Whitehorse, Yukon

Thursday, March 25, 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?


Hon. Mr. Ostashek: I have for tabling a comparison of individuals on the payroll, full-time equivalents and person years.

Speaker: Are there any Reports of Committees?



Petition No. 2 - Response

Hon. Mr. Fisher: I have for tabling a response to Petition No. 2, regarding the Gateway housing project at the corner of Duke and Alsek Streets in Whitehorse, which was received by this House on December 17, 1992.

Speaker: Introduction of Bills.


Bill No. 6: Introduction and First Reading

Hon. Mr. Ostashek: I move that Bill No. 6, entitled First Appropriation Act, 1993-94, be now introduced and read a first time.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 6, entitled First Appropriation Act, 1993-94, be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 6 agreed to

Bill No. 7: Introduction and First Reading

Hon. Mr. Ostashek: I move that Bill No. 7, entitled Interim Supply Appropriation Act, 1993-94, be now introduced and read for the first time.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 7, entitled Interim Supply Appropriation Act, 1993-94, be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 7 agreed to

Bill No. 89: Introduction and First Reading

Hon. Mr. Ostashek: I move that Bill No. 89, entitled An Act to Amend the Fuel Oil Tax Act, be now introduced and read for the first time.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 89, entitled An Act to Amend the Fuel Oil Tax Act, be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 89 agreed to

Bill No. 46: Introduction and First Reading

Hon. Mr. Ostashek: I move that Bill No. 46, entitled An Act to Amend the Income Tax Act, be now introduced and read for the first time.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 46, entitled An Act to Amend the Income Tax Act, be now introduced and read a first time.

Some Hon. Members: Agreed.

Some Hon. Members: Disagreed.

Speaker: I believe the “agreeds” have it. I declare the motion carried.

Motion for introduction and first reading of Bill No. 46 agreed to

Bill No. 29: Introduction and First Reading

Hon. Mr. Ostashek: I move that Bill No. 29, entitled An Act to Amend the Tobacco Tax Act, be now introduced and read for the first time.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 29, entitled An Act to Amend the Tobacco Tax Act, be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 29 agreed to

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

Are there any Notices of Motion?

Are there any Statements by Ministers?

This then brings us to Question Period.


Question re: Curragh Inc., financial assistance

Mr. Penikett: I would like to ask a question of the Government Leader arising from his deadline for the Curragh negotiations, which I understand is next Monday, March 29, 1993. Since that day is approaching, and this is the last day the House will be sitting before the twenty-ninth, can he give this House a progress report on the negotiations, between Burns Fry and Curragh Resources, on the loan guarantee?

Hon. Mr. Ostashek: I would like to thank the Member opposite for the question. I would like to report to the House that there was a very good exchange in a meeting between Burns Fry and Curragh yesterday in Toronto. I understand, from our officials here, that Curragh and Burns Fry are meeting again in Toronto today. Curragh will be tabling their reply to the conditions that have been put forward by the Yukon government.

Mr. Penikett: Although he did not say so in precise terms during debate last Wednesday, the Government Leader is reported as saying, in the Watson Lake newspaper, that the first condition regarding the bank backing off in terms of its collateral is not negotiable. Is that still the position of the Yukon government?

Hon. Mr. Ostashek: As the Member is fully aware, I tabled a letter in the House last week from Curragh Resources asking for a media blackout on the negotiations; I will respect that blackout.

Mr. Penikett: I would like to ask the Government Leader, since his Minister of Economic Development is going to be galloping into Toronto just as negotiations are concluding, and he has already advised us that he will be getting a briefing on the negotiations: will the Minister of Economic Development carry with him a mandate from the Government of Yukon to involve himself in negotiations, or perhaps even make decisions if that is necessary, in order to conclude an arrangement with Curragh?

Hon. Mr. Ostashek: The Member opposite is correct. The Minister of Economic Development will be in Toronto, I believe on Monday. He will be briefed by Burns Fry. As we stated in the House earlier, the negotiations are between Burns Fry and Curragh. I am sure if there are any developments, the Minister of Economic Development will be in touch with me.

Question re: Budget commitments for 1992-93

Mr. Penikett: I would like to ask a question about a new subject arising from discussions in this House over the last couple of days, during which time the Government Leader has restated his belief that the previous administration committed this government to $36 million in new expenditures in the last year. I would like to ask the Government Leader if he can confirm, as I think he did partially yesterday, that $14 million of those $36 million are revotes, and therefore not new expenditures at all?

Hon. Mr. Ostashek: I believe what I said in the House was not that the previous administration had committed this administration to new expenditures, but that their supplementary estimates were coming in $36 million more than what was in the main estimates that they tabled in this House for the 1992-93 year. Yes, $14 million of that was re-votes.

Mr. Penikett: For the record, the Government Leader did say that they were new expenditures. He just conceded that $14 million were not.

Could I also ask him to confirm that a further $12 million of that $36 million was the result of the Alaska Highway agreement negotiated between this government and the federal government, which is 100 percent funded by the federal government and, therefore, does not change the deficit or surplus position of this government by a single penny?

Hon. Mr. Ostashek: The Member opposite is partly correct. Yes, there is a lot of recoverable money in there; however, the point is that, when the main estimates were tabled by the previous administration, they forecasted a $19 million deficit. We were supposed to be left with an accumulated surplus of $30 million, as of March 31, 1993.

By the supplementaries that were tabled in this House, the reality of it is that we will have an accumulated deficit of about $7 million. That administration spent $58 million more than they took in.

Mr. Penikett: I think the Government Leader is going to need some help with his sums. Just last night, he again admitted that there would probably be a $15 million lapse in the amount he is now forecasting in a bill before this House. This means that his statement that there would be a $58 million deficit, even in his own terms, is no longer accurate. Would he agree with that?

Hon. Mr. Ostashek: We are going over old ground again but, if the Member opposite wants to do that, that is quite all right with me. We did say that there could be a two or three percent lapse. If that were to happen, in a best-case scenario, we could end up with a $3 million to $8 million surplus, not a $30 million surplus that was forecast in the main estimates last year.

Question re: Government employee appointments without competition

Mr. Cable: My question is for the Minister responsible for the Public Service Commission.

Recently, the government has posted what appears to be an inordinately large number of proposed appointments without competition. Someone recently counted over 60 of these notices, dating back through the month of March. Can the Minister tell this House why there seems to be such a large number of appointments without competition.

Hon. Mr. Ostashek: I am not aware of that many appointments being made by this administration that should have gone to competition. I would have to get more information and bring an answer back to the Member.

Mr. Cable: Could the Government Leader indicate to this House what circumstances normally surround appointments in the public service without competition?

Hon. Mr. Ostashek: Again, I am not sure what the Member is after, because I am not aware of us making any appointments. There have been no new people hired. Whatever has been done has been done from within the system itself.

I will have to get more information and get back to the Member.

Mr. Cable: In that event, what I will do is pass along the information that I have to the Government Leader. Perhaps we can get a considered response then.

Question re: Court reporting contract

Ms. Joe: I have a question again on the court reporting/recording contract. In the paper last night, which I am sure the Minister of Justice read, it says that a long standing Yukon business will soon close its doors because the territorial government plans to hire an outside firm to do a job. This is not the only business in town suffering the consequences of this government’s preference for outside hire. We have just heard of another contract being awarded to an outside company over a local one, because the outside bid was $94 less.

What is so depressing about the court reporting contract is the lower standard of work that will be provided to the court. What information does the Minister have that convinced him that the quality of work would be equal to what J.G. Moore is providing now?

Hon. Mr. Phelps: I thought I had answered this adequately yesterday. I will try once again.

The government set up certain criteria and standards for tendering this work. Those criteria are at least equal to the standards that are met in southern courts, including the courts in the City of Vancouver. When the bids came in, they were evaluated by a large number of people on a panel, which represented the various stakeholders involved in the court system. Each party evaluated the tenders independently. They all agreed on the ranking, and the ranking came out with the new firm as number one.

Ms. Joe: I have some information that I would like to send over to the Minister of Justice. What I have here are transcripts prepared by the company that has been awarded the contract from the British Columbia, indicating that it has had problems with tapes being erased, inaudible tapes and some trials having to be retried. There is also an article that talks about two sexual assault cases that have had to be retried due to tape recorders being used instead of people.

I would like to ask the Minister: if a retrial or an appeal happens as a result of this kind of inadequate service, is it going to cost the government more money than it is saving now?

I would like to ask the Minister how he can justify spending this amount of money, possibly, for retrials or appeals, when he thinks he is saving money on awarding a contract to an outside firm.

Hon. Mr. Phelps: I think the hon. Member, with respect, is off on a wild tangent from the issue before us. The issue before us is simply this: the contract for court reporting was tendered; it was tendered on the basis of criteria that were set up very carefully, and based on the minimum requirements required by other courts in Canada. When the bids came in they were evaluated by very reputable people who are stakeholders in the system and who unanimously agreed on the ranking. It is by that very objective process that the award has been given to the number one ranked company.

Ms. Joe: I find it really hard to believe that the Minister actually believes this, when there is evidence that this kind of court reporting is not adequate, and that there have been problems with this type of court reporting in other jurisdictions in Canada - the very fact that this gentleman was told that he would get the tender, even before it went out for bid, is a question.

I would like to know, because of businesses being closed down and people being out of work, if the Minister will send a positive message to small businesses in the Yukon, and reconsider the decision to hire outside companies.

Hon. Mr. Phelps: I am not really surprised by the support on the other side for the politicians to meddle in the tendering process. They did it time and time again, while they were in power.

I would suggest to the hon. Member that what she is really trying to do in her line of questioning is cast doubt upon the stakeholders of the court system. I suggest to her that it is a very dangerous and detrimental thing to do, because they are people of high integrity, who took the task upon themselves to evaluate the bids, and really what she is doing is launching an attack upon a good number of people who do not deserve that kind of criticism.

Question re: Court reporting contract

Ms. Joe: The Member has not answered my questions. I have asked him whether or not he was serious about the government’s vision for the future; we have sat here and looked into some of it and I am sure we will listen to some more of it this afternoon. But the question I am asking him is about his preference for outside hire over local business people. What we are hearing is that outside Firms are getting preferential treatment because the government ministers are not keeping track of the kinds of things that are happening in their departments.

We have a business closing down; we have people who are going to be out of work very soon and on unemployment insurance, or whatever, and I would like to ask him if his vision for the future includes closing down Yukon businesses and putting Yukoners out of work. That is the question.

Hon. Mr. Phelps: The Member opposite has been given a very, very difficult brief to argue. I am glad I am not in her shoes.

Simply put, a very fair tender was put out. Three firms bid on that package. Unfortunately, the one she refers to - the Yukon-based firm - came in well over the successful firm. The price gap was amazing, to me. I do not know if the Member is trying to say that we should forget about the tendering process and, at any cost, insist upon hiring a local firm that is really owned by people outside the territory.

Ms. Joe: I am talking about the kind of things that will happen as a result of the tender being awarded to someone else for a lesser amount of money and the quality of work that will result, and the consequences that may happen in the courts as a result of the inadequate service.

People in the Yukon are going to probably see more money being spent as a result of things that may occur. I have asked him the question before but he did not answer: how can he justify awarding that contract, knowing that there is going to be inadequate service to the courts that will probably cause more money to be spent in the end?

Hon. Mr. Phelps: I find it incredible that the Member opposite would stand up there and make those kinds of assertions about the quality of the service, when she is disagreeing with judges in the system, with lawyers in the system, and with people who work in the courts daily. That is who she is disagreeing with, and I would take their expertise over hers any day, when it comes to court services.

Ms. Joe: He is putting the blame on someone else again - it is not his fault, it is somebody else’s fault. I would like to ask him one more time - because he did not answer - whether or not he would reconsider his decision because of the consequences that the company and the individuals will be facing as a result of the decision to give preferential treatment in hiring to people from outside.

Hon. Mr. Phelps: No, I will not interfere with the tendering process. It has been above board, objective and the evaluations have been performed by the stakeholders in the system.

Question re: The Sluice Box, article re government finances

Mr. McDonald: Yesterday in Committee, the Government Leader acknowledged that there were errors in the Consulting and Audit Canada financial review. He agreed that the article to government employees about government finances in The Sluice Box newsletter, which was based on that report, was not accurate. Can the Government Leader explain why he, as Minister responsible for the Public Service Commission, authorized the publication of the article in question in February, when the government knew as far back as last Christmas that the figures were wrong?

Hon. Mr. Ostashek: What was said in the House in Committee was that the article in The Sluice Box was based on the calculations and the figures in the Consulting and Audit Canada report. I gave the Members opposite the explanation during questioning on it the night before. It is as simple as that.

Mr. McDonald: Unfortunately, it is not that simple at all. What we have is a situation where information, which was out as much as $13 million in capital, $3 million out in the operations, $8 million out in terms of the federal transfer payment, was communicated to employees in February - two months after the government had already had different information, information that they had used in the supplementary estimates. Can he indicate why this article to the thousands of employees of this government was published when they knew that the information was incorrect?

Hon. Mr. Ostashek: That is not exactly correct. I told the Member last night in Committee of the Whole. I showed him how it compared to the variance 8 reports. He could not expect the figures to be exactly the same; the reports were done at different times.

Mr. McDonald: I am not trying to get at the reasons for the information being different. I accept that the information was different. I am trying to find out why the Government Leader authorized the publication of information that they knew was wrong. The information was basically $24 million out of line, from information that they already knew was going to form the substance of the supplementary estimates? That is the question. Why did they authorize an article that misled the public employees of this government?

Hon. Mr. Ostashek: As I stated in Committee yesterday, when the figures are compared to the variance 8 reports, which were not available at the time that article was done, we explained why those figures came out the way they did. There was not that much difference. It was just the way that they were rolled up.

Question re: Golden Horn, rezoning

Ms. Moorcroft: I have a question regarding a rezoning application at the Carcross Cutoff near Golden Horn.

I was informed by area residents that someone has mysteriously bulldozed the right-of-way for a new road on lot 125, through the treed buffer zone, prior to any decision being made by the lands branch and the Minister on a subdivision application for that lot.

Is the Minister of Community and Transportation Services aware that this land clearing has taken place? If so, can he indicate whether anyone had proper permits or authority to do the clearing.

Hon. Mr. Fisher: I just became aware of the clearing a few minutes before coming into the House. In fact, we have one of our inspectors investigating to see exactly what has happened and by whom.

Ms. Moorcroft: The road clearing appears to the local residents to be in anticipation of a government decision to approve the subdivision plans, yet the lands branch is in the process of a survey of views of the local residents.

The deadline for residents to comment is April 8 - some 10 days away. I am sure the Minister does not want this consultation to look like a sham. Can the Minister indicate what steps he will take to restore the confidence of the local people that this government has not given unofficial approval for the subdivision application and construction of a new road.

Hon. Mr. Fisher: I believe the Member opposite answered the question herself. There has been no subdivision at this point. Letters have gone out to the residents asking for input. The clearing of this buffer strip is currently under investigation.

Ms. Moorcroft: I would like to ask the Minister again if he will instruct his officials, when they discuss this matter with the property owner, to ensure that no further peremptory action takes place until the government has made a clear decision based on the residents’ concerns about the subdivision application.

Hon. Mr. Fisher: When the investigation is completed and we know exactly what has happened out there and if someone has done something they were not supposed to do, we will be instructing them to cease and desist.

Question re: Area development regulations, subdivision

Ms. Moorcroft: It is going to be small comfort that you cannot put the trees back. The Minister of Community and Transportation Services indicated to the House last week that some of the area development regulations have no force in law, in particular the regulation prohibiting subdivision in the Golden Horn area.

Can the Minister say how long he has been aware of this problem, and how many other sets of regulations it affects?

Hon. Mr. Fisher: This is not a legal opinion, but I have been aware of some problems with the area development regulations for approximately two or three months. I cannot say for sure, but it was sometime around Christmas that I became aware that there were some problems with the area development regulations with respect to subdivision.

Ms. Moorcroft: As the Minister well knows, this raises serious questions about the government’s ability to plan areas, communities, or neighbourhoods effectively and to regulate land use in specific areas throughout the territory. The public is operating under the belief that certain laws and regulations are in effect, and they plan and use their land accordingly.

Can the Minister indicate what steps he is taking to correct this problem? For example, does he anticipate changes to the Area Development Act, and will we see them in this session?

Hon. Mr. Fisher: I am sure the Member is aware that to amend or review legislation takes some time. Very recently we became aware - and I cannot say for sure, because I do not have a legal background - that there may very well be some problems with one portion of the area development regulations in respect to subdivision.

I have asked the department to look into this to find out whether there is an actual legal problem with it and, if so, then we will make the necessary amendments in due course.

Question re: Appointments to boards and committees

Mrs. Firth: There has been a general agreement by all Members of this House that there be a committee made up of Members of this Assembly to appoint Yukoners to the various boards and committees within the government. The objective of that is to remove the politicization of the boards and committees.

Will the Government Leader be accepting this positive initiative, and when will this committee be appointed?

Hon. Mr. Ostashek: I thank the Member for the question, although I would like to point out to her that she is fully aware that the motion is on the Order Paper. It was debated in the House in December of last year; debate was closed on it and an amendment was put forward by the Opposition.

As the Member also knows, I spoke to her about this motion before the session started this spring. We would like to put this motion through, but we feel some of the clauses in the amendments make it unacceptable. We are still looking at it; we might be bringing it back in this session.

Mrs. Firth: I thank the Government Leader for refreshing my memory. I had not forgotten. I want to ask the Government Leader this question: the government wants the committee to review appointments proposed by Cabinet Ministers only. Members from this Legislative Assembly have expressed that they would like other Members and other Yukoners to be able to make recommendations. I would like to ask the Government Leader what his position is regarding that issue?

Hon. Mr. Ostashek: The Member opposite is basically right; the intent of the motion was that a committee of this Legislature could review appointments that were put forth by the government, so the government could not be criticized for making political appointments. This committee of the House would be looking at the qualifications of the people whose names were put forward. We would still like it to go through in that format. We believe that it is a workable arrangement. It will give the Legislature a chance to examine the qualities and the qualifications of the people who are named to these boards; if the government were to try to bulldoze political appointments through, they would pay the political price for it.

Mrs. Firth: The Minister did not answer my question. I want to know what his position is regarding allowing other Members of the Legislature, and other Yukoners - many of whom are here today - to make appointment nominations to the boards and committees instead of it just being exclusively for Cabinet Ministers. What is his position regarding that?

Hon. Mr. Ostashek: I do not know where the Member opposite has been. It has always been my understanding, it has been during this administration, that the names put forth for the boards and committees do come from the public. They come forward to the Minister and the Minister makes some recommendations. It has always been in that respect. We were putting this motion in as a safeguard, so the public could examine those appointments prior to them being made.

Question re: Appointments to boards and committees

Mrs. Firth: I was not going to followup, but the government just said a word, in public, that triggered my imagination.

The intention of this committee is to de-politicize the boards and committees of government. Right now, the government only wants Cabinet Ministers to have the right to make nominations for appointments to the boards and committees.

We are asking that the Government Leader allow other Yukoners, and other Members of this Legislative Assembly, to make recommendations for appointments.

We are not asking that this be discussed in public, or that these people have to come before the committee in a public way like they do in the United States.

I see the Government Leader pointing at it. That particular aspect of the amendment, that it be removed, has been agreed to by Members of this House.

What am I asking the Government Leader to do is meet the other Members of the Legislative Assembly halfway and state what his position is regarding other Yukoners, and other Members of the House having the ability to make appointments.

I hope that he will say he agrees with that position and that he will move in that direction.

Hon. Mr. Ostashek: Certainly we want to have public input into making appointments, and as I said in the first part of the question, that is exactly what is happening now.

I do not know where the Member thinks the names come from that come to the Cabinet Ministers; the names come from different interest groups from within the community. The names are recommended to the Minister.

It was the same procedure used when the previous administration was in power, and yet when they are in Opposition they put forth an amendment that they want everybody to be nominated to committees through the Legislature; a big, cumbersome, process.

What we are looking for is for the Legislature to be able to scrutinize the names of people who are being suggested in camera.

Mrs. Firth: Do I take it then, by the partisan nature of the discussion, that it is this government’s intention that they really want the ability to make the appointments the way the other government made them and not open it up to other Members of the Legislative Assembly and the public? That is what I am hearing from his words.

Hon. Mr. Ostashek: That was precisely why the motion was put forward, so that the Legislature could have a say in appointments, scrutinize the people who were going to sit on these boards and de-politicize the system.

Question re: Curragh, Inc., financial assistance

Mr. Harding: I would suggest to the Government Leader that he proclaim the Public Government Act; that would take care of all this debate.

I want to change the subject. I would like to address, once again, the problem facing Yukoners who are losing jobs in this territory.

I have recently learned that 10 owner/operators of rigs who haul ore for Yukon Alaska Transport have been told that their rigs are no longer required and many layoffs are continuing, both at Yukon Alaska Transport and at Curragh.

Will the government quickly cut to the bottom line in its negotiations with Curragh, because people’s lives in this territory are suffering immensely.

Hon. Mr. Fisher: I was also made aware that Yukon Alaska Transport has been asked by Curragh Resources to reduce the number of trucks hauling from Curragh to 25; that will end up in a layoff of the lease operators. There are currently 35 trucks hauling, so the 10 lease operators will be going, as will a number of people working for Yukon Alaska.

Mr. Harding: The point remains that many people are suffering in this territory. I would like to talk a little bit more about that and see if they could perhaps answer my question. From the time the NDP left office, unemployment has risen in this territory from eight percent to 14 percent. The new Yukon Party government has been in power for almost six months of this fiscal year and has done little except fire deputy ministers, costing taxpayers $1 million. When will the government realize that unemployment costs money in social assistance, UI benefits, loss of consumer confidence and also disposable income?

Hon. Mr. Ostashek: The Member opposite, in his preamble to his previous question, said if we passed the Public Government Act we could solve all those problems. They had the opportunity to proclaim it but they did not.

I want to answer the Member’s question. The fact remains that unemployment is at 14 percent - one year ago it was at 12 percent, not eight percent - 12 percent. The Member opposite knows very well that unemployment goes up every winter in the Yukon.

The other thing is that there are 600 more jobs in the workplace today than there were a year ago. There are 300 more people working than there were a year ago - 300 more people than a year ago. As far as the Curragh situation goes, the Members opposite had full awareness of the situation and could have dealt with it a year ago but did not have the courage to do so.

Mr. Harding: I would really enjoy seeing the Government Leader give that speech in my riding today, because I know what would happen to him. People are suffering in this territory.

What concrete steps are being undertaken, specifically, to get these unemployed workers back to work? If the government does not get them back to work, what is the government specifically and concretely planning to do to help these laid-off workers protect their future?

Hon. Mr. Ostashek: I do not know where the Member opposite has been all winter. We are trying to get the Curragh operation back to work and, as for creating other jobs in Yukon and the private sector, if he will listen to the budget speech perhaps he will get some answers.

Question re: Curragh Inc., layoff notices

Mr. Cable: I know the Government Leader is somewhat touchy on the subject of the Curragh negotiations. There appears to be some sort of a blackout, both in this House and the media.

Can the Government Leader tell us when he first became aware that Curragh was planning to give out permanent layoff notices, as it did this week?

Hon. Mr. Ostashek: I thank the Member opposite for the question. Curragh is not a touchy subject. We are dealing with it. It is more touchy for the Opposition than it is for us.

To answer the Member’s question, Curragh made us aware a long time ago that, because of the legislation in place, after 13 weeks they would have to issue permanent layoff notices to their workers.

Mr. Cable: Perhaps the Government Leader has already answered the question, but, just to confirm, could the Government Leader tell us whether or not these layoffs constitute a permanent reduction in the Faro workforce.

Hon. Mr. Ostashek: From my conversations and meetings with Curragh, once they have their financial house in order, most, if not all, of these people will be recalled.

Mr. Cable: I recollect a few moments ago someone talking about a reduction in the workforce for the Yukon Alaska Transport area of the total Curragh operation. Is that a permanent reduction in that portion of the workforce?

Hon. Mr. Ostashek: I cannot answer on behalf of Curragh except to say what they told me. They said that once they had their finances in order, most of the people would be recalled. Whether that goes down to their suppliers and contractors as well, I do not know.

Speaker: The time for Question Period has now elapsed. We will proceed with Orders of the Day.


Speaker: Government Bills.


Bill No. 6: Second Reading

Budget Speech

Clerk: Second reading of Bill No. 6, standing in the name of the hon. Mr. Ostashek.

Hon. Mr. Ostashek: I move that Bill No. 6, entitled the First Appropriation Act, 1993-94, be now read a second time.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 6, entitled First Appropriation Act, 1993-94, be now read a second time.

Hon. Mr. Ostashek: Mr. Speaker, hon. Members, it is an honour and a privilege for me to present our first budget in this House. The 1993-94 Government of Yukon budget for capital and operations and maintenance totals more than $483 million, of which $129 million is for capital projects throughout the territory and $353 million is for the operation and maintenance of government.

Due to our controlled spending, improved government management and the streamlining of government operations over the past four and a half months, we are presenting here today a balanced budget. In view of the $58 million deficit for the fiscal year 1992-93, this is a remarkable achievement.

I want it noted for the record that we have not yet met our objectives in relation to our financing. This government should have a monthly operating reserve of $35 million in order to meet our cash requirements, and for any emergencies. If these monies were now available, our decision on providing aid to Curragh Resources would certainly have been much easier. As we have reported to Yukoners, that reserve is gone, and it will take a few years of sound fiscal management to rebuild our bank account.

In the interim, for the first time in our history, the Government of Yukon is borrowing money to meet its day-to-day operations. Banking services, including the rural banking system, are now costing us some $400,000 a year, because there is no longer a sufficient compensating balance in the bank to cover the costs of providing these services. I am confident that, with our commitment to sound fiscal management, we will overcome these challenges and correct the mistakes of the past.

This budget is a tribute to my colleagues, deputy ministers and all departmental officials who worked so hard to better manage their operation and maintenance costs in order that there would be sufficient discretionary funds for capital projects. It must be recognized that it is primarily the capital budget that creates private sector jobs.

Members should note that this is the largest capital budget ever tabled in this House. In addition to our normal capital spending requirements, we are fortunate to have major capital projects, such as the start of construction of the $44 million new Whitehorse General Hospital and some $27 million for the Shakwak and Alaska Highway projects.

We estimate that the construction employment created in the Yukon by the 1993-94 capital budget will be the equivalent of 720 person years.

I am proud of this budget. The supplementary budgets that we debated earlier this week clearly demonstrated the serious financial shape that we, as a new government, found ourselves in. No government, particularly a government of this size, can continue to spend $58 million more than it takes in as revenue and not expect to be in serious financial trouble.

To continue this trend would be economic folly of the worst order. I want to make it perfectly clear that we will make every effort not to deficit finance this government.

We promised the people of the Yukon good, responsible, accountable government, and that is precisely what we are delivering in this budget.

The Yukon was at a financial crossroad last October when the territorial election was called, and there were two paths that lay ahead. One path was very well-travelled and easy-going. It appeared to travel down a gentle slope. The other path was hardly used at all, and it was difficult to travel, but it kept to the high ground.

Every other government in Canada has taken the downward path, little realizing that the gentle slope soon leads to a steep decline. This path leads to debt, dependency and deficit financing. Once down this path, it is extremely difficult to turn around.

Currently, the Government of Canada and provincial governments have a combined deficit of over $620 billion, and this debt is growing by $60 billion a year. When the debts of the Crown corporations, civil service pension plans and the Canada Pension Plan are added in, the total public sector debt swells to an astounding $1.1 trillion.

It has been estimated that, if the federal debt continues to grow at the current rate, this debt will equal the country’s entire output of goods and services by 1999, only six short years from now.

Provincial governments are faring no better. The Saskatchewan government tabled its budget last week and announced its intention to cut its deficit from $600 million to less than $300 million in one year.

Cuts of this magnitude require drastic action, such as eliminating 400 jobs, downsizing one-quarter of government agencies, boards and commissions, and reducing funding levels for hospitals, schools and municipalities by as much as eight percent. In addition, they also increased their provincial sales tax from eight to nine percent and gasoline tax will be increased by two cents per litre.

The Government of Newfoundland, on the very same day, announced that it intends to reduce its projected deficit of $150 million in 1993-94. This, too, will require drastic action. They expect to cut $29 million out of government programs and wage and benefit cuts of $70 million were also announced.

On the same day that Saskatchewan and Newfoundland tabled their budgets, the Government of British Columbia, in its throne speech, warned of the difficult choices it was facing in health care costs and other social program areas. It will be tabling its budget later on this month and it is expected to be a very tough one.

The Government of Alberta has already frozen grants to municipalities, schools and hospitals and the new Premier has indicated that there will be further pay cuts in the public service.

The Government of Manitoba is expected to bring down one of its toughest budgets ever on April 6. Cuts to government payrolls, school funding, day-care grants and numerous provincial subsidies have already begun.

The Government of Quebec has warned that user fees for health services, higher tuition fees and the freezing of wages and benefits of civil servants may be in the offing if the government is going to tackle its $4.6 billion deficit.

Similarly, the Governments of Ontario and New Brunswick are looking at cutting civil service jobs to reduce expenditures. The Government of Ontario, for example, has indicated that it will be eliminating 15,000 government jobs. Our sister territory, the Northwest Territories, is the only other government in Canada that has tabled a balanced budget for 1993-94, after having a $50 million deficit in 1991-92. This will be achieved by increasing personal income tax, insurance premium taxes and by the introduction of a payroll tax.

That is the state of the nation. It is not a very pretty state to be in.

I have provided this information in order that the people of the Yukon will have some understanding of the financial health of the various jurisdictions across the country and some context for judging the initiatives contained in the budget that I have tabled today.

When we took office, the Yukon was perched on the very edge of the slippery slope of deficit financing, but we caught the situation just in time.

Last November, in order to avoid going down the path of no return, we implemented measures to control hiring, travel and discretionary spending. Results were impressive. Compared to the same period last year, government hiring was reduced by 50 percent. Airline bookings were reduced by 45 percent, and purchase requests decreased by 32 percent. The controls on hiring, travel and discretionary spending have not been, and will not be, lifted. The guidelines are still in place, but the control over them has been transferred from Management Board back to individual Ministers and their deputy ministers. At the same time, Management Board has established a system to monitor these expenditures to ensure that the guidelines are still being followed.

The Government of Yukon, through this budget, intends to keep to the high ground and take the less-travelled path leading to a balanced budget and economic self-sufficiency. We know this path will not be easy; there is always a price to pay but, as I have already pointed out, the road to deficit financing, as federal and provincial governments have learned, is a much rockier one to travel.

There are three ways the government can achieve a balanced budget: it can reduce its expenditures; it can raise its revenues; or it can do a combination of both, reduce its expenditures and raise its revenues.

Reducing expenditures in a meaningful way means cutting programs to the public and cutting civil service jobs. The dramatic cuts that have been made in Saskatchewan and Manitoba, and the expected cuts in Ontario, are examples of this approach. Raising revenues can mean raising taxes, which may also increase the price of goods and services.

Tax increases are never popular and governments often shy away from making them, even when they know they are necessary. At the same time, too great an increase in taxes can act as a disincentive for business and for the development of economic opportunities. However, we believe most taxpayers are willing to pay more now if it means paying less later. The only other choice open to government is the combination of both; in other words, reduce expenditures and increase revenues. The challenge is to maintain the proper balance.

The Government of Yukon has chosen the latter option. It intends to keep overall expenditures at last year’s levels, subject to additional costs resulting from the opening of new facilities that were not previously budgeted for, and to raise its revenues an appropriate amount.

There are several important reasons for picking this option. All Yukoners know that the shutdown of the mines at Faro and Watson Lake are impacting on the Yukon economy. During these times Yukon business has become more dependent upon government spending, and in particular, the spending of government employees. It must be recognized that because of these two major mine closures, the unemployment rate in Yukon is currently at 14 percent.

We hope, of course, that our offer of a $34 million loan guarantee to Curragh Resources will enable the company to raise other financing to re-open these two mines. In the interim, it is a fact that when the economy is experiencing a downturn, the demand on government services, especially social services, increases.

As I have said, major reductions to government programs can translate into layoffs in the public sector. However, in our case this approach would only serve to further depress our economy at a time when one of our private sector employers is experiencing financial difficulties.

We made a commitment to downsize government without massive layoffs. We intend to keep that promise. Through attrition and operational efficiencies we believe our goals can be realized. We also believe very firmly that both our unionized and non-unionized employees support such a responsible approach. In fact, all departments are diligently - and I might add, with some enthusiasm - reviewing their departmental organizations, examining areas of program duplication and service delivery options. On January 29 I announced a roll-back of salaries for MLAs, Ministers, political staff and managers. In addition, the performance pay and cash gratuity benefits for managers is being withheld and a new incentive policy is being developed, based on improving government efficiency and cost-effective delivery of services.

To further our commitment to improve government operations, I will be announcing later in this session the details of a government efficiency improvement program that will encourage the general public and government employees to bring forth ideas and initiatives to improve overall government efficiency.

Another major reason for our balanced approach of reducing expenditures and raising revenues, is due to Yukon’s fiscal relationship with Ottawa under the current Formula Financing Agreement.

Under formula financing, any increase in our tax revenues that result from increases in the rate of taxation, such as raising the fuel tax by one cent per litre, flow entirely to our benefit and do not reduce the federal transfer payment.

On the other hand, increases in revenues that result from increases in volume of taxes received, such as selling one hundred more litres of fuel, reduce the federal transfer payment. We call this the “perversity factor”, and it is a major disincentive for us to become more economically self-sufficient.

In other words, the Government of the Yukon is being penalized $1.45 for every dollar it fails to raise in tax rates. The Yukon currently enjoys some of the lowest rates of taxation in Canada.

The Government of Canada imposed this penalty on the Yukon, because the previous government was not raising enough of its own revenues through taxation in comparison to the national average tax rates. In other words, Canada did not believe that the Yukon was utilizing its tax capacity to the same extent as were the provincial governments.

Another major problem with formula financing relates to linking our rate of funding to economic conditions in southern Canada. A cap was put on the formula to ensure that the federal transfer payment to the Yukon could not rise faster than the rate of growth in the Canadian economy. This cap, and the “perversity factor”, will have reduced the federal transfer payment to the Yukon by approximately $200 million over the life of the current five-year agreement.

I have had discussions with the Minister of Indian Affairs and Northern Development, as well as with the federal Minister of Finance, about obtaining some relief from these conditions. I will have more to say about this when I talk about the new federal vision for the north.

We have inherited these problems, but we believe we can work with the Government of Canada to change these terms by demonstrating our commitment to responsible fiscal management. This budget will serve us well in that regard.

In introducing the 1993-94 budget today, I would like to inform all Members that, commencing this year, we have discontinued budgeting for person years. You will find, as an addendum, a separate report on full-time equivalents (F.T.E.), which will be used in the future. This measure of employment provides a more realistic and accurate picture of overall government employment than the person year system previously used.

This change is also in keeping with our management philosophy, which is now being put into effect throughout the government. We intend to allow our deputy ministers and their managers to manage their programs in a fiscally responsible manner. By this, I mean that, in addition to having the responsibility and authority for their programs, they will be given the tools, with limited controls, to carry out their responsibilities. They will also be held accountable for their management. All departments are reviewing their policies and procedures to put this management practice into place.

The Government of the Yukon recognizes that it must get its expenditures under control, and it has been working hard to achieve that objective. I am pleased to announce, for example, that our commitment to reduce the costs of the Executive Council Office by $1 million has been achieved. This represents a 10 percent reduction from the previous fiscal year.

Community and Transportation Services has trimmed its budget by four percent, representing a reduction of $2.4 million.

Through improved management, Economic Development has reduced its budget by 14 percent. However, it should be clearly noted that economic development in the Yukon will be enhanced upon completion of the negotiation of the $10 million infrastructure funding now in progress.

The budget for the Department of Education has increased by five percent, representing $3.5 million. This increase is primarily due to additional funding of the land claims implementation trust fund.

The Department of Finance has increased its budget by $400,000, for an increase of eight percent. This increase is due to the department now having to vote monies for our banking services, including the rural banking system. In prior years, when we had surplus funds on hand, these services were paid for by holding money on deposit at the bank.

The Department of Government Services has reduced its expenditures by six percent, which represents a decrease of $1.5 million.

The biggest increase in departmental budgets for the new fiscal year is for the Department of Health and Social Services. Its budget will increase by 22 percent, or by $17.5 million. This increase is not due solely to increasing social assistance costs, but also expenditures for the operation of the extended care facility, and also increased expenditures resulting from the health transfer agreement. High costs for social assistance became an issue over a year ago, and continues to be a problem. An interdepartmental committee, chaired by the Department of Health and Social Services, has conducted an in-depth study of this problem, and measures will be undertaken to bring these costs under control.

The Department of Justice has no increase in expenditures planned for the 1993-94 fiscal year.

The Public Service Commission is reporting a 17 percent increase in expenditures, or $1.5 million. The principal reason for this increase, is the change in the Workers’ Compensation Act requiring the government to pay full premiums.

The Department of Renewable Resources has had a six percent reduction in its expenditures, or $882,000, while Tourism has increased its spending slightly, by two percent or $107,000.

The Women’s Directorate has decreased its budget by five percent for a reduction of $21,000. As Members know, the Directorate hosted the Federal/Provincial Conference of Ministers in June of 1992. The funding for the conference was included in the 1992-93 budget, but of course, that will not be required this year.

The Yukon Housing Corporation has a 24-percent increase, or $2.5 million. This increase is largely of recoverable dollars and has very little impact on our surplus/deficit position.

Of the 16 government departments or agencies that are reported in the operation and maintenance budget, eight of them have reduced their expenditures in relation to the 1992-93 fiscal year forecast. For those departments that have budgeted increased expenditures, it is this government’s opinion that there are good reasons for doing so.

In the last eight years, there has never been a year in which eight government departments reported a reduction in their operation and maintenance budgets. This is a significant achievement, but more work remains to be done.

As I pointed out earlier in this address, Yukoners currently enjoy some of the lowest tax rates and fees in Canada, and we have been penalized as a result of this. Under the Formula Financing Agreement, we are penalized for these low rates and have not been able to maximize our full economic potential.

In order to move forward, we must change this situation. Accordingly, the Government of the Yukon is proposing, in this budget, that there will be increases in the following taxes.

The general personal income tax will increase from 45 percent to 50 percent of the federal income tax, and there will be a five-percent surtax on Yukon personal income taxes in excess of $6,000. We have chosen to raise the personal income tax rate by five percent, rather than to reinstate health care insurance premiums. The income tax rate increase is more equitable in terms of application to the individual Yukoners than health care premiums, because the premiums for government employees, and employees of large companies, are cost-shared with their employers. This leaves self-employed people, and people working in small businesses, to pay their premiums themselves. Secondly, the cost of collecting health care premiums is inordinately high compared to the collection of income tax.

These changes in personal income tax rates still leave us well below the rates charged in eight provinces and puts us on a par with the a ninth.

There will be a five-percent increase in the general corporate rate for income tax from 10 percent to 15 percent. At the same time, the small business corporate rate will increase by one percents, from five percent to six percent. Again, these changes still leave us among the lowest rates in Canada.

The fuel oil tax on diesel will increase from 5.2 cents per litre to 7.2 cents per litre.

Similarly, the fuel oil tax on gasoline will increase from 4.2 centre per litre to 6.2 cents per litre and the tax on aviation fuel will increase from 0.7 cents per litre to 1.1 cents per litre.

Even with these increases, Yukoners will still have the lowest rates of diesel and gasoline taxation in Canada.

The tobacco tax will increase from 3.2 cents per cigarette to 8.2 cents per cigarette. This increase brings us to about the middle of the Canadian tax range for tobacco products.

It is estimated that these tax increases will yield $8.8 million in additional revenues and allow us, together with the expenditure reductions, to balance our budget.

We do not like having to do this; no government does, but it is necessary, and I know Yukoners do not want to see us sink into a quagmire of debt that is plaguing virtually every other jurisdiction in Canada.

Ensuring responsible fiscal management was a commitment in our four-year plan and it is a commitment that we fully intend to honour.

I am pleased now to provide certain highlights of our 1993-94 budget plans:

Executive Council Office: to effect cost savings, as promised by the government, the operations of the Executive Council Office have been streamlined. Overall, the streamlining has resulted in a 10-percent cut in spending from the forecasted spending for 1992-93. Proposed spending for 1993-94 is $8.6 million.

The Executive Council Office will continue to place a strong emphasis on resources for land claims, with $1.3 million budgeted this year. This reflects the high priority the government accords the settlement of the outstanding claims of the Yukon’s aboriginal people.

Negotiations are underway with the federal government on a new five-year agreement on aboriginal language services, with an emphasis on language preservation, enhancement and development through community programming.

Negotiations on a new five-year agreement on the French language services have been completed. Enhanced funding under this agreement, which is cost recoverable from the federal government, will allow for improved public services for francophone Yukoners in the areas of health and social services, education, justice and public information.

Community and Transportation Services: a $16 million capital expenditure on the Shakwak project - Alaska Highway will occur this year. This will cover the cost of reconstructing about 30 kilometres near Beaver Creek. The funds for this project are provided by the U.S. government through Public Works Canada for the improvement of the Alaska Highway north of Haines Junction. Total expenditure and funding over the next five years will be $89.6 million. In addition to safer road conditions and reduced user costs, the project will enhance employment in construction and tourism.

Five million dollars will be spent on reconstructing 15 kilometres of the South Alaska Highway in the Swift River area. Funds for this project come from Public Works Canada in connection with the Alaska Highway devolution agreement. Total expenditure and funding from the Government of Canada for this section of the highway over the next three years will be $20 million. The road building industry, as well as the people of Yukon, will benefit from this project.

Six point one million dollars in capital expenditure is provided for in the budget for Alaska Highway reconstruction work in the Swift River area and near Two-Mile Hill in Whitehorse. Total expenditure over the next five years on the highway from the BC/Yukon border to Haines Junction is estimated at $55.1 million.

Major work includes reconstruction, paving and bridge upgrade. The Government of Yukon is committed to improving this section of the highway, given that it is our major access route to southern Canada that supports mining, tourism and the supply of goods and services to the Yukon.

Twenty point five million dollars will be budgeted for land development projects. In order to provide for a steady supply of lots to the people of Yukon and to ensure continued economic activity in the construction industry, the Government of Yukon is planning to spend up to $18.9 million for the development of residential lots, and $1.6 million for the development of land for commercial, industrial, agricultural and recreational purposes.

The budget also provides for some funding in support of the City of Whitehorse’s efforts to obtain EARP and water board approvals for the new Whitehorse sewage treatment facility.

The Government of Yukon is currently negotiating an overall cost sharing of the required funding. Funding is also allocated for other communities for sewage treatment.

Economic Development: the Yukon mining incentives program, aimed at offsetting costs for individuals and companies prospecting and exploring Yukon mineral properties, will have its budget increased to $863,000, and the program will place greater emphasis on assisting individuals and small companies to develop promising properties.

An electrical infrastructure program will be introduced this year to assist industries to provide electrical power to development sites. The program will provide loans to offset the capital costs of grid extensions or the use of alternative energy sources. It will be available to all industry sectors, including mining development.

The Canada/Yukon Economic Development Agreement will continue to be an effective instrument in the development of new business, and the expansion and modernization of existing business in Yukon.

EDA program funding in forest development, small business support, tourism, renewable resources, economic development planning and mineral development will be increased this year.

More than $6 million has been provided for in the budget for assistance to small business and non-profit groups through the business and community development funds.

Funding of $284,000 has been made available under the Northern Oil and Gas Action program. This money is available for research projects relating to how Beaufort Sea oil and gas development will benefit the Yukon.

Education: $2.4 million will be provided to the land claims implementation trust fund, more than tripling the size of the trust fund. Under the umbrella final agreement and the band agreements worked out thus far, Yukon First Nations have taken on new responsibilities. Together with a matching contribution from the Government of Canada, the implementation training trust fund will provide them with the dollars necessary to train their people for a smooth transition to self-government.

Nearly $6 million has been allotted to the construction and maintenance of schools, including $1.3 million to complete the Porter Creek Catholic Elementary School, and more than $1 million for capital maintenance repairs on various schools including repairs to the Mayo School roof. The budget will also cover planning costs for a new urban secondary school in Whitehorse, and design costs for a new Grey Mountain Elementary School, along with the purchase of land in Dawson for the Robert Service School. The education budget also provides for the upgrading of the St. Elias Community School and F. H. Collins.

Health and Social Services: $13.8 million has been budgeted to begin work on the new Whitehorse General Hospital. The development of the infrastructure, including site work, sewer, water, power and roads will get underway this year providing employment and economic benefits to Yukoners. Total cost of the new hospital is estimated at $44.6 million.

Four point three million dollars will be advanced to the new Whitehorse Hospital Corporation in order to provide them with sufficient funds to cover start-up costs.

Three point two million dollars has been budgeted by the Government of Yukon to open the new continuing care facility in Whitehorse. This facility will provide care to Yukon residents requiring extended care or rehabilitation services.

Justice: $2.2 million has been budgeted to complete the construction of a 25-bed minimum security correctional centre in Teslin. The foundations were completed in October 1992. Building construction will begin in April and the facility is expected to be ready by the end of October 1993. This project is on time and within budget. This project means jobs and other economic benefits for Yukoners.

Tourism: we recognize the potential for further growth in the film and TV production industry; the government has increased funding for this area by 200 percent, to more than $100,000. The potential for economic benefits to Yukon from the film industry is significant.

Upcoming anniversaries, particularly the Klondike gold rush anniversary, represent an enormous opportunity for Yukon. The government is working closely with the Yukon Anniversaries Commission as it prepares a strategic plan to tap the enormous potential for our tourist industry. In addition, the government will provide financial assistance of $285,000 to the commission for its administrative operations.

Five hundred thousand dollars will be allocated by Tourism for marketing and advertising purposes to reach potential growth markets in North America, including those markets seeking adventure-travel experiences uniquely suited to the Yukon.

This kind of investment brings significant benefits to our tourism industry, providing employment and other economic gains for all Yukoners.

Land Claims: March 17, 1993, was a very historic day for Yukon First Nations and Yukoners at large. It was the day that this House passed two bills, giving effect to the land claims umbrella final agreement and the self-government agreement.

The Government of the Yukon has stated in its four-year plan that the settlement of Yukon Indian land claims is a top priority of this government and with the passage of this legislation, this government has honoured that commitment.

We look forward to seeing the Yukon Indian land claims settlement legislation receive speedy passage in the House of Commons so that Yukon First Nations and non-native Yukoners can work together as equal participants in managing the Yukon’s future.

We are anxious to get on with the process of implementation, and we know that Yukon First Nations, after 20 years of waiting, are anxious to take control of their own lives, their own lands and their own future.

The successful settlement and implementation of the Yukon Indian land claim will promote immeasurable social, economic and environmental benefits to the Yukon.

It is not my intention to mention all the 128 points in our commitments to Yukoners here today, but I would like to mention a few of them, in addition to responsible fiscal management and a land claims settlement.

The caribou herd recovery program for the Aishihik area is near completion for this year. It is a program that enjoys Yukon-wide support but has been opposed by radical animal rights activists, both within Canada and abroad. The Yukon government, with the support of the First Nations, has carried out the program despite this pressure and met its responsibility for better management of Yukon wildlife.

Our government committed itself to completing the hospital transfer from the Government of Canada and proceeding with the construction of a new hospital in Whitehorse. Significant progress has been made and the federal Treasury Board is expected to approve the hospital funding before the end of this month. We have also concluded an agreement with the federal government covering health care billings for status Indians.

Significant progress has been in relation to the Northern Accord and forestry transfer negotiations. The Northern Accord is ready for signing and will provide Yukon and First Nations with revenues from Yukon’s on-shore oil and gas resources.

The transfer of forestry resources will enable our government to properly manage our forests and protect the Yukon environment.

Legislation will be introduced this session proposing a restructuring of the Yukon Development Corporation, and changing the mandate of the corporation to ensure that the profits of both the Yukon Energy Corporation and the Yukon Development Corporation are directed at reducing energy rates, development energy infrastructure and promoting energy conservation.

In keeping with the four-year plan, the Department of Education, in conjunction with First Nations, parents, students and other stakeholders will be undertaking a review of the curriculum taught in Yukon schools. This review is necessary to ensure that Yukon students are prepared to compete in the 21st century.

Regarding mining, our government has been supporting the efforts of the Yukon Chamber of Mines to encourage the federal government to implement the revised flow-through share program, along with other tax measures to promote mining exploration. As a consequence of our participation at the Cordilleran conference held in Vancouver in late January, mining exploration is expected to double this year in the territory and we have already seen evidence of this with the announcement of Pacific Sentinel Gold Corporation to proceed with their $7.2 million drilling program on their Casino property.

Tourism remains a very important sector of the Yukon economy and plans are being put into place to prepare for the 1996-1998 gold rush centennial celebrations. These celebrations offer the potential of a significant increase in tourism if we prepare our plans well.

The Yukon just signed a $380,000, five-year agreement with Ottawa under the Green Plan to promote environmentally sustainable agriculture in the Yukon. This agreement will focus on soil conservation, water quality, pollution and waste management, wildlife and agriculture interaction, as well as on environmentally sustainable practices and on public education.

These are just some of the commitments in our four-year plan that our government is implementing. There are many others, but time does not permit me to review them all today.

I want to talk a little bit about working toward self-sufficiency and a better quality of life.

This budget will stand us in good stead for the coming year. Our four-year plan will take us to the year 1996. We need a vision that takes us beyond that. We need a vision that will lead us into the 21st century.

When you start off on a journey, you normally look at a road map to see where you want to go and what road you have to take to get there. The 1993-94 capital and operation and maintenance budget that I have tabled here today will set us on the right road. It will lay the groundwork to enable the Yukon to progress into the 21st century. The steps that we are taking now will set our future course. This budget represents the beginning of our journey toward self-sufficiency.

It can be politically dangerous to have a vision. I recall that, when the Right Honourable John George Diefenbaker, Prime Minister of Canada, spoke about building “roads to resources” to open up Canada’s north, his critics laughed at him. They spoke mockingly about building a road from “igloo to igloo”. Well, Dawson City and Inuvik are now some of those igloos!

Without that vision, there would be no Dempster Highway. Without the Dempster Highway, there would be a very limited flow of goods and services between the Yukon and the Northwest Territories. Without that vision, the Yukon would have no road access to the Beaufort Sea.

The laughter of Mr. Diefenbaker’s critics has long since faded away, but the road that emanated from that vision remains.

This government also has a vision, and it is our road map, if you like. We presented this vision to the Government of Canada on December 4 of last year. It is entitled Toward Self-Sufficiency in the 21st Century; Becoming More Self-Sufficient Through Infrastructure Driven Investment.

Our presentation was very timely, as the Government of Canada is currently developing its own vision of the north that will be worked out in concert with northerners themselves and how they want to see their future unfold. There has  not been a consistent federal position on northern development since the late 1950s. Such a mission statement is long overdue.

The settlement of land claims has often been used as an excuse for not proceeding with northern development. With the settlement of several First Nation land claims, however, this excuse is no longer valid. Most First Nations I have talked to say that they are not opposed to development. What they want is a say in how the development takes place and a share of the benefits from that development.

For far too long, Yukon First Nations have been standing by the wayside as development went on all around them, without their input or participation. They experienced all the negative social impacts of this development, but few of the positive benefits. It is little wonder that many Yukon First Nations become alarmed when they hear that a development project is being proposed in their traditional territory.

We acknowledge and recognize the fear the Vuntut Gwich’in of Old Crow experienced when they heard that a pipeline was being proposed in their area. The pipeline would carry natural gas from the Mackenzie Valley, down the Dempster Highway, across the northern Yukon and into Alaska to the Kenai Peninsula, where it would be liquefied and shipped to markets in China and Japan. It is a multi-billion dollar project, one that will take years to develop. Right now, it is just at the preliminary planning stage.

The people of Old Crow are vitally concerned about the impact such a development would have on the Porcupine caribou herd, which is their livelihood.

In late January, at their request, I met with officials of the company who are proposing the pipeline and trying to put a consortium together to undertake the project. I advised them that they would have to talk to the people of Old Crow, as well as to the Na-Cho Ny’ak Dun First Nation and the Dawson First Nation, whose traditional territories may also be involved.

I also told them that they would have to talk to the Inuvialuit of the Western Arctic Region and the Tetlit Gwich’in of Fort MacPherson in the Northwest Territories.

The land claims bills that we passed in this House last week will ultimately ensure that Yukon First Nations have a say in whatever developments are allowed to proceed on their lands. It should also be noted that the Vuntut Gwich’in First Nation is one of the first four bands proceeding toward the ratification of their land claims agreements.

I recently had the opportunity to speak to the Chief of the Tetlit Gwich’in both here and in Yellowknife. The Tetlit Gwich’in are already implementing their land claim and are interested in investing some of their land claims money in Yukon. This is a very encouraging sign. They also want to talk to the proponents of the pipeline project to determine how they might benefit from the project, should it be allowed to proceed. For the first time, First Nations people are in the driver’s seat, and they are in a position to negotiate their own terms and conditions. This is one of the reasons why the settlement of the land claims in the Yukon is so vitally important to all Yukoners.

I would also like to address some other concerns Yukoners might have about our future. It is not our intention to create a “Pittsburgh of the North”, as some critics have put it, or to flood all our valleys with massive hydro projects, nor is it our intention to turn the Yukon into a national park and make all Yukoners park exhibits. Neither of these extremes are appropriate, and to conjure up images of them is counter productive. We treasure our environment, and any development must meet appropriate environmental conditions. Our pristine wilderness is one of the Yukon’s most precious resources, and any development must proceed with caution.

What we are proposing in our quest for self-sufficiency is to broaden our economic base, to diversify our economy and, thereby, improve our quality of life. We do not want to get caught in the situation ever again where so much of the economy of the Yukon is dependent upon the financial well-being of one mining company.

The mining industry has told us that, if we provide the necessary infrastructure, the proper investment climate and reasonable regulatory processes, they will provide the mines.

The broadening of our economic base must not be confined exclusively to mining. Tourism, forestry, construction, agriculture, trapping and other industries will not be left out, but it must be recognized that mining, now and for the foreseeable future, provides us with the greatest opportunities for strengthening and diversifying our economy.

The Yukon is too small a jurisdiction with too small a tax base to go it alone. In the short term, we are going to need the assistance and cooperation of the federal government. We believe the assistance and cooperation will be forthcoming if we can clearly demonstrate that the Yukon is serious in its commitment to self-sufficiency and that we want to free ourselves from our dependency on federal financing.

We want to work with the federal government now to provide the infrastructure and investment climate that will promote mining and other developments in the north.

We know that the Northwest Territories shares our view. In mid-January, the three governments met in Yellowknife to discuss infrastructure development for mining. The Chamber of Mines for each territory together with Northwest Territories First Nations participated in these discussions.

The Yukon will act as the host for the next meeting, which is to be held in Whitehorse on April 16 and 17. It is our intention to invite the Council for Yukon Indians, the Yukon Chamber of Mines, the Prospectors Association, as well as the Yukon and Whitehorse Chambers of Commerce to participate in these meetings.

In February, I had the opportunity to meet with the Deputy Prime Minister and the Minister of Indian Affairs and Northern Development in Ottawa. At that meeting, we proposed that Yukon be given some relief from the “perversity factor” and the “cap” on our formula financing, provided we guaranteed that these funds would be devoted exclusively to the development of self-sufficiency infrastructure.

We argued that our government does not want to remain forever dependent upon federal transfer payments to fuel our economy. The original purpose of the Formula Financing Agreement in 1985 was to promote the development of infrastructure that would raise revenues and diversify the Yukon economy. The Yukon has failed to live up to that agreement.

Had these two impediments been removed in the current funding arrangement, the Yukon would have had $200 million to invest in transportation and energy infrastructure.

We have been told by the mining industry that if we could provide additional power, mining exploration in Yukon would quadruple. We have been told by Geddes Resources, the proponents of Windy Craggy, that if they are allowed to proceed they would be looking to Yukon to obtain their power requirements.

We know that when the Williams Creek property proceeds to the development stage, which is expected shortly, it will require a road and power.

Pacific Sentinel Gold Corporation, which owns the Casino property west of Carmacks, has announced its $7.2 exploration program, which is already in progress, to prove up their reserves. This is a gold-copper-silver-molybdenum property that, once developed, will rival the size of the Faro mine.

I also met with Governor Hickel of Alaska earlier this month, and he is very interested in discussing the possiblity of developing an interlocking power grid among Yukon, Alaska and British Columbia.

Accordingly, I have invited Governor Hickel and Premier Harcourt of British Columbia to attend a conference this June in Whitehorse to discuss this possibility. Other items on the agenda include a proposed road link between Juneau and Atlin and the status of the Windy Craggy mine.

All of these initiatives are possible if the various governments and the First Nations work cooperatively together.

We know full well that the majority of these developments will not take place for some years to come. Ther timing will be dictated by world market prices and other events. What we have to ensure is that we are on the right road and that we are not detoured from our destination of achieving self-sufficiency in the 21st Century.

In conclusion, I want to make a point that we are not promoting development for development’s sake.

We want Yukon children to enjoy quality day care and an education that enables them to meet the challenges of the future.

We want Yukon seniors, to whom we owe so much, to receive the highest quality of health and hospital care.

We want to minimize family violence, vandalism and alcohol and substance abuse.

We want to improve Yukoners quality of life.

We can accomplish none of these if we not not have the necessary funding and programs available to carry them out. Every other government in Canada is now finding this out. They all took the wrong road.

This budget that I have tabled here today sets our future course in the right direction and I commend it to all Members of the House for their consideration.

Thank you Mr. Speaker

Mr. McDonald: I move that debate on the motion be now adjourned.

Speaker: It has been moved by the Member for McIntyre-Takhini that debate do now adjourn.

Motion agreed to

Hon. Mr. Phillips: I would like to take this opportunity to extend an invitation to all Members of the House, the public and the media to join us for a small reception in the cafeteria of the building after the House adjourns today.

Having said that, I move that the House do now adjourn.

Speaker: It has been moved by the Hon. Government House Leader that the House do now adjourn.

Motion agreed to

Speaker: This House now stands adjourned until 1:30 p.m. Monday next.

The House adjourned at 3:15 p.m.

The following Sessional Papers were tabled March 25, 1993:


Comparison of Employees and Full-time Equivalents (Ostashek)


Response to Petition No. 2 (received by the House on December 17, 1992) regarding the Gateway Housing Project in Riverdale (Fisher)