Wednesday, March 24, 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 with the Order Paper.
Introduction of Visitors.
Are there any Returns or Documents for tabling?
Are there any Reports of Committees?
Introduction of Bills.
Are there any Notices of Motion for the Production of Papers?
Are there any Notices of Motion?
Are there any Statements by Ministers?
Ross River Literacy Project
Hon. Mr. Phillips: I am pleased to rise today to announce the first in a series of literacy projects being undertaken by my departments advanced education division.
In cooperation with the Yukon Literacy Council, we are providing a total of $25,000 to the Literacy Project Board in Ross River, a voluntary organization of local residents. The funds are being used to provide one-on-one tutoring in basic literacy, as well as supervised computer-assisted literacy instruction. The tutor has been hired locally.
The intent, of course, is to help needful residents of Ross River acquire the basic literacy skills they will require to take advantage of further training opportunities at the Yukon College Community Campus, or in other locales.
In a tight economy, jobs are scarce and we are committed to giving all Yukoners an equal shot at the jobs that are out there. Literacy training is a key part of that commitment.
Mr. McDonald: Again, the Official Opposition supports another education initiative recently announced that the NDP government had a role in developing while in government.
Members will recall the special literacy fund created last year to encourage more valuable work in literacy in the Yukon.
Ross River has a history of operating successful pilot projects to tackle illiteracy in their community. The computer-assisted literacy project funded by various governments a few years ago was one example of that.
In my view and in the view of a vast majority of Yukoners, literacy is liberating; it fosters self-confidence in those learning to read and we should encourage community-based initiatives to improve our literacy rate in the territory.
Mr. Cable: I rise to commend the Minister for his decision to support literacy in Ross River, and I extend my hope that this will be the first of a series of these projects conducted by his department.
Literacy is fundamental to the development of individual human potential, and is an integral part of creating equality of opportunity in society. I want to extend my best wishes for the success of this initiative to the people of Ross River, the Yukon Literacy Council and the Department of Education.
Speaker: This then brings us to Question Period.
Question re: Tax increases
Mr. McDonald: Yesterday, we heard the Government Leader stand in the House and state confidently that the NDP government should have raised taxes in the Yukon as long ago as 1987 and 1988. Yet, we also heard the Government Leader say in the election campaign last October that it would have been obscene for the NDP to raise taxes while they were in government.
Did the Government Leader say that during the election campaign to fool the public into electing the Yukon Party to office?
Hon. Mr. Ostashek: Not at all.
What has to be remembered is that the Government of Yukon has a certain avenue through which they can raise money through taxation and fees. When the government does not take advantage of those opportunities that are given to them to raise their own funds and then expect the money to come from the Government of Canada, that is when the perversity factor kicks in, and I believe this year the penalty is $1.45 for every dollar we could have raised.
There are some real ramifications to it.
Mr. McDonald: The Government Leader said that the penalties cost Yukoners $120 million over five years. Did he not mean that we should have taxed Yukoners by an extra $300 million over five years? Does he not realize how unfair that would be to Yukoners and what kind of impact this would have on the economic stability of the territory?
Hon. Mr. Ostashek: Yes, I did say that the perversity factor is going to cost Yukoners $120 million over the life of this Formula Financing Agreement. It has cost us $60 million in the first three years and it is going to cost us another $60 million in the next two years, for a total of $120 million.
The fact remains that taxing capability is given to the territorial government to raise their own funding. When we do not take advantage of it, as I said earlier, we are penalized. Yukoners enjoy the lowest taxes...
Speaker: Order please. I would ask the Government Leader to please conclude his answer.
Hon. Mr. Ostashek: ...in each and every category of any jurisdiction in Canada.
Mr. McDonald: The issue is not whether or not we could tax the people; it is whether or not we should tax the people. Why did the Government Leader call it obscene during the election campaign for any suggestion that the Yukon NDP government could have taxed the people but did not?
Hon. Mr. Ostashek: I thank the Member opposite for the question. What is obscene is a government that would spend $58 million more than they took in and yet would do nothing to raise their own money. Instead, they tried to fool the public of the Yukon.
Question re: Tax increases
Mr. McDonald: We have a great deal of difficulty accepting the governments figures, both in the forecasting that they have done with Consulting and Audit Canada and the forecasting they have done recently with respect to the supplementary budget, but we will spend a few weeks discussing that.
In order to avoid the federal penalties in the federal transfer payments to the Yukon territorial government, the taxes in this territory would have to be raised 40 percent - or as the Member opposite said, 45 percent. Does he feel that that is justified? Does he feel that is a justified imposition on the taxpaying public of the territory today?
Hon. Mr. Ostashek: Certainly not, but the fact remains that the territorial government is seeking to be responsible for their own spending; they should also be responsible for raising some of their own funding as well, without being totally dependent upon all the citizens of Canada. There is no doubt that taxes should be lower in the Yukon than they are in the rest of Canada. They also should not be at the very bottom of every jurisdiction in Canada when we already enjoy the northern tax benefit.
Mr. McDonald: I feel I have been speaking to the federal Finance Minister, not the Yukons Finance Minister. Is the Government Leader aware of the fact that the tax burden on the average Yukoner is about the same as the average tax burden on the average Canadian taxpayer across the country? Is he aware of that?
Hon. Mr. Ostashek: I would have to disagree with the Member opposite on that. I do not believe that is fact at all.
Mr. McDonald: The Yukons Department of Finance indicated to me some years ago that the tax burden was the same as, or higher than that which existed in the rest of the country. Will the Government Leader undertake not only to look into this particular factor before he makes any major decisions on taxes for this territory, and will he also assess the incredible impact that an extra $300 million out of the taxpayers pockets will have on the territorial economy over the next five years?
Hon. Mr. Ostashek: Well, $300 million out of the taxpayers pockets - I do not know where the Member opposite got those kinds of figures. They are certainly not realistic.
There is no doubt that the taxpayers of the Yukon could never begin to accept that kind of tax burden.
Question re: Dawson City sewer and water
Mr. Cable: I have a question for the Minister of Community and Transportation Services. It is my understanding that the Yukon government officials reviewed the City of Dawson sewer and water problem recently and prepared an internal report relating to the cost of repairs and what had to be done to make the system functional. Will the Minister table that report in the House?
Hon. Mr. Fisher: I think that maybe your information is not totally accurate. The officials from the Department of Community and Transportation Services reviewed the findings of Shiltec, an engineering company out of Alaska that had done a review of the system for the City of Dawson.
Mr. Cable: In view of the Yukon Partys election commitment to rectify sewage problems, in such areas as Dawson City, is this House to assume that the government has accepted responsibility for the technical problems relating to the failure of the Dawson City sewage system?
Hon. Mr. Fisher: The Government of Yukon is neither accepting nor not accepting the responsibility for the mistake; or was there a mistake? We are not saying one way or the other. We are looking very carefully at the fact that there are some very major problems and we are currently reviewing that.
Speaker: Before the Member asks his final supplementary I would caution that the request for a legal opinion in a question is not allowed. I do not know if there are legal implications to this; if there are and the Member is asking the Minister for a legal opinion as to liability or accepting responsibility, then he should refrain from asking that opinion of the Minister.
Mr. Cable: Due to the fact that the Dawson taxpayers have been forced to borrow money to run what appears to have been a poorly designed system, is the government prepared to forgive the city the amount of such borrowings?
Hon. Mr. Fisher: The debenture that the City of Dawson currently has for the repairs to the system is being reviewed, along with the cost of repairing it. That is all being thrown into one package that is being reviewed by the department and by this Cabinet.
Question re: Tax increases
Mr. Penikett: I would like to pursue the question asked by my colleague, the Member for McIntyre-Takhini. Yesterday, the Government Leader said that the previous government had been warned, in 1987 and 1988, that we had better raise taxes.
Can the Government Leader tell this House exactly who warned the previous government that it should raise taxes?
Hon. Mr. Ostashek: I do not think my exact words were raise taxes. They were warned that they were going to be facing a severe penalty if they did not raise monies they were capable of raising on their own.
Mr. Penikett: The Minister did not answer the question, but his exact words were, 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, they were going to be penalized. That is what the Government Leader said.
Who said that? It certainly was not the Yukon Party, who opposed every fee increase and every tax increase that was contemplated under the previous government.
Who was it?
Hon. Mr. Ostashek: I can just tell the Member opposite that it was in discussions with the bureaucracy in Ottawa.
Mr. Penikett: This is the bureaucracy that stuck the Canadian taxpayer with the GST, and they are giving advice to the previous NDP government, and we were supposed to accept that advice?
Is the Government Leader not aware that the consequences for the Yukon taxpayer of taking that advice from the federal Conservative bureaucracy could have been an increased tax burden, over the period he is talking about, of as much as $12,000 per taxpayer? Does he not understand that?
Hon. Mr. Ostashek: It seems that they still have very thin skin over on the other side of the House, and they are using some very astronomical figures - $12,000 for every taxpayer in the Yukon. The fact remains that, because of that government not living up to their responsibilities under the Formula Financing Agreement, we have been penalized.
Speaker: Leader of the Official Opposition, new question.
Question re: Tax increases
Mr. Penikett: It was the Government Leader, the Member opposite, who talked about a $120-million penalty under the adversity element of the formula financing - something we explained publicly and objected to. I would like to ask him if he was aware that, in the years he is talking about, the taxpayers of this territory, as much as those in the rest of the country, warned that any government, after the GST, that raised taxes again - any government that hit them with more taxes was likely to be hit back by the electors. Does he not understand that?
Hon. Mr. Ostashek: There was a party that was hit by the electors and now they are sitting in Opposition. They are sitting in Opposition because they could not live up to the responsibilities that were given to them by the electors.
Mr. Penikett: Given his statement in the election campaign that it would be obscene to raise taxes, will he admit now that he lied to the Yukon voters at the time of the last election about his intentions?
Hon. Mr. Ostashek: Not at all. If anybody lied to the voters or the taxpayers of the Yukon at the last election it was the Members opposite, when they were telling them in what good health the Government of Yukons finances were in; then we find out that they spent $58 million more than they took in.
Mr. Penikett: The fact remains, and it is a major disgrace, that there has been a huge deception of the Yukon taxpayers - hundreds of millions of dollars of expenditures promised; the claim that there would be no cutbacks, no layoffs and no reduction in services; but we are going to have quite the opposite. Can the Government Leader tell us of a single case in the seven and one-half years when the Yukon Party and its predecessor, the Conservatives, proposed or supported a single tax or fee increase in this House - one single case?
Hon. Mr. Ostashek: I was not in this House. I was not here in the Opposition during the reign of the previous government, but the fact remains that the previous government left the territory is dire financial straights and were not prepared to live up to the responsibilities placed on them by the taxpayers of the Yukon.
Question re: Public protest over unemployment
Ms. Moorcroft: Tommorrow, at noon, there will be a protest against federal government policies, which have caused record unemployment in Canada and right here in the Yukon, thus demonstrating the economic incompetence of the federal Tories. Will the Minister of Economic Development be supporting this protest campaign on Thursday?
Hon. Mr. Devries: I do not think it is my place as a Cabinet Minister to support those types of protests.
Ms. Moorcroft: I had hoped that the Minister would attend the rally to show his concern for the unemployed. Since this government assumed office last November, unemployment in the territory has risen to 14.1 percent, well above the national average.
The Minister spoke yesterday about the Ministers dream scheme for 2001 and yet he gave very few details about how he would go about providing jobs for Yukoners. Will the Minister of Economic Development tell us specifically what he will be doing to put Yukoners back to work today to help counteract the downward trend begun by the feds.
Hon. Mr. Devries: The Member will have to wait until tomorrow when the budget is brought down. Then the Member will see how we will be assisting job creation in the Yukon.
Ms. Moorcroft: We do know there is a recession in the Yukon. The Government Leader told us so. His announcements have attacked small business confidence and demoralized the unemployed Yukoners who are looking for work.
I would like to ask the Minister whether or not he believes his government will do more harm than good by opening their negotiating position with proposals to take away job security from 1700 public servants.
Hon. Mr. Devries: I am not aware of the last item she talks about. Again, she will have to wait until tomorrow to see what the budget has in it.
Question re: Court reporting contract
Ms. Joe: I have a question in regard to the contracting out for the court reporter/recording services. I am not exactly sure who will be in a position to answer the question by the time I have finished asking it.
I have a copy of an ad here that was in the Whitehorse Star, asking for court recorders - excellent English and typing skills required. I am also familiar with the fact that they went to Yukon College to talk to the students, offering them six jobs with flexible hours and possibly training later. This tells me that there will be a downgrading of services. What is so important about this to Yukoners is that they are asked to call an outside firm.
A local firm has been providing first-class court reporting services for a number of years and contributing to the local economy.
I would like to know if awarding contracts to outside firms, over local firms and the downgrading of services to the Yukon people in the courts is part of the governments vision for the future?
Hon. Mr. Phelps: I will not give as long a speech in reply, because we do not have that much time in Question Period.
I can tell the Member that a tender was advertised. The tender was drawn up very carefully and it was based on standards that are currently in place in the courts in Vancouver and other areas of Canada.
The end result was that there were three different parties that bid on the package. Those bids were very carefully evaluated by a large panel, whom I am told evaluated the bids independently, according to the criteria set out. All the people on that panel agreed to ranking, which included stakeholders, and as a result of the evaluation the contract has been awarded to the top-ranked firm.
Ms. Joe: When a representative of the firm that has been told that they are going to be getting the contract goes out and asks for people to apply for the court recording job with little or no training, I wonder about the exact standard that they are talking about.
It is a fact that using tape recorders to record court proceedings, which is what they are going to be doing, except in the Supreme Court, is a downgrading of services, because the expertise of court recorders that is available to the courts will no longer be available if this ridiculous plan is approved.
I would like to ask the Minister if he is confident that no problems will arise if inaudible tape recordings are used as a reason to appeal a case?
Hon. Mr. Phelps: The issue of quality was one that was taken very seriously by the people on the panel, in setting the criteria, in weighting the criteria and in evaluating the tenders. I have to say that I am convinced in my mind that it was done in a very professional and objective manner by the parties who were asked to undertake that job. I have some faith in their judgment with respect to the quality being at least equal to that is being utilized now in the courts in Vancouver.
Ms. Joe: Six local jobs will be lost. It is possible that some of these people will have to pack up and leave the Yukon if the government signs this contract. I think it will be sending a message to Yukoners that it does not support local hire. How does he intend to convince Yukoners that the government is open for business when they are actively forcing people out of jobs?
Hon. Mr. Phelps: Nothing could be further than the truth. My understanding is that jobs were offered to some of the very people that the Member is referring to, as well as other Yukoners. Training is being offered and the main issue really is that we had a tender come in considerably lower than the tender that was submitted by the unsuccessful firm to which she refers.
Question re: Employee suggestions
Mrs. Firth: I would like to ask the Government Leader a question about The Sluice Box that we discussed during the supplementary second readings, particularly the article about doing more with less. In this article, it says that the government will allow employees to offer their suggestions about how to cut costs and increase the effectiveness of government. If they are practical they will be implemented, and if not they will get a response telling them - guess what; I found this interesting - why it cannot be done. This is a good idea but I think a better way of doing it would be just to put a suggestion box up and encourage everyone to contribute their ideas.
I would like to ask the Government Leader if the person who is supposed to be designated in the Executive Council Office to receive these suggestions has been designated, and who that person is?
Hon. Mr. Ostashek: I thank the Member opposite for the question. There has been no one designated at this point. It is a commitment that we made and that we intend to follow up on - that is, to make government more efficient and to be able to accept suggestions from the people who are employed with the civil service now and should best know how to do the jobs most efficiently. It is in the process of being put together now. The firm guidelines and criteria have not been finalized yet.
Mrs. Firth: I do not think we need firm guidelines and criteria. If he wants suggestions from employees, perhaps the government could take me up on my suggestion that they just encourage people to do it, not allow them, and put up a suggestion box.
When does the Minister anticipate this person being appointed? Exactly what will their job be?
Hon. Mr. Ostashek: It is not gobbledegook, as the Member opposite says. A suggestion box has been put up in other places and, to some extent, it works. However, we are looking at a system that is a little more extensive than just a suggestion box. We are looking at ways in which to reward the people who come up with the suggestions that are implemented, so it is a fairly extensive program that will be put in place. As soon as it is in place, we will be announcing it.
Mrs. Firth: I like the word reward, because that leads me right into my final supplementary. The Government Leader has also made comments about incentives being given to managers who can demonstrate cost-cutting initiatives and increased efficiency. Now, we find out it is going to be rewards.
Can the Government Leader be very specific when he answers this question and tell us exactly what he is talking about when he speaks about rewards or incentives?
Hon. Mr. Ostashek: I would like to be very specific but, as I told the Member opposite in her previous question, this policy is still being developed. Once it is developed, it will be announced.
Question re: Anniversaries Commission, government commitment to
Mr. Harding: I have a question I would like to ask on behalf of the Yukoners in Dawson City. The Yukon Anniversaries Commission, established and supported by the previous NDP government, has helped the territory to realize maximum tourism benefits from the notable Yukon anniversaries, such as the 50th anniversary of the Alaska Highway, which generated tourism visitation figures that were records. The Yukons best tourism marketing opportunities in 100 years, the 1896 and 1898 centenaries of the discovery of gold and the Klondike gold rush are fast approaching.
What commitment is the Ministers government prepared to make to the Anniversaries Ccommission to ensure that it is able to maximize the tourism benefits from the gold rush centennial?
Hon. Mr. Phillips: I thank the Opposition critic for Tourism for his first question in the House regarding tourism and my opportunity to respond to it.
The Anniversaries Commission just finished the 50th anniversary of the Alaska Highway. As the Member said, we saw the best year ever in tourism in the territory, and I see the Anniversaries Commission continuing. The government is committed to the continuation of the commission. I suppose the Member will have to wait.
Currently, the Anniversaries Commission is doing an evaluation of the anniversaries and hopes to get it to me very shortly - next week, I think. It will be an interim report on what went wrong, what went right, and how we can do it better the next time. I am waiting to see that report before we go much further with the Anniversaries Commission.
Mr. Harding: Given that the Klondike is the home of the two major anniversaries this decade, will the Minister give his commitment to basing the commission in the heart of the Klondike, in Dawson City, from now until the Klondike gold rush centenary observances are complete?
Hon. Mr. Phillips: Again, I thank the Member for the question. I will not give that commitment here today because that is exactly the kind of thing I asked the Anniversaries Commission to report back to me on in their evaluation study. Of course, I do not have that report in front of me yet, so it would be premature for me to have asked them to evaluate where the office should be and then preempt them by making an announcement here today. I will wait until I get the report before I make the announcement.
Mr. Harding: We will be awaiting the announcement.
Recognizing that the Klondike and Dawson City have a vested interest in the successful observance of the Klondike gold anniversaries, will the Minister provide assurances today in this House that Klondike residents will be guaranteed a majority of seats on the commission in the run-up to the centenary observances?
Hon. Mr. Phillips: I am sure that members of the Dawson area will have key roles or play key parts in the Anniversaries Commission, but again that very question is the question this evaluation is going to address as well - the make-up of the new commission. If the Anniversaries Commission itself is making that suggestion, it would be premature for me to preempt them by making an announcement on the make-up of the commission before I see what they are recommending.
Question re: Helicopter contract
Mr. Cable: My question is for the Minister of Renewable Resources. I understand that the helicopter support contract that was let in relation to the wolf kill was given to a firm from outside of the Yukon. Can the Minister advise this House as to whether he is of the opinion that the local helicopter supply services are insufficient to contain the tendering process within Yukon boundaries?
Hon. Mr. Brewster: That is not correct at all. The helicopter firm that got the bid was from Watson Lake; it was stationed there.
Mr. Cable: It is my understanding that this company is owned outside. If, in fact, I am wrong, I stand to be corrected.
My supplementary question is: can the Minister tell this House whether this particular requirement will be tendered again next year, during the second phase of the Aishihik wolf control program, if in fact the second phase is started?
Hon. Mr. Brewster: Yes, in the second phase, which will occur, the contract will be let out again in a fair manner and in accordance to the regulations for contracting.
Mr. Cable: Will it be the intention of the Minister to put the tender call for helicopter services for the second phase of the wolf kill to outside firms?
Hon. Mr. Brewster: I can say this very frankly: if there is a difference of $14,000 between an outside firm and a local firm, yes, I would be looking at the outside firm. A difference of $14,000 in the bids is very large.
Question re: Environmental standards
Mr. Penikett: I have a question for the Minister of Economic Development, who has, in his open for business campaign, talked about the more positive attitude toward mining, which he says his administration will bring. Regarding his partys comments on the Environment Act, could I ask if his more positive attitude involves lowering environmental standards for industry here.
Hon. Mr. Devries: I can assure the Leader of the Official Opposition that that is not the objective. We will be maintaining the existing environmental standards.
Mr. Penikett: I doubt if the mining industry would be pleased to hear that.
I would like to ask a supplementary question. Given some of the comments made during the discussions about the future of the Faro mine, could I ask the Minister if part of his more open, positive attitude would involve efforts by this government to lower the wages of people working in the mining industry?
Hon. Mr. Devries: I assure the Leader of the Official Opposition that that is not our intention.
Mr. Penikett: We are beginning to wonder what the government will be doing for the mining industry.
Given that, during the election campaign, they talked about lower power rates, and now his colleague has announced, in his capacity as the Minister of the Yukon Energy Corporation, that they are going to be having much higher power rates, can I ask the Minister of Economic Development if he still supports lower power rates for the industry, notwithstanding the efforts of his colleague, the Minister responsible for the Energy Corporation?
Hon. Mr. Phelps: Boy, am I mad. I would like to remind the hon. Member that I did not ever make such a comment or announcement. There was an announcement made by the very independent power companies that were burdened by the excessive spending habits and political interference of the former government, which has been alluded to by the Hon. Member for Riverside in his former life, before he became a politician. They are struggling to overcome the mismanagement and political interference from before.
I can assure the hon. Member, who I am certain is concerned about this issue, that I, as part of this very happy coalition on this side of the House, will be taking steps, along with the Minister of Economic Development, to ensure that there is an inexpensive supply of energy for the mining companies that now understand that this is a part of the country that is open for business.
Question re: Whitehorse sewage facility land acquisition
Ms. Joe: I have a question for the Minister responsible for land claims. According to a news item this morning on CBC Radio, a city councillor suggested that they should distance themselves from the mayor because he does not necessarily express the views of the whole council, especially when it comes to land selected for the two local First Nations. Since the Government Leader supports the land grab from the Taan Kwachan by Mayor Weigand and federal Minister Tom Siddon, will he tell this House if he has the support of his whole caucus, including the Member for Old Crow?
Hon. Mr. Ostashek: The Member opposite says we are into a land grab. Nothing could be further from the truth. We are committed to the settlement of land claims with the Taan Kwachan and the Kwanlin Dun, the same as we are with every other band. I have stated publicly and in this House that the land issue would be dealt with at the land claims negotiating table.
Ms. Joe: It is pretty hard to deal with negotiations at the table, especially after the Government Leader, on behalf of his whole government, has committed land that has been selected. He is having a bit of a problem, and there are some doubts about his credibility because of the public opinions he is expressing on the radio. I would like to know, and so would the Taan Kwachan, whether or not he intends to continue to offer his opinions, on behalf of his government, to the media, rather than first negotiating the issues at the table.
Hon. Mr. Ostashek: I do not know what the Member is referring to with respect to the radio. I believe it was Mayor Weigand who was on the radio, not I. I was responding to a statement that was made by the mayor in public. I met with the representative from the Tan Kwachan this morning and had a very good discussion that cleared the air.
Ms. Joe: That sort of answers my next question, although I do not think the Government Leader understands what he actually did and the uproar it has created among a lot of First Nation groups; for example, offering or agreeing to the offering of land to the city that was selected by a First Nation. I would like to know if he will, in the future, make the same kind of public statements. It is very important for the the First Nations to know if the Government Leader, after supporting land claims legislation, is going to continue to make those types of statements, as they may seriously jeopardize negotiations at the table.
Hon. Mr. Ostashek: I just want to clear the record here. I stated publicly that the issue of land for the Whitehorse sewage treatment facility would be settled at the land claims negotiating table. I have not stated anything different at any other time.
Question re: Government Services, ministerial policy direction
Mrs. Firth: I would like to ask the Minister responsible for Government Services a question about a legislative return he tabled in this House in response to my question about policy direction that was being given to the Department of Government Services.
In the Ministers response - and I am sure the Minister would not hesitate to admit that he did respond well to that question - he mentioned the word philosophy three or four times.
The legislative return I got says many things, but absolutely nothing about philosophy or policy direction - if you will bear with me just for a minute, Mr. Speaker...
Speaker: Not for long.
Mrs. Firth: Okay. I want to give people an example of what this statement says so they can appreciate the point that I am trying to make. In this statement, it says, In essence, the re-focus activity will address the fundamental question: how can the branch realign or re-focus its activities with existing resources, et cetera." It is a bunch of bureaucratic babble, with all due respect.
The Minister was talking in a philosophical sense. Could he tell us what exactly the policy direction is that has been given to the Department of Government Services, so that the people who work there know where they stand.
Hon. Mr. Devries: I thank the Member for her question.
It is my role to give the general policy direction to the department, and it will be the role of the public service and the department to develop specific initiatives and options that will address those broader policy goals.
I have great confidence in the ability of the senior management and staff in my department to meet this challenge.
Mrs. Firth: What is the policy direction that the Minister is giving the department?
Hon. Mr. Devries: Basically, it has been conveyed to senior management at a number of meetings and this direction forms part of the early stages of the departments strategic planning exercise that is now taking place.
Mrs. Firth: What is the policy direction that the Minister is giving the department? What is he telling them?
Hon. Mr. Devries: Basically, we are telling them that we want to see the department operate in a more efficient, effective manner.
Speaker: The time for Question Period has now elapsed. We will proceed to Orders of the Day.
ORDERS OF THE DAY
GOVERNMENT PRIVATE MEMBERS BUSINESS
MOTIONS OTHER THAN GOVERNMENT MOTIONS
Clerk: Motion No. 25, standing in the name of Mr. Millar.
Motion No. 25
Speaker: It has been moved by the Member for Klondike
THAT this House urges the Implementation Review Committee to recommend realistic placer mining regulations that will promote the development and growth of the placer mining industry while protecting the Yukons fishery resource.
Mr. Millar: In the last few days in this House we have heard a lot about Curragh and Faro, and so we should. They are a very major part of the Yukon economy that is in trouble. Just for the record, I believe the government is being very responsible in the way they are handling that situation.
We have heard about the uncertainty of the people in Faro. Yes, I do feel for those people, and I am going to tell you why.
The placer mining industry, of which I am a part, has been in the same position as the people in Faro are in now for the last 19 years. It was June 11, 1974 when the Klondike Placer Mining Association was founded in Dawson City to deal with government on its administrative practice in applying the then-new Northern Inland Waters Act. I will get back to that a little later on.
Right now I am going to speak about the history of placer gold mining in the territory. I know that most, if not all of you in this House are very aware of most of the history, but I feel it is important that I get it on the record myself. I want everyone in this House to understand where the placer mining industry is coming from. Although they do have a lot in common with the hard rock mining industry, there are some differences that I hope to be able to point out. They are very important to the Yukon economy. After all, they do generate new wealth - it is not recycled money; new money.
Just before I go into the history, I would like to cite one of the things that I really believe that they do have in common with the hard rock industry. I believe one of the reasons that Curragh is now going to the federal government for money is because of the price of their water licences. A few years ago, these water licences cost them $10.
The last time they went to get their water licence renewed, it cost them over $10 million. That was for the legal fees and other miscellaneous administrative fees. They had to post a $15 million decommissioning bond before they could even be issued a licence. The court ruled that $5 million had to be paid up front.
The reason I mention this is because, although on a slightly smaller scale, the same thing is happening to the placer mining industry. It must be remembered that the placer miners are, for the most part, small, family-type operations, and we cannot afford to hire people and end up paying $10 million. Most of us - probably all of us - do not see that kind of money in 10 years.
Gold in the Yukon was first reported in 1850 by Robert Campbell, a Hudson Bay Company explorer. In the 1880s, men seasoned in the goldfields of California, Australia and the Cariboo district of British Columbia reached the territory. These men initially worked the river bars with rockers, a slow and cumbersome device with which two men might process up to four yards of pay gravel per day. These bars were, for the most part, quite lean, and the mining was restricted to periods of low water on the larger rivers - about two weeks in the spring and a couple of months later on in the summer.
Bar mining increased, and prospecting grew, leading to the discovery of more substantial placer deposits. In 1886, coarse gold was found in the Fortymile River. Bar mining dropped off considerably. At this point, I would like to say that it did not drop off completely. A couple of weeks ago, I was talking to one of the oldtimers who had come here in the late 1930s or early 1940s. He was talking about his mining experiences up and down the Klondike and Yukon Rivers. I mention that because, the day after he told me that, he passed on. He was a long-time and very respected placer miner in the Dawson City area, by the name of Ole Lundy.
In 1892, gold was discovered on Miller Creek and Glacier Creek in the Sixtymile area. Miners moved into an area known as Tro Dek. Some say the name of the river meant full of fish. Others translated it as hammer water, but the white prospectors mispronounced the Indian word, until they coined the Klondike River.
Today, the whole district is known as the Klondike. Not far from where the Klondike River meets the Yukon River, Rabbit Creek flows into the Klondike. It was on that stream, on August 17, 1896, that George Carmack and his two Indian brothers-in-law, Tagish Charlie and Skookum Jim, staked a claim. That claim set off the famous Klondike gold rush. In less than four years from now, as was pointed out in Question Period, this whole territory, and Dawson specifically, will celebrate this magnificent occasion: the 100th anniversary of the discovery of placer gold on that creek.
As we all know, Rabbit Creek was renamed Bonanza Creek. Robert Henderson, who was a partner of Carmack, supposedly told Carmack about the gold on Bonanza Creek. Henderson missed out on Bonanza gold and staked on Hunker Creek; he never did find gold on that creek, but Hunker Creek and many other creeks in the Klondike still, to this day nearly 100 years later, offer good rewards to modern-day gold miners.
Along the creeks are tailing piles - not tailing ponds as in hard-rock mining; in other words, there are no chemicals or other deleterious substances contained in them. They are just gravel piles - washed gravel piles. Tourists come every summer to see the big mounds of gravel and the No. 4 dredge - the worlds largest wooden dredge. That dredge is seen as a very important part of the Klondikes past history. That one dredge has been restored by Parks Canada to preserve it as an historic attraction. It is a reminder of the gold mined from these creeks. The Yukon Consolidated Gold Corporation dredges started working shortly after the initial gold rush. They worked until 1966.
During those 60-plus years, some $300 million worth of gold was taken from these creeks. For the initial years, up to 1934, gold was worth about $20 an ounce in U.S. funds. All the gold prices I will be quoting are in U.S. funds. Then the price increased to about $35 an ounce until the time the dredges shut down. Considering the many variables over the years, it would be time-consuming to figure out what the $300 million worth of gold would be in terms of todays dollars, but gold, that one word, changed the destiny of the Yukon forever.
It was one year after the bonanza discovery was made, in 1897, before the outside world heard about gold in the Klondike. By 1898, journalists were writing sensational articles about enormous gold deposits in the Klondike, a district somewhere in Canadas north.
It was only natural that the good news, based on that one word - gold - triggered a great international rush. It was a rush so unique that the world has not seen an event like it before and it is very likely that it never will again.
The world was in a state of financial collapse. Gold was in short supply and big demand. Gold was needed by governments to support paper currencies and a global depression had caused banks and businesses to go bust at an alarming rate. Does any of this history sound familiar, like perhaps it is happening again today? History is repeating itself.
There was no employment to speak of. People had nothing left to lose. People had hit the roads as hoboes. They quivered in long soup lines that illustrated poverty and despair. Gold was the only word needed to stir the imaginations of men, women and even young children - all ages and of every profession, rich and poor and from every lifestyle. There was a real mixed bag of folks and cultures. Excitement was high.
The Klondike gold rush was a tonic. It stirred peoples spirits and gave them hope. It gave them a purpose in life. Businesses hummed, restaurants bulged and hotels were packed. It was all because of that magic word: gold. To think that one word could trigger such an event. It was a rush that, it was said, saw an estimated 100,000 people set out for this little corner of the world. For various reasons, not all of them reached their destination, but thousands did. They made their way down the Yukon River to Dawson in the year 1898. Towns were springing up along the route. One such town was Whitehorse, where we are gathered here today. It is because of gold.
Above the white tents lined up on the Yukon River banks were signs tacked up to advertise their wares: cigarette stores, barber shops, restaurants and shops of dubious distinction. Businesspeople were waiting for the White Pass railway to reach Whitehorse. Tracks were already being laid, beginning in Skagway - all this industry because of the discovery of gold in the Klondike.
It was 1898 when the biggest throngs of people descended on Dawson. It is said that there were over 30,000 people in Dawson that year. It was billed as the biggest town north of Seattle and west of Winnipeg, or something like that.
The people that were too late for the Klondike gold rush found gold elsewhere: in the Keno area, Whitehorse Copper belt, Livingston, all over the territory and into Atlin, British Columbia.
The people who were not lucky enough to find gold went into other occupations. They fished, farmed, logged or set up service businesses. Thus began a stable Yukon population. These pioneers were the reason for many of the communities that now exist throughout this territory, so 1898 is an important year; it marks a significant, historic occasion for the people of Dawson and the entire Yukon.
As I have mentioned, there will a 100th anniversary to celebrate the discovery of gold. That will happen in 1996, less than four years from now. There will be another 100th birthday celebration in 1998 to remember the most famous gold rush in the world.
That big party is less than six years from now. I have always said that the tourism and mining industry should work with each other for the betterment of the whole territory and I believe that very strongly. After all, Dawson City is a live, breathing, placer mining town that was built on the Klondike gold rush, and to this day it is still the main supply centre for the numerous mines in that area. Dawson City still holds the gold rush flavor that it had in the 1890s.
The reason the Yukon is a territory within its own rights, and not the Yukon district, is because of gold - placer gold. If it had not been for gold the Yukon could still conceivably be a district of the Northwest Territories. The Yukon might not even exist as its own entity.
June 13 is the territorys birthday. It was in 1898 that the Yukon Act proclaimed that more than 207,000 square miles of land be set aside as a territory. Every Member knows why: gold - placer gold. There was an enormous gold rush going at that time in the Yukon.
The Yukon was declared a territory within its own rights because the government wanted to collect the royalties, as well as taxes on other items such as liquor and outfits coming into Canada from the United States.
The Klondike gold rush was the reason the Yukon Territory was separated from the Northwest Territories. The Yukon Territory was born because of gold. The Yukon Territory was literally put on the map because of the Klondike gold rush. That enormous, historic gold rush could not be stopped. I trust that I have made my point on this.
The placer mining industry is vitally important to the whole Yukon for both its historic and economic aspects. The tourism industry relies on minings rich history to promote tourism in the Yukon, especially in Dawson. The cottage industries rely on the mining industry to supply gold to the gift shops and jewelry designers. Their gold nugget jewelry is popular with our visitors, as well as with the local residents.
At my insistence, through the KPMA, a Dawson City economic profile study was undertaken last year by the Yukon territorial government. It was not an effort I did by myself; it was very strongly supported by the Klondike Placer Miners Association. It was a cooperative effort among three organizations. The study was conducted by the Dawson City Chamber of Commerce, with the help of the Klondike Placer Miners Association and the government Department of Economic Development.
The information for the study was collected over the summer of 1992, with an interim report being released in the fall of the same year; that is what I have here in my hand. The sectors surveyed were government, the service businesses - which were split into components of local services - business visitors services, renewable resources - which includes agriculture, fisheries, forestry and trapping - and the placer mining industry.
In terms of person months of employment, payroll and purchases, the mining industry is shown to have the largest impact on Dawsons economy. Mining was responsible for 27.5 percent of the person months of employment. It was responsible for 67 percent of the purchases and responsible for 40 percent of the total payroll.
I would like to insert here that placer operations are seasonal. Miners put in a years work in six months, or usually less. The work is done in long shifts, usually seven days a week. The reason I wanted the Dawson economic profile study done was because I felt that I knew what the results would be, and I wanted everyone else to also be aware of these results. I was not disappointed. The fact is that placer mining in the Dawson City area has a very large impact on the economy of Dawson and the territory as a whole.
These facts and figures should give a good indication of how important mining still is to the Klondike, even after nearly 100 years.
Mining suffered through the threat of regulations, high interest rates on operational money and low metal prices. We have been through it all in the last 10 years, yet mining has remained the number one industry of importance in this territory.
However, we do not know how long we can hold on. Over the last three years, since 1989, there has been a reduction in the number of placer miners coming back each season. In 1989, there were 226 placer miners working claims in the Yukon. By the following season, only 194 returned. That is a reduction of 32 placer mining operations. A few more did not return in 1991 and 1992. Over the years, some of them have been charged under various acts, and others feel that they cannot comply financially with the stringent environmental regulations, and they have packed it in.
There are several factors that contribute to the lost revenues from placer mining operations. One significant reason is that the placer mining business is getting bombarded and abused with more regulations and more legislation, which we in this industry feel is very unjustified. When you couple that factor with low metal prices and high operational costs, there comes a time when there is no point to continue working. If there is no profit at the end of the day, it makes no sense to keep on trying.
The Dawson mining district, as a leader in gold production, has shown how important mining is to Dawsons economy. It would be devastating for Dawson and the Yukon to lose this industry.
There has to be reasons for regulations. Regulations have to be sensible and affordable. There has to be a good reason when any government brings in legislation that could put someone out of business.
I would like to say that the placer mining industry is not against regulations. As a matter of fact, it was the placer mining industry that went to the government in the first place asking for good, commonsense regulations.
The Yukon Placer Mining Act is a strong piece of federal legislation. It gives the person the right to access claims for the purpose of mining. Regulations coming from other federal agencies have to be reasonable. While miners are protecting the environment, they still have to be able to make a living and to offer jobs to the public.
I want to point out that placer mining takes place on less than five percent of all the creeks in the Yukon. I would like you to remember that figure.
The vast majority of placer miners are loyal Yukoners. They are careful not to destroy the land, the fish, the birds or the animals. We do turn the dirt upside down. This is the land that offers us our livelihood and our lifestyles.
For people to be productive, they must be given incentives. They cannot have these incentives removed. The threats of over-regulation are taking away the dreams and aspirations of the people who are involved in this small business. In the last 19 years, government meetings and paperwork have taken up much too much of a miners time. Placer miners only have six months, or less, out of the year to make a living.
Furthermore, I want to point out that government people get paid while they go to sit in all of the meetings. Over the last few years, and particularly on the Implementation Review Committee, it has been a handful of very dedicated placer miners and operators who have remained active. In some cases they have spent so much time in these meetings, their operation has gone under.
That, to me, is a great dedication; if it had not been for those individuals, I am confident there would be no placer mining in the Yukon today.
Some placer operations are important as Yukon employers. A mining operator may hire as many as 30 people in a season. The whole industry provides seasonal employment for anywhere between 500 and 900 people. They can no longer compete with the staggering amount of paperwork and the threat of stringent federal regulations any more. These regulations are driving operating costs beyond affordable limits. The paperwork connected with these regulations is overwhelming. It is bad enough for the larger operators who have several people on the payroll; it is even worse for a one- or two-person operation that does not have the manpower to cope with the phenomenal amount of paperwork and red tape; it is taking all their time away from productivity.
I would like to add that there are some older gentlemen in this business. They have been placer mining most of their lives, and I can assure everyone that they would never consider doing anything else for a living. I have heard of gentlemen who are not well-educated and have come from other countries - Czechoslovakia, Hungary, or wherever. They have lived in the Yukon for many, many years. They speak perfectly good English, but some of them may not be able to read and write English well enough to deal with the paperwork that is required for them to stay in the placer mining business.
I would like to point out that this is the paperwork that a small placer mining operation has to fill out to get their water licence. I have done it several times and I still have a heck of a time with it. There are private consultants who will deal with the paperwork, and the additional cost of doing business can range anywhere from $400 or $500 to $2,000, - even $10 million as I said a little while ago - for engineering work and other professional consulting services.
That brings me to the subject of the KPMA. The Klondike Placer Miners IAssociation has been very progressive since its formation in 1974. There is only one reason the KPMA had to be formed: the object was to promote the interests of and defend the rights of placer miners against too much federal government involvement in the industry. The KPMA was established by 56 miners who gathered in Dawson on June 11, 1974.
The issues at that time were basically the conditions annexed to the authorization to use water without a licence in the Northern Inland Waters Act. Over the last 19 years, the association has had to deal extensively with the Fisheries Act, the Yukon fisheries protection authorization, new major amendments to the Northern Inland Waters Act, which has recently been revised into a Yukon Waters Act and even more recently, the association has been dealing with the Implementation Review Committee, or, the IRC. Also, the association has been dealing with the application of the environmental assessment and review process guidelines order, better known as EARP.
The number of the extensive regulations we have dealt with over the years is mind-boggling. It is difficult to keep track of them all. The principal activity of the KPMA is to negotiate with government on legislation, regulations and policies that have an effect on placer mining. It is seldom possible to block new legislation regulations, but the impact on placer mining can be moderated by negotiations and changes.
If it had not been for the KPMA, the placer mining industry could conceivably be out of business now. The bulk of the KPMAs work is carried out by the officers and directors on volunteer time. The KPMA has made gains for miners in a number of areas. Examples are fuel tax savings and income tax treatment.
However, the main gain for the miners has been the long negotiations over water discharge. Although the current discharge standards are heavy duty, they are far better than they would have been without the KPMAs involvement, but the current discharge standards may not be current very much longer. We have new proposed ones threatening us right now. I was a member of the KPMAs board. I resigned when the constituents in the Klondike riding elected me to serve as a Member in this Legislative Assembly. I am very proud of the work that has been accomplished by the KPMA.
At one time, an official from the Department of Fisheries and Oceans remarked that, without the KPMAs lobbying efforts, the Yukon would be under the same strict standards that apply in B.C. and Alaska. I would like to point out that those strict standards, especially in Alaska, nearly shut that industry down. It is starting to make a comeback, but those standards nearly did shut that industry down a few years ago.
As you can tell from that statement, the only justification for Fisheries to want to implement stringent discharge levels here seems to be because it was being done in other areas.
That is simply not a good enough reason. When someone tries to put me out of business, they need a better excuse that to say, we are going to implement these regulations because everyone else is doing it. There is no scientific proof, but everyone else is doing it so we will do it too. It is not good enough. Give me a valid reason, give me solid proof or give me solid scientific evidence why regulations need to be changed.
I have mined for the last 10 years on Gold Bottom Creek. Gold Bottom is a tributary to Hunker Creek. As a matter of interest, I want to point out that the cost of meeting my current effluent standards has skyrocketed. It is a significant portion of my operating expenses. My settling system alone cost over $20,000 to implement. The system costs between $5,000 to $10,000 a year for upkeep and maintenance.
Remember, I am only able to work four to six months out of the year. In that time, about 30 days is spent making money or sluicing. On a mine upstream on the creek each successive cut becomes additional settling for the next cut. Because of the need for additional settling to meet current effluent standards I am no longer allowed to backfill the cuts with the overburden. I must push the overburden up on the hillside. This method of operation costs me more money than if I were allowed to backfill and it leaves big piles up on the hillside.
That method of handling overburden also means a potential increase in the site restoration costs. Handling dirt and gravel in this way creates slopes on the overburden pile. That is not all. Ground sluicing is a cost-effective method of overburden removal, but that method will become impossible to use as adequate settling facilities cannot be provided under the new proposed effluent standards.
I am not here to plead my own personal case before the House. I am only trying to provide you with some background information. I want to point out how vulnerable this important industry is going to be under this amount of federal regulation and legislation.
In terms of dollars, the annual placer production varies depending upon many circumstances. In the last few years placer production has ranged anywhere between $40 million and $80 million. It certainly has the potential to go higher, providing the industry does not get struck off the face of the earth.
Mining has been going on here for a hundred years and it is only been in the last 20 years that regulations started to be formed to protect the fish. The fish survived long before the regulations standards started to come in.
Furthermore, one study after another has been done by environmental scientists and consultants. It is a very lucrative business. There are mounds of these reports, just like the seven-inch high stack here beside me; the studies could line the walls of this room. None of these reports prove that placer mining has a significant effect on harming fish. Of all of these reports that they have done over the years, none of them can prove that placer mining hurts the fishery. There is definitely some short-term effect, but there is no proven long-term effect on the fisheries.
As a matter of fact, in trying to say that there is harm done to the fisheries, these reports use such terms as: estimate, suggest, indicate, implied, may be, approximately, will vary, unknown, is considered to be, no clear cut evidence, suggested threshold. There is nothing in these words that leads me to believe there is any hard-core, scientific proof that the placer mining industry is killing fish.
Water quality tests have shown that the muck that flows naturally into the creeks and river streams at many times during the year, especially during spring run-off, has been much higher than limits allowed to the placer miners by todays water standards.
The fish have survived the sediment flowing naturally into their streams and there is solid evidence to show that placer mining has benefited wildlife. By clearing areas and tilling soil, it helps provide the wildlife with fresh new willow growth for food as well and for nesting habitat.
Hunker and the Sulphur Dominion Loop in the Dawson area is one of the most heavily mined areas in the Yukon. It also has one of the highest concentrations of moose and bears in the Yukon Territory.
I would like to take a moment to talk about the mining process that is carried on by the smaller family operations, such as mine. The placer mining process involves turning the ground upside down and stripping off the overburden. In most cases, what is involved is that we strip off anywhere from 10 to 20 feet of overburden and push it out of the way. We then set up our sluice boxes, or, as is happening today, there are many more screening plants and trammels being used because we have to become more efficient.
We then process the pay gravel. In some areas, it is 20 feet of pay gravel; in other areas, like the one in which I mine, there is less than a foot of actual pay gravel. I have to strip off 30 feet of overburden, then I am down to about a foot of pay gravel that rests on top of the bedrock. I take that pay gravel and sluice it, or put it through some sort of recovery system. At no time during this process are any chemicals added. Once the mining is actually completed, revegetation takes place very quickly. We speak of wanting certainty. We are not asking for a lot.
In 1992, when I first began mining on my own, the water discharge standards were not in force at all. We were told that they were there and had just not been enforced. It was quite apparent that, if they were enforced to the letter overnight, the placer mining industry in the Yukon would disappear.
In 1988, the IRC recommended to the Ministers of DIAND and DFO the Yukon fisheries protection authorization or, as it is known in the industry, the green book. There was a good deal of concern in the industry that we could not meet these new, very tough, regulations. In fact, there were a few who could not.
I would like to take a moment, Mr. Speaker, to let you know what those stream classifications and regulations are. There are five different types of stream classification in the Yukon. There is a class 1, which has the most potential for fish or salmon; class 2 are streams that are used for rearing, but not necessarily for spawning. There is also a type 3 and type 4 stream. Most of the mining operations are done on a type 4 stream. The type 1, 2 and 3 are very heavily protected, and anyone wanting to do mining on those streams realizes it is the cost of doing business that they have to meet those very strict standards.
On type 1 and 2 streams, you are not allowed to discharge. On a type 2 stream, you can put 0.2 millilitres out, which is drinkable. Type 3 does allow for a little bit more, and the type 4 streams, the ones I am mostly talking about today, are 5.0 millilitres per litre of settleable solids.
Although very stringent, these are regulations the placer mining industry can live with. They are not what we would like, but we can at least live with them.
Many placer mining families in Dawson, Whitehorse, Mayo, Carmacks and other communities have been producing involved citizens for many generations. Although most placer miners are small businesses, collectively the industry employs about 500 people directly, making this one of the Yukons largest employers. This group of placer miners is probably one of the most productive groups in Canada, per capita, in creating new wealth for Canada. Recent economic studies prove that most of this money is spent in the Yukon. The placer mining industry in the Yukon has contributed more than one million troy ounces of gold, for a value of over half a billion dollars, to the Yukon and Canadian economies in the 10 years between 1981 and 1991.
Fortunately, regarding the environmental effect, placer mining has a relatively low impact. For instance, although water is used as an energy source, there are no chemicals added by placer miners to the water. Thus, environmental risk is negligible. This fact is recognized in the new Yukon Waters Act, which replaces the Northern Inland Waters Act, where a major distinction is made between the placer miners use of water without chemicals versus some of the other uses of water by industries that may use toxic chemicals, as compared with pollution problems associated with sewage treatment.
We placer miners have a clear environmental conscience. There is no known significant long-term problems that we cause. Millions of dollars have been spent over the last 10 to 15 years trying to prove that we do. Another recent study completed for the Yukon mining Implementation Review Committee stated that there is no significant effects on survival growth or histopathology of juvenile chinook salmon exposed to suspended placer mining sediment at 3.4 milligrams per litre for 28 days.
For many years now, volunteer representatives of the placer mining industry have strived to work with First Nations representatives, Yukon Conservation Society leaders, officials from all levels of government, and an array of various departments to assess legislative regulatory matters. Although this has proven to be difficult and expensive, especially for owners away from their work, this cooperative method of trying to resolve issues with Yukon solutions seems to be working.
Our industry has good credibility with all groups and government departments. This has been earned the hard way, through commitment to respecting other points of view while working toward consensus agreement. Our industry has been on the leading edge of managing environmental issues with government and other groups. As a result of this sincere effort, our industry has accomplished more toward a balance between real environmental concerns and allowing future responsible development.
Let us continue to work together to find Yukon solutions to Yukon issues.
The authorization policy directive came into effect in June 1988. The placer mining inspecting unit inspects and regulates industry. The water use application remained with the Yukon Territorial Water Board. The Implementation Review Committee was required by its terms of reference to monitor the application of the fisheries protection authorization. The IRC was to make recommendations to the Ministers of DIAND and the Department of Fisheries and Oceans for refinement of this document - I am talking here about the green book, the one that regulates the placer mining industry. This was supposed to happen prior to the 1992 mining season, but it did not. In July 1992, the Yukon placer Implementation Review Committee released a proposal for public discussion. This proposal was released through the committee, never having been approved by the Klondike Placer Miners Association. The KPMA felt there was no way we could meet the standards implied there; it was a document forced on us by DFO. It was entitled The Yukon Placer Authorization.
The proposed recommended changes to the Yukon fisheries protection authorization, which since June 1988 has set water quality standards for the Yukon placer industry, kept the same sort of classifications as I mentioned earlier - the four different stream classifications - but the class 4 streams were basically made like the class 2 and 3 streams. I would say 60 percent to 65 percent, maybe even 70 percent, of the industry would go under if these regulations are brought into place. Right now, the placer miners of the Yukon Territory today have no idea what kind of regulations they are going to be working under in 1994. We have been given some grace; we know that the current standards are going to stay in place for the coming season, but that is all. We have no idea what is going to happen after that.
It has been like that since I have been in the mining industry. From one year to the next we never know whether we are going to be able to mine during the next year.
We are fortunate in that, when the proposal from DFO came out, there was a huge outcry from the Yukon population. Open houses were held throughout the Yukon, people showed up to try to find out what was going on, and a petition was signed by more than 2,600 people who opposed the proposed Yukon placer authorization.
At the same time, the petition supported realistic and justifiable environmental standards. We, in the placer mining industry, strongly believe that. Most of us were born and raised here, like I was. We are strong believers in the environment. We do not want to see it destroyed. However, at the same time, we see no reason to make the standards more difficult than they currently are, when they have been trying to prove for years now that we are doing some damage to the fish and they have not been able to.
I would like to make it clear that all we are talking about are the water standards. We are not talking about what could happen to the trees and surface at all. Most of these regulations, and everything I have been talking about today, deal specifically with water quality standards. That is not to say that there is not a concern for land use, because there is. As a matter of fact, there was a committee called YMAC - Yukon Mining Advisory Committee - that was formed to look at just those issues. The Yukon Conservation Society was a part of it and, I believe, the CYI was also. The hard rock industry was a part of it as was the placer mining industry. They sat around a table a number of times and came out with regulations that both industry and the environment could live with. I do not know where that document is. I think it is still sitting in Ottawa somewhere. I hope it will come down soon.
Certainty is all the placer miners are looking for. We want to know what our regulations are. We want to know what we have to do to continue to work in our chosen field.
I hope I have shown today how important the whole mining industry is to the economic well-being of the territory. At this time, all I can say is that I think the placer mining industry is extremely important to the territory.
In 1982, when Faro closed down for a short time, it was the placer mining industry that helped to carry this territory through.
I do not think that we should be forgotten. I urge the Members in the House to support my motion to urge the Implementation Review Committee to recommend realistic regulations on the placer mining industry while, at the same time, protect our fish and fish resources.
Mr. Harding: I would like to begin by complimenting the Member for Klondike on his speech. It is certainly heartfelt. I hear the frustration in his voice and I hear much of the same frustration in my community from people who want to work, but for one reason or another, their future, livelihoods and their strong feeling about what they are doing is encroached upon by one source or another.
I was very much informed by the content of the Members speech; even though I have never been a placer miner I did work in the mining industry. The industry was good to me; it put food on my table and I think that we are all somewhat related in that fashion. I can certainly at least begin to try to identify with the concerns of the Member for Klondike.
Nineteen years is a long time to be battling, and I would suggest to the Member, in the wave of things that are happening with the federal government, when they start dictating and looking upon the smaller brother, the Yukon Territory, this leads to very unfortunate and mixed messages.
The documents being brought forward certainly do not seem to relate to the situation that we have in the Yukon, especially for people who work in a particular industry and know something about what is happening in that industry.
It must be very frustrating to sit down with federal bureaucrats who might live in Ottawa, and who do not really have a clue about what they are talking about, while you are going out on a day-to-day basis making your living in the Yukon. Why would anyone in the Yukon want to destroy the environment of the Yukon? It does not make any sense.
I would also concur with the Member for Klondike that the federal government water licence provisions - and no one will ever hear me say that they are not important - judging by the size of the document that the Member held up and also through discussions I have had with Curragh Inc. regarding what they had to go through and the expense they incurred, could be viewed as being tremendously cumbersome - not only by big companies like Curragh Inc., but also by placer miners who have to deal with those provisions, especially since most placer miner operations do not have access to the capital and the income that perhaps Curragh Inc. would have, or had in the past.
I think the provisions have a tremendous effect on the industry. I certainly understand the motives behind the water licensing provisions to ensure that provisions are in place to protect the environment, protect access to water and the objectives of the licensing regulations. I also understand the Members concern for filling out the cumbersome documents and the work that is entailed in fulfilling the regulations.
You would not get any argument from me, that if the water licensing provisions could be streamlined, then they should be, for the benefit of the industry. I do not think that cumbersome documents benefit the environment in any way, which is the main objective of the provisions in the first place.
The Member opposite talked a bit about the impact on the economy of Dawson City, which is also very important. While Dawson has a major historical value to the territory, I share with him his concern about the loss of an industry that has that much impact on Dawson, as well as the whole territory. Quite simply put, the tourism industry is based largely in the Yukon on gold: the discovery of gold and the history of gold. That is one of the very unique features, along with the history of the First Nations people, who were here long before the discovery of gold.
To lose an industry like that would be devastating, not just economically, but to our psyche. Mr. Speaker, when you think of the Yukon, you think of mining, placer mining in particular, and you think of gold. I remember, when I was a kid, watching Yosemite Sam and Bugs Bunny and the Klondike adventure they did in the cartoons. Even at a very young age, children all over North America, and wherever Bugs Bunny is watched, learned that the Klondike, the Yukon, is associated with the gold mining industry. It is very important.
That brings people to the territory, to find out what it was all about and what happened here.
The comments about the economic impact and the spinoffs, not just in the terms the Member put it, but in the big picture - the macro-economic picture - are very well-taken. I also share his concern that people, not only in the placer mining industry, but in gold mining in general in the territory - Skukum Gold and Erikson Gold near Watson Lake, the Canamax gold mine, many gold mines across the country, as well as in B.C. - suffered as a result of low gold metal prices. It is unfortunate, because that kind of economy-driven activity is very beneficial and creates the wealth that allows us to develop more economic activity and provides for social networks and frameworks that can improve our society and quality of life as a whole. Without the strong economic framework, it becomes more and more difficult to generate a strong social framework. By a strong social framework, I mean a social framework and programs that we have for a long time as Canadians believed are required to ensure that those a little less fortunate, at least on a temporary basis, will be picked up a little bit by those who are more fortunate.
Without economic activity, such as placer mining and gold mining in general, it becomes more and more difficult to sustain those very important programs. The reduction in miners and operations that the Member for Klondike talked about is also very discouraging. I think that is a trend that he and the Klondike Placer Miner Association should continue to raise as a concern that the industry does have. They have generated a lot of support and I know that they have a lot of friends in the territory because people in general support their livelihood. I think that is very important. I think that there would be very few Yukoners who would not say that there should not be a strong placer mining industry in the territory.
One very ominous statement the Member for Klondike made was that he is confident that placer mining would have been out of business if it was not for the KPMA and the lobbying that they did to have input on proposed regulations. I am not sure if he believes this or not as I have heard the comments he has made in the past but, if I or anyone else in our caucus had anything else to say about it, had we been elected on October 19, 1992, we certainly would have done everything that was in our power to ensure that that was not the case. We would have taken the necessary action to impress upon the federal government that this industry is important to us.
While we share other groups interests, such as the First Nations and other user groups, who might have concerns about what, potentially, could be happening environmentally to the fish, we would like to see regulations that have meaningful balance to them. Regulations for the sake of regulations do no one any good.
We took the position with the federal government that without scientific proof we would not support the very restricted effluent regulations that were put forward. There were a lot of people in the Klondike who did not get that message. Perhaps it was not communicated well enough. Perhaps the Environment Act sent out an alarm signal to people in the Klondike region. The Environment Act was voted on by all the Members in all the parties in this House and might have sent off some signals to the placer mining industry that we were not in favour of the industry. I want to tell you today, for the record, that is not the case. We would have given it our all to ensure that the placer mining industry would exist today and a long time into the future.
For the record, I want to talk a bit about the things that were done by the previous administration to demonstrate not just rhetorical support, but hard tangible initiatives that were undertaken to illustrate to the placer miners and the people of the Yukon that there were some things that were done that were positive. It is unfortunate that we have the big brother of the federal government in certain areas, as it is tough. I am sure the Members opposite are learning that through certain jurisdictional disputes they may be having with the federal government. It is tough because you certainly cannot impose upon them, you have to impress upon them and you have to work at it. They are the people who came up with some of these regulations that we are talking about today.
That really caused a conflict in the industry. It really caused the placer mining industry to worry about their very future in this territory. It is certainly a very terrible situation, and it saddens me to know that people are leaving the territory in that area simply because they cannot make a decent living at something that they want to do.
There was a lot of consultation work done among the placer mining industry, the Klondike Placer Miners Association, the Chamber of Mines, the previous administration and international markets for the product. They are committed to that process. The Member also raised the point about his frustration, the paperwork, the committees, and the dedication of volunteerism that some placer miners had to put in.
I think it is the toughest thing to deal with in a democratic society, because you get so many different, conflicting interests - as the Member for Kluane likes to say, different special interest groups. They all have an agenda and hard philosophical beliefs, and it becomes incredibly difficult to pull a consensus from them. As government, you have to try and encourage debate and encourage an environment where all these people and groups, who have these sometimes diametrically opposed viewpoints, have an opportunity to engage in discussion and try to reach a consensus. Sometimes what happens is that governments put out regulations that may be very touchy or restrictive for certain of the groups, knowing full well that they will be smashed all to heck in discussion and debate with the groups.
However, that is the starting point, and that sends off alarm signals to the groups that are worrying about their futures, and rightfully so. I think that could be a very frustrating process for people, especially when your whole livelihood is on the line. It is not so much the development of initial proposals that are too restrictive, but it is important that, in a democratic society, governments continue to facilitate those groups getting together to work things out. Sometimes, it will never happen. Sometimes, the groups will not be able to achieve a consensus and, then, government will have to give some direction and let the chips fall where they may. They will do all the consulting and do what they can to ensure that as much consensus-building has been done as possible.
When the New Democrats came to power in 1985 - and I have done some research into this - Yukon did not really have much of a program, or any programs, by the territorial government because at that time mining was, indeed, a federal responsibility. There was not a lot that the territorial government was doing here in the territory - spending the tax dollars - because the devolution of powers had not come to the territory on mining, and still has not. The previous administration felt there was some funding and things that could be done because, ultimately, no matter whose jurisdiction it is, the territorial government has the responsibility and the task of creating an environment economically conducive to growth, conducive to wealth and conducive to a wealth that can create strong social and economic frameworks, which in turn create a higher quality of life for all Yukoners. That is very important, so the previous administration did look at some things that could be done to assist the mining industry.
The Yukon mining incentive program was developed. That program was put in place to assist prospectors, exploration companies and placer miners. I see that, in the document Toward Self-Sufficiency in the 21st Century, the new governments concept or vision includes an enhanced Yukon mining incentive program. I certainly think that that may be a good program. We will have to wait and see what is going to be suggested by the new program and exactly what specific details are included, but we will certainly take a very hard look at it. We will probably be able to give some suggestions that might make it even stronger.
The Yukon mining incentive program in 1991 amounted to $653,700 for 57 projects. Of this, $323,000 went to 21 placer operations. In 1991-92, $682,000 was spent on 53 projects under the Yukon mining incentive program.
Of that money, $400,000 went to 24 placer operations. I think that has demonstrated financial commitment. Some would argue that it should have been more and some would argue that it should have been less, but, nonetheless, that was the determination that was made by the government on the basis of consultation with different groups and consideration of budgeting, policy and planning.
There were a number of cost-shared projects with the feds under the Economic Development Agreement. A lot of them came at the request of the KPMA.
In 1989-90, $42,500 was invested in a gold recovery project, which was carried out by Mr. Randy Clarkson. In 1989-91, $96,000 was spent studying fish habitat restoration measures and four years of regional geology mapping was done to discover new areas for placer reserves - so exploration work was done. In 1991-95, we will see - or would have seen under our government - $20,000 to study the long-term impact of placer mining on the lower Klondike and, in particular, the impact of sediment discharge on fish habitat.
I know that there are people in the KPMA who are quite fed up with studies and feel that it creates uncertainty in their future, but I also think the Member has to realize that there are other groups out there who are really concerned about the environment. I am not saying that I necessarily agree with those groups, but in our democratic system, they have a valid concern. As government, there is a responsibility to investigate it. Unfortunately, the result of that is usually a commission or study, which can drive everybody crazy, but it is the only way to get the information needed to get any kind of decision.
The old joke about the definition of a moose is that it is a horse designed by a committee. I think that is a joke that sometimes has a lot of merit, but in our system, all those views have to be brought together.
The Minister of Tourism will appreciate this; there was a committee involved in the planning and design of the Yukon visitor information centre. I know the Minister has some strong feelings about the result of that committees work.
There was $111,000 that went to scientific and economic research, and that went into the Yukon placer Implementation Review Committee. I think that is important. The IRC is a forum - in effect, I guess it is a committee, as I have been describing it - that is put together to represent all those who have an interest in the industry, directly or indirectly. As frustrating as that forum is, it is important.
Not only can it have some negative effects in the placer mining industry and the people, but it also provides a strong forum for the Klondike Placer Mining Association to lobby government on legislation. I know that it is sometimes very frustrating that the impact is not as great as it should be on the federal government, as a result of those lobbies. Nonetheless, it does provide that avenue, and that forum, and I think it is important.
In the 1991 fiscal year, $214,000 went to the resource transportation access program to build roads and other infrastructure for placer operations. It is important to have access to the potential mining that is being planned for the area.
There was $75,000 for repairing the private bridge at Indian River and there was work done with placer miners to effect the needed repairs, which was a cooperative effort between the previous territorial administration and placer miners.
There was snow clearance and maintenance of roads. A very big item that was mentioned by the Member for Klondike was the exemption on fuel tax for off-road use that was brought in under the previous administration. Perhaps that was not communicated well enough to the placer miners because, in talks and discussions with Ministers of the previous administration, they felt they had done some good things, but perhaps they did not get the message out to some of the miners. The Member, quite rightly, takes some credit for the lobby as a member of the placer mining association. I also think that the previous administration should take some credit for what was done.
There were also extensive lobbies by the previous administration for the re-introduction of flow-through shares. I have gone to great lengths to do some research into this, to document and examine what was done, because I feel that there is room for a modified flow-through share program in the country. The previous plan had a number of faults. Whether or not it was developing new exploration opportunities is not in question. It was doing a lot of exploration. As a matter of fact, exploration went sky-high when that program was in effect.
The problem was the cost-benefit analysis. Apparently, the federal government felt that, because of the credit system that was involved in it, it was costing the taxpayers too much and not enough mines were being developed. There was also substantial abuse by some of the mining companies.
I believe there is room for looking at the flow-through share program again, but with more covenants. I know the new territorial government made much in discussion during the election, as well as after, about efforts to re-establish and re-introduce the flow-through share program - as did the previous administration make those attempts - at least in some modified way. I will be interested to see if they are successful in those endeavours. If they are successful, it will be good for the mining industry and, subsequently, for all Canadians.
I want to talk a bit about the Environment Act, which was controversial, but it ended up with the support of the Members opposite, who are now in government. In talking to a few placer miners, who do earn their living in that field, I believe the act has sent out some mixed messages. There was some confusion in the industry as to just who was coming out with the regulations restricting effluence that were creating lots of problems for them.
I do not think the Environment Act had any intention of creating unrealistic covenants, which the Member for Klondike spoke about, and I do not think that it did. Eventually, it gained the support of all the parties in the Legislature. That is an important feature of the Environment Act that has to be pointed out to the KPMA in the Klondike region.
I also want to say that the placer mining industry is subject to the whims of people in Ottawa, who take different messages from the territory. Sometimes, I do not know if they understand full well what is going on. They do not really know what it is like to live here and what our unique environment is like and how we feel about it. Like the Member said, he was born and raised here, and why would he ever want to destroy the environment? That is a valid point and pretty much speaks for itself, especially from someone who is soon going to have three children to think about. He has a vested interest in the environment and the future that is going to be left for his children. Everyone in the territory has the responsibility to think about the environment.
Fortunately, in our society and in our democratic system, we have philosophical differences. Especially in our political system, we have differences that separate parties from one another. Impressions are created about different parties - sometimes with reason, sometimes without reason; sometimes with merit, sometimes without merit. I do not know anyone in our caucus who is not interested in the placer mining industry and not interested in seeing the placer mining industry continue to grow and flourish - or start to rebound would probably be more appropriate.
We have demonstrated a commitment to that end in the years the NDP was in government, both in the long term and in the short term. One of the things I think was a very important aspect was that the previous administration had organized some training courses at Yukon College for placer mining. I would be interested to hear more about the effect of those courses - whether they were, indeed, effective; whether they were put to good use - but I do believe that the intent was there and one-half million dollars was dedicated to that end, to try and make sure people were trained on the various requirements of that industry.
There was also a large degree of advertising undertaken in conjunction with the territorial government, both in national and international mining industry periodicals. There was a presence, partially funded by the territorial government, at trade shows where it was important to promote the Yukon placer mining industry; and there was attendance at the Canadian Institute of Mining, Metallurgy and Petroleum meetings.
Prior to this debate, I went to some length to discuss with the Minister of Eeconomic Development under the former government some of the things he undertook to do in support of the industry, so that I felt I could be on more solid ground in saying that there was demonstrated supported for the industry and as a result I feel confident that there was.
I was informed of some of the representations that were made at mines Ministers conferences. For example, there was one in Halifax that was actually chaired by the Yukons mines Minister, the Minister of Economic Development, and there was a lot of discussion both about reintroduction of flow-through shares, the covenants on effluents that were too high in the Yukon, and all kinds of other things on which positive supportive work was done. It is unfortunate that sometimes it did not yield the kind of results that organizations such as the KPMA might have wanted to see in entirety; but, as the Member for Mayo-Tatchun pointed out to me, there are people as well - and rightfully so - who are concerned and want to see work done at least. They do not necessarily want to see work done to create cumbersome regulations; what they want to see is work done to ensure that the environment - and, in the case of the effluents, that would be the fish - would be protected.
The unfortunate thing is that it goes on and on. It seems like, every time you turn around, there is another attempt to say that it is harmful to the fish. Over and over, the results have been negative. There certainly are some serious differences of opinion on both sides of the equation as to whether or not it is. This is certainly harmful to people who make their livelihood in the industry. It is very unfortunate that it is having that effect. I would like to see a determination made by the federal bodies and the IRC, which this motion is all about, that the fishery resource is finally, once and for all, pronounced safe as a result of the regulations that are presently in effect and govern the placer mining industry.
That will be very important for security. People in the placer mining industry could invest. People who are concerned about the fishery resource can feel satisfied that they have done their work to ensure that their livelihoods and sustenance are safe. There are many who use the fishery resource to put food on their table and, in some cases, the product of their work becomes the food on the table. They could then feel satisfied that work had been done to prove that there has been no real harm to the future of their livelihoods as a result of the existing legislation.
In closing, the placer mining industry and this motion have our support, both rhetorically and also in terms of demonstrated initiatives that were undertaken when our party was the governing party. We would do anything we could to ensure that the industry would rebound, become stronger, create wealth and jobs, while protecting the Yukons fishery resource, which is so critical for so many people in the territory and in Alaska.
Hon. Mr. Devries: I rise to support the Member for Klondike in his motion. When we on this side came into government, we found a peculiar situation relating to mining in general. Time and time again, I heard that the previous Minister who held my portfolio enthusiastically supported mining, but there was always the question of whether this support was unanimous among all of his Cabinet colleagues. I see the Member for Faro commented on this, but as the Member was not in Cabinet at the time, we are not certain of the accuracy of those statements.
When we assumed power, the Implementation Review Committee hearings were at an impasse. I will get into that very shortly. First I would like to just go back to where the Member for Klondike told some of the Klondikes history. Again, we have to think that the development of the Yukon was entirely dependent on the placer mining industry, initially. Basically, the exploration of the Yukon was more dependent on the fur trade. I think it is kind of ironic, when we see Friends of Animals, and groups like that, in the process of trying to eradicate the fur trade, when it also played a very important role in the development of Canada.
I would blame it more on the Department of Fisheries and Oceans for trying to single out the placer mining industry as the culprit in the reduction of salmon stocks. The Member for Klondike said that just five percent of the streams of the Yukon have placer mining on them. Realistically, there is no way that the Department of Fisheries and Oceans could ever make that accusation. If there were a five percent decline in the fish stocks, perhaps they could attempt to do that. Even then I do not think there would be any justification in them doing that.
It was after we got into hard rock mining that mining and placer mining together became the number one industry in the Yukon. Certainly, the placer mining industrys development was not without its drawbacks. There was a major boom in the Dawson area and I imagine it had some very serious effects on some of the First Nations people. However, it is also interesting to see that many of the First Nations people adapted to a miners type of lifestyle very easily. A very large component of the employment of the placer mining industry was made up of First Nations people.
I still recall the build-up of gold fever when I visited the community of Barkerville about 27 years ago, and again, several years ago, I was floating down the Yukon River with my colleague from Ross River-Southern Lakes. We were a few days behind the Leader of the Official Opposition - I guess he had a different title at that time. We would stop at various interest points and people would mention that the Leader of the Official Opposition had been by several days before.
It was very interesting to visit the abandoned sites of those early days. I could not help but imagine some of the hardships that many of these people experienced as they lived through the severe winters and had to wait for the spring mining season. Although, by the same token, I have never avoided hardship and I, in a certain sense, envied them.
When we left Pelly Crossing I vividly remember a picture being shown to me by someone - I have forgotten the name of the person; I am sure that the Member for Tatchun knows her. She showed us a picture of herself, several of her brothers and their friends on a raft floating down the river to Dawson City. She was the oldest of the group and I believe she was either 14 or 16, I am not certain, but in this day and age, if we put our children on a raft to go school, I am sure that the Childrens Aid Society would be after us, accusing us of child abuse or something. However, in those days it was standard practice and it shows the courage that people had in those days.
The development of the Yukon and the nostalgia surrounding the gold rush has made the placer mining area of the Yukon, and also Whitehorse, as a part of it, a major tourist attraction.
The contribution of the placer miners toward the Yukon, according to statistics, is as great during their short operating period as Curraghs is on a day-to-day basis.
I found the comments from the Member for Mayo that much of the negativity of the industry toward the NDP was perception is something I am not going to get into. The placer miners felt that they had been deserted and they were feeling that their very existence was not just in jeopardy, but in fact coming to an end.
Fortunately for the Yukon, the government changed and a new perspective was given to the IRC. With that new mandate, we now see, in four short months, the IRC reaching a consensus that we feel the majority of the parties can live with. I am not blaming the side opposite, but it happened. The IRC was going nowhere until we gave them the instructions to pursue this more aggressively and get everyone working together to come to a consensus. I feel it was our role in this that delivered a situation we could all live with.
I would like to say a few words about the value of the industry from an economic perspective. Yukon placer gold production for 1992 was 99,541 troy ounces. The 1989 placer gold production was 298,229 troy ounces, representing $104 million in value. The amount that the placer mining industry contributes to the Yukons gross domestic product is substantial - very significant.
In 1991, 1,364 claims were staked and 899 in 1992. The number of placer operations in 1992 was 186. This figure does not include the hobby enthusiasts - including me when I run around the rivers with my gold pan - and prospectors actively involved in finding placer deposits in the Yukon.
To assist in the development of new placer exploration, we invited the Canada/Yukon Mineral Development Agreement Geoscience placer section office to attend the Cordilleran roundup last January in Vancouver. The placer geologist, under the MDA, have completed mapping the surface geology for Black Hills Creek on a scale of 1:50,000 and published a report in the Yukon Exploration and Geology. This project involved testing drainages south of the Klondike to determine placer gold reserves for miners and geological mapping.
I was interested to note the Oppositions new-found concern for Dawson City during Question Period today. I am pleased to see the concern and that it is well-founded.
When we were in Opposition, we were very disappointed with the message sent out to the placer industry when the no-development party tried to ban the goldpanner from the Yukon licence plate. I found it interesting at the Cordilleran Roundup - it may be perception or it may be reality - how the mining community thinks of the NDP as the no-development party. Perhaps if they do not feel this label is justified, they could better improve their communication strategy.
The placer mining community felt they were being deserted by the very people who were elected to work on their behalf. Mr. Speaker, you can understand my pleasure with the NDPs new-found concern for Dawson City.
I was in business in 1982 when all the hard rock mines in the Yukon shut down. I remember that it was the placer mining community that provided the only glimmer of hope in the gloom of those shutdowns. I am very pleased to support my colleague from Dawson City and very pleased we were able to put a fresh perspective on the Implementation Review Committee hearings.
Through the hard work of our negotiator - and it was the same person the Opposition used, Mr. Randy Clarkson and the staff of the Yukon Department of Economic Development, the federal Department of Fisheries and the Department of Indian Affairs and Northern Development - it is hoped that Yukoners will benefit from the survival of this industry.
Mr. Joe: I would like to thank the Member for Klondike for his very important motion. I am not a placer miner, but my father was. My father used to tell me lots about his Dawson mining days. He worked there for three years.
If we want to talk about mining today, we are facing a different world from my fathers day. There are rules and regulations today; I see that it is getting harder than ever for placer miners. I want to speak about what I believe.
I would like to speak to this motion, because I believe that everything should be done to make sure that our fish are protected.
Placer mining is important to the Yukon economy. It was not necessary to my ancestors. It is here now and we must work with it.
There are lots of things that can help make this industry work better. Our fish, beaver, muskrat and other animals that depend on clean water must not be hurt by mining.
We must make sure that our water and rivers are kept safe, not only for us who live now, but for our children and their children, too. The placer mining industry has a great deal to offer the Yukon economy. However, so do the people who depend on the rivers, not only to eat fish and trap animals; they need the water to drink.
At a place down the river from where I live in Pelly Crossing, the people cannot drink the water because it is dirty. I believe that there is a way for these two things to work together. There is a way for both these interests to live beside one another.
There are many small operations in my riding that are not getting ahead because a number of larger ones are taking over. I believe we need to look at a way to make life easier for small businesses, so that all the support does not just go to the big operations.
I agree with the Member for Klondike that regulations must be reasonable - this means reasonable for everyone involved.
Mr. Speaker, I would like to tell you more about rules and regulations. It is a problem today. Small business people who are trying to make a living when they can only work two or three months in the summer, the ones who have to work with pick and shovel, are the ones who are hurt. They have to face the same rules and regulations as big businesses and companies. We should look closely at this and try to make a change in placer mining.
Hon. Mr. Ostashek: I rise to speak on what I believe to be a very important motion. I certainly hope it gets unanimous passage in this House today.
The mining industry in the Yukon is suffering, and has suffered in the last 10 years especially. It is suffering for various different reasons. We have had a downturn in the economy in the last three or four years. The price of gold has been low for many, many, years now. It seems to be locked into the price range where it is at now and will be for the foreseeable future, unless we were to see the phenomenon that happened in the late 1970s when gold went to $800-plus an ounce. When that happened, I think we had a small view of what the gold rush was like in 1898. There were mining companies running all over the country. Many pieces of equipment were being moved into Dawson City and a lot of work was created.
We are speaking today, basically, about the placer mining industry, but we cannot forget mining as a whole. The placer mining industry brings great benefits to many small Yukon communities. Without that opportunity for employment and without the monies that are spent by the placer miners some of those communities would not be doing very well.
Placer mining is more than just an industry in the Yukon. Placer mining is a way of life in the Yukon for a certain segment of our population and has been for many, many years. Many ma-and-pa operations try to keep a small overhead and try to carve out a living from the creeks of the Yukon.
Placer miners are very, very independent people and they do not ask for much. They ask only to be left alone so that they can carve out their living along the creeks of the Yukon, and in most cases are not looking for government assistance.
We also know, as the Member for Dawson said, if it had not been for the gold rush in 1898, the Yukon could well be part of the Northwest Territories today.
My understanding is that the reason that it was carved out from the Northwest Territories was to protect Canadas sovereignty and to put into place mechanisms to cope with the influx of people who were coming into the territory.
Along with that, I believe that the placer mining industry has contributed to the Yukon on an ongoing basis for almost 100 years. I believe that it can continue to provide economic benefits to the Yukon for many, many more years to come.
The placer mining industry, and the mining industry as a whole, have said that they are not opposed to environmental regulations; they are not opposed to regulations at all. The industry knows that we are living in an age where you can no longer go tear up the creeks, raise havoc and walk away from the sites. The industry knows and understands that. They are not opposed to the regulations, but what they are looking for is some reasonable regulations that they can abide by, and which are not so cumbersome and expensive that they cannot make enough money in a season to pay for the environmental protection they have to observe.
Another thing we have to keep in mind when debating this motion and the concern of the placer mining industry on reasonable regulations so that they can continue to operate in the Yukon, is the fact that over 90 percent, maybe even more, of the placer mining going on in the Yukon today has been going on on those same creeks for many, many, many years. The placer mining industry does not appear to be breaking new ground in virgin territory away from existing access routes. It is just too costly to get back into those areas and be able to make a living, so they are concentrating their efforts on the creeks and the tributaries of the streams that have been mined for the last 100 years in the Yukon.
I know, Mr. Speaker knows, and Members of the Opposition know, and as the Member for Klondike pointed out, there are still fish in those streams. Those placer mining operations have not killed all the fish.
There may not be as many fish as before, but we do not know that for sure. We do not know that at all. The placer mining industry is asking that reasonable regulations be in place so that their discharge into the streams does not have to be of such pristine quality that not even Mother Nature could achieve it if the placer mining industry was absent from the creeks.
I have lived for 20 years in the Yukon on glaciated areas and glacier-fed streams. We just have to look at the White River, the Donjek River and Slims River; all those rivers that come off the glaciers. For about eight months of the year they are a deep brown in colour. They are full of soils being washed from the glaciers. During the summer months, one cannot drink the water out of any one of those streams; even after letting it settle overnight for 24 hours, it is still a milky colour. I believe that nature, through flash-floods and similar occurrences, puts more soils into the creeks and rivers, and causes more damage to fish populations in one rainstorm than the placer mining industry could do in an entire season.
As I said, the placer mining industry benefits many communities in the Yukon. They are small communities that sometimes do not have much else going for them.
As the Member for Klondike said, Dawson City was founded on placer mining, but now tourism contributes a big part to the Dawson economy and the placer mining industry contributes a big part to the tourism industry. People come from thousands of miles away to see placer mining operations while they are in the Yukon, and not only in Dawson City and the Klondike. I spent many years in the Burwash area. Every summer, tourists arrived. Over the years, different lodge operators have run tours to a live placer mining operation, so that tourists visiting the Yukon could enjoy and understand how gold is retrieved from these operations.
When I was doing flight-sightseeing tours out of Kluane, as we flew out of Burwash Landing and over the glaciers on our way back, almost everyone wanted to fly low over a placer mining operation so that they could see how it was done. It is a great attraction.
There is no doubt that while placer mining is operating it creates a mess on the creeks but, as the Member for Klondike has said, Mother Nature rejuvenates the land after the mining has stopped. It does not take long until vegetation starts growing back over those areas.
As everyone in this House knows, I was in the outfitting business for many years and had the opportunity to travel over a pretty good chunk of the Yukon north of Burwash Landing. I came across some old hand-placer mining sites, where they used to sink the shafts by hand and build a little cabin in the bush. I believe the Member for Watson Lake spoke about the hardships these people endured to make a living by mining for gold. There is no doubt that it gets into peoples blood. As I said previously, it is a lifestyle in the Yukon. We have, I believe, third-generation Yukoners mining some of the creeks that their ancestors mined.
I believe that we, in this Legislature, have to support that industry. The industry has stated that they want to be environmentally responsible and they are prepared to be.
The hon. Leader of the Official Opposition asked today in Question Period if the Yukon Partys position was, in order to attract mining, were we going to relax environmental regulations. I can tell the Member opposite that that is not the case at all. The mining industry is asking for a mechanism through which they can put their case in front of those regulatory bodies all at one time, without having to jump through this hoop over here and that hoop over there. They are not asking to be relieved of the responsibility of looking after the environment. They are just asking that the system by streamlined so, as the Member for Klondike said, the cost would not be so onerous that it deters mines from operating in the Yukon.
I know, and Members opposite know, that we all have to take a more responsible approach to the environment these days. We, on this side of the House, are going to do that, but we believe that the system can be streamlined so that getting the documentation is not such an onerous task and the mining industry will be able to survive in the Yukon. That is placer and hardrock mining.
I have heard comments in public like Mining is yesterdays business. It is not the future of the Yukon. I believe that those people are dead wrong. Without mining, even as depressed as it is today, we would have very little reason to be in the Yukon. Governments in the Yukon were created because of mining; mining did not come here because of government, and I do not think we can lose sight of that.
We have to work with the industry and give them the ability to run their operations in a cost-effective, environmentally-friendly manner, so they are able to make a living.
Let us think for a minute about the supplies and services that the mining industry in the Yukon requires, and the amount of jobs they create in that service and supply sector, with most of those jobs being in the City of Whitehorse.
We see the effect when we have an operation the size of Curragh devastated by metal prices and having great difficulty surviving. I hope that will be accomplished, and the mine will survive and get through this tough period. We need that mine, but we need the placer miners just as badly.
We have to be able to put together an economic climate in the Yukon that is attractive to the mining community. To do that, we do not have to walk away from the environmental concerns - we do not have to do that at all.
The Member for Mount Lorne made some comments the other day about our stand on Windy Craggy. Certainly, we support Windy Craggy; you bet we do. That operation would have major economic benefits for the Yukon. I believe, and Members on this side of the House believe, that Windy Craggy can go ahead and be environmentally sound. The only thing that the company is asking for is the opportunity to make their case in front of the environmental review panel. That is all they are asking, and I think they should be afforded that opportunity.
Those are the kinds of obstacles that are crippling the mining community, not only in the Yukon and British Columbia, but clean across Canada. This is why companies are moving to South America. They are moving there because they do not have all these hoops to jump through. That is right, they do not.
I know the environmental regulations are not as tough down there, but these mining companies would be prepared to operate here if they were given a fair break and given the opportunity to present their cases.
In many cases, such as Windy Craggy, they are not even given the opportunity to appear in front of the environmental review panel to see if they can operate in an environmentally sound manner, and that is wrong.
I love the Yukon, and I love the mountains, and I love the wilderness, and I do not want to see it all decimated either. However, the fact remains that we have a wealth of minerals in the Yukon. It is our strong point. We have these minerals. In order to be able to get those minerals and be able to sell them in the market, to see our economy grow, we have to be very supportive of the mining industry.
Mining nowadays is much more effective than it was 50 years ago. There is no doubt about that. I grew up in the coal mines in Alberta, and I can go back there today and see the scars from those mines. Nobody thought about reclaiming that area after they were done mining. Just 10 or 15 miles from there, where Luskar Coal has been operating since the mid-1970s under new environmental regulations - they are still mining millions of tonnes there every year - if one looks at the areas they mined five years earlier, one cannot even tell that there was a mine there. The pits have been refilled, the areas have been revegetated. Go there in November or December, and you can see the big horn sheep grazing on the areas that were mined five or six years earlier.
It can be done, and I think the message the mining community is trying to send is that they are prepared to work with the governments but, please, put a process in place so that they do not have to, as I said earlier, jump through one hoop over here, another one over there, and spend millions and millions of dollars in the review process, which adds to the total cost of the operation and has a very serious effect on whether the operation is viable or not.
I am fully supportive of this motion, and I believe the placer mining industry can contribute to the Yukon for many years to come. I believe the placer mining industry can do that without harming our fisheries, and I believe they are prepared to do that and are prepared to live with reasonable regulations. I certainly support this motion.
INTRODUCTION OF VISITORS
Speaker: I would just like to draw the Members attention to the presence of Norma Kassi in the gallery. Norma is the former Member for the Old Crow riding. She did not seek re-election in the newly renamed riding of Vuntut Gwichin. Welcome, Norma Kassi.
Mr. Cable: A few years ago, I had the pleasure of sitting on something called the Yukon Placer Mining Guideline Committee, which did not result in much of a report. However, I did have the pleasure of meeting many placer miners and hearing their problems and those of the other stakeholders in the area. It became apparent to me that there was an irreconcilable conflict between the various pieces of legislation: the Yukon Placer Mining Act, the Northern Inland Waters Act, the Fisheries Act and the Territorial Lands Act. We made our best shot at resolving that conflict, but I have to say that we were not successful.
This was several years ago, and the situation had been going on for some time. The federal legislators have not been terribly diligent in resolving the conflict, and they have put the burden of deciphering the legal problems onto the miners, the other resource users, the environmentalists and the public service. They, through their lack of action, have caused considerable, needless friction between those people. I am happy to see that we are moving toward some resolution of the friction between these people - friction resulting from the vague legal situation.
If the word realistic, as I think it does, encompasses the term precision and certainty, then I certainly will have no problem supporting this motion. The placer miners need certainty in their water use, in relation to reclamation, and in relation to land use. Until they get that certainty, they will not be in a position where they can invest in the future and move the industry forward.
The other stakeholders - the fishery resource people, the environmentalists and the public service, to some extent - will not know exactly what piece of legislation is to govern until the federal government takes the necessary steps and makes the necessary legislative action to resolve the problem.
If this is a first step on the part of this House in setting that in motion, then I have no problem in supporting the motion.
Hon. Mr. Phelps: Before I proceed, I understand the Leader of the Official Opposition had a question.
Speaker: The Leader of the Official Opposition was asking if question should be called on the motion, but I am sure the Minister of Justice wants to have his say.
Hon. Mr. Phelps: I thought he might have been doing that, but I was sure he would not want to have the question called before he heard my addition to this debate.
I do have a few words to say. I could stand up and sit down a couple of times; it is good exercise. It goes without saying that the lifestyle of most placer mining families, and people involved, is one that is dear to the hearts of many Yukoners. It epitomizes the image many people have of Yukon citizens being ruggedly independent and who work hard, in the bush, and fashion a lifestyle that, quite often, does not bring them into contact with the rules and regulations that most people in the citified parts of the country face in their daily lives. It is a lifestyle that many people enjoy and many others aspire to.
I often become concerned about those in our society who have a them and us attitude toward mining in general, and placer mining in particular. Unfortunately, many of the environmental groups that sometimes like to come to the Yukon and tell us how to live have taken it upon themselves to state that, somehow or other, there is an inconsistency between those who are engaged in the mining industry and those who enjoy the outdoors and appreciate the wilderness in particular, and Indian people in general.
I sometimes think that what is overlooked is that Yukon Indian people have played an extremely important role in placer mining ever since, and before, the most famous strike of gold in the Klondike. I was very pleased to have been presented, not too long ago, with a recent history that has been compiled about the life of Skookum Jim, sponsored by the Skookum Jim Friendship Centre. It is a really interesting book. The unique thing about this particular history book is that a lot of it is devoted to taking down stories in the oral tradition from Indian elders who knew Skookum Jim, Tagish Charlie and Patsy Henderson.
It is very clear that Indian people from the Tagish and Carcross area were involved in prospecting for gold prior to 1896. It is also fairly clear that Skookum Jim, Tagish Charlie and Patsy Henderson had at least as important a role to play in the original discovery as George Carmack, who seems to have been given all the credit. Perhaps this is because of our history books and their focus on Europeans as the people who did everything in those days.
It is interesting, too, to see in that book that Skookum Jim, shortly after the discovery, separated from Carmack. It is a little known fact that it is Skookum Jim who carried on prospecting and discovered gold in the Kluane Lake area, and caused a minor stampede there and the creation of Silver City - the historic city that the Hon. Member for Kluane is constantly reminding us should be preserved as an historic site.
Skookum Jim made the original discovery up there in 1903, quite a few years after the discovery in the Klondike. Were it not for that discovery, it is quite possible that the Alaska Highway, rather than going through Champagne, past Silver City, around the lake and up to Beaver Creek, would have gone from here through Dawson and over to Alaska along the Sixtymile River or along the Tintina Trench. That is an important point, because the Alaska Highway itself - and its siting - has had a tremendous influence on the socio-economic development of the territory.
Skookum Jim, as people know, resided in Carcross primarily up until his death. Up until about a year before he died, he continued to travel throughout the Yukon and northern British Columbia searching for gold. It was not because he needed the money but, for him, it was compatible with his lifestyle and something he wanted to do. In fact, his last epic journey was from Carcross and Tagish to Atlin and down to Telegraph Creek, from whence some of his ancestors came. He then came back to Tagish, and then to Carcross, where he stayed, knowing that he was about to die. It was about that time that he had his final will and testament drawn. From a trust fund set up within that document came the monies that were used to start the Skookum Jim Friendship Centre that we know today.
Tagish Charlie returned to his roots in Carcross, as well, as did Patsy Henderson, who was a very respected chief. When I was a young lad, Patsy used to give very interesting lectures to the tourists who used to take the Tutshi down to Ben My Chree and back about the Indian lifestyle before the white man, about Skookum Jim and Tagish Charlie, and about the discovery of gold in the Klondike. He used to claim that it was he who picked up the first nugget, and I think he was not alone in that assertion among the people who were in that original party. Patsy Henderson was under age, 15 or 16, when the legal age was 18, and therefore not allowed to register documents in the mining recording office, so he did not reap the wealth from the discovery that the adults in the party - Carmack, Tagish Charlie and Skookum Jim - did.
I say this because that was the beginning of a tradition among a good many Yukon Indian people. I know of a lot of Indian people who are employed in the placer mining industry throughout the Yukon, but particularly in the Dawson area. I know of Indian families who have their own operations and many, many Indian people who have been trained in heavy equipment and who work seasonally. Some of them, for many, many years, have worked for some of the long-term mining operations.
I can recall - when I was involved with land claims - David Joe and some of his friends getting involved in the fringes of placer mining in an area outside of Haines Junction. I hope that they were somewhat more successful then I have been in the few ventures that I have tried, because it is a tough game. A lot of people put more gold into the ground than they ever seem to take out.
Operating heavy equipment, operating in the informal atmosphere that most of the small operations are involved in placer mining entail, operating seasonally, being able to work your own hours, to a large extent, and the feeling of independence: all of these things are entirely consistent with many of the cultural values of First Nations people. I am stressing this because I really suspect that their role in the placer mining industry, especially, has been largely ignored, or perhaps deliberately downplayed by many of those who would save us from environmental and ecological disaster, like Green Peace and this Watson character who came up to save us from the wolf kill, and others too numerous to mention.
There has been some talk about the issue of how much damage is really done by stirring up the overburden, the clay and mud and getting some of that into the rivers and streams that are used by fish - in some cases to spawn, but in many other cases traversed by salmon species as they make their way from the ocean to the spawning beds from which they originally came.
Last summer, I was fortunate enough to take a very interesting river trip in a boat with my good friend from Watson Lake. We left from the Kluane River, just down from Kluane Lake. We put in at the Government Leaders home there, and from there we proceeded down the Kluane River to the Donjek, from the Donjek to the White, from the White to the Yukon and then down to Dawson.
When we put the boat in at the Kluane River, right where the Government Leader has his home - it is a beautiful river, clear and picturesque, and I had never been down it before - I asked how far one went before starting to get muddy waters and glacial streams coming in and polluting the water with earth and dirt and clay and volcanic ash. I was told it would be about two and one-half miles. So we set off, and almost immediately came to the place where the Duke River flows into the Kluane; from there on, the water got dirtier and dirtier and dirtier. It seemed at times, when we got down to the Donjek and then to the White, we could almost walk on the water, it was so thick. I remember filling a water glass with the river water in the evening before we went to bed and in the morning coming out to see if it had all settled; perhaps 25 percent of the solids in the water had settled to the bottom and I could not really see through the liquid.
The White River, when it flows into the Yukon, is famous, it is so chockful of dirt and grit and volcanic ash. In fact, in one of the books on the Yukon River that canoeists use the author talks about liking to approach the junction of the White River and the Yukon River at night and then float without paddling so that he can hear the grit from the White River scraping against his canoe from that point on, as he floats down to Dawson. In Dawson, of course, if one has a boat - although the Yukon River largely dilutes the White River - one has to change the impeller water jet in the outboard motor yearly, because it wears out. I have had outboard motors that I have used constantly on the lake system here and never even think of having to replace the impeller. In fact, I did wear one out once - I did not, for the life of me, know what was wrong with the motor - but it is unusual to say the least.
When we were travelling down the Donjek and the White, we carried an extra impeller because we were told we might wear one out just in a few short days - the few short days it would take to travel from the confluence of the Duke and the Kluane River down to Dawson.
I mention all of this not just to say that there are rivers so muddy as to make placer mining seem like a very minor nuisance to the overall scheme of things, but I say it because there is a tremendous salmon run that goes up the White River and the Donjek River and into the Kluane River to their spawning grounds. That has been going on since before civilization arrived in North America and before anyone can remember. It certainly has not jeopardized by the tremendous amounts of volcanic ash and mud that is washed down daily by those rivers.
I really have some problems with those who would place such terribly strict conditions on water licences for placer miners. As has been said by speakers before me and by the Hon. Member for Klondike, basically the stuff that goes into the settling ponds and on into the streams and rivers is simply the same stuff that almost chokes the Donjek and White rivers. Those rivers have not proved to be detrimental to the salmon run or the other species that live in those rivers and migrate back and forth.
There has been an awful lot of dedicated work done by a lot of people who are trying to come to grips with the bureaucratic imperatives, legislation and regulations under the Northern Inland Waters Act. A good many people in the industry have sacrificed a great deal of time and sometimes even their livelihood, seeking a reasonable compromise position. It has been an extremely frustrating task for people in the mining industry. We all owe a vote of thanks to those who have been involved in the KPMA. I can think of some of the presidents over the years who have worked tirelessly to try and bring some certainty to the industry. Some of these people, as has been said, have been there for three or four generations, mining on the same creeks. Two of the past presidents of the KPMA came from the Mayo area and they worked long and hard trying to resolve the issues.
A person who deserves honourable mention for all the work that he has done in recent years in Al Kapty, who I know has put a lot of time into dealing with the regulations respecting the purity of discharge from these operations. I understand that he is hoping to be able to finally wind up all that work sometime in the next four or five months. I think that we all owe Al a vote of thanks, because he brought stature and an organized mind and a great deal of ability to the job.
Needless to say, I, like everyone else in this House, strongly support the motion. I want to thank the Member for Klondike for bringing it forward. I think it is important that we clearly state our beliefs with respect to the future of that industry and the importance of bringing certainty to it. Of course, I will be supporting the motion.
Mr. McDonald: I rise to support the motion as well. I will give the reasons why. It is sometimes very difficult to debate a motion such as this when it is clear that Members are going to agree and they struggle to find original words, which can cause them to go through real contortions to demonstrate how much they agree, and how much original thought they are willing to apply to the motion.
However, there are a couple of things that perked up my interest and I could have shaken the Minister of Economic Developments hand for some of the words that he said. I thought for a moment that I would only be able to depend on my own experiences in the Mayo district to carry on with what I have to say in the debate, but there was enough incendiary material from the Member for Watson Lake, that I do have a speech.
While the speech may not be entirely original - I am sure that you will have heard it many times, Mr. Speaker - it is useful information to put on the record, because I think there have been some concerns about where our people, and particularly parties, stand with respect to mining in the territory, and placer mining in particular.
As the mover of the motion has pointed out at some length, and thoroughly, the fundamental issue, as I understand it, for the placer mining industry, is that they need to be working and operating in an environment where they are aware of the pressures that they must face respecting environment regulation.
In the placer mining industry, as in the mining industry generally, you will note that the mining industry has to operate not knowing whether the mineral price will be sufficient to justify the rent or lease fees that they have to pay for equipment or whether or not they will be able to pay all of their bills at the end of the season. It is an industry that has to depend on a good degree of luck, as well as a lot of skill and knowledge of the ground, to determine whether or not they will get pay dirt and whether or not it will be sufficient to justify the continuation of their business.
What the mining industry does not need is to operate in an environment where controllable items, such as regulations, become some onerous, difficult and obtuse that they have to add that particular element to the uncertainty in which they operate.
The difficulty that policy makers - particularly, politicians - have faced within the last 15 years or so, is that while they have been interested in providing for appropriate environmental protection, they are not certain where the public demand will end in applying that regulation.
I have heard, on many occasions, federal Ministers in our country stand up and make announcements about the regulatory climate and about new initiatives that they intend to take that are clearly, in many respects, a considerable improvement over prior regulations, only to find themselves knocked down and about by the critics who feel that the regulations are not tough enough. I suppose the concern in the mining industry is that they would like to know when enough is enough.
Certainly, in assessing the environmental regulations for the placer mining industry, where the science has never been terribly clear, this is a problem that is endemic and insidious.
As the Member for Klondike has described it in his motion, it is important that we do what we can to ensure that the regulatory environment in which the placer miners operate is as certain and understandable as possible. As I have mentioned, the gold prices and the ground on which they are operating are two elements of the business that are never sure things.
As a number of people have pointed out as well, for the most part, the placer mining industry, at least in the Mayo district - though perhaps not precisely the same in the Klondike district - has been characterized by a fair number of family operations. In that district, many people who own equipment and have small companies that do a variety of tasks, depend on the time that they spend on the creeks in the summer to put the bread and butter on the table over the year. Of course, they also fix furnaces, plow roads and do a little road work here and there to make up the balance of their income. Consequently, one should not be surprised at the anxiety that government regulators hear when they hold public meetings in communities like Mayo and receive stiff resistance to proposals for a new regulatory environment that people sometimes have a hard time understanding. Sometimes people feel that the regulations were not devised with the thought in mind of the industry continuing.
I can speak from my own experience. During the period that this issue has been debated, I have had the opportunity to attend meetings in the early 1980s, when the debate was of great currency in the territory. There were meetings in both Dawson and Mayo and I presented the case from my perspective to the various placer mining review bodies. There was one particularly noteworthy one chaired by Ione Christensen. At that time, the difficulty and complexity of the issue really came to the forefront. I think people understood for the first time what was at stake. It was also an opportunity, at that time, for the placer mining community to get the quiet support of a large portion of the Yukon public who had only been silent observers to the evolution of that industry, and who, when push came to shove, were prepared to be counted to ensure that the industry had a fair shot at continuation.
It also became clear, at that point, that the Yukon had come of age in terms of their respect for environmental values. Many eloquent speakers on both sides of the equation came forward to speak both for the continued protection of the placer mining industry and an assurance that the industry could continue, more or less without any significant damage, as what has occurred in Alaska. At the same time, there were people in the environmental lobby, largely based in Whitehorse, who felt that there were many issues that had not been given proper respect and found the placer mining regulation review to be one of the first opportunities to thrash out the issues in the public, so the public would have a balanced view of what was being debated.
In the midst of that, there were a number of budding politicians who were trying to survive the debate and ensure that people were generally satisfied all around. One thing it did impress upon me - even though I come from the hard-rock, not the placer mining, industry - was that the placer mining industry had a role to play in the territorial economy. We were all treated to a pretty thorough socio-economic analysis, largely sponsored by the KPMA, as to its value of the industry to the economy. It was useful for all of us to appreciate what might be lost if we simply let a bureaucratic process run its course.
Just to provide the final leg on the stool, the fishery industry was also going through a bit of a crisis. There were and are a number of people in the territory who do depend upon the fishing industry to make some money and put food on the table. Perhaps ironically, the fishery industry has found its most significant home in Dawson. The Han Fishery in that community is probably the largest commercial fishery outside of Whitehorse, or perhaps the largest commercial fishery in the territory.
In any case, the fishing industry was going through its own problems. The Pacific Salmon Treaty was being negotiated. The opportunities for the catchment of Yukon-bred salmon had appeared to be constrained through the negotiations for that treaty. Consequently, those people in the fishery industry felt that they were being plugged from two different directions. They also had an opportunity to speak during the placer mining guideline review hearings. Unfortunately, I cannot report that the fishery industry has improved substantially in their positioning with respect to the Salmon Treaty, but I do know individuals in that industry who have come to terms with their colleagues in the mining industry in Dawson. For the most part, it is a reasonably easy alliance.
The Minister of Economic Development had, in his own fashion, given us to believe that things had changed dramatically for the placer mining and mining industries, thanks to the last election. I have to take serious umbrage at that allegation. That is probably one of the worst bum wraps that any government has had to face in a long time. There was a suggestion by the Minister that the NDP was perhaps not interested in supporting mining, even though it had Ministers who did and were reputed to have been aggressive defenders of the mining industry. It was felt, generally speaking, that mining was not being supported and that all the talk about support from Yukon Ministers was simply that - talk and empty rhetoric.
Mr. Speaker, you will know, as I am sure others will know, that the support for mining in the territory has increased dramatically in the last few years, in the last seven years in particular, thanks largely to the NDP government. There is an old saying that talk is cheap, but where is the money, and the Minister should put his money where his mouth is.
We can satisfy Members concerns about where the money went if we simply look at some of the facts about the governments programming efforts to help the mining industry, particularly the placer mining industry.
The motion we have before us today talks about the creation of the IRC, the creation of committees made up of a wide variety of interests who have been asked to come together to resolve difficult regulatory problems, but one has to ask precisely when that took place. The creation of the IRC took place around 1988 or so, largely at the insistence of the industry and of the Yukon government. It was felt that if all players did not come together, we would never have a regulatory regime that met the acid test of acceptability to a broad range of interests. The IRC was immediately charged with the responsibility of doing a number of useful things - not only sponsoring scientific surveys and studies of the situation so that our base knowledge could be improved and so that we could make actually informed decisions based on fact, not anecdotes and not mythology. The IRC was also charged with coming to some conclusions with respect to a regulatory environment that would permit the mining industry to survive and to ensure that the fishery resource was retained.
That just happens to be the motion that is before us and it is also the mandate of the IRC.
The Government of the Yukon was quite supportive of this approach. In fact, they encouraged this approach; they did not sit back passively, wondering what might happen. The Yukon government ensured that they had representation on the IRC and ensured that the person responsible for mining in the government would be the permanent member on this body, so they could bring an understanding of mining and mining interests to the table. They also had the support from the Department of Renewable Resources, so that those interests could be communicated. We wanted to ensure that mining interests could be understood at this table. If one looks at the makeup of the IRC, one would immediately see that, not only was the Yukon government represented and participating, but we also had the Klondike Placer Miners Association represented, DIAND - because they had the administrative responsibility for water - as well as the Department of Fisheries and Oceans, who probably had the most aggressive perspective of anyone when it comes to environmental protection.
The significant bodies, both private and public, are represented. It ends up being chaired, with our support, by a person who acts for the Klondike Placer Miners Association, when he is not running helicopter companies: Al Kapty.
Consequently, there was every suggestion that if reasonable people could sit down in a non-combative environment, they could come to conclusions that were reasonable.
We supported this particular initiative as we felt that it was a eminently reasonable kind of approach to sorting through tough regulatory questions.
On the regulatory side, there was mention made of the Yukon Mining Advisory Committee, YMAC, which was charged with developing land use regulations under the quartz and placer acts.
This Yukon Mining Advisory Committee had, in its embryonic stage, its greatest support in the president of the Klondike Placer Miners Association of the time, Mr. Frank Taylor, and in the Minister of Economic Development in the Yukon government at the time, the Member for Mayo.
It was at a breakfast meeting with the Minister of Indian and Northern Affairs where the issue was raised that if there were going to be changes made in these important resource acts in the federal Parliament, or by the federal Cabinet, that these changes should be made only after thorough consultation. We got into the friendliest of arguments as to precisely what consultation entailed.
The federal government was making the case that consultation was something that they had been conducting for the previous three or four years, and they were about ready to impose something in Parliament, through legislation and regulation changes.
We, and certainly the Klondike Placer Miners Association, felt that the advice that federal authorities had received at that point was incomplete, and that it would be a terrible thing for the federal government to simply accept the advice of its civil servants on this matter, and move to enact some laws that had not been seen thoroughly by the placer industry and the mining industry.
It was at that meeting that we encouraged the federal Minister, and it was shortly after that meeting that the federal Minister agreed that they would establish such a committee. To suggest that the Yukon government, during this period of tough decision-making around the regulatory environment, was sitting on its hands is false. It would certainly be inappropriate to suggest that the NDP government at the time did not care about regulations.
I will get back to the point about whether or not we put our money where our mouth was. Well, of course, we did, and we did in a major way. In 1985, we moved to do a number of things. First of all, we showed our willingness to forego the off-road fuel tax. This amounted to approximately $2 million or $3 million in those days. This was a significant contribution that was largely for the placer mining industry, because it was largely that industry that took advantage of the rebate. Consequently, they were the ones who were the greatest beneficiaries.
As well, we moved to provide millions of dollars - $10 million over four years in one program alone in the resource roads program - which largely assisted the mining industry and, particularly, the placer mining industry. That program became the resource transportation access program - RTAP - after that, and it has been going ever since. That program, in the first four years, spent $2.5 million a year and was largely for the mining industry. This had to be considered an improvement over the $30,000 a year tote road program that existed before. It was the only vehicle for road upgrading.
I also lobbied very early on to have placer mining roads opened earlier than they had been before, to the point that, at the beginning of the fiscal year, most mining roads were open.
There were even deals struck between highway road foremen in the various communities and some of the placer miners if the placer miner could make a case that he was going to bring the equipment in even earlier than that. To say that there was no attention paid to this matter is simply unfair.
At the same time, around 1985 or 1986, the federal government, which had been supporting the prospectors assistance program, decided that it was something that they were no longer going to fund. Consequently, they cut it from the A base of the Northern Affairs budget. One of the first things that the Yukon government did was to pick up the program. That is something we have always tried to resist doing because for the Yukon government to simply pick up programs the federal government was off-loading promised to be a very expensive proposition. Consequently, we took a risk by picking up this particular program, because we knew how important the mining industry in general was, and how important it was to identify new reserves in the long term.
Furthermore, we expanded our program offerings to also include funding for junior companies that wanted to do more thorough development and investigation of potential reserves. Consequently, that was another example of putting money where the mouth is.
The Members, in the last election campaign, made some claims about our governments perhaps less-than-aggressive position, with respect to flow-through shares.
It was suggested that, if only we were a little more aggressive, we would have achieved what virtually every other government in the country, as well as private sector associations - including the Mining Association of Canada and the Prospectors and Developers Association of Canada - could not achieve, which was to see the reimposition of flow-through shares. Despite the fact that we had motions in this House, some of which we, the NDP, sponsored, to encourage the reimposition of flow-through shares, despite the fact that Ministers regularly at ministerial meetings in very much a minority position asked for the reimposition of flow-through shares, despite the fact that even at a mining Ministers meeting we hosted where we raised the issue once again of flow-through shares - and I recall one occasion where we had only one Minister at the table who supported flow-through shares; I was the Minister at the time - we still have this impression given by the Members in the Yukon Party benches that somehow the NDP government had no interest whatsoever in supporting flow-through shares or supporting the mining industry.
On top of that, we also developed a program to supply new mining operations with electrical power. We announced the program last year. That was one area where we felt we could usefully meet yet another need of the mining industry.
As the Members opposite have claimed on a couple of occasions, particularly when things got a little rough with respect to Curragh, the mining industry was a federal responsibility.
Yet, here was the Yukon government, with over seven years of NDP administration, putting all this money into the mining industry when, clearly, it was not our responsibility.
Another point that could be made is that the federal government was interested in off-loading a number of other responsibilities, including and especially geological mapping. This is something the Chamber of Mines has been concerned about for years. In fact, there was a period where geological mapping virtually came to a standstill, because the federal government positions that were responsible for the mapping were not being filled by federal authorities due to different funding priorities. In the negotiation for a new Economic Development Agreement, the Yukon government took pains to support an element of that agreement. This was a brand-new agreement of $9 million over five years, which the Yukon government would cost-share, which would ensure, among other things, that the geological mapping would continue. Consequently, we now have the Yukon government partly funding what was once a federal responsibility in order to ensure that activity would continue, so that the long-term health of the mining industry would be protected.
We did not stop there. There was also a concern, particularly from the Chamber of Mines, that they needed to be able to respond to the many pressures they faced, whether it was the regulatory environment, land claims discussions, or whatever was happening at the time; those concerns were listened to by the government.
I went to a Chamber of Mines meeting myself, where the members - all volunteers - were sitting around asking how they could respond to the needs of the association when they only collect a small amount from their members and could not staff the office. The Yukon government provided financial support to that group so that they could hire someone - this was someone who, incidentally, ended up criticizing us in the election for not doing enough for mining. Nevertheless, we were big about that.
The point of the matter was that the government provided that support for that industry association and even went through the process of developing and agreeing to fund a program with that association that was designed to improve their public relations, and hence the stature of the mining industry, including placer mining, because there was a concern that their voice was not being heard. The government provided funding and advice about how that association might improve its image in the territory. I listened all last summer to ads on the radio supporting the placer mining and mining industry, funded by the Yukon government.
Some Hon. Member: (Inaudible)
Mr. McDonald: I will tell the Member what we did for Windy Craggy, Curragh Resources, Sa Dena Hes and Canamax. These are all mining projects. Give me time and I will get down to it. There are lots of things to say here.
Another concern of the industry was that there was not enough interest by outside investors who could provide capital to help a cash-starved industry - particularly at the junior mining level. What did the Yukon government do? Did they sit and complain and wring their hands and say, Gee, I wish you guys could do something about it. They did not do that. The Yukon government developed investment brochures, provided funding for people to go to trade shows and try to encourage investment in the mining industry in the Yukon, because we cared about that element of the project.
Mr. Speaker, I have not got to my barefoot-boy-from-Carcross speech, so you will have to give me some time. I need time.
The Minister gives the impression that suddenly, upon the new government coming into office, with a few choice words to the same people who have been sitting on the IRC all along, and a few really strong policy statements coming from the government - policy statements that I do not think he could actually describe - we are now to expect that there is going to be a magical resolution to the whole issue of placer mining regulations in the territory.
It could not have possibly been that the IRC, which came to a conclusion last fall, was blown out of the water with its recommendations by the placer miners themselves and, consequently, had to go back to the drawing board because they realized, in large part, that the DFO officials had perhaps swayed the discussions too much. No, it was the brilliant direction coming straight from the Minister of Economic Development and right into the heart and soul of our one representative on that committee that is going to turn that whole thing around.
This is not realistic at all. The Member for Dawson suggested that it is real. With all due respect, the Member for Dawson does not have the experience and does not understand the situation at all.
I would like to ask, of all the Members in this House, who was actually drilled a single round? Who has actually used some explosives? Who has actually mucked a single round of ore? We are talking mining.
I would love to speak with some of the people who have worked with you.
The Members opposite have suggested that it was only until today that the NDP had any respect for the City of Dawson, that suddenly we were showing some new-found concern for that city. That is absolutely the most ludicrous, stupid - can I say that? - statement that I have heard for a long time. The list of things that we have done to support Dawson City is legion. The support for that area, both in tourism and mining infrastructure, has been a proud accomplishment of the NDP.
The Member opposite has made reference to the NDP being something they called a no-development party. Opening Curragh does not smack of being no development. Helping to open Canamax does not smack of no development. Helping to open Sa Dena Hes does not smack of no development. All of these things are in stark contrast to what has been done by the Yukon Party, which has participated in the closure of a number of mines and which has witnessed and monitored, particularly, Elsa back in 1982.
The NDP has shown considerable interest in ensuring that there is more economic development, that there are jobs for Yukoners and that there is an appropriate environment for growth.
I thank Mr. Speaker for being so patient with me. I will now conclude my remarks.
Speaker: The time being 5:30, the House will recess until 7:30 p.m.
Speaker: I will now call the House to order.
Hon. Mr. Phillips: I move that the House now move 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
COMMITTEE OF THE WHOLE
Chair: I will now call Committee of the Whole to order.
We will continue with general debate on Bill No. 4.
Bill No. 4 - Second Appropriation Act, 1992-93 - continued
Hon. Mr. Ostashek: We are into general debate in Committee of the Whole and I hope we can move ahead tonight and start discussing the bill in front of us - the supplementary estimates for the 1992-93 year. We, on this side, are prepared to answer questions now in general debate on that bill.
Mr. McDonald: It is also my hope that we can move ahead tonight. I think that it is quite clear that we both want to get into many of the line items, and certainly we can do so if questions are answered.
We do believe that there are a number of questions that should be put forward and answered by the Member opposite, because we do believe that the subject area is perfectly relevant to the bill at hand.
I realize that in the last 24 hours, if one counts the media reports as being a reflection of what at least a couple of observers have thought important, we have been criticized for not pursuing specific allegations that were made in the Government Leaders speech on second reading speech, and we have also been criticized for getting - as one person called it; not surprisingly - sidetracked into some of those allegations.
The only thing that I can do is what I believe to be the only proper thing under the circumstances, and pursue a line of questioning that is not dissimilar to the one that we presented yesterday afternoon.
The reasons for that were clearly stated on the record yesterday. I do not think I have to go over them again as I think they are pretty fresh in the Government Leaders mind.
One line of questioning I believe to be very important, given what has transpired in the Legislature, both in December and in the first part of this sitting that we have experienced so far. As the Government Leader will remember, in December he introduced a ministerial statement on the financial forecast for the current year. In introducing that forecast, he indicated that the bottom line, in terms of the governments available funds, was approximately $57 million in debt. He also indicated that there were a number of significant reasons for that. He cited in his statement that they were the result of two collective agreements that totalled $22.8 million for two years, costs in Health and Social Services that were $25.7 million in two years and increases in Education totalling $13.6 million in two years.
He took the trouble at the time, and we can appreciate his candour, to explain that there were 400 extra employees not budgeted for as a result of this information. The result of that information was that the whole chemistry of the discussion in the territory changed overnight, and had not changed again until this supplementary was tabled. In fact, when the supplementary was tabled, this same report was identified as having been true, despite the criticism from the Opposition in regard to the reports veracity; consequently, if there were any doubts about the forecast, they should be put to rest.
It is our contention that we must determine, given that this forecasting is for the same period and there are a number of different forecasts, which is right, not based on what the Government Leader says we should believe, but upon an analysis and examination of the facts and the numbers themselves. That is our only ability to determine what is right. Given that so much play has been made of the forecasting of the government, and given that virtually all the speeches around this supplementary have been about a particular deficit figure, we would be remiss and irresponsible not to examine the forecasting ability of this government, the truthfulness of the statements they have made with respect to forecasting in the past, and then judge for ourselves how comfortable we feel with the projections.
We have all agreed so far that no one will know what the situation will be until the Auditor General does an accounting for this current year, but we are told that we must believe in these estimates for a variety of different reasons.
I want to put one thing clearly on the record because I think there was some hint last afternoon that all the politicians here were simply trying to project this budget as something that is generated by the administration, and we are all just here looking at this baby as if it was just born today - that it was all just a big mechanical exercise and all they did was simply total up some numbers. I do not believe that is the case. I want to say for the record that I have lots of respect for the abilities of all the people who work for the government in the senior ranks. They do a fine job, including those who were cited in the discussion yesterday, but the issue is not what they have done. The issue is what the politicians have done, and are claiming has been done.
This is an exercise that is not the responsibility of any civil servant. This is an exercise that is exclusively the responsibility and the domain of the sitting elected Members in this Legislative. The front bench on the government side, in my view, take 100 percent responsibility for these numbers and for their calculation, and no one else. I do not want to entertain a lot of discussion unless the Government Leader wants to pursue it. I am not going to initiate a lot of the discussion about who said what in the administration. This budget is the creation of the Cabinet. I have known for years good, solid public administrators who have done marvelous work for the areas that they are pursuing. They have done so by developing budgets that quite often request money that is more than what we have available to us. This is no reflection on their ability as administrators; it is simply a reflection of their dedication to their task. Despite the fact that sometimes they are told they should be modest in their expectations, they still, in their enthusiasm, sometimes get carried away and ask for more money than is available.
The point I want to make is a simple one. Priorities are set by the Cabinet. If they want to spend money in a particular way, that is their choice. In this case, the budget the Minister is tabling tomorrow is not simply a mechanical exercise and some computer printout. These are choices that reflect the politicians wishes - period; end of story.
That was an aside, Mr. Chairman, but I think it was absolutely essential to address that point, because I think there may have been some misunderstanding.
I would like to talk about the forecasting now. I asked some questions yesterday about some forecasting mechanisms that the government has used in the past and has put a lot of stock in. I have not asked any complicated or detailed questions. I would like to know if the Government Leader is now prepared to answer those questions. They should be still fresh in his mind.
Hon. Mr. Ostashek: I have a few comments in reply to the Member opposite. I think we should set the record straight right now. The Member opposite is talking about two different documents. He is talking about the budgetary process - the supplementary estimates - and he spoke of our main estimates that will be tabled tomorrow. We are fully prepared to get into a line-by-line debate and be accountable for whatever responsibility we had for the supplementary document that was tabled here a couple of days ago and we are fully prepared to take responsibility for the main budget that we are tabling tomorrow. I have no problem with that.
I want to set the record straight. I have done it several times, but I think it is important that I do it again tonight. When we were sworn into office on November 7 - actually, it was prior to our being sworn in; it was in my first meeting with Finance - I was told that the financial health of the government was not as good as Finance thought we might think it is.
Prior to engaging Consulting and Audit Canada to do a financial review to give us what the balance would be on March 31, 1993, we had not even made a decision to do that exercise. The figures that were given to me - and I know now that they were honest figures - were ones we wanted to have confirmed. The figures that were given to me were that the projected deficit for the 1992-93 year would be in the neighbourhood of $61 million. That was my first conversation with Finance officials. It was also said that our accumulated deficit as of March 31, 1993, would be in the neighbourhood of $10 million.
That is what we were faced with as the new administration coming in. We felt that we should have someone else verify those figures for us, prior to our making any decisions about what we were going to do. It was at that point that we decided to engage an outside firm. It was not that we did not trust Finance; that was not the case at all. It was just to give us another view to verify whether or not these figures were in the ballpark. That is what we wanted to do. That is what the Consulting and Audit Canada exercise was all about.
Along with that, we did not want to be accused of exactly what we are being accused of now, of putting out a political document. Arrangements were made to gather up the figures from the departments and funnel them through directly to Consulting and Audit Canada; they would review the figures that were given to them by the departments. That is the process that took place.
It was very hard for us to get into explanations - confirming or denying, agreeing or disagreeing - when those figures went directly from the departments to Consulting and Audit Canada. It was not an audit and that is why it did not go through the process of supplementaries or a budget; it was just to verify the balance that we would have in the bank on March 31, 1993.
As I said before, that was accomplished. The figure was put forward by Consulting and Audit Canada. Our interest was to have that figure. It verified what Finance was telling us - in the ballpark. As I said, it was not an audit; however, in order for it not to be perceived as a political document, we had the information funneled that way, so we were not seen as giving instructions or playing games with the figures that were given to Consulting and Audit Canada, the firm that was engaged to do the review.
The figure come about on that basis, and that is why we are in the position we are in today.
Now, I want to reflect on some of the things the Member opposite said. He talked about supplementary estimates. We are prepared to go into line-by-line debate on the supplementary estimates, and we are prepared to answer all the questions they have. That is the document that is in front of this House. We are prepared to do that, and we have no difficulty with that at all.
It was the Members opposite who put an amendment to the motion to send the Consulting and Audit Canada document to the Public Accounts Committee. It was their amendment. The issue that is facing the House today is the supplementary estimates. That is the most accurate reading we have of the financial health of the government. The Consulting and Audit Canada report was a snapshot, early in November of last year, of what the projected accumulated deficit would be on March 31, 1993, based on period 4 variance reports.
Those were the figures we had from Finance at the time; therefore, I believe, if the Members opposite really want to know the financial health of the government and want to get into great detail on the supplementaries, we have no problem with that. If they want to try and blame us for some of the stuff in the supplementaries, fine. That is legitimate. It has gone through all the processes and was tabled in this House in the proper manner and we are prepared to debate and discuss it, and answer any questions. We are prepared to do the same with our main estimates when they come up. I have no difficulty with that, but I do not believe we should be discussing a document that is eight months old now, trying to get a picture of the governments financial situation.
The question facing this House now is why there was $58 million more spent than was taken in last year. That is the question that is facing the Legislature today, and that is the issue we should be examining at this point.
I do not know why the Opposition would be afraid or concerned about getting into those supplementaries. We are prepared to do that. We should not be talking about a document that is eight months old - it is based on figures that are eight months old. It was a snapshot of when we took over government. That is all we were looking for - a snapshot of what it was when we took over government.
On that basis, we are prepared to start any time. If Members want to start asking questions, we will go through the supplementaries line by line. We will talk about them for as long as Members wish, and if they want to blame us for some of the decisions made in there, we will debate that. I have no problem with that, but those are the accurate figures that came through the system, which the hon. Member has said often in the House is the way it should be done. We are prepared to get into debate on it.
Mrs. Firth: I have been anxious to get into this debate for a while now. I feel like I am caught in the middle. I understand what the Members on this side of the House are doing and the point they are trying to make. They have a reputation to protect and they have a responsibility to ask questions about allegations being made about their performance as a government, so they have launched an aggressive offensive strategy and that is what is happening. I understand that.
The government is in somewhat of a defensive position. The date on this document in question, the review of the change in the accumulated surplus, is December 4, so it is not eight months old; it is a current document. I appreciate the Government Leaders point about how old the numbers may be.
I was not a Member of the Public Accounts Committee, but I remember being here during the debate in this Legislature when this document was referred to the Public Accounts Committee, and everyone in the House agreed to that happening. We did not feel that it was appropriate to debate the document in the House at the time.
The document went to the Public Accounts Committee and all hell broke loose, with all due respect. The next thing that I heard, after listening to an hour of witnesses in the Public Accounts Committee, was that perhaps the document was a little more political than had been intended. The Public Accounts Committee did not feel that they could deal with it as it was considered to be a political document, and therefore the committee was not going to discuss it and the document was sent back to the Legislature.
As a Member of the Legislature, my concern about this document - I certainly do not want to go through every line in the document and ask questions about it - is that it has been used by the government for political purposes. Whether the government accepts that or not, that is what has happened.
This document was used by the Government Leader to very publicly state the governments financial position. The position was that the government is broke. That statement had an impact on the economic tone of the territory. That concerned me, because of the impact on my constituents and other Yukoners. That is what I said at the time the document was first discussed publicly.
I raised concerns about the appropriateness of the document being used. I consulted with people in my constituency, both from the Yukon Party and people who preferred to support an independent philosophy. They were all of the same opinion: that there were some difficulties with the format of the document, that it had been used in a political nature, and that it had a very negative impact on the economic situation in the Yukon.
Just to refresh Members minds, the announcement was made one month prior to the Christmas shopping season.
So now where are we? I think it is appropriate that there is some discussion about this document. I do not think it is appropriate that we go into every detail of it and that is because I have already drawn my own conclusions about it through the Public Accounts review, my own analysis and some consultation with accountants.
Perhaps the government is re-thinking the wisdom of using this document in the manner it was used. I do not think the government should be criticized or consider this a position of weakness if they are doing that. I think that would be quite appropriate. We do not always do all the right things, at the right time. My advice to the government, regarding this document, would be to answer what questions they can; if they cannot, they should tell us. Maybe they do not understand the figures, or perhaps some of the figures were not as accurate as they had expected. My feeling about the document is that there are some errors in it; it was hastily drawn up - that was the conclusion of the witnesses who appeared before the Public Accounts Committee. It was not sent back to the Department of Finance to have the numbers verified before it was made public. That was the testimony given to the Public Accounts Committee.
Consequently, I have drawn my own conclusions about the document and its accuracies. I do not want to spend the next two weeks discussing this document; I would like to get into the supplementaries.
I want my position to be very clear on the record. I, like some of the other Members of the Opposition, am trying to determine exactly what the governments financial position is. I know that the Government Leader finds this very frustrating, but please be patient with me; I do not have as much information as the Members opposite. The Minister of Tourism says, Let us move into it. We will move into it, but I am trying to determine where this government is coming from, what its plans are, how it is moving ahead and what its objectives are. I have this document and the supplementary estimates to work from, and I know both documents will have some bearing and influence on what has been prepared in the budget that will be tabled in the House tomorrow.
I am trying to understand the rationale for the budget. I hope this will help me to understand the direction the government is moving in.
It is not going to end here with this document and with the supplementary estimates. We are going to have a budget to question, and the government is going to have to defend it. If I choose to support the government on some of those initiatives, I am going to have to defend that for them.
I want to feel very comfortable about the direction the government is taking and where they are leading Yukoners before I stand up to defend them. I am not in a position where I have to defend the government. I am not in the position where I have to accept what the front bench says and agree to it, as do the Member for Klondike and the Member for Vuntut Gwichin.
I have an independent-thinking mind, and I like to ask questions, draw my own conclusions and make my own assessments. If it frustrates the Members opposite, or annoys them, I cannot help that.
I know I can be an annoying person, and I accept that. That is the reality, and that is what we are all stuck with. We are all going to have to get along somehow, because I do not think any of us want to sit here for the next three months debating the supplementary estimates.
Besides, tomorrow, when the budget is tabled, both this document and the supplementaries are probably going to become relatively low-key, unexciting documents, because everyone is expecting that the budget will be a much more exciting document.
Can we get on with the business? Can we have whatever questions are being asked about this document answered because I would like to get into the supplementary estimates. I have some questions I would like to ask about the supplementary estimates. I want to try to make a determination of where the government is coming from because all I have heard so far is criticism about the previous government.
I am ready, like many other Yukoners are, to hear what this governments solutions are to the problems that exist, and to the criticisms that they have been directing at the previous government. The only way that we are going to find that out is if we get on with the business and we get some questions answered. This is part of the business and that is something we all have to accept.
If Members are just going to shake their heads and say no, we are not going to do this, then we are not going to get anywhere. There has got to be some give and take, otherwise we are going to be here forever, with one group in one corner saying it is black, and the other group in the other corner saying it is white, and the rest of us in the middle just sitting here wondering when we are going to get to make a decision, and when we are going to get on with business. I just want to get on with the business.
Chair: Order please. Like yesterday, there have been a lot of comments about the Consulting and Audit Canada report, which was tabled by the Government Leader in the House in December 1992. However, that report was not referred to Committee of the Whole and the Committee was not instructed to report on it.
When talking about Bill No. 4, Members are free to refer to any documents they have used when they were preparing to discuss the bill or the book. They should not expect that debate can centre on any document other than the bill or the book.
If Members want to refer to the Consulting and Audit Canada report during debate, I have no problem with that as long as they relate it directly to what the Committee has been told to talk about; that is, the supplementary estimates. We will now continue with general debate.
Mr. McDonald: I would like to first of all find out whether that is a ruling that states that we cannot discuss, in your view, the Consulting and Audit Canada report in these discussions. If that is the case, then I am afraid that, although it pains me very much, I will have to challenge that interpretation of events.
I find, with the greatest respect - and I mean the greatest respect; I am not being facetious - I find this, what appears to be some kind of ruling that suggests that we should not be following the line of questioning that we are following now, to be extremely wrong-headed. I think the problem here is that what the Opposition is attempting to do, if you will let me explain my position, is to assess what the forecasting instruments have been. We already established yesterday that the government has asked from its departments, on a couple of different occasions, for information about what the financial situation of the government is all about.
They asked for what they called a snapshot in November. At virtually the same time - within a matter of only a couple of weeks - we got another snapshot of the government finances. In both cases, there had to be thinking in the departments about the projected expenditures to year-end. In both cases, whether with the Consulting and Audit Canada exercise or the supplementary exercise, they had to project some information about what they expected that they would have to spend by year-end.
If the government had said, at the time they were releasing the information, that it was a snapshot and did not have a large reliability factor and that we should not put too much faith in it until we had a budget, that would be different from the situation that has transpired since then. What has happened instead is that the Government Leader has stated that he did not want to set in motion a political exercise to blame anyone or do anything other than simply assess the finances for the governments purpose, in terms of their budgeting needs and their policy setting.
I do not know what the government believes to be the definition of a political exercise, but we got a ministerial statement, on December 15, in which there is a statement that says it all, in terms of the point I want to make. The Government Leader says, I also want to make it very, very clear that the dismal financial position the Yukon government finds itself in today is not of our making. We do, indeed, look forward to hearing explanations from our friends opposite who must accept full responsibility for the state of affairs that we have inherited. That is a political statement by anyones interpretation.
What we have here is quite simply a situation where we are trying to assess the forecasting mechanisms of the government. All of the information comes from the departments one way or another, for whichever mechanism. We are talking about this fiscal year; we are not talking about another fiscal year. We are talking about the budget of the Government of the Yukon; this is the budget of the Government of Yukon. We are talking about forecasting mechanisms; the Consulting and Audit Canada report is a forecasting mechanism and the supplementary is a forecasting mechanism. They are very interrelated in many respects, because the information comes from the departments.
I would ask the government: if we were ever to talk about forecasting measures, generically, for budgets, when would we ever be able to ask that information?
We would never be able to ask that information, even though it is perfectly relevant to budgeting. We have talked in this House, in the context of budget estimates, about the stock market in Toronto; we have talked about international metal prices; we have talked about free trade; we have talked about a whole series of things in the context of budget discussions. The Member for Ross River-Southern Lakes, who shakes his head, stood here one day and treated us to what was ostensibly a thoughtful analysis of the international monetary system. He was given great credit in the local media for being a visionary. It was all in the context of the budgets, but it had nothing to do with the actual development of the figures in our budgets at the time. In one respect, it had nothing to do with it, but it was certainly considered to be permissible, because we were talking about the environment in which we are operating.
In this situation, we are talking about something that is much more germane to this subject; we are talking about budget forecasting for this government, for this fiscal period - the same fiscal period. Information is coming from the same departments about their needs to the end of this fiscal year. It is all contained in there. No matter how one cuts it, that is what we are talking about.
The Government Leader raised again the issue of the Public Accounts Committee and suggested that the Public Accounts Committee took hold of the issue and disposed of the issue. The situation certainly is not as simple as that. The Public Accounts Committee was decided the issue was very political and they would not deal with it; they decided that, because of the timing of the land claims committee, there was not sufficient time to go through it and do what we felt we had to do if we were really going to challenge the numbers, which is what the Liberal Member on the committee was asking for and which many of us really wanted to know at the time. We felt it was quite inappropriate for that committee to be doing that thing, so we basically decided to hand back this whole issue to the Legislature on the understanding that the Legislature would actually discuss it. If I had known for one second that the government would now try to duck out and not discuss this at all, even though it is the single document that has basically driven public discussion for four solid months, and that they would refuse to answer any questions about it, I, as one member of the Public Accounts Committee, would have insisted, no matter how much time it would take, that we go into this document and peruse it in the detail it deserves.
That is not what we discussed in Public Accounts, and that is not how it transpired, at all. I will take the point from the Member for Riverdale South. I will certainly not be expecting us to go through every last line item in the Consulting and Audit Canada report. I make that concession; however, for us not to talk about the subject at all is, to use the Government Leaders word, obscene, given the prominence this document has had in the public over the course of the last four months. This is not an eight-month old document. This is four months of discussion at coffee tables, in kitchens, in pubs, in workplaces right across this territory. It is an important document. It does deserve at least a brief discussion, as long as the discussion reveals some answers.
If the Government Leader had only said, at some point that that was then, this is now, that there were some errors in that document, and let us get on with something else, that would have been an argument in his favour for us to continue on. However, what we have been faced with is no apologies, no suggestion at all that anything was wrong with this document, period. There was even a suggestion in second reading debate that the supplementary verifies what was in the Consulting and Audit Canada document. That is what the Minister said.
If the Member wants to stand up and describe for us what the limitations are in the Consulting and Audit Canada report, we can move on.
Chair: Order please. The Chair has not said there is no room to discuss the report. When talking about Bill No. 4, Members are free to refer to any documents that they have used when preparing to discuss the bill or the book. They should not expect, though, that debate can centre on any document other than the bill or the book.
If Members want to refer to the Consulting and Audit Canada report during debate, I have no problem with that, as long as they relate it directly to what the Committee has been told to talk about, and that is the supplementary estimates.
No debate is permitted on any ruling or decision made by the Chair, but an aggrieved Member may immediately appeal to the Speaker.
Mr. Penikett: I think that we are going to take counsel for a minute as to whether or not we want to appeal this ruling. I want to tell you that we are fairly shocked at what we have just been told. I want to calmly review a few facts about this situation.
First of all, the Government Leader keeps repeating that this document has been referred to the Public Accounts Committee as if somehow that sanctifies it, blesses it, ennobles it in some way, and somehow renders it free of any flaws or errors.
This is a document that the government has been using to hammer the Opposition, claim that the government is broke - even though they recently changed their tune about being broke - for months and months. We are now being told that we cannot ask questions about the document.
The Opposition did not refer this matter to the Public Accounts Committee, the whole House did. If the government opposite had opposed that referral, it would not have happened. What happened when it went to the Public Accounts Committee? I will not be as polite as my colleague here - I tried to ask some questions and the government majority on the committee would not let me. The questions that I wanted to ask, they would not let me ask, so it was sent back to the Legislature.
For the first time in 15 years in this House, when the government wants to refuse to answer questions, it appears the Table Officers are supporting them. That is absolutely scandalous in my experience. Absolutely scandalous.
I have a few questions of my own. Let me put them on the record, even though the government clearly will not answer them.
We are talking about a supplementary dealing with not last years expenditures - the Government Leader keeps saying - but this years expenditures during which he was in control of the public purse for half the year. Did the government spend public money on this report this year? Yes, but he will not answer questions about the document.
Is this is a public document? Not a private document provided to the Cabinet or Management Board. Normally, it would not be, but the Government Leader chose to make it a political document - I believe it was always intentionally so, otherwise Merv Miller and the other Socreds would not have been involved in the commissioning of it. The Government Leader made it a political document in his ministerial statement, which was a blatantly political statement in this House. The Government Leader made some accusations, not only about the bottom line, but about cost centres.
We have had no opportunity since he made that statement, to ask questions about some of those assertions of fact - assertions of fact about which we have serious concern. In fact, I believe if the Government Leader would even grace us, as he is new to this House, with a certain little respect for democracy and allow us to ask some questions and him answer them, we could ask some questions about some of the factual -
The Member for Riverdale North says we are making up rules.
It is amazing what a little authoritarian he has become as the House Leader of a minority government.
You would think they had won 77 percent of the vote and not 37 percent. They keep talking about how two-thirds of the people voted against us. Let me remind them that two-thirds of the people voted against them. They do not exactly have an overwhelming mandate and certainly not for playing the kind of games that are being played here.
I would like to say this to the Chair, and through you, to the Table Officers: we are being told that this public document cannot be discussed publicly. It has been used to vilify the Opposition. It contains a whole number of assertions about which we have many problems...
Chair: The Chair has not said that. The Chair would like the Members to relate their discussion to the supplementary estimates.
Mr. Penikett: What the Members opposite seem to have a lot of trouble understanding is that this has got everything to do with the supplementary estimates. I will come to that if you will bear with me and let me make my argument, Mr. Chairman.
The document that has been used to vilify the Opposition is essentially slander, an absolutely insidious thing, conscripting senior officials and trying to do the same game. I have all the memos that I got from the same officials just before we left office. I know what they told us about the financial situation before we left office. I know what they said.
We are now being told, in general debate on expenditures for this year, that we cannot discuss one of those expenditures, an expenditure involving a forecast that was prepared instead of a budget, which could easily have come to this House in the fall. The time and money spent on this document could have been put into preparing a supplementary.
Some Hon. Member: (Inaudible)
Mr. Penikett: So could you have in 1985. That gentleman over there did not have one ready, so he called an election instead.
Some Hon. Member: (Inaudible)
Mr. Penikett: Obviously, I was afraid to call an election; that is why we did it - brilliant.
Did we raise this document in discussion of this bill? I would like to get your attention to this point, Mr. Chair, if I could. I am asking you, rhetorically: did we raise this document in discussing the bill? We did not. The Government Leader did at second reading and since then in debate on this bill. He has spoken to it again today, affirming his faith in it. Yet, somehow, he will not agree to answer questions.
This document is not just about the bottom line. In fact, the Government Leaders political statement, when he introduced this document into the House, made that clear, because he talked about cost cutting.
Now we can see that this is not an audit, even though some people over there try to make it appear as though it was an audit. It is a forecast. It is, in every sense, a budget document and we have to treat it as such because it was produced instead of preparing a supplementary. Did they come forward with a supplementary last fall? No. I remind the Government Leader he is talking about precedents.
We are trying to talk about the supplementaries, but the Government Leader has been lathering us with this for four months, and now he will not answer questions. What is he afraid of? There is no point trying to play macho games with Mr. Ostashek. We want to ask questions about this document, because the government has been hammering us with this document for four months. We go into the Public Accounts Committee, and the four government Members of the committee will not even let us ask questions.
What point is there giving up talking about this and going to the supplementary estimates if they will not answer any questions anyway? What is the point? They keep saying that the only thing that matters about this document is the bottom line. It does not matter that some of the other figures are wrong because it comes up with the same result. It was all a bit of lingo from the computer game which is about garbage in, garbage out. You cannot get good ends from bad means. You cannot get good results from bad data. We cannot ignore some of the bad data in here. We want to ask questions about it. Clearly government decisions, budgetary decisions, financial decisions, policy decisions have been made on the basis of this document. The Government Leader nods No. The very fact that he came into this House and made a ministerial statement, a political statement, is a decision made on the basis of this document. We have a right, in the budget debate, especially general debate, on a supplementary dealing with this year, to ask questions about that. He may insist on his right to not answer questions, and he can not answer questions if he wants. There is no way, in any rule, to prevent us from asking questions about this budgetary matter.
Chair: The Committee will now take a brief recess.
Chair: I will now call Committee of the Whole to order.
Hon. Mr. Phelps: I want to say a couple of things about the way in which the debate seems to be going. I find it regrettable that Members opposite, at this point in time, seem to think it fitting to be haranguing the Chair after the Chair has made a ruling on a point of order.
I also want to make it clear that in my view it is really not appropriate to be haranguing the officials at the Table on the same subject.
As I understand the rules, and I am reading from section 42(4), it states that, in the Committee of the Whole the Chair shall maintain order in the Committee of the Whole, deciding all questions of order, subject to an appeal to the Speaker.
In my view, the appropriate procedure here is either for the Members to proceed on a basis that is compatible with the ruling of the Chair, or appeal it. I do not think it is proper, and it is certainly unparliamentary, to be haranguing the officials or the Chair about a ruling that is made.
There is very definitely a remedy, and that remedy is for us to move back and have the Speaker hear the matter, if that is what the side opposite wants to do. From where I sit, I think we are getting entirely out of line. I understand it is an emotional issue with some Members, and I understand the politics of it.
I enjoy a good battle as much as anybody on this type of matter. However, I would recommend to all concerned, and the Members opposite in particular, that if they are unhappy with the ruling, surely the appropriate thing to do is to ask for an appeal.
Mr. Penikett: If I may, I will comment on the same procedural point made by the Member for Ross River-Southern Lakes, in making two points, both of which would be an appeal, one to him and one to you, sir.
First of all, I would say to the Member for Ross River-Southern Lakes that part of what we have been trying to establish is exactly what the Chair has ruled. If, indeed, the Chair has ruled that we cannot ask any more questions on a matter of major public policy, which the Government Leader himself introduced into this debate, then we would certainly want to have that kind of ruling made in the clearest possible terms so that, if we are to appeal it, we can know what case is to be tried before the Speaker.
I also want to make the subordinate point to him: were he still over here, I can just imagine the thundering rage we would be facing at the idea that the government-of-the-day did not have to answer questions about a matter dealing with financial affairs of the government: a report paid for in this budget year by the taxpayers, commissioned, albeit with the aid of some British Columbia Social Credit advisors, by the government-of-the-day and an absolute refusal by the government to answer the questions, when it is absolutely relevant to the discussion of the state of the territorys finances today, which is the subject of the supplementary.
The second appeal that I would make is to you, sir, in the Chair. I would say this, as my colleague for MacIntyre-Takhini did, with the greatest of respect, as I have known you a long time, since your days as Chief of the Vuntut Gwichin, and before; this Legislature, like most parliaments, is the furthest thing from the consensual traditions of First Nation peoples, where everyone gets a chance to talk and everyone is involved in the decision. We have the very opposite here. All people are allowed to talk here, but only some people are involved in the decisions - those over there, perhaps occasionally in consultation with one of the parties here.
We have very little power in this Assembly. The one ancient right we have, going back hundreds and hundreds of years of parliamentary history in the British tradition, is that we can ask questions. Am I to read into your ruling that we must suffer a test of relevancy that has never been applied in all my years in this House? I have listened to dozens and dozens of budget debates and I have listened to thousands of extraneous items being introduced in the budget debates and I have never heard before a situation where the government appealed to the Chair to close off a line of enquiry. Why is the government refusing to answer the questions?
Chair: I am neutral here, as the Chair. The government did not speak to me on this issue at all.
Mr. Penikett: I am not asserting that the government has spoken to you directly. I am clearly making the point that they do not want to answer these questions or have us debate this document that is highly relevant to the financial discussion - essential - to the nature of the debate in which we are now engaged.
My appeal to you, Mr. Chairman, is a very simple one that arises from the comments made by the Member for Ross River-Southern Lakes.
I believe, sir, that all Members of the House need to know what your ruling is in respect to whether we can continue to ask questions that we regard as highly proper and highly relevant.
Mrs. Firth: I would like to speak to the same procedural point, Mr. Chairman.
I agree with the Minister of Justice who has said that it is unfortunate that we are now spending our time debating this issue, as opposed to what we are really here to discuss.
As I understand it, your ruling was not a ruling saying that I could no longer ask questions about the particular document in question. I understand that you are just cautioning us that when we do ask questions they must somehow be related to the supplementary estimates, so that does not restrict us from pursuing the line of questioning that we have been pursuing as long as there is absolutely no relationship to the supplementary estimates.
Am I correct in interpreting your ruling in that manner?
Chair: The ruling is what I was addressing.
At this point, I would like to read the ruling one more time.
Like yesterday, most of the talk is about the Consulting and Audit Canada Report, which was tabled by the Government Leader in the House in December, 1992. However, that report was not referred to Committee of the Whole and the Committee was not instructed to report on it.
When talking about Bill No. 4, Members are free to refer to any documents they have used when they were preparing to discuss the bill or the book. They should not expect, though, that debate can centre on any document other than the bill or the book.
If Members want to refer to the Consulting and Audit Canada Report during debate, I have no problem with that as long as they relate it directly to what the Committee has been told to talk about; that is, the supplementary estimates.
Is there an appeal?
Mr. Penikett: I would like to ask you a question with respect to the ruling, by way of clarification. That is, Mr. Chairman, how would you advise us, private Members in this House, if in debating the supplementary before us we have relevant questions pertaining to the Consulting and Audit Canada Report financial forecasts, the government continues to refuse to answer them.
How would you advise us in that regard?
Chair: I cannot force anyone. I am here as the Chair of the Committee of the Whole. I am neutral.
Mrs. Firth: May I make a suggestion? Could we start over again? Can the Opposition Members present their questions to the government in some non-threatening way? Could we maybe get some answers from the government? Could we start this debate over again on a new footing and get on with the business. Is that a reasonable suggestion?
Mr. Penikett: I am prepared to accept Mrs. Firths excellent suggestion in the hope that it may produce some results.
Chair: Shall we try to continue general debate on the supplementaries?
Hon. Mr. Phelps: The ruling seems clear to me. We should simply be asking questions about the bill. We can refer to any other material we wish, but the subject matter that is referred to this Committee by the House is the supplementary bill and that is what we are here to discuss. The questions comparing other documents or making reference to other documents is fine, but we are not here to study any document but the bill. That is all.
Mr. Penikett: Can I ask the Government Leader if the supplementary before the House includes expenditures for a piece of research commissioned by the government called Review of Change and Accumulated Surplus of the Government of the Yukon.
Hon. Mr. Ostashek: Certainly, that will be included in the supplementary estimates.
Mr. Penikett: Could the Government Leader say, since the report I just asked about was prepared at approximately the same time as the information for the period 4 supplementary would have been gathered, if the information that might have gone into the supplementary was essentially the same kind of information and from the same sources - namely, the departments of the Government of the Yukon - as went into the report that was paid for under the supplementary entitled Review of Change And Accumulated Surplus of the Government of the Yukon?
Hon. Mr. Ostashek: If the Member opposite is asking me if the information that was used for Consulting and Audit Canada is the same information that was used for the supplementaries, I imagine some of the information was gathered from the departments but, again, the Consulting and Audit Canada report was basically based on the variance 4 supplementaries, not on the variance 8 supplementaries.
Mr. Penikett: That was exactly my question. My question was about the period 4.
Since the Government Leader has, on a number of occasions in this House - including during debate on this item - affirmed his confidence in the conclusions of the report, Review of a Change in Accumulated Surplus, paid for in this supplementary, would he have such a degree of confidence in the bottom line of this report that he would also express a similar degree of confidence in the component numbers that led to the bottom line in which he has expressed faith?
Hon. Mr. Ostashek: No, I cannot. We have publicly said that there are some errors in the report. We have not denied that, but the fact does remain that we were looking for the accumulated surplus as of March 31, 1993.
Mr. Penikett: In terms of the nature of the document and the nature of the informations we are talking about, in respect of the accumulated surplus report, the information that went into it is more like the information that goes into a supplementary, such as the period 4 supplementary, than that provided in an audit. Would the Government Leader agree with that proposition?
Hon. Mr. Ostashek: I can say that the Consulting and Audit Canada report was not an audit.
Mr. Penikett: That view is one with which I would wholeheartedly agree because, as I understand it, an audit is done after the fact, after all the expenditures are made. While this report was completed in fairly short order, an audit around here customarily takes a number of months. Can the Government Leader confirm that a supplementary process, unlike this process, takes several months to complete?
Hon. Mr. Ostashek: Yes, I have no problem confirming that. As we said earlier, the Consulting and Audit Canada report was commissioned to give us a snapshot of where the government was when we took over the administration.
Mr. Penikett: Would the Government Leader agree that it was inevitably a blur, because it was a snapshot of a moving target. Hon. Mr. Ostashek: Point of order here. We are talking again about the Consulting and Audit Canada report. Let us refer to the supplementary estimates, and if the Leader of the Opposition wants to refer back to the report, we will be happy to keep getting into details. Let us talk about the variance 8 supplementaries that are tabled here, the supplementary budget. That is the ruling of the Chair.
Mr. Penikett: I understand that both an audit and a supplementary, based on my experience in government, involve departments double-checking numbers, and indeed making a test of reasonableness about some of the projections. Can the Government Leader confirm, that in preparing supplementaries, that the Department of Finance will check a departments numbers. Draft documents will be double-checked by officials, particularly deputy ministers and financial officers in departments. In that respect, the process is very different from the process that went into the report called Review of Change in Accumulated Surplus.
Hon. Mr. Ostashek: I have no problem saying that is right. It is a very different process that went into the two different documents.
Mr. Penikett: Can the Government Leader also confirm that it is normal practice in period 4, period 8, period 9 supplementaries - in other words mid-year supplementaries - as it was in this Consulting and Audit Canada document, to ignore past actual experience in making forecasts about total expenditures and revenues.
Hon. Mr. Ostashek: The Member opposite will have to forgive me. I do not quite understand the question, but I do not think one would ever ignore actuals.
Mr. Penikett: Correct me if I am wrong, and the Government Leader may wish to consult with the deputy, but, as I understand it, the only time actual expenditures are verified is historically, after the fact. As a matter of policy in preparing public financial documents, budget forecasts, for example, and especially mid-year supplementaries, the track record and experience of the government is not factored in. For example, if there is, every year, a pattern of lapses, and has been for the last number of years, that is not taken into account in a period 4, period 8 or period 9 supplementary.
Hon. Mr. Ostashek: From my understanding on supplementaries, the year-end cash position of the government is projected to the best of our ability when the supplementaries are being prepared.
Mr. Penikett: Is it not the case with the supplementaries for every year for the last seven - the numbers for which I read into the record yesterday or the day before - as it is with the case of this Consulting and Audit Canada document, that the mid-year supplementaries - period 4, period 9 or, in this case, period 8 - project deficits when the final expenditures have been very different and have shown surpluses?
Hon. Mr. Ostashek: I am not quite sure I understand the question that the Leader of the Official Opposition put forward. Perhaps he would not mind repeating the question, please.
Mr. Penikett: I would ask the Government Leader if the supplementary before us has in common with the Consulting and Audit Canada Report, and with the period 4 and period 9 supplementaries for the last half dozen years, the following feature: that, while they project significant deficits for the year, the final supplementary for the year has, most of the last few years, shown surpluses?
Hon. Mr. Ostashek: That is correct.
Mr. Penikett: The Government Leader is in fact confirming, or answering in the affirmative, the question that I put to him some time ago, in that it is common practice - policy, if you like - to ignore the past actual experience in making forecasts in period 4, period 8 and period 9 supplementaries.
Hon. Mr. Ostashek: No, I do not think that is correct.
Mr. Penikett: Forgive my confusion because, in my last several questions, the Government Leader seemed to confirm that it was correct.
Let me ask this question: is it not correct that, over the last six years, on average, $12 million of capital budget expenditures and $6 million of operation and maintenance expenditures and budget expenditures were not actually spent by the government? Did the Government Leader not confirm that that pattern may be anticipated even by him this year when he predicted that there may be lapses, at least in the order of the magnitude of $15 million?
Hon. Mr. Ostashek: Yes, that is correct. I did address that in my second reading speech. We expected that the same would continue this year and that there would be lapses that could be in the neighborhood of two or three percent.
Mr. Penikett: Would the Government Leader confirm that the supplementary before the House, like the review of change and accumulated surplus document, does not include any such prediction of a $15 million lapse?
Hon. Mr. Ostashek: Yes, that is correct. I stated that in second reading debate, also.
Mr. Penikett: Yesterday, my colleague, the Member for McIntyre-Takhini, pointed out that there were quite huge discrepancies between the expenditure forecasts cited in the review of change and accumulated surplus document, Mr. Merv Millers essay in The Sluice Box, and the supplementary that is now before the House.
The Government Leader, at that time, in essence, took those questions as notice and offered to provide the House with some explanation for the differences in expenditure, revenue and recovery forecasts in those three documents. Can I ask the Government Leader if he has that information to table now?
Hon. Mr. Ostashek: Yes. On the question put by the Hon. Member for McIntyre-Takhini on the difference between the figures in the publication The Sluice Box and those of Consulting and Audit Canada, as Members will note, it is a breakdown in the capital spending. The number in The Sluice Box is, I believe, $107 million; the Consulting and Audit Canada number is $106,851,000. The operation and maintenance spending numbers in The Sluice Box were $337 million and Consulting and Audit Canadas numbers were $337,155,000. The totals of those numbers in The Sluice Box were $444 million; the numbers in the Consulting and Audit Canada report were $444,000,006.
On the numbers for the transfer payments from Canada, The Sluice Box shows $252 million, and there was no number in Consulting and Audit Canada for that. On the territorial revenues and recoveries, $136 million was in The Sluice Box publication, and there was nothing shown in Consulting and Audit Canadas report, but it had revenues. There was nothing shown in The Sluice Box, but there was $317,959,000 shown by Consulting and Audit Canada. On recoveries, again, there was nothing shown in The Sluice Box, but it was shown as $69,490,000 by Consulting and Audit Canada.
That totalled out in The Sluice Box publication to $388 million, and it totalled out in Consulting and Audit Canadas report to $387,449,000.
A balance of minus $56 million was shown in The Sluice Box publication; Consulting and Audit Canada shorted out as minus $56,557,000.
The Member will note that the numbers are the same in total; only the breakdown is different.
The Member went on to ask why the numbers in The Sluice Box article were different from the numbers contained in the supplementary now before the House. I believe I answered that question last night and would refer the Member to pages 224 and 225 of yesterdays Blues. I would like to repeat, though, that there is no reason why the numbers should be exactly the same, because they were prepared at two different times from two different sets of sources of documents. It would, indeed, be extraordinary if they came out to be exactly the same. I did point out yesterday, however, that, in fact, the Consulting and Audit Canadas numbers, which are also the ones used in The Sluice Box, are fairly similar to those shown in the current supplementary, when put on a comparable basis.
As mentioned yesterday, the Consulting and Audit Canada report netted down Yukon Housing expenditures to arrive at a net subsidy for the Yukon Housing Corporation in both operation and maintenance and capital. This is consistent with the reporting practice in our public accounts. The supplementary contained Yukon Housing Corporation expenditures at gross for voting purposes with the company recovery shown in the recoveries column. Some members of the Official Opposition will be familiar with this practice since they instituted it several years ago. Prior to that time, only the net Yukon Housing expenditures were voted in this Assembly.
Mr. Penikett: I thank the Government Leader for his answer. I take it then that since Mr. Merv Miller has not, I assume, sworn a Cabinet oath of office or the oath of secrecy of a senior official of the government, that his report here, published in The Sluice Box in February, was based on the Consulting and Audit Canada report, not from access to the Finance department documents in preparation for the supplementary budget. I would ask if, since the Government Leader has conceded that there may be errors in this document - I think he has in his essence conceded that - that these errors may have been replicated in Mr. Millers article in The Sluice Box in February. I ask the Government Leader if he would explain why that would happen when I believe many of the errors in this Consulting and Audit Canada report were well-known to the government long before the publication of this article by Mr. Merv Miller in February.
Hon. Mr. Ostashek: I cannot answer that question. My understanding is that the information for the article written by the gentleman named by the Member opposite was taken from the Consulting and Audit report.
Mr. Penikett: My question to the Government Leader is this: since he has today conceded, in two ways, that there are mistakes in this report, one by not being willing to answer and defend the particulars in it and, two, by saying - he put it negatively - he was not going to claim there were no mistakes in it. Since Mr. Miller, the certified management account, published this article in February based upon the Consulting and Audit report, about which there were many public comments as early as December and through January, can he explain why a flawed report was replicated by the senior financial advisor of the Yukon government in February?
Hon. Mr. Ostashek: No, I cannot. I answered the question that, based upon my information, the information in The Sluice Box was based upon the Consulting and Audit Canada report.
Mr. Penikett: I would like to ask the Government Leader, since I do not know if he has changed the budget or Management Board process since he has come into office, if he can confirm a couple of things. The first part of preparing supplementary budgets is somewhat like the process undergone in the Review of Change in Accumulated Surplus, in that it involves inviting department estimates of what they want or need for the rest of the fiscal year; however the process for supplementaries is different from there on in that there are certain controls built into the actual supplementary process. Can the Government Leader confirm that?
Hon. Mr. Ostashek: Yes, I can confirm that.
Mr. Penikett: In the budgetary process, as I understood the process, the government establishes overall limits on additional spending. After the original forecasts are made, many requests for more money than was in the main estimates have to go through a fairly rigorous Management Board analysis and examination. These requests are routinely reviewed, cut back or rejected completely, in keeping with the overall spending limits, and often departments end up finding the additional resources they need internally, or they are told to do so by Management Board, without requiring more than what was originally budgeted.
I would like to ask the Government Leader, since he has claimed that the former government approved $36 million in additional expenditures if he means by approved, that Management Board and Cabinet have given final approval of the supplementary ready for tabling in the House, rather than simply that the Ministers have signed off applications to Management Board.
Can the Government Leader state what is the basis of his evidence that it was approved; in other words, there was a budget ready to present to the House involving an additional $36 million in expenditures?
Hon. Mr. Ostashek: It is my understanding that they were granted Management Board approval to be included in the next supplementary.
Mr. Penikett: I want to be very precise about this. The final Management Board approval for a supplementary does not happen until the government has taken into account all the financial realities prior to going into the House. I would like the Government Leader to confirm an impression we obtained from some of his colleagues, that he and they had a belief that, simply because Ministers had signed off applications to Management Board, that constituted Ministerial or Cabinet approval.
Hon. Mr. Ostashek: I believe that is incorrect. As I said, it is my understanding that the items in the $36 million were approved by Management Board.
Mr. Penikett: Let me tell the Government Leader, for the record, that I am absolutely certain that is not the case. I would be willing to discuss it with the Deputy Minister of Finance, because I do not believe that was the case at all and, in fact, neither do any of my colleagues who sat on Management Board or Cabinet with me.
Hon. Mr. Ostashek: I guess the easiest way to resolve this, if we can have the approval of the Members opposite, would be to table the Management Board minutes with the items.
Mr. Penikett: I do not know what the practice is with the Members opposite, but, of course, Management Board minutes under our government were ultimately approved by Cabinet. Until the Cabinet had made a final decision about bringing legislation forward, I do not know what he is saying constitutes approval. I am not going to approve the selective tabling of documents on the floor of this House. We could all play that game. We have lots of Cabinet documents we could table, which I do not think is something we should be getting into.
I have lots of documents that would prove profoundly...
Some Hon. Member: (Inaudible)
Mr. Penikett: Well, Management Board documents happen to be Cabinet documents.
Some Hon. Member: (Inaudible)
Mr. Penikett: No, I said I have lots of documents that I could table.
Some Hon. Member: (Inaudible)
Mr. Penikett: Well, I probably still have some Cabinet documents in the sense of briefings from the Deputy Minister of Finance and from other deputies, which are, in the normal course of things, confidential documents that I would not make public.
Let me ask the Government Leader: since the Consulting and Audit Canada report contained no detail about revenues and recoveries, and since there is not, in fact, not an awful lot more detail contained in the supplementary, I would like to ask the Government Leader about the margin of error in the forecasts on revenue. As with all deputy ministers, it is our experience that the Finance department routinely underestimates the revenues. It certainly did during our time in government. In fact, it is not that uncommon a practice. Even when I was a municipal councillor, the treasurer used to do the same thing. It is maybe a prudent thing for Finance Ministers to overestimate expenditures and underestimate revenues. Can I ask the Government Leader how comfortable he is - what margin he thinks there may be - with the forecast of revenues and recoveries contained in the supplementary.
Chair: Order please. Pursuant to Standing Order No. 2(5), the time being 9:30 p.m., I will rise and report to the House.
Speaker resumes the Chair
Speaker: I will now call the House to order.
May the House 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 from the Chair of the Committee of the Whole. Are you agreed?
Some Hon. Members: Agreed.
Speaker: I declare the report carried.
The time being 9:30 p.m., this House now stands adjourned until 1:30 p.m. tomorrow.
The House adjourned at 9:30 p.m.