but we are not going to train people for jobs that may not be there. You cannot anticipate what is going to be there. There is a surplus of mining people across Canada, and our strategy is to see First Nations people and Yukoners trained. We cannot make the assumption that these jobs are going to appear out of nowhere.

Mr. McDonald: I do not quite know what to make of that response. The immediate question that comes to mind is: is the Minister saying that, because there is a surplus of trained mining personnel across the country, and because we are not certain jobs might be available for the year 2000, the government will not invest in mining training, or other training that might allow Yukoners to participate in these megaprojects in the neat jumble of ideas in this document?

Hon. Mr. Devries: No, that is not what I was saying. When most mining projects come onstream, there is two or three years’ lead time. Given that lead time, when one of these projects gets its go-ahead, we have the strategy in place and ample time to ensure that people get proper training, so Yukoners can get jobs at these properties, unlike what the previous administration did.

Mr. McDonald: The previous administration tabled two comprehensive training strategies, which were not the subject of any objection from the Yukon Party and the Member opposite, who was the Education critic at the time.

Given that many of the jobs of the future are going to require post-secondary education, and given that so much of the population requires basic literacy and lifeskills training, what emphasis will be placed in this area in order for the overall goals and objectives of the infrastructure plan to be met?

Hon. Mr. Phillips: That question is probably more properly directed as me, as the Minister of Education. I can assure the Member that basic literacy skills are a priority of this government, and those programs will be continuing.

Question re: Education review

Mr. McDonald: I am happy to hear that. Given that the Minister of Education is now interested in answering this line of questioning, I will direct the next question to him. The Minister indicated, in a noteworthy speech to the Chamber of Commerce, that the emphasis on lifeskills was something that we would have to move away from. Given, at the same time, it is the prevailing belief in much of the education community that for many people to take advantage of economic opportunities and acquire the basic skills so they can get a job, they require lifeskills training. Has the Minister had a change of heart regarding lifeskills training or is he just being misunderstood?

Hon. Mr. Phillips: I would like to say that I was being misunderstood. If I had to give that speech all over again, I would put a little different emphasis on the area of the speech that everyone has seemed to focus on.

I can give the Member assurances that the lifeskills and the basic literacy skills are something that this government realizes is very important in upgrading individuals so that they may obtain better employment. We will certainly be continuing those types of programs. In some cases, we will possibly be enhancing those programs.

Mr. McDonald: The Minister has back-pedalled on this subject so fast that I have had to put on the jets to keep up with him.

Speaker: I take it from the Member that is his one-sentence preamble and he will ask his supplementary now?

Mr. McDonald: Thank you for joining Question Period, Mr. Speaker. Yes, that was my one-sentence preamble. Given that the Yukon Party has said basically next to nothing about the training strategy and the training needs of Yukoners during the last election, can the Minister of Education indicate what the government’s position is with respect to the Yukon Training Strategy that the NDP government tabled in the Legislature last spring.

Hon. Mr. Phillips: I believe the Yukon Party supported that training strategy when it was proposed by the Member opposite, and we still support that strategy.

Mr. McDonald: I am happy to hear that. Certainly that makes things much easier in the future. That is my one-sentence preamble, just in case you were interested in entertaining...

Speaker: I would just like to remind the Member that a gratuitous comment often does not constitute a preamble to a question. That is the point I was making for the Member.

Mr. McDonald: On that point, not to belabour...

Speaker: Order please. I do not want to get into an argument with the Member in Question Period. I am simply cautioning him that our Standing Orders require a one-sentence preamble. These are the Standing Orders made up by all Members of the House. If the Member wishes to challenge them, he can do that by substantive motion or it can be referred to the Committee and we will look at our Standing Orders. Please proceed.

Mr. McDonald: Will Yukon people, particularly the department, CYI and Yukon College, be consulted with respect to any addendum that they would like to pursue respecting the training component of the infrastructure document that the Ministers opposite have taken before federal Ministers and shown as a blueprint for economic recovery in the Yukon?

Hon. Mr. Phillips: I do not know why the Member asked the question; I think that consultation should be mandatory and of course we will consult with the groups involved. We would have to talk to the Yukon College and the industry and others out there to find out what type of training programs are needed and we would be consulting with them before these programs are developed.

Question re: Development assessment process, streamlining

Ms. Joe: I have a question for the Minister responsible for Economic Development. The government’s paper, Toward Self-Sufficiency by the 21st Century, discusses many potential developments such as new mines, pipelines, roads and railroads. Each of these would likely undergo some kind of environmental assessment or development assessment process. The government’s paper says the development assessment process should be streamlined and my question to the Minister is: how does he intend to streamline that process?

Hon. Mr. Devries: As the Member knows, in the land claims umbrella final agreement there is the development assessment panel process, which is a much more streamlined process than we have now. Meanwhile, we are attempting to ensure that the various agencies, which mining companies would have to go to, will all function at the same time, so that it is not a three or four year process.

Ms. Joe: My question was in regard to how he intends to do that. We are aware that it is included in the land claims legislation and my question to him is: how does he intend to negotiate that process and streamline it? Has he consulted with Ottawa or the CYI on this?

Hon. Mr. Devries: I can assure the Member that the CYI has been invited to the meeting here on the 16th, with the Ministers; several different agencies will be at this meeting and all those things will be discussed.

Ms. Joe: One of my concerns is in regard to the streamlining, and if there is a decision to change the process in some way, will it require again a change to the land claims legislation?

Hon. Mr. Devries: To the best of my knowledge, it would not require a change to the legislation. I can assure the Member that there will be no shortcuts.

Question re: Conflict-of-interest legislation

Mrs. Firth: I have a question for the Government Leader regarding the conflict-of-interest situation that we have in the government.

I raised concerns about former government employees, such as deputy ministers, leaving the government and being in a position to utilize sensitive information related to their jobs, against or in competition with the government, thereby creating a conflict of interest.

The Government Leader expressed much concern when I raised the question and indicated that he was going to do something about it immediately, yet the Public Government Act, which would provide a cooling-off period, sits on the shelf unproclaimed.

I would like to ask the Minister if there were some safeguards sought with the recent dismissal of the three deputy ministers.

Hon. Mr. Ostashek: I thank the hon. Member for the question.

Yes, the conflict-of-interest guidelines under the Public Government Act, along with the Public Government Act, are sitting on the shelf. We feel that it is a cumbersome piece of legislation and we are reviewing the legislation at this point.

As for specific requests being made of the deputy ministers who left the service of the government, I am not aware of requests that were made with respect to conflict of interest.

Mrs. Firth: There was a rather interesting interview done by one of the local newspapers about whether or not Mr. Ostashek may have sought guarantees. In that interview, the Government Leader was quite curt about whether or not he had given direction to the Public Service Commission about guarantees.

Could the Government Leader tell us today whether or not he gave any direction to the Public Service Commission, and whether or not there were any safeguards put into place?

Hon. Mr. Ostashek: The Member opposite is aware that under contracts that were entered into by the previous administration - contracts and severance packages - those issues of conflict did not seem to be addressed.

Mrs. Firth: It has come to my attention that safeguards were not put in place. Maybe the Government Leader could tell us why not.

Hon. Mr. Ostashek: Again, I would like to reiterate that it is because of the contracts that were drawn up with the people in question.

Question re: Conflict-of-interest legislation

Mrs. Firth: I thank Opposition Members to allow me to follow up, because it is a very important issue and I do not think we should let it go by.

The Government Leader stood in this House when I originally asked the question and told us how very, very concerned he was about the issue.

The conflict-of-interest legislation still sits on the shelf unproclaimed. It is one piece of legislation that can give the government some protection and not put it in jeopardy when senior officials - not just deputy ministers, but when senior officials - leave this government.

The Government Leader has done nothing to seek safeguards. The conflict-of-interest legislation continues to sit on the shelf. Could the Government Leader tell us when he expects to deal with this matter so that we are not putting the government in jeopardy as employees leave the employ of the government?

Hon. Mr. Ostashek: Yes, there is no doubt that conflict of interest is of grave concern to this administration and we want to deal with it in the proper manner. We do not feel that the bill that is on the shelf right now addresses the issue, because it is such a cumbersome bill. While there are aspects of the bill that we agree with, we are not certain that it should be an all-encompassing bill.

It is in the process right now of being reviewed by a Cabinet committee. We hope to bring legislation forward in the fall session.

Mrs. Firth: If that is the case, why does the Government Leader give me the same answer as last time: that they were very concerned about it.

If legislation is coming forward in the fall session, can the Government Leader tell us what he is doing in the interim to provide those safeguards? Obviously, nothing was done with the last three firings of deputy ministers.

Hon. Mr. Ostashek: As we said, we are following the procedures that were in place when we took office.

The Opposition Members were there for seven and one-half years. They did nothing about it until they were leaving office, then they did it with this cumbersome piece of legislation.

We are dealing with it. We will be bringing in decent conflict-of-interest legislation that will satisfy the concerns of Yukoners and this House.

Mrs. Firth: I heard that from the previous government. Now, I am hearing it from the new government with the new ideas.

If I might just extend my supplementary a little bit, because the vocal Member across the way is saying that they have only been here for four months. I am asking for some interim guarantees, because the Government Leader expressed that this was of tremendous concern to him. If it is such a concern, surely there should be something put in place on an interim basis. I am anticipating more government employees leaving. What is the Government Leader going to put in place on an interim basis to protect the government?

Hon. Mr. Ostashek: As I said to the Member previously, had she been listening, the policy is under review. They will be coming forward with recommendations and legislation. As the recommendations come through, we will be putting policy in place that will not have the effect of legislation, but it will do in the interim. We are waiting for that to come from the Cabinet committee so that we can make a decision on it.

Question re: Economic strategy

Ms. Moorcroft: The government’s economic plan for the 21st century talks about examining the implications of international agreements, such as the Free Trade Agreement and the proposed North American Free Trade Agreement. The document states that “maintaining an open trading system is essential for a resource-based economy like the Yukon”. However, in the same document, the Yukon government is petitioning the federal government for transportation and energy subsidies, which are contrary to the spirit and letter of the Free Trade Agreement and NAFTA.

Can the Minister of Economic Development explain this apparent contradiction?

Hon. Mr. Devries: There are no subsidies in there that I am aware of. We are seeking assistance in building the infrastructure, but we are not seeking subsidization for the transportation itself.

Ms. Moorcroft: As I stated in the preamble to my first question, the document talks about subsidies for transportation and energy and that he was looking for that from the federal government. The Mexican or American governments could challenge the Government of Canada that subsidizing the electrical power rates in the Yukon runs contrary to NAFTA.

Did the Minister of Economic Development discuss this consequence with the federal government? Does he have a strategy for dealing with it?

Hon. Mr. Devries: I might have to get back to the Member on that. I am not certain of the aspects of it. I have studied it to a certain extent, but I had not looked at that portion of it.

The Member must remember that the majority of the exports will be to the Asian markets, and the NAFTA agreement would not pertain to it, to a great extent.

Ms. Moorcroft: It is clear that mining companies, to use one example, are drifting south to do business in South America and Mexico where, for their purposes, “better” environmental regulations are poor or non-existent, and the wages and cost of doing business are cheaper.

Can the Minister indicate if he supports an add-on to NAFTA, such as that proposed by the new U.S. administration, to address these concerns about environmental regulations, labour standards, et cetera, among Mexico, Canada and the United States?

Hon. Mr. Devries: I will take that matter under advisement and get back to the Member.

Question re: Public Service Commissioner, appointment of

Mr. Cable: My question is for the Minister responsible for the Public Service Commission. On December 23 of last year, an order-in-council was issued appointing Patricia Cumming as Public Service Commissioner for a six-month term. The act allows for such appointments for an unspecified term not exceeding 10 years. I do not think it contemplates probationary appointments, because that creates the possibility of political interference in the Public Service Commission.

Will the Minister responsible help to ensure that this does not happen by asking a committee of this House to review the appointment of the Public Service Commissioner?

Hon. Mr. Ostashek: I was not aware that I was going to be asking a committee of this House to review the appointment. As the Member opposite stated, an appointment can be made for up to 10 years. I do not think that we have done anything to contravene that.

Mr. Cable: There was no suggestion that the government was breaking a law. There was a suggestion that there is a better way of doing it.

The Yukon Party made many commitments during the election campaign in October. One of those commitments, in their words, was to ensure that the abuse of authority and intimidation of public employees stopped.

Can the Government Leader tell us how he is going to do that, if his government will not ensure public accountability in the appointment of the Public Service Commissioner?

Hon. Mr. Ostashek: I understand the Member opposite has a motion on the Order Paper, and we could probably discuss this in great detail when that motion comes forward. I am not sure what the Member is looking for in an answer. I think we have sent out a clear message to the civil service that we will act responsibly and will not be intimidating workers who are employed in the civil service. We intend to continue to operate in that manner.

Mr. Cable: Intimidation and accountability are perceptions. Is the Government Leader prepared to consider using a committee of this House as a vehicle for appointing the Public Service Commissioner?

Hon. Mr. Ostashek: As I said, the Member has a motion on the order paper and I guess we will get into it in debate.

Question re: Hazardous waste storage facility

Mr. Penikett: I have a constituency question for the Minister of Community and Transportation Services. I would like to ask if the Minister has made a firm decision yet on the location of the special waste storage site, or whether a potential decision will be subject to public consultation.

Hon. Mr. Fisher: The location that was picked by the committee for the hazardous waste site will not be changed if, in fact, a facility is built.

Mr. Penikett: The Minister seems to now be indicating the project may not go forward at all and I understand that he may not want to leak something of his own budget. In public statements, the Minister has indicated that he may have been looking at, what he called, a less elaborate project with lower capital and operation and maintenance costs. Can I ask the Minister if he is satisfied that a less elaborate project could proceed without compromising public safety in any way.

Hon. Mr. Fisher: I think that it is public knowledge that I have asked the department to look at alternative methods of storing, shipping and disposing of special waste. One of the criteria would definitely be that public safety would not be compromised.

Mr. Penikett: The Minister may be able to finally answer this question after the budget is tabled tomorrow. But can I ask him if he would clarify his previous answer and indicate to us, since he said that the original project site is to be maintained, when he talks about alternatives, referring to something other than a facility at that site is he looking at transportation out of the territory as an alternative? Could he elaborate?

Hon. Mr. Fisher: Yes, certainly we are looking at the possibility of transporting special waste out of the territory on an ongoing basis, rather than storing it for a long period of time. That is one of the alternatives.

Speaker: Time for Question Period has now elapsed.

Notice of Government Private Members’ Business

Hon. Mr. Phillips: Pursuant to Standing Order 14.2(7), I would like to identify the order in which the items standing in the names of the government private Members are to be called on Wednesday, March 24, 1993. They are: Motion No. 25, standing in the name of the Member for Klondike; Motion No. 27, standing in the name of the Member for Vuntut Gwich’in; Motion No. 29, standing in the name of the Member for Klondike; and Motion No. 30, standing in the name of the Member for Klondike.

Speaker: We will now proceed to Orders of the Day.


Speaker: Government Bills.


Bill No. 4: Second Reading - continued

Clerk: Second reading, Bill No. 4, standing in the name of the Hon. Mr. Ostashek - adjourned debate.

Hon. Mr. Ostashek: I rise today to conclude my debate on second reading of the supplementaries, and I would like to review a little from where we left off last night - just to bring the Opposition back up to speed as to what we were engaged in.

Just prior to concluding last night, I was speaking about the irresponsible manner in which the Members opposite acted prior to calling an election last fall while they were not prepared to deal with some of the more unpopular issues at the time: Curragh, Taga Ku, the budget. We had a Government Leader who was more interested in pursuing his fame on the national scene on constitutional issues and looking for his place in the history book rather than minding the bank at home.

I want to touch on this issue a bit because it is very, very important to where we are at in the discussion on the supplementaries today in this House. There is no doubt in my mind, or anyone else’s mind now in the community, that the former administration knew, prior to calling the election, that they were in trouble - in trouble financially. The piggy bank was empty.

I was a little amazed at Question Period this afternoon. Here we have an Opposition party in the House today that spent seven and one-half years in government with no vision for the future of the Yukon and no vision for infrastructure for a self-sustaining economy. We take the initiative to put out a discussion paper and take it to the federal government to try and get some money to put infrastructure in place so that we can be self-sufficient and not so dependent on the federal government, and they are starting to nit-pick at the document. The fact remains that when the previous administration took over in 1985, they assumed a government with a $41 million surplus - a $41 million surplus - and a formula financing agreement that would see this territory receive in excess of $2 billion over the life of their government. Those funds were negotiated - negotiated so that the territorial government could provide the infrastructure to be self-sufficient and not be so dependent on federal handouts.

I suggest to this House that the previous administration was a dismal failure in providing self-sufficiency infrastructure for the Yukon.

If only they had taken just a small percentage of that money and put it into power development so that we would have cheaper energy costs for people who wanted to provide jobs in the Yukon, industry for the Yukon, mines for the Yukon, tourism for the Yukon.

The high cost of energy is one of the major stumbling blocks that we have to developing a self-sufficient economy in the Yukon. If the previous government would have taken a small percentage of that every year, they still would have created the jobs that they did by building all of these fabulous buildings, recreation centres in the communities, curling rinks in ghost towns and the Watson Lake sawmill. They could have put something in place that would be bringing wealth into the territory today.

I want to refer back to some of the comments made in the House yesterday by the Member for McIntyre-Takhini. I am very concerned with some of the comments, innuendoes and assumptions made by the Member. I want to go back and ask the Member again if he can really, in his mind, think that a firm with a reputation such as Consulting and Audit Canada has would be involved with a new administration coming into power in what he calls a political financial review.

Consulting and Audit Canada has a record that they must look after; they have their integrity that they must defend and I am sure that the Member opposite does not believe what he has said - that they would be party to a political review.

I am very concerned about the innuendoes and assumptions cast by the Member for McIntyre-Takhini that the professional managers within the civil service would be involved in some farce to discredit the former administration or to put false figures forward to blame the former administration. Next they will be blaming the Auditor General this fall when he verifies the figures. I have grave concerns in that area.

I want to talk about the variance 4 report that was put forward by the previous administration, which they say they did not sign off. They say that they did not approve $36 million in additional spending, but I have the list here of what they approved and what they did not approve. The fact remains that there was an additional $36 million that was approved in the variance 4 report. The Members on the other side are saying no. Well, we did not approve the additional spending.

I want to go back to something else in the variance 4 reports that is very interesting. The Opposition in the debate on the supplementaries has made much about us trying to cast blame on the other side and not doing anything to tighten up the system to save money. I want to inform this House that in the supplementaries that the previous government approved and the variance 4 report that they had approved - not us - their projected forecast for March 31, 1993 was a deficit of some $61,000,079.

They may condemn us for not taking any action to save money. There is at least $3.5 million we have saved, because they came in at $58 million. The fact remains that that administration spent $58 million more than they took in. The credibility of the people on that side of the House really needs to be looked at.

I want to talk about another topic. The Leader of the Official Opposition, in his debate yesterday on the supplementaries, was very condemning of this side of the House because of some deputy ministers leaving the service of this government and the severance packages that had to be paid to them.

Let us go back to 1985, when that administration took power. There were deputy Ministers who were let go; there were deputy ministers who had their desks taken away from them; there were deputy ministers who had their telephones taken away from them. They say that if we had to get rid of them, we could have done it through constructive dismissal; we could have documented this stuff. We saw how the Leader of the Official Opposition handled one of those scenarios. We still have an outstanding lawsuit for hundreds of millions of dollars. Let us talk about the costs of the severance packages for a moment and the lucrative severance packages that were negotiated by the then-Government Leader of the Yukon and some deputy ministers. There were some severance packages negotiated long after the fact - long after the people were employed by the government.

Some of those severance packages were excessive. We are going to be dealing with that issue. Every one will be dealt with in a fair and equitable manner, not on a one-by-one basis, as was done by the former administration.

With the costs of the severance packages of deputy ministers, the cost of the severance packages for the OIC appointments in the Executive Council Office on a change of government, the renovation to the Legislative precincts - I think the Members opposite had a vision when they started renovating the Legislative precincts just prior to calling the election. Taking all those costs into consideration - and there are always costs associated with a change of government - we still come in with $3.184 million, to be exact, less than what they were forecasting in the variance 4 reports.

There is no doubt in my mind that the controls we put in place did save this government money. They will continue to save this government money.

I just want to go back a little bit and talk about Curragh because it seems to a subject dear to the hearts of the Official Opposition.

Some Hon. Member: (Inaudible)

Hon. Mr. Ostashek: The Member for Whitehorse Centre says, “the whole of the Yukon”, and I agree.

Those Members, when they were sitting on this side of the House knowing what the financial health of the government was, did not let us know on the Opposition side. The Government Leader said there was no way the Government of the Yukon could afford $34 million to help this company. There was no way that he could afford to help this company without help from the federal government. But, as soon as he is on the Opposition side, he is hammering on us to give them $34 million, unsecured. That is the kind of accounting and bookkeeping that cause these $58 million deficits - however, I did not spend all of the money.

I want to talk a little bit about the accounting procedures of the Leader of the Official Opposition. He knows full well that his administration spent $58 million more than they took in. He is not prepared to admit that and get on with the job of being a good Opposition and questioning the government. He is not prepared to do that job. But he is prepared to keep on playing his smoke-and-mirrors accounting. We are going to now mix consolidated and unconsolidated surpluses. Hey, what a remarkable vision the Leader of the Official Opposition has had. There is only one thing I am sorry for. When they vacated the offices upstairs, they did not leave me those socialist calculators that can bring a deficit in 1991 and 1992-93 and tell the public of the Yukon they had come up with a balanced budget. I wish I had that calculator right now; I really, really do. Let us look at that. The 1991-92 accumulated surplus left us $13 million in the hole. “We have got a balanced budget again”, they said. “Every year we were in power we balanced a budget.” The projected deficit for 1992-93 was $19 million. Again, “We balanced the budget. No problem.”

I want to dwell a little bit on the reference to consolidated and unconsolidated, because I find it remarkable how the Leader of the Official Opposition explained yesterday that it all adds up. It seems that the Leader of the Official Opposition did not know what the term “consolidated” meant until he got into trouble.

Consolidated, accumulated surpluses do not work for government. They are an accounting practice the Auditor General likes to see in the books. Let us be realistic about this; it is only the last two years that they have been shown. All the way through the previous administration we talked about unconsolidated accumulated surplus.

I would like to go back to the second reading of Bill No. 17 in November of 1991. The third supplementary for 1990-91 referred to an accumulated surplus of $64.5 million. This was an unconsolidated figure given by the Member opposite in the House.

In the 1992-93 main estimates, on page four, we find an accumulated surplus of $64, 493,000 shown on March 31, 1991 as unconsolidated. Now, for the sake of  expediency, and smoke-and-mirrors accounting, we start adding consolidated and unconsolidated and we try to fool the public because we do not have any other defence. That is what the Leader of the Official Opposition is saying. There is no other defence.

Let us just look at what a consolidated accumulated surplus is. We start out with an unconsolidated accumulated surplus in March 31, 1992, of $50,846,846. Then we add in our equity in the Yukon Development Corporation. Is the Leader of the Official Opposition saying that we can sell the Yukon Development Corporation and the Yukon Energy Corporation to get money to pay our bills? Or is he saying that we can sell our investment in the Yukon Housing Corporation and our social housing projects? Can we sell all of them? That is what the Leader of the Official Opposition is telling us. That is what he is trying to tell the people of the Yukon - smoke-and-mirrors accounting.

The Leader of the Official Opposition has stood up in this House a couple of times since the session started and said he was not a rich man. The tone he uses implies that it is a sin to be rich, or a sin to be able to look after yourself. If he keeps his own books like he kept the books of the Yukon, I can understand why he is not rich.

The fact remains that the previous administration spent $58 million more last year than they took in.

The Leader of the Official Opposition made much yesterday of his charts in his educating of the House. I would like to table this for the Member opposite, and this is what I call his accounting principles. As you can see, the main estimate is just the fin sticking through the water. Then, Mr. Speaker, you get the whole works when you get the supplementaries.

The Leader of the Official Opposition condemns us for, in five months, not curing all the wrongs it took him seven and one-half years to put in place - all the bureaucratic stuff he has built up, some of it legislated - and now it is going to take years for us to deal with it. He condemns us on this side, and the Minister of Health and Social Services, for not cleaning up the mess, saying we knew we were in trouble.

In 1991, they knew they were in trouble with Health and Social Services. What did they do to clean it up in the 18 months they were still there? Nothing. They did not identify it at all. Now, within five months, he wants this administration to clean up the mess they left.

He went on in great detail yesterday about how, in 1985, they came to power and how efficient they were as a government, how they got the budget out in no time at all. The budget he tabled was a budget that was put together by the Progressive Conservative government that was in place prior to his taking office.

It is unbelievable.

As I said earlier, we cannot turn this around overnight, but we will turn it around. We will not be coming in with a request for $58 million in our supplementaries next year, I can assure you of that, Mr. Speaker.

I believe that some of the problems that were experienced by the previous administration were not all of their own doing, especially in Health and Social Services. It is a problem, as the Leader of the Official Opposition said yesterday, that is going on across Canada. I do believe that they could have acted more quickly instead of letting it get to the stage it is at now. It is eating a tremendous portion of the O&M budget every year.

Speaker: The Government Leader has approximately three minutes to conclude.

Hon. Mr. Ostashek: In conclusion, I want to say that the one fact that cannot be disputed by Members on that side of the House, and it has been borne out in the Consulting and Audit Canada review and in the supplementaries, and it will be verified by the Auditor General this fall, is that the former administration spent $58 million more than they took in in the last year. There is no doubt about that.

The government was doing good, not bad. They were getting on pretty well until 1991 and then it all started to fall to pieces on them. They could not pick up the pieces, and that is why they are sitting on that side of the House today and we are on this side.

We are going to invest in infrastructure in the Yukon. We have a vision for the Yukon and it is not a vision that is going to continue to take 86 cents out of every dollar that comes from Ottawa. We are going to work very diligently to put Yukon on a track of self-sufficiency for the 21st century.

We can hear from the jeers and hoots from the other side that they never had a vision for the Yukon. They were quite prepared to continue to take the handout from Ottawa, even after being warned in 1987, and again in 1988, that if they did not pull up their socks and raise some money under their taxation system that they were going to be penalized. That penalty has cost Yukoners $120 million in this five-year period.

Some Hon. Member: (Inaudible)

Hon. Mr. Ostashek: You should have been prepared to live up to the responsibilities that were placed on you. There is the administration that is quite prepared to live off the handouts from Ottawa and try and juggle the figures to say that our formula financing is going down. I will repeat one more time that the previous administration spent $58 million more than they took in last year. We will be getting into the line-by-line debate.

Motion for second reading for Bill No. 4 agreed to

Bill No. 5: Second Reading

Clerk: Second Reading, Bill No. 5, standing in the name of the Hon. Mr. Ostashek.

Hon. Mr. Ostashek: I move that Bill No. 5, entitled Fourth Appropriation Act, 1991-92, be now read a second time.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 5, entitled Fourth Appropriation Act, 1991-92, be now read a second time.

Hon. Mr. Ostashek: The purpose of this bill is to vote additional sums for the year ending March 31, 1992. The monies that are required in this bill are required because three votes were overspent.

The Department of Education overspent its O&M vote by $362,000. The Department of Justice was overspent for O&M purposes by $48,000 and, finally, the Public Service Commission spent $402,000 more than the monies previously voted for that department. The total overexpenditure amounts to $812,000.

The overexpenditure in education can be attributed to the year-end accrual of teachers’ salaries. The accrual previously established proved to be inadequate. These additional funds were required to establish proper liability.

The Department of Justice overexpenditure was due to several factors, among which the victim of crime payments and additional auxiliary and casual staffing at the Whitehorse Correctional Centre were the most important.

The Public Service Commission required additional funds because Workers’ Compensation Payments were higher than anticipated, as were employee leave accruals.

While these three votes were overspent, every other vote was underspent for the year. These underexpenditures far exceeded the overexpenditures. Nevertheless, Members are aware that the Financial Administration Act requires that all overexpenditures receive legislative approval. Hence, this bill.

In overall terms, the 1991-92 fiscal year saw the unconsolidated accumulated surplus decrease by $13.6 million, from $64.5 million to $50.8 million. While this decrease in itself is not of a major concern, it is unfortunately indicative of a trend that must be reversed if we are to avoid the burden of deficit financing.

Mrs. Firth: This supplementary estimate is essentially a tidy-up job because there has been an illegal expenditure. The Financial Administration Act has been breached and this supplementary estimate has been brought forward to tidy up the bookkeeping matters of the government.

I have no comments about the details or the numbers; we were all aware of them from the Public Accounts Committee, but I would like to enter into some discussion with the government about how they are going to see that this kind of thing does not happen again. As I recall it, the previous government had two such illegal expenditures - one shortly after they were elected to office and this is the second one. We have a new government in place, which is talking about cleaning up the finances and the spending habits of the government and making people accountable. I would like to ask the Government Leader, when he makes his final comments, if he could, for the benefit of the Members of all of the parties in this House, tell us exactly what his government is going to do to see that this kind of illegal expenditure does not occur again. I would like to know what specific policy direction has been given to the departments to see that it does not happen, and what new initiatives he is taking to make the managers more accountable for this kind of overexpenditure - even for overexpenditures in the department that creates the necessity for a supplementary estimate. If I could get some information from the government regarding that, then when we enter into Committee of the Whole debates I may have some further questions regarding the policy direction the government is taking.

I look forward to hearing what other Members have to say and what the Government Leader has to say, and I will be following up in Committee of the Whole.

Mr. McDonald: I am going to be brief in second reading on this particular measure because I think the Government Leader has explained adequately, for the purposes of second reading, precisely the reasons for the overexpenditures in three of the departments. I would like to reiterate, though, that there are a couple of points to be made, and then speak briefly about the Financial Administration Act and what we are actually requesting departmental managers to do - what kind of superhuman effort we are asking them to perform in bringing their budgets in with a surplus.

As the Government Leader has indicated, there is an overexpenditure totalling $812,000 on a budget total of approximately $412 million originally budgeted, both in the main estimates and the supplementaries. That is probably one-quarter of one percent of the budget total that has been overexpended.

If the Financial Administration Act indicates that it is against the law, then that is a problem for us. We should not simply ignore it. At the same time, I would like to point something out - with the full knowledge that the words I speak now are similar to the words that I have spoken on this matter in the past, and will be similar to the words I speak when we deal with supplementary estimates in future years.

For example, a department such as the Department of Education voted $66 million on the operations side to provide for public schools and post-secondary libraries and archives services to territorial residents. They overexpended their amount by $362,000. We must understand that the main estimates for this figure of $66,343,000 were developed a full 18 months, and longer, prior to the time the year-end came about.

If one were to compare this situation with that of a business or one’s own home accounts, we would be asking ourselves to plan our own private household account as much as 18 months in advance, and then want to come in exactly on target at the end of 18 months. That is a phenomenal feat for any departmental manager in the government.

As Ministers will find out, in the years to come, when they say no to people, simply because they are being cautious with the money and, therefore, underexpend their votes, they will be buying themselves a great deal of trouble. They will obviously have to put tremendous pressure on the administrators to be as exact as possible - not to overspend, because it is against the law, and not to underspend, because it buys unneeded grief for the Minister and for the government. If monies are voted to do a particular thing, they are not voted to lapse - they are voted to fulfill a function. Ministers must come in and defend those estimates. It is necessary work to do that.

To have the departmental administrators come in precisely on target is a monumental feat. I think it would behoove us to have a discussion on this matter, perhaps in general debate on the supplementary estimates, or perhaps in the general debate around the main estimates.

If we are going to be faced with the situation in the future, no government wants to contravene the Financial Administration Act. However, if the act, in and of itself, has unrealistic expectations, then we owe it to ourselves to review that. This is not a licence, and I am not saying this in terms of giving licence to administrators to overspend the budget or to be careless; however, we do not want a situation where the demands are so unrealistic that it ends up in a breach of law, where we have to come into the Legislature and wring our hands about this. We must try to find an alternate approach to keep some rigour and discipline in the system to spend according to the amounts that have been budgeted, as well as to recognize that coming in this close to the target - less than one-quarter of one percent in a $400 million budget - is a phenomenal feat, and we should be thankful and proud of most of the administrators for doing an extremely good job in that respect.

This question deserves a great deal of debate and discussion. Perhaps, even this afternoon, we will have an opportunity during the supplementaries to discuss it a little more thoroughly and have a useful exchange of views as to how this might be resolved, without playing politics, with the assurance that we might come to some kind of conclusion that at least most of the Members of this House can live with.

Speaker: The Hon. Government Leader will close debate if he now speaks. Does any other Member wish to be heard?

Hon. Mr. Ostashek: Both Members opposite made some very valid points. The Member for Riverdale South said the Financial Administration Act had been broken, and there is no doubt that it has. It is a very serious matter.

At the same time, the former Minister of Finance, the Member for McIntyre-Takhini, made some very valid observations. To expect our managers to be able to come in right on target each and every time in a budget that has now grown somewhere over $400 million is a monumental undertaking. As the Member for McIntyre-Takhini pointed out, we try to hold the managers accountable; we do not want them fluffing the figures to make them overly excessive, so the Minister has to defend them in the House in the line-by-line debate. Yet, we try to encourage them to come in with realistic figures and try to live within those figures.

The Member for McIntyre-Takhini made some valid observations that, perhaps, this Legislature should be having a debate on how we can change the legislation, if that is the way the House feels, so we are not asking our managers to do the impossible.

As the Member for McIntyre-Takhini pointed out, tabling the budget some 18 months prior to when it ends is taking a shot in the dark.

The Member for Riverdale South asked what this administration is going to do. We have been looking at the budgetary process and at ways that we can improve the process. We believe that the main estimates should be that: main estimates. I, for one, do not believe in overly excessive supplementary budgets but, when you look at the arguments that the Member for McIntyre-Takhini puts forward, when you are asking managers to project 18 months into the future, it causes a problem.

On that note, I do not want to start revealing all the things that we are going to be doing. I would like to leave that to our budget debate, but I can tell the Member for Riverside South that we are looking at possibly splitting the budgets again, bringing the capital forward in the fall and the O&M in the spring, so that the managers do not have to project that far into the future.

We are asking our managers to come up with realistic figures in the main estimates. I do not like dollar line items in the main estimates; I do not like them at all.

Those are a few of the actions that we are taking, and I am sure that we will get into much debate, when we table our own budget, as to different approaches we are taking and approaches that Members opposite would like to see us take.

On that, I have no further comments at this time.

Motion for second reading of Bill No.5 agreed to

Hon. Mr. Phillips: 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 Government House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.

Motion agreed to

Speaker leaves the Chair


Chair: I will now call Committee of the Whole to order. We will take a brief recess.


Chair: I will call Committee of the Whole to order.

Bill No. 4 - Second Appropriation Act, 1992-93

Chair: The Committee will be dealing with Bill No. 4 entitled Second Appropriation Act, 1992-93. Is there any general debate on Bill No. 4?

Hon. Mr. Ostashek: I have Mr. Sanderson, the Deputy Minister of Finance, here to help me with the technical questions during general debate.

This supplementary was necessary because it appears we have spent $37.4 million more in the current fiscal year than was projected in the main estimates tabled in this House just a year ago. While many of these expenditures are recoverable, changes to revenues and recoveries in the transfer payments from Canada mean that the increase in our annual deficit at $38.6 million almost matches these additional expenditures.

The revised annual deficit now stands at $57.9 million. This is for 31,000 people in the Yukon.

Politics aside, I doubt that there is any Member in this House who believes expenditures and deficits of anywhere near this magnitude can be sustained. The figures contained in this supplementary are the result of a full-fledged period 8 variance report, prepared by the departments. In other words, given the information departments had available on November 30, 1992, this is their best estimate of monies that will be required to continue to operate until the end of the fiscal year, which will be in several weeks. The departments were recently surveyed as to the lapses from the projections they expected would occur. The amount identified was insignificant.

However, despite this assurance I am sure we will have lapses of some monies at year-end, although it is difficult to give any realistic estimate of the magnitude of these lapses. I expect in net terms it will amount to $10 million to $15 million, or roughly, two to three percent of actual percentages for the year.

Based on the projections contained in this supplementary, the unconsolidated accumulated surplus of $50.8 million with which the government began the 1992-93 year, will be turned into a $7 million accumulated deficit by the fiscal year-end. If we do lapse $15 million we will still have reduced our accumulated surplus by some $43 million. Unfortunately, it appears the Consulting and Audit Canada report was, in general terms, correct in its conclusions; that some of the detail in the report may have been flawed matters little now.

I also hope that we do not get into a debate on consolidated versus unconsolidated accumulated surpluses.

The Official Opposition knows that until several years ago, the unconsolidated figure was the only one reported in our public accounts.

Reporting of consolidations began two years ago because of pressure on governments across Canada to accept public sector accounting standards set by the Canadian Institute of Chartered Accountants, who believe government reporting should match private sector accounting.

In the private sector consolidations make sense. A subsidiary can be sold by a parent company to access cash or to increase profits. In my opinion, these factors are not applicable to this government.

The consolidated figure reported in Yukon includes government’s investment in the Yukon Development Corporation and some items from the Yukon Housing Corporation and the Workers’ Compensation Health and Safety Board.

This means, for instance, that if we were to sell Yukon Development Corporation, we could regain our investment in that corporation. The fact of the matter is that no government in the Yukon is going to sell the electrical utility. Nor would we sell the Workers’ Compensation Board or our social housing stock to finance day-to-day government operations.

The Opposition has quoted the consolidated figure quite regularly since they began to sit on the other side of the House, but it was quite different when they were in power. If, when they were in government, they thought the consolidated, accumulated surplus was a relevant figure, why did they not use it?

I would refer Members to the 1992-93 main estimates book where on page 4 the following statement appears: the audited, accumulated surplus of the government as of March 31, 1991 was $64,493,000.

In other words, the unconsolidated figure was quoted. Absolutely no reference was made to the consolidated figure. I believe that was a wise choice because the fact of the matter is that it does not really mean very much.

We should all focus on the main issue: that we were spending far in excess of what we received and it must be stopped. The main estimates for 1993-94 will be tabled shortly and we will begin to address that problem.

The document before us today contains a great many overexpenditures and some underexpenditures. The actions we have taken to control outside travel, hiring and discretionary expenditures will have contributed to reducing the funds required in this supplementary, although it is really difficult to quantify the expenditures thus avoided.

In this regard, I would like to reiterate some statistics I mentioned in my second reading remarks. Compared to a similar period one year ago, there was a 50-percent decrease in hiring activity, a 32-percent decrease in purchase requests and a 45-percent drop in airline bookings. Unfortunately, the bulk of the expenditures in this bill were already made or committed to by the time we took office and there was little room left to maneuver in this current year.

I would like to take several moments to speak to the specific funding requests that we are dealing with today. The previous government approved for inclusion in the supplementaries approximately $14 million of revote capital funds that lapsed at the end of the 1991-92 fiscal year. These monies, less about $1 million, which turned out not to be required, were spread among a number of departments.

The Legislative Assembly requires an additional $507,000 in O&M spending authority. The bulk of this was due to the cost of the October 19 election.

The Executive Council Office has requested $330,000 in additional operation and maintenance money. There are many variances in the department but, in general terms, it could be said that the funds are required as a result of land claim negotiation costs, French and aboriginal language services and termination benefits for political staff of the outgoing government.

Community and Transportation Services needs $421,000 more in O&M funding. This is the net result of a host of over- and underexpenditures and is best left to departmental debate.

Suffice it to say that the flooding encountered in various watersheds last year contributed to this figure, as did some 100 percent recoverable sport and fitness contribution payments.

The departments of Economic Development, Finance, Government Services and Yukon Housing Corporation are all giving up O&M funds. These monies were found through internal efficiencies or resulted from a delay or deferral of previously budgeted projects.

The Department of Education requires almost $3.9 million in supplementary funding. As is to be expected in a department of this size, there are numerous reasons for this request, but the bulk of it was as a result of new teachers required to meet the demands of a growing student population.

Monies have also been transferred in from capital for the training trust fund and more funds are required for post-secondary graduates.

Health and Social Services accounts for almost three-quarters of the O&M funds being requested in the supplementaries before us today. The department needed $14 million more than was voted in the main estimates - a 21-percent increase.

Additional monies are required in every program carried on by the department and, in some cases, these monies are very substantial - $4.4 million, or 43 percent more, is required for the social services program, while an additional $6.9 million, or 19 percent more, is needed for health and social services.

These expenditures, mostly in social assistance, have apparently been out of control for several years now and the previous government had raised concerns in this Legislature last year. I suppose I can take some comfort from the fact that we are not the only jurisdiction in Canada, or in the world for that matter, to be facing a financial crisis in these areas. We are all well-aware of what has happened in the provinces that have been hardest hit by the recession, but I think it is of concern that we seem to have experienced something of the same over the past several years while our economy appears to have escaped the worst of the recession.

The appropriate Ministers will be speaking to these matters during the departmental debate, and I will be looking forward to Members’ questions.

The Department of Justice requires $2.2 million for O&M purposes, the bulk of which is for the victims of crime program and the cost of outside legal counsel.

Both the Public Service Commission and the Women’s Directorate required small infusions of O&M monies.

Renewable Resources is asking for $1.1 million in new operation and maintenance monies, but over $850,000 of that sum is recoverable under various contribution agreements.

The Department of Tourism has requested an additional $356,000, most of which is for the Yukon Anniversaries Commission.

A total of $17.6 million in new capital monies is required. As I mentioned earlier in these remarks, approximately $13 million of this is a revote of 1991-92 capital funds.

The remainder is a combination of numerous additional costs and savings in a great number of projects. Any discussion of these is probably left to departmental debate.

However, one new project of significance deserves mention. Included in the capital request of the Department of Communication and Transportation Services is $13.5 million for capital construction of the Alaska Highway and the Haines Road.

The Alaska Highway portion of this work is the result of the devolution of responsibility for the highway from the federal government to the Yukon. These items have no impact on our surplus or our deficit because they are recoverable, either through contribution agreements or our formula financing agreement.

In my remarks during second reading, I spoke of changes in our revenues that are reflected in this supplementary. I propose to say no more now, other than to mention that our transfer payment from the federal government remains under some pressure as a result of the slow growth in the general Canadian economy. As Members may know, the growth of our transfer payment is tied, in part, to the rate and increase of the Canadian gross domestic product.

Ministers stand ready to answer questions Members may have during departmental debates regarding the contents of this supplementary. If Members have any questions of a general nature prior to debate on individual departments, I will be pleased to try to answer them.

Mr. McDonald: I appreciate the opportunity to ask a few questions about the supplementary estimates before us this afternoon. I know the Government Leader will forgive me if I bounce from one subject area to the next. There is a reason for that, which will be clear later on. There have been a lot of things said, and claims made, in the last number of months that deserve some clarification at this point, so that we can all be working with the same information.

The Government Leader, in his opening remarks and general debate, said a number of things that could be considered somewhat inflammatory. I will, for the most part, resist responding to those remarks because I think it is important to get some facts on the record first and then get carried away with rhetoric later on. I realize that is not always the approach that is generally taken, but at this point much of what the Government Leader said in second reading debate regarding the NDP having no position on Curragh and Taga Ku and no vision for the future are things that deserve some attention in the House. Certainly, we will give that more attention later, but not at this very moment.

The Government Leader began by stating that the Consulting and Audit Canada review and financial forecast had some problems but, because the conclusion was the same, there is no difference and we might as well accept the fact that this supplementary budget before us is simply reconfirmation of the projection that was in that forecast. I would like to ask the Government Leader what relationship, if any, the Consulting and Audit Canada report had with these estimates and whether or not these estimates, in and of themselves, were arrived at independently of the work done by Consulting and Audit Canada.

Hon. Mr. Ostashek: I can tell the Member opposite that the work done by Consulting and Audit Canada had no effect on these figures at all. They were prepared for a different period. Consulting and Audit Canada did their review prior to the variance 8 reports.

Mr. McDonald: That is useful background information.

In the second reading debate, The Sluice Box newspaper was identified as being another source of valuable information to the Opposition, to the general public and particularly to public employees. The Sluice Box basically had every intention of setting the record straight - I guess they felt that the record needed to be set straight. They outline an overview of what they call the government’s cash shortfall.

Now, can the Government Leader indicate how the numbers in The Sluice Box were arrived at? Were they an offshoot of the financial forecast? Were they arrived at independently by the Department of Finance forecast, or were they part of the supplementary budget forecasting?

Hon. Mr. Ostashek: I have not had a chance to view the figures that are in The Sluice Box article. I have not seen them, so I could not tell you at this point, but I can get an answer and bring it back to you.

Mr. McDonald: I think an answer would be desirable because clearly, from our perspective, whenever there is an effort to set the record straight, we want to be in fact assured that the record is being set straight. We have, as was pointed out in second reading debates, some concerns with respect to the figures that were shown in the financial forecast, and some separate concerns about the fact that they were in fact different from those identified in The Sluice Box, and substantially different again from those figures that are contained in the supplementary estimates that we have before us today. Perhaps the Government Leader, with the assistance of the Deputy Minister of Finance, would be able to explain why there may be an allegation, or a suggestion, or perhaps a comment of fact - I am not sure what to call it - in The Sluice Box, which shows that the capital spending for the Yukon government is expected to be $107 million, when the gross budgetary expenditures in the supplementary estimate is $120 million. I realize that is only $13 million. Well, $13 million is $13 million and The Sluice Box did come out in February 1993.

The operation and maintenance expenditures are projected to be $334 million but in The Sluice Box, they are $337 million. That is a $3 million difference, and $3 million is the price of the extra teachers that the public education system needed. I do not think we can be playing around with numbers like this. We have to be fairly certain that numbers that we are using are solid. The government in The Sluice Box indicated the transfer payment from Canada was going to be $252 million, but we seem to have a transfer payment projection here of $244 million, which is a difference of $8 million. These are all significant differences.

It is very difficult to read the Consulting and Audit Canada report, because there is no sum total of numbers or basic balance sheet that makes any sense and I will be asking the Government Leader to explain it later.

This is something that I think deserves some explanation because, after all, the final figures are not going to be known until October as to what was actually spent. Clearly, without wanting to sound partisan here, the Government Leader has made a major point of saying that not only was there an overexpenditure, but that it was the direct responsibility of the NDP and it was a demonstration of the NDP’s mismanagement of money.

Clearly, if those are the allegations that are going to be made, and if they are going to be the hallmark of the government’s positioning on this question, then we are going to want to know why there are such significant variations in the numbers that are being reported.

I point out that it is not good enough to say that even though the numbers in the financial forecast were in error, the conclusion was the same. In budgeting, I do not think the end justifies the means. I do not think you identify the final result and then get the numbers to justify it. I think we deserve more and I would like to hear the Government Leader’s response to this and then I would like to pursue the financial forecast, if he does not mind.

Hon. Mr. Ostashek: I would like to say that I will have to get an answer on the figures in The Sluice Box for him, but maybe I can give the Member opposite some insight into the difference in figures between the Consulting and Audit Canada report and the supplementaries.

I believe the question was asked yesterday by the hon. Member for Riverdale along that same topic, where the Consulting and Audit Canada report shows the 1992-93 O&M expenditures at $335 million, capital expenditures of $107 million and recoveries of $69.5 million.

Supplementary No. 2 for 1992-93 shows O&M expenditures of $335 million, capital expenditures of $120 million and recoveries of $88.8 million. The Member for Riverdale was asking what the difference was between those two numbers, and I suspect that is what the Member opposite is asking.

To answer that, first of all, the supplementary was prepared as a result of the variance 8 report. That was not the exercise that was used in preparing the Consulting and Audit Canada report, therefore, there is no particular reason why those two figures should agree.

However, in fact, the two documents are similar. Consulting and Audit Canada reported Yukon Housing Corporation expenditures on a net basis. In other words, Yukon Housing Corporation’s recoveries were deducted from the gross expenditures to arrive at a net expenditure. This matches the presentation in our public accounts.

The supplementary is completed on a gross basis and is not netted out. This is a result of the Financial Administration Act, requiring that gross, not net, expenditures be voted in the Assembly.

If the supplementaries were calculated on the same basis as the Consulting and Audit Canada report, comparisons between the two would read as follows: O&M expenditures in supplementary 2, $329,356,000. Consulting Audit Canada said they were $334,860,000. Capital expenditures in supplementary 2 stated $103,921,000 and Consulting and Audit Canada reported $106,851,000.

In recoveries - and this is where the difference comes in; most of it is on recoveries -, the supplementary said there would be $65,990,000 and Consulting and Audit Canada reported that there would be $69,490,000.

I hope that explains that portion for you. I will have to bring the information back regarding The Sluice Box, because I am not sure where those figures come from.

Mr. McDonald: It does not really explain it at all for me; however, I will try to take it step by step, so we can get a better understanding of what is going on.

First of all, there is something unclear in my mind. Precisely when were the supplementary estimate figures developed? When was the budget call for this particular supplementary?

Hon. Mr. Ostashek: The period 8 report is for the end of November, and it was out in the first two weeks. After that, the reports were prepared over the following month. We are looking at November 30, 1992.

Mr. McDonald: We have the supplementary being prepared for November 30. Departments are collating information. Can the Member indicate when the Consulting and Audit Canada report was being collated, and when the information was being drawn together for that report?

Hon. Mr. Ostashek: We will have to clarify that if you are not clear on it. The variance 8 report is for November 30, 1992. The document was prepared during the first two weeks in December, and that is when the call went out.

Mr. McDonald: I knew that is what the Member meant. They called for a period 8 variance.

The point I am trying to get more information about is when the information was drawn together. On the one hand, there was the suggestion that, in November, when the departments were pulling together information for Consulting and Audit Canada, they were pulling together information that was subsequently published as accurate a projection of the departmental estimates as possible at the time that they were pulled together in November.

We have information for the supplementary being pulled together by November 30, and collated in the first two weeks of December; however, we are still talking about the best projections as of November 1992. In terms of the identification of financial needs, what was the difference in time between when the departments were pulling together information for the financial forecast and the time the departments were asked to complete a supplementary period 8 variance?

Hon. Mr. Ostashek: I guess the Member is asking what the time difference was. There was about a month’s time difference, but I would like to point out to the Member opposite that the Consulting and Audit Canada was basically done on an update of the variance 4 reports.

Mr. McDonald: I am still trying to get a little bit more information with respect to when the figures were pulled together. The information submitted to us with respect to the Consulting and Audit Canada report was that departments were asked to pull together information and best projections in November 1992. Is the Government Leader saying that they did that separately from the projections they were expecting to be pulling together for this supplementary, virtually in the same month?

Hon. Mr. Ostashek: Yes, as the Member opposite is perfectly aware, we took office November 7. Consulting and Audit Canada was commissioned during our first week in office.

Mr. McDonald: I am really confused as to the methodology being used here to determine financial forecasting. The Government Leader may correct me if I am wrong, but we appear to have a situation where departments have been asked to prepare a financial forecast for year-end by November 14, so that Consulting and Audit Canada could take this information and do a reasonable financial forecast. At virtually the same time, departments are expected to be wrapping up, two weeks later - for the November 30 deadline - a supplementary period 8 financial forecast to prepare for a supplementary budget. Were these two activities happening simultaneously?

Hon. Mr. Ostashek: I think the Member is a little confused, or perhaps I am not explaining it properly. The variance 8 report is based on the numbers as of November 30. They are put together in the month of December. The Consulting and Audit Canada numbers given by the departments were their best estimates at the time, in early November, based basically on their variance 4 reports. They did not have time to do all the variance reports up to variance 8 in the amount of time that was given them. They used the variance 4 reports for the basis of their figures submitted for the Consulting and Audit Canada report.

As the Member opposite is fully aware, the terms of references given to Consulting and Audit Canada involved telling us what the bank balance would be as of March 31, 1993.

Mr. McDonald: I am well-aware that the departments had no time to do a proper analysis for the Consulting and Audit Canada reviewers. I am well-aware they were only given a couple of days, and I am well aware they did not have time to check the numbers either. That is all part of the record. Is the Government Leader suggesting that the departments, in doing their period 8 variance, are doing their forecasting to year-end and are starting that process of doing the forecasting to year-end only on November 30, and doing all that work in the following two weeks? That work is then submitted to the Department of Finance. Is that what he is saying?

Hon. Mr. Ostashek: It takes about 10 days to get the figures off the computer, so it was about December 10 when the figures came off the computer and the work on the variance report is started after that.

Mr. McDonald: The Member is suggesting that, for the purpose of doing a variance, which is only determining the commitments and the actuals for a particular time, it is only a process of drawing numbers from a computer.

The process - and I happen to know this - for developing projections on the money they are about to spend is something that departments plan virtually months in advance. They expect a period 4 and period 9 variance at least; it is part of the budgeting process. If the Minister is suggesting that it is only a simple calculation drawing committed and actuals for a particular time without a sense of what they might be spending, which is a much more subjective process, then I have some problem with his interpretation of how things work.

The point I am trying to make here is simple, and I will phrase it in the form of a question. The Government Leader has already indicated that he felt the Consulting and Audit Canada report was an accurate document and, regardless of whatever problems one might have had with the presentation, it is virtually similar - he said it was identical in many respects - to the supplementaries. Is that not the case?

Hon. Mr. Ostashek: When one looks at the balance that Consulting and Audit Canada came up with for March 31, of $5.7 million, it is very close to what the supplementaries are - $7 million, I believe. It is very, very close.

As the Member opposite said, departments are doing forecasting all the time, but I want to inform the Member now that we were concerned about the balances at the end of March and we believed we were going to be faced with a fairly substantial deficit; we were pushing the departments, and pushing them hard, to cut out everything they possibly could, to cut back and not be in a dream world. We wanted them to get the figures down to something realistic that Management Board could live with.

Mr. McDonald: The Member will forgive me if I make the suggestion that we are still in a dream world after four months from the time the Consulting and Audit Canada report was conducted. I know the Government Leader must have a copy of the Consulting and Audit Canada report with him, because he has made so much of it and claimed that, as documents, the report and the supplementary are basically brethren, with a few minor differences.

There is an executive summary in the Consulting and Audit Canada report that purports to explain precisely the reasons for the changes in growth from the beginning of the 1991-92 fiscal year to March 31, 1993. Can the Government Leader indicate to us whether or not he feels this executive summary is an accurate reflection of what is in the Consulting and Audit Canada document?

Hon. Mr. Ostashek: I am sorry, I missed that one. Can you just repeat that please?

Mr. McDonald: The executive summary in the Consulting and Audit Canada document is found on page (iii). It is item No. 5. It explains what is in the Consulting and Audit Canada report, right to the very dollar. It talks about a surplus of $64,493,000, turning into a deficit of $5,711,000, as of March 31, 1993. I guess we have added a couple of million dollars to that since it came out. Does the executive summary explain what is in the report?

Hon. Mr. Ostashek: There is no doubt that we have admitted that there are some errors in the calculations within the report. Again, I want to draw to the Member’s attention that, when you get two reports that are put together by two different sources, and they come to within $4 million of the accumulated deficit, it has to tell you something.

Mr. McDonald: The Government Leader is trying to hang his hat on the fact that they both came to almost exactly the same conclusion. They seem to suggest that the law of averages would consequently make the first conclusion accurate, simply because it had been backed up by a second conclusion. I do not think we can quite buy that, not in terms of our need to investigate the expenditure forecast by the government.

It is germane to the topic here to be analyzing precisely what is being purported as fact here. I do not mean anything by it. All I am trying to do is find out what is fact and what is fiction. In general debate, we have a tendency, on both sides of the House, to make everything seem black and white. Somebody is either all bad or good, or the reports are all bad or all good. What I am trying to do is find out what is believable about the report and what is not believable about the report. The same is true for the expenditures in the supplementaries, which we will get to in a few minutes, or maybe later today or tomorrow.

I am not trying to make a partisan point, but I am just trying to ask, a step at a time, if the executive summary is an accurate reflection of what is in the report? Does the Government Leader feel comfortable with that?

Hon. Mr. Ostashek: The debate was supposed to be on the supplementaries, but it seems like it is on Consulting and Audit Canada. The supplementary is the document that is tabled in the House and the document we are supposed to go through, line by line, and identify where the spending took place. However, it seems that the Members opposite are more interested in shooting holes in the Consulting and Audit Canada report.

I would reiterate that the report was commissioned for one purpose: to give us a balance at the end of March. They were very close to what the balance in the supplementary says. If we can go through the supplementaries, and if the Members opposite can point out some glaring mistakes there, I will accept that.

Mr. McDonald: I would not purport to be able to point out any glaring errors in the supplementaries until we have gotten to them as a final document in a forecasting procedure. This is what this whole process is: forecasting expenditures to year end.

I am trying to use the information that is on the public record. Not being in government any more, I do not have the information the Members opposite have. All I have is the information they have tabled in the Legislature as being information they have, by their own admission, used to come to certain conclusions, both political and administrative.

Consequently, that is the information I used. I am not trying to do anything other than to find out from the Government Leader, in terms of the forecasting, what is reliable information and what is not, so that when we get to the supplementaries, as the final stage in this, we will know precisely what information we can depend on and what information may even be marginally suspect.

This is very useful because, for us, it is kind of an investigation game. We get bits and pieces of information, we listen to a Minister speak at a public meeting, we read The Sluice Box, we get the Consulting and Audit Canada report, we get the budget document, we try to read something from the Government Leader’s speeches, and we try to put all this information together. It is darned confusing, in some respects. I get a fresh appreciation for what the Opposition has to go through by being in Opposition. It is an interesting game, and it is an important one.

In terms of the Consulting and Audit Canada report, does the Government Leader feel comfortable that the executive summary, which purports to explain what is in the report, is accurate?

Hon. Mr. Ostashek: I am going to state it one more time. The Member opposite seems to be having trouble understanding it. There was only one figure in the Consulting and Audit Canada report that this administration was interested in. The document was not used for anything else. It was not used for putting the supplementaries together.

The one figure that this administration was interested in was the deficit balance as of March 31, 1993.

Mr. McDonald: With all due respect, it was not the only thing that the Consulting and Audit Canada report was used for. It was used to lambaste the NDP. It was used to explain that there were serious overexpenditures in certain areas, to pinpoint certain departments and certain departmental managers as being wastrels and to demonstrate that the government had a handle on the finances - not some general figure that was the sum total of lots of other people doing the work, but the government itself going through a responsible, coherent, legitimate process to come to a conclusion that, in the end, by its very nature, fingered certain departments for having overexpenditures. In our understanding, this was an attempt to indicate that the previous government were irresponsible financial managers.

I realize the Member may not enjoy going through the details, but he has to understand that we find it essential that he does so to determine whether or not the conclusions some Members opposite came to - whether it be a total figure for a projected deficit or various expenditures within departments that they were projecting as being overexpenditures - are accurate. It is very important for the public business to do this. That is the reason I am pursuing this line of questioning; I think it is quite legitimate.

I would think that anyone who had gone through all the pomp and ceremony of tabling this document as the beginning stage of forecasting the financial situation in the government and culminating in the summary would be interested in hearing about it. We were treated to the conclusion. Now we want to get down to the body of the document so that we can assure ourselves that the conclusions are just. That is all.

I am not going to stop at the executive summary. Clearly, there were other reasons for wanting to go through the report and the forecasting process. I would like to know if the Government Leader feels that, as a start to the process, whether or not the executive summary is an accurate reflection of what is in the document and an accurate reflection of the reasons for the projected deficit.

Hon. Mr. Ostashek:  I find this line of questioning quite amusing.

The fact remains that we wanted to verify what the financial balance of the government would be on March 31, 1993, because we were told when we assumed office that the money we thought was there, was not there.

That we used this document to say that we had our financial house in order is not an accurate statement to be made by the Member opposite.

This document, as I said and reiterated time and time again, was for one reason and one reason only: to get the deficit balance as of March 31. This document has come very close to where the supplementaries are.

If the Member is so interested in seeing the overspending in the departments, I suggest that we get into the supplementaries and go through the departments one by one and we will see where the overspending is.

Mr. McDonald: Obviously, this is going to have to be a little more painful than I thought it might be. I am afraid I cannot let this go; it is impossible for me to let this go. I do not have a great memory, but it does cover at least four months. I am still smarting, personally, from the criticisms that have been leveled by the Government Leader. We are still in the Legislature, we are still talking in public and I think it is very important for us to know whether or not the statements that have been made in the past and the forecasting projections that have been made in the past have validity.

It is made all the more difficult for us now because the Government Leader is saying that it does not matter how you come to the numbers as long as we trust the final number.

I cannot do that, because I do not have any other information other than this financial forecast, the employee newspaper and this supplementary budget book. That is what I have.

Both the Government Leader and the Opposition have been responsible for enormous loads of rhetoric. What we need to do is get down to the details.

We can be through this in a matter of an hour or we can spar for the rest of the afternoon. I am prepared to do either, but I think the questions are irrelevant and the questions need to be answered.

I did not state that I had any problem with a new government wanting to see where its financial fortunes were. I have not ever stated that I had any problem with that. I think that is a laudable goal.

If I may be permitted to be frank, I would be surprised if the Public Accounts Committee did not come to the same conclusion. It is a good thing.

At the same time, I did not dispute the fact that, when the Government Leader came into office, the Department of Finance - the deputy minister perhaps - told the Government Leader that if he had big spending plans he had better think again; he also identified some growth areas that are obvious in the sum total of government expenditures, which a responsible government would pay some heed to. I have no problem with that. I did not say, either, that the government has used the Consulting and Audit Canada report to determine whether the house is in order - to use the Government Leader’s words, if I copied them down properly. What I am saying is that this financial forecast is the beginning of a financial forecasting process attended by a political campaign to try to make a case, and I would like to know whether or not in this first instance the government still has the degree of certainty about this report as it originally did when it tabled it. I am just starting with the executive summary. Does the Government Leader think the executive summary reflects what is in the report?

Hon. Mr. Ostashek: It looks like the Member opposite and I will be here for a long time. I have said time and time again, Consulting and Audit Canada was hired for one reason and one reason only: to give us that one figure. If I would have thought that this report was a financial forecast and every detail in the report was accurate, I would not have bothered with variance 8 reports; I would have just used this. The document in front of this House today and the one that matters is the variance 8 report. That is the one that matters.

I cannot say whether each page of this is accurate or inaccurate, because I have not gone into it in that much detail. I wanted one thing out of this report, one thing only, and that is what our bank balance was. Today, we are borrowing money, and have been for several weeks now, to pay our bills. That is the financial health of the government, and I cannot testify to each one of these figures here because I have not gone through them in that detail.

The Members opposite referred this document to the Public Accounts Committee  and asked it to publish a report - not to bring it back to the House and deal with it during the supplementaries. Let us deal with the supplementaries and see where the money really did go.

Mr. McDonald: The Government Leader should be a little careful when talking about what the Public Accounts Committee did or did not do. First of all, the Public Accounts Committee has not yet reported - and I speak as the chair. When they report, I am sure the Government Leader and all the public will understand precisely what they did. I am also certain that the Government Leader knows very well what the Public Accounts Committee has decided to do in terms of their own review. It was stated on the public record in this House.

I sat where the Deputy Minister of Finance is now sitting, and I indicated at that time that the Public Accounts Committee firmly felt that they could not deal with the financial forecast to determine the accuracy of the document because of the political nature of the document itself and the debate that was active in the House.

They even suggested that, in future, it might be appropriate to consider not sending such political documents to the Public Accounts Committee. I take some responsibility for that, because I was the one who moved the motion to have it go to the Public Accounts Committee.

I do not want to get off on a tangent. I want to focus in on things. I am not asking the Government Leader for detail on the Consulting and Audit Canada report. I have not gone into dealing with all the details. I am still on page one.

The Government Leader has indicated that he was not interested in treating this financial review, as it is called, as a financial forecast. If he had, he would not have gone ahead with the supplementary budget process.

With all due respect, when this forecast was tabled in the Legislature, it was made patently obvious at the time that one of the main reasons for this review was precisely to do a forecast, and to do a forecast independently of the supplementary budget process, because the government did not necessarily feel that the administration had earned the government’s trust in developing financial forecasting; therefore, they did something independently, and billed that forecast as reliable. They did not table a single figure of so many millions of dollars and said, consequently, that that is what it is all about and, if you do not believe it, you are challenging the integrity of Consulting and Audit Canada. They tabled the whole document, which was widely read by many people, including us. That was all we had to go on. It purported to use some facts and even named, for example, general wage increases. It picked general wage increases as a prominent feature of potential government overexpenditures, or the reason why the growth was so large.

When it got to the Department of Education, quite out of the blue it decided to name the Minister of Education, who just happened to be me, as having been someone who had redirected expenditures within the budget.

He then cited that in the Legislature as being something that was wrong. At least, the implicit suggestion was that this is something that should never be done. When the Government Leader, under the normal course of events, starts to manage the department’s budget, he will come to understand very quickly, if he is dealing with the Yukon public, that there will be some expectation that the estimates made months and months in advance do not always accurately reflect the needs of the Yukon public, months and months later.

The point I am making is that we went into some detail about this review. That detail was used to justify the validity of the bottom line. That bottom line, which we were all supposed to believe, was accurate at the time. In this particular case, we are on the executive summary of the financial review. To start the process at this point, all I am asking is whether or not the Government Leader is every bit as confident about the numbers now as he was when he tabled it and started his case before the Yukon public - which carried on into letters, wide mailing lists, The Sluice Box articles and, finally, the supplementary. Is he convinced that the information here is reliable? Is the executive summary reliable?

Hon. Mr. Ostashek: I can state again that the one figure we wanted was the balance as of March 31. That was the reason for the whole exercise. It is not possible for me to go into detail on each one of these figures. I have not reviewed these figures with the departments; I have not reviewed these figures with Consulting and Audit Canada. We wanted the bank balance. It came very close to what Finance was predicting when we took over office. It was verified, and the supplementaries now reverify that. It was the only figure that I was concerned with in that report.

Mr. McDonald: I am aware that very few people reviewed the figures in the Consulting and Audit Canada report. That was made painfully obvious when the report was first digested by various reviewers. Nevertheless, the report itself was used to justify the total deficit figure, as well as to justify the claim that the government was broke.

One has to admit that this is basically the only message that we have heard from the government for the last five or six months - apart from those messages that come from them when they are pressed by some group of citizenry, say from the community of Faro.

What I am interested in - this is a serious point and I will not be chippy here - is that this document was used to justify the fact or the claim that the previous government was broke. This document was used to justify the claim that we were going to overspend our budget by tens and tens of millions of dollars. Detail was provided in the report. It was the beginning of a financial forecasting process.

The Government Leader has never said that the information in this report is anything other than reliable. The Government Leader has gone on to say that the bottom line in this report is similar, if not virtually identical, to the conclusion that they are coming to now in the supplementary, so I think it is absolutely relevant, critically relevant, at this stage, to understand whether or not the Government Leader feels that this information continues to be reliable.

He has made these cases, even in the second reading speech. He identified the Consulting and Audit Canada report and, unbelievably, he criticized me for having had the audacity to question some elements of the Consulting and Audit Canada report, as if I had no right to question them, because these folks were professionals and that the Yukon government had used them in the past.

I think the best thing that we can do is cut to the quick, get down to the detail and satisfy ourselves as to whether or not we feel comfortable with the numbers. The Minister has already said that he does feel comfortable. I am asking him questions so that he can help me and the Members on this side of the House feel comfortable.

So I will ask again, starting with the executive summary. I will not get into asking about every line item, because I will be asking the other Ministers about line items contained in the Consulting and Audit Canada report when we get to the departmental estimates; I am only talking about the general forecasting now contained in this report, that was used in the Minister’s second reading speech in the supplementary as extra justification, or verification, of the bottom line figure. Does the executive summary reflect what is in the Consulting and Audit Canada report?

Hon. Mr. Ostashek: We should be dealing with the supplementaries. That is the document that is relevant. It is the one that was tabled in this House for discussion. It is the one we should be going into line by line.

I will say again, the Consulting and Audit Canada report was done to verify the figure that was given us as the projected balance for March 31 by Finance when we took office. That was what the report was commissioned for and what it did. I feel quite comfortable with that figure of $57 million. I cannot get into the details of this report, because I did not review each and every one of those departments. I cannot do it.

The fact remains that that figure verifies what Finance told us. It was very close. In fact, this one was a little more generous than the one from Finance. It verifies what the supplementaries are saying, that the government is borrowing money to pay the bills.

Mr. McDonald: I would like to remind the Member that the Consulting and Audit Canada report, when it was tabled, was a report that the government used to justify its explanation of why it felt the previous government was overspending the budget and why they might have to overspend the budget even while they are holding the reins of the government’s finances. The government did not table a single figure and tell us to believe it because it came from Consulting and Audit Canada. They tabled a document, which had background that could be used to justify the bottom line. That is what we are using.

I did not ask the Government Leader whether or not all the items in the report are accurate. I asked him whether or not the executive summary was accurate. Perhaps he could answer one question: because he does not know if the executive summary accurately reflects the body of the report, can he tell me if the Department of Finance feels that it does?

Hon. Mr. Phillips: I wonder if I might jump into the debate at this point. I guess I am having some trouble with the line of questioning that is coming from the Member opposite, because the Public Accounts Committee has considered the Consulting and Audit Canada report and has not made its report to this House on any recommendations regarding that report. In fact, we are really discussing Supplementary No. 5, the 1992-93 estimates, and yet none of the questions the Member is asking is relevant to that. He is talking about the Consulting and Audit Canada report. We are not here to debate that right now; we are here to debate the supplementary estimates. The time to debate the Consulting and Audit Canada report is when the Public Accounts Committee brings in its report. I think the questions are irrelevant.

Mr. McDonald: I cannot disagree more with the Member than I will right now. I will only portray what is on the public record until the Public Accounts Committee report is made public and finalized. The Member was in this Legislature when I was making my opening comments, which I understood were agreed to by all Members of the committee. The understanding was that we would not deal with the substance of the Consulting and Audit Canada report in the Public Accounts Committee because of the political nature of that question-and-answer process. I even went so far as to criticize myself for having referred it to the Public Accounts Committee in the first place - referring a political hot potato to the Public Accounts Committee. The assumption was that we would go into the Legislature and discuss the Consulting and Audit Canada report in the Legislature where the politicians are supposed to be discussing this kind of thing.

We are in the Legislature now, and we are now talking about the forecasting for the current fiscal year. Consulting and Audit Canada was an integral part of that process, as announced by the Government Leader. It was an integral part because, as I have mentioned on numerous occasions, they indicated that they were in trouble and started to make their political case of financial trouble back in November and December, even before the Consulting and Audit Canada process was thought of, or at least initiated - it may have been thought of long before that. We have been treated to many comments about the financial situation based on the information in the Consulting and Audit Canada report, further in the The Sluice Box, in letters to thousands of Yukoners and in the second reading speech for this bill.

The Consulting and Audit Canada report was introduced into the debate by the Government Leader in second reading in his opening remarks. I feel confident that it is essential that we talk about the Consulting and Audit Canada report under the circumstances, because we only have the information - and I will repeat this one more time - that is contained in the Consulting and Audit Canada report, The Sluice Box, the letter to Yukoners and the supplementary to determine whether or not the information the government is presenting is accurate.

At this point, given how prominent the Consulting and Audit Canada report has been made in the public mind by the government, for us not to discuss this forecasting for the current fiscal year - which is what the supplementary estimates are all about - would be irresponsible. When are we supposed to discuss this? When are we supposed to have a good question and answer about this? This is budget information, and this is a budget session. We should be talking about precisely these things.

A lot of figures are going to go flying over our heads over the course of the next few weeks. I am certain we will all have our noses buried in the Blues - Blues meaning the account of the Hansard record, not depression. We will all be trying to figure out those numbers so we get some sense of what is happening. We all want to know what is happening.

I understood from the remarks by other Members, and they can speak for themselves, that we wanted to know precisely if this is the financial situation of the government. We are not going to get the period 8 variance report; we are not going to get the detailed numbers; we are not going to get any background documents. We are only going to be getting the summary information that the government publishes. I have shown my hand right here, and that is the information I have. This is the only information I am using. I am trying to make sense of it, so you have to be patient with me, because that is all I have. I am not going to start off with any tough question here.

I am starting off with the executive summary, page 1 in the financial forecast. I find it difficult to get anywhere on this subject when I cannot get past page 1. We would hope that the Government Leader has had a change of heart, because he understands the predicament the public and I are in. Perhaps, he could just start off with page 1 in the financial forecast.

Does the Government Leader feel confident that the few numbers in the executive summary reflect what is in the Consulting and Audit Canada report? We have a surplus of $64,493,000 at the beginning of 1991-92. They say there is going to be a deficit of $5,711,000 in eight days. They say the significant reasons for the changes were, and they totalled them up to add up to the difference, between the $64 million surplus and the $5 million deficit.

They say there was an increase in salaries and wages due to the collective agreement. That seems to be a theme in this document - workers are at fault here - and it is $22,825,000. There was an increase in Health and Social Services of $25,653,000. There was an increase in Education of $13,574,000.

The remaining $8,152,000 is accounted for by relatively minor changes in operating and maintenance expenditures and the balance of YTG partners, the Crown corporations.

Is that an accurate summary of what is in this document and what the government knew at that time was the situation with respect to government finances?

Hon. Mr. Ostashek: Yes. If the Member opposite really wanted to know what the financial health of the government is, then we would get on with the job of debating the supplementaries and we would deal with overexpenditures or underexpenditures, in each and every one of the departments.

I want to reiterate again, for the record, that one reason that report was published was to verify the balance that the Department of Finance said we would have at the end of March. That is all that report was used for. It was not used to debate the variance 8 reports and it was not used in forecasting our budget for the next year. We are using the government documents for that forecasting and to go through the same steps that the Members opposite did when they were in power.

The Members opposite do not want to admit that the government is broke, and it is because of money that they spent. They do not want to admit that.

The Consulting and Audit Canada report verified, close enough for my estimation, what Finance was telling us the balance would be in the bank on March 31, 1993.

The current information, the supplementaries, are now saying that it was in the ballpark; it is close. That is what the document was used for, to verify that the government was indeed in financial trouble, or would be at the end of March.

As the Member knows, the government is now borrowing money to pay its bills. The government no longer gets free banking services because we have no balance in the bank for the interest to take care of that. We now have to pay for those banking services, another additional cost for the taxpayers of the Yukon, and the Member wants to talk about a report that he does not agree with. He does not agree with the balance of the report, to be truthful, but he wants to get into the nitty-gritty of the report, which I would never have become involved in. I wanted one figure: the balance. That is the only figure I was interested in - and the report is four months old.

Mr. McDonald: I hope we do not get too belligerent here, because I am certainly capable of doing that myself. I do not want to, because I do not think that is useful. What we have to do here is get down to brass tacks.

The Government Leader has indicated that all they wanted to do was get a balance figure so that they could use that to determine, presumably for their own purposes, where they stood financially so that they could start dealing with their policy questions - identify the policy issues and deal with them. Presumably, he was not going to spend $25,000 on the so-called bottom line. He wanted to get a bit more information than that, so they developed a report that identified certain cost-setters as being problematic.

For the Minister of Finance to say that he does not care what is in the report - just the bottom line - suggests that he does not want to find out where the problems are. If there are problems in the Department of Health and Social Services, he should know about that. If the Minister of Finance is the Government Leader, he should be asking Ministers to do something about it. That is fair enough and I agree with it.

However, the Government Leader cannot make a believable case that all they wanted was a bottom-line figure and then go on to say that it verifies what Finance is telling us now. The Consulting and Audit Canada report came first. Then the supplementary estimates process came second. The Consulting and Audit Canada process was first. The government feels it was reliable. The supplementary process came second and was reliable in terms of the bottom line. The supplementary process came second.

It was not whether or not this verifies what Finance said, in the first instance. Finance is presumably, according to the Government Leader’s argument, trying to verify what Consulting and Audit Canada said, because they came first.

Now, everything was fine up until that point. I was about to stand up and say that if the government had simply not embellished the information and had only announced the information, the Government Leader might have a case. However, the Government Leader went on to say that this was the reason why we are broke. Those are alarmist words. This Legislature has coasted on surplus budgets for years and years and now is told by this government that it is broke. Do you think we are not interested in that subject? This is very interesting information to us, and we need to know.

The more we hear from the Members’ opposite about how it is all the NDP’s fault, the more we are going to want to know precisely what is in this document and every other forecasting instrument the government used to come up with its latest bottom line.

I am certain the Government Leader read the whole thing. However, if he says he did not, that is fine. The Government Leader cannot try to make us believe that he did not read the executive summary or talk about this with Finance officials. He cannot make us believe that. Even for this government, that would be too incompetent. That is just simply not believable.

Will the Government Leader tell us whether just the summary information laid out in the financial review, just the first page - most people do not read past the first page of many documents, but this one is simple; it is just a first page and there are not many words on it - does the Government Leader, after reading the first page, presumably, and after discussing it with Finance officials, feel confident that the executive summary outlines accurately what is in the report? I am not asking whether or not it outlines accurately what the reality was in government, just whether or not the executive summary accurately outlines what is in the report.

Hon. Mr. Phelps: It is interesting to sit here and listen to all of this questioning. What concerns me is the issue of relevancy of the line the hon. critic is taking.

The issue here surely is relevancy to the supplementaries. My understanding is this: a new government is formed after the recent election; the Government Leader is given certain advice and signals by his officials, including the Department of Finance; the Government Leader, in that role and in his role as Minister of Finance, engages a reputable firm to do a rough estimate of where government is. He needs to test the information that he is obtaining from the government officials he has inherited, and those rough estimates are used as a tool for giving some validity to the other information he is receiving from government at the time.

In the normal course of events, the supplementary budget, which we now have in front of us, is prepared, brought forward and tabled in this House for debate.

What I find rather curious is that, at this point in time, under some ruse that really does not give me any confidence about the relevancy of the line of questioning, the critic for the Opposition wants to devote his energies in a thorough examination of this report, which is simply used as a tool to test, in rough terms, the information that was given to the Minister of Finance when he first took office, more than halfway through the fiscal year.

I understand that the Member is rather thin-skinned when it comes to criticism and would like to spend a lot of time criticizing the work done by the people who did an independent review. I fail to see how that is relevant to examining, line by line, in whatever detail is asked for, the supplementaries that are before us here today.

Perhaps the former Minister of Finance could enlighten me on how he feels this is relevant. Surely, we are here to discuss the supplementaries. The primary purpose of our being here today in Committee of the Whole is not to spend our time examining this other document. For the life of me, I cannot see the logic that brings us to what could very possibly be days of examination of a document that is peripheral to the whole exercise.

Mr. McDonald: I had hopes, when the Minister of Justice stood up, that he was going to do what he has been prone to do on occasion, which is admit to some mistakes by the Government Leader, a bit of mea culpa on behalf of the Yukon Party. It did not happen.

We could have been finished this at 3:30 p.m., one and one-half hours ago. If a simple question had been answered, we could have been on to other things; however, we are having trouble getting past page 1 of this document.

The reason we are talking about the document is the relevance of the document itself. Firstly, it was identified in the Government Leader’s own budget statement as being one of the documents that had led us to understand the true financial position of this government.

In fact, this is what the summary is all about. It is all about trying to understand what the financial situation of this government is, in this fiscal year.

We have a situation where the House has been treated to precious little information until the supplementary, but it has heard many public statements about the financial position of the government, both in the past sitting and in this sitting. As I have mentioned before, on a couple of occasions, the only information that we have to work with are a few public documents and lots of public statements about being broke, and we feel obligated to identify where the government is getting its information.

This is not information that I tabled; it is information that the government tabled, and it has everything to do with financial forecasting. The government tabled this information in this Legislature as a reflection of what they thought their fiscal position was.

The Government Leader has taken great pains to state that the bottom lines of the financial forecast and the supplementary are the same. The Government Leader has made no overt announcements with respect to the reliability of the financial forecast, consequently, it is still an active document. Presumably, it is still a document worth pursuing.

We are talking about financial forecasting, and we are going to remain on the subject of financial forecasting until we get some answers on this subject. There is a lot of ground to cover. I will run through some of the items that we should be covering. To give some understanding to the Minister of Finance, I am going to be asking questions about a whole series of things.

The financial forecast is one item, because it is relevant, because the Government Leader made it relevant. We are going to be talking about the controls the government has instituted and try to get some sense of what the cost of these controls are. We are going to be talking about the capital budget in general terms. We are going to be talking about how the government feels that, for the first time ever, they can spend $120 million, which is certainly an enormous expenditure.

We want to talk about the revenue picture. That is very important to us. I am still not clear about the revenue and recoveries. I see what seem to be glaring errors, and I am certain the Minister of Finance, with the help of the deputy, will help clear those things up for me, and for us. I will be asking questions about that. There was some talk in second reading about the Department of Indian and Northern Affairs’ projections on their transfer payments. I would like to get some more information on that. I want to find out more information on the Formula Financing Agreement. I want to know what the Government Leader’s thoughts are on that subject.

I want to find out some of the Government Leader’s thoughts on the Financial Administration Act - following the discussion we had briefly in second reading. All of these are relevant items in this debate.

Right now I am trying to ascertain the reliability of the forecasting mechanisms that the government has used to come to the conclusions that they are coming to. If we do not discuss this now, at what possible moment can we discuss this, or does the government simply believe that they are going to table the document, make some grand claims about being broke, basically lambaste the NDP and walk away from the discussion? It is not going to happen. It cannot happen. We are going to talk about this in detail only because the government has made these items important items for consideration and because we spent one whole week in December talking about nothing but this item.

The public has been operating under the assumption that this document is accurate. I have people repeating back to me lines that the government states about this. Consequently, because it is dealing with financial forecasting in this year, because it was referenced in the Government Leader’s own remarks and because the Government Leader even suggested that I was irresponsible for criticizing these folks in his rebuttal to my remarks, I feel obligated to ask a few questions about this; they are totally relevant to this discussion.

I am not trying to ask any trick questions. I am starting off on page 1. I am not even promising to go through the whole report. I just have a few questions about it. Given that I have tried for two and one-half hours to get past the executive summary, I do not want to get into having him explaining any of these other charts that I do not understand. I feel obligated to, though, because I feel a lot depends on it. We have to ask about revenues and recoveries and some of the things in here we feel are mistakes.

Under normal circumstances, the Government Leader - the Minister of Finance - would simply stand up and tell us what it means and that the executive summary reflects what is in the body of the report and that it was accurate from the moment they had it. He might go on to say that this schedule means this and that, and that the areas the Opposition feels are mistakes are not really mistakes and give the reasons why. He might say why the document was very important to them for the first four and five months of their term and that it still has some relevancy and that it is still basically reliable. We could have finished that by four o’clock then we could have been on to other things.

I feel obligated. The more I do not get an answer to this question, the more worried I get, quite frankly. All I have asked is a simple question about the executive summary - about whether or not it reflects what is in the document. That is all I have asked. This is not a hard question. Surely somebody in the Department of Finance would have figured it out. I am not even asking whether or not the Ministers have done it. I have turned my tack to the Department of Finance. Have they done it? Do they feel comfortable? Do they think it reflects what is in the body of the report? If I can get the answer to that question, I will move on to the next question.

Hon. Mr. Phelps: That was a pretty lengthy bunch of verbiage from the side opposite. Let us just deal with the one issue - the relevancy of this document in this particular debate. The Member opposite seems to base his case on the fact that this document - he says - was used to arrive at the figures in the supplementaries. If that were the case, then I could understand relevancy. If this was a document that was used by the Minister or by the government or by the Department of Finance or the corporate entity to arrive at the numbers that we have before us in the supplementary, then I could understand an argument about relevancy; but that is not, with respect, the position taken by this side. The position taken by this side is that this document was not used to arrive at the numbers in the supplementaries. It was an examination done by an independent firm to verify a forecast given by officials back when the government first took office.

It has never been the contention that Finance, or this government, was using those figures to develop the supplementaries before us. Logically, that is where the Member’s argument about relevancy breaks down.

The Member says he has all kinds of questions about forecasts and about what the federal government might be doing, all based on the supplementaries, no doubt. With respect, those lines of questions are quite relevant.

However, to try and get into a thorough line-by-line examination of a document that was not used to develop the supplementaries, with the greatest of respect, I would say is entirely irrelevant. It certainly does not pass the test of relevancy.

Mr. Penikett: I will not be so cruel to the Member for Ross River-Southern Lakes as to cite the thousands of examples of lesser relevance in many of his questions during his time on this side of the House.

During general debate on a budgetary document, almost any question involving government expenditures can be posed in this Committee at this time.

The Minister of Tourism asked, “What is the point?” I will come to the point in a minute. If this document had simply been a privately contracted report - a Cabinet document commissioned by these consultants and then transmitted to the Minister of Finance for discussion with Management Board or Cabinet, and used for their internal purposes - we might have some knowledge of it; we might ask some questions of it, but we would not need this long debate that we have had here today. What was this report used for? It was not just used for the bottom line as the Government Leader says. If it was that, I am sure the instructions would have been, “Give us a bottom line; give me a deficit; I want a deficit. I want to be a real Tory. I want a deficit.” But it did not do that. It was set to identify cost pressure points, and more importantly, it had a major political purpose, which was to smear the previous government.

That was plain in the ministerial statement of the Government Leader when he introduced the report. It was not a neutral, dispassionate commentary on the current finances of the Yukon government. It was a full, frontal assault on the previous government.

One of the things that irks us, and let me frank about that, is the way in which senior officials of the government have been press ganged into this smear campaign - people we worked with and we had a trust relationship with. I have stacks and stacks of documents in handwriting of the former Deputy Minister of Finance, critical of Members opposite, but I would never, ever betray my oath of office by speaking to those documents or quoting from them in this House.

That would be quite improper. What do we have? We have had senior officials sent out by the government to pursue this smear campaign. The Member talks about relevance. The basic question before us is the financial health of the government today. The first statement by the government, and the first so-called evidence of this ill state of health, was presented in a ministerial statement by the Government Leader and then transmitted to a committee. It so happens that, in that committee, it was decided that it was a political document, and we could not deal with it in the Public Accounts Committee. Because it was not an audit, it was not appropriate for the audit committee to deal with it; it should be dealt with in this House.

In affirmation of its relevance, the Government Leader, in his second reading speech on this bill, referenced this document. I would like to quote what he said. “The current supplementary is based on more up-to-date information that was the result of a formal period 8 variance report exercise completed by government departments. While there has been some question about the accuracy of the Consulting and Audit Canada report, I would hope this supplementary puts that to rest.”

The Government Leader, himself, has introduced into this debate on this bill the question of the accuracy of the Consulting and Audit Canada report. We now want to ask some questions about that report and the dependence the government has placed on it because, not only has the Government Leader referenced it in his second reading speech - making it relevant - but he has continually, in answer to questions by my colleague, related it to the supplementary. This is not only in terms of the final conclusion, but also in answer to my friend’s earlier questions about the great disparity between Merv Miller’s numbers, Consulting and Audit Canada’s numbers and Charles Sanderson’s numbers.

We have not received an answer to that yet - not real answers. We did not get our briefing, as might be common parliamentary courtesy, that was given to the Liberal party and given to the Independents. We did not have a chance to ask the person with whom we worked for many years, the Deputy Minister of Finance, about some of these numbers, and we have some knowledge of them. We might have asked some good questions, but we did not get the opportunity.

When the document that the Government Leader has referenced was referred to the Public Accounts Committee and we tried to ask questions, I was frustrated in that effort. We could not. I was told to come back to the House and ask them because it was a political document - not an audit, a political document.

I handled it as a politician and asked them on the floor of the House as an MLA. So what happens? At the first general debate on the budget, which we are doing here now, we are told by Members opposite that not only are they not going to answer questions, but we cannot ask them because they are not relevant.

How was it relevant in December - a big smear campaign begins; a whole series of questions are asked about the accuracy and validity of numbers in that report - and now when we get a supplementary based on the same year, a supplementary that contains no information, the Official Opposition having been given no briefing, the only document for which we can reference any detail is the Consulting and Audit Canada report, and we are told we cannot ask questions about it.

Mr. Chair, if I could have your attention for a moment, the one thing the Official Opposition, and in fact, all Opposition MLAs, and indeed all MLAs, have in this House - and I speak from some knowledge, having been here longer than anybody else - is the right to ask questions.

I do not know what the Members opposite are afraid of or why they are afraid to answer questions about this document, in which they have invested so much political capital. I do not know why they are afraid to answer questions.

We are quite prepared to have a rational, objective, cool and calm debate about the budget and what is going on.

We have this continuation of the smear campaign, and the Government Leader is now standing in his place and saying to us that he will not even answer any questions about this document, when we have never yet been given an opportunity to ask the legitimate questions about the accuracy and the validity of the assertions made in the document - assertions that the Government Leader has embraced, and which the Government Leader has used to abuse or smear the reputation and the credibility of Members opposite.

It is true that we do not have the right to force Ministers to answer questions, but we do have the absolute right to ask the questions, especially, in general debate on the budget.

We have the right to ask questions about documents on the same subject, documents that have been paid for with taxpayers’ money. For that reason alone, the relevance of the document is founded; an expenditure of public funds went into the preparation of that document.

We have a right to ask questions about those expenditures. We have a right to ask them of the Minister of Finance in general debate on a supplementary budget that deals with exactly the same subject: the expenditures in this year. My colleague, the Finance critic for the Official Opposition, has the right to stay here and ask those questions until he is satisfied with the answers. That is the only weapon we have. We have no power in Opposition. That is the only right, an ancient parliamentary right going back hundreds and hundreds of years, that he has. He cannot be curtailed. He must not be curtailed in his right to exercise that.

I would say only to the Government Leader, I have been in his shoes. I spent enough time over there, that I know if he wants to expedite the debate, the best way to do it is answer the questions, not to make spurious procedural arguments about relevance.

Hon. Mr. Ostashek: There has been a very interesting debate in this House today. That report was tabled in this House in December of last year. The Members opposite had the right to debate it at that point. They did not. They referred it to the Public Accounts Committee. They passed an amendment to the motion to refer it to Public Accounts, to take it out of the House. They did not want it in this House. Now, when we are dealing with supplementary budgets that they do not want to get into, they are trying to throw out a red herring. They want to get into the details of the Consulting and Audit Canada report, which they wanted to get out of the House in December. They proposed the amendment to refer it to the Public Accounts Committee. So, there we are.

The document has no relevance to the supplementaries that are in front of us today. The document was commissioned for one reason: to verify the balance that was given to me by Finance in early November. That is what it was for. Now, we are into March.

The budgetary process has gone on the same as when the Members opposite were in government. The same documents were used. The Consulting and Audit Canada report was not used to make up the budget or the supplementaries. It was commissioned for one reason, and one reason only, which was to verify the balance that was put forward by Finance in early November.

I believe that we should be debating the supplementaries. Let us see what the health of this government is and where the money went. It is all in the supplementaries. Ask some questions on the supplementaries.

Mr. Penikett: Let me just say something to the Government Leader. I say it to him in a comradely, friendly way, because he is new in this House. When we had a resolution presented to us immediately after the document was presented in December - the document that was intended to smear the former government - we had a motion debate. It allowed each Member to speak once, and that was the end of it. The reason that all of us wanted to send it to the audit committee - we all voted for it, since the government, at some time, had described this document as an audit - was because we wanted to be able to ask some questions about it and get into some detailed discussions. When we got to the Public Accounts Committee, we found that was not the will of the committee, we had to ask the questions in the House.

Now, we come back here. If the Public Accounts Committee had dealt with it, we still would have been able to debate the issue again here in the House. There would have been two debates: one after we gathered some information, not just after having been given it 24 hours.

Their report identifies some cost centres, and it essentially makes some allegations against former Ministers and deputies that we have the right to ask questions about.

The Government Leader cannot come in here now and say, “You had your chance to debate in December, you had it for 24 hours; you got to have a short speech about it in December, and that is the end of it.”

It is not the end of it. When a budget is presented here in this House, Members on this side have a right to ask questions. We have a lot of questions about this report, because there is no information in the supplementary document, but there are some assertions of fact in this report. Since the Government Leader has again, in his speech, claimed not only is the bottom line confirmed, but he is essentially reconfirming some of the assertions of fact in that quickie, the Consulting and Audit Canada report.

I am afraid that the Government Leader cannot cut off the debate this way. We have questions to ask and, if he wants to expedite the business, he must answer the questions. There is no other way that we can deal with general debate on this supplementary, unless we deal with a document that he introduced into the House, that he used as a frontal attack on the former government, that he has referenced again in his second reading speech and, in answer to questions today, has attempted to claim that they are based on the same sources of information.

Chair: Pursuant to Standing Order 2(5), the time now being 5:30 p.m., I will rise and report.

Speaker resumes the Chair

Speaker: I will now call the House to order.

May we have the report from the Chair of Committee of the Whole?

Mr. Abel: The Committee of the Whole has considered Bill No. 4, entitled Second Appropriation Act, 1992-93, and I now report progress on it.

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. Phillips: I move that the House do now adjourn.

Speaker: It has been moved by the 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 5:31 p.m.

The following Sessional Papers were tabled March 23, 1993:


Annual Report of the Yukon Public Service Staff Relations Board for the year ended March 31, 1992 (Ostashek)


Annual Report of the Yukon Teachers’ Staff Relations Board for the year ended March 31, 1992 (Ostashek)


Employer Needs Survey Summary Report, Advanced Education, February, 1993 (Phillips)


Bonnet Plume River: Canadian Heritage Rivers System Nomination Document (Brewster)


Bonnet Plume River: Background Study for the Canadian Heritage Rivers System, July, 1992 (Brewster)

The following Legislative Returns were tabled March 23, 1993:


Policy direction and restructuring of Government Services (Devries)

Oral, Hansard, p. 182


Employment contracts: no change in number of employees hired under contract (Ostashek)

Oral, Hansard, p. 158


Court Reporting contract, bid evaluation and review process (Phelps)

Oral, Hansard, p. 161


Yukon Energy Corporation: cost of consulting contracts (Phelps)

Oral, Hansard, p. 109

The following document was filed on March 23, 1993:

Drawing representing perceived and actual expenditures: difference between Main and Supplementary Estimates (Ostashek)