Whitehorse, Yukon

Monday, March 29, 1993 - 1:30 p.m.

Speaker: I will call the House to order. We will begin with Prayers.

Prayers

DAILY ROUTINE

Speaker: We will proceed with the Order Paper.

Introduction of Visitors.

Are there any Returns or Documents for tabling?

TABLING RETURNS AND DOCUMENTS

Hon. Mr. Phillips: I have for tabling the annual report of the Yukon Advisory Council on Women’s Issues.

Speaker: Are there any Reports of Committees?

Petitions.

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?

This, then, brings us to the Question Period.

QUESTION PERIOD

Question re: Curragh Inc., financial assistance

Mr. Penikett: I have a question for the Government Leader.

Metals Week newspaper of New York is doing a story on the dim prospects for Curragh, because of the territorial government’s unprecedented demands for first charge on security. Can the Government Leader say if his negotiators in Toronto have begun to negotiate yet on the first of the 14 conditions in his list?

Hon. Mr. Ostashek: I thank the Member opposite for his question. As I stated in the House on Thursday, there were at least two meetings that I was aware of last week to discuss the terms and conditions we put forward through Burns Fry to Curragh. My understanding is that there are supposed to be negotiations again this week. I am waiting for a call from the Economic Development Minister this evening.

Mr. Penikett: I am concerned, as I am sure all Members are, that Metals Week, a New York publication with a huge circulation, is also apparently reporting that Curragh is having a great deal of trouble securing the equity, which it is now seeking from private investors because of uncertainty as to the territorial government’s position on the loan guarantee.

Can the Government Leader advise us as to whether he has had any similar concerns expressed to him by people, either in the financial markets in Toronto or other sources?

Hon. Mr. Ostashek: No, I have not had any of those types of concerns relayed to me. In fact, this is the first I have heard of this particular concern.

Mr. Penikett: I confess that we know of it only because of calls to our office this morning.

I would like to ask the Government Leader: since today’s date, March 29, 1993, has been indicated as a deadline to these negotiations, can he give us an update, following his report to the House last Thursday that there had been an exchange between Burns Fry and Curragh?

Hon. Mr. Ostashek: My apologies to the Member opposite. I hope that I will be able to report to the House tomorrow, after I confer with the Minister for Economic Development tonight, who is in Toronto meeting with Burns Fry today.

Question re: Food prices

Mr. Penikett: Maybe I can change direction on this question, to a different topic.

Last week, it was again reported that the Yukon had the highest food prices in Canada.

I would like to ask the Government Leader if he can indicate if his government is taking any steps to look into the causes of these higher food costs, and whether his administration is contemplating steps to do anything about the high food prices.

Hon. Mr. Ostashek: As the Member opposite is fully aware, food costs in the Yukon are a concern to everyone; there is no doubt about that.

The prices are monitored on a monthly basis and we are watching to see what transpires. The prices fluctuate, but I believe for the last two months Yukon has had the highest food prices in Canada.

Mr. Penikett: Obviously the higher operating costs for stores in the territory is one reason, and that includes electrical costs, which are rising, municipal taxes, and other cost increases. Can the Government Leader indicate what analysis - by Consumer and Corporate Affairs, Economic Development or the statistics unit - might be done to estimate the impact of these costs on consumers in terms of inflation or higher social assistance payments, for example.

Hon. Mr. Ostashek: Economic Development is doing cost analysis of the effect of higher inflation and the effect of the tax increases put forth in the budget last week. They have completed this analysis and we do not see anything to be alarmed about at this point. Whenever there are increases of any kind they affect the consumer.

Mr. Penikett: The Government Leader just indicated that the new tax in the budget may have an effect on costs too. Obviously, higher costs for consumers mean fewer dollars to spend in local stores. I would like to ask the Government Leader if the Department of Economic Development, in its work that he just referred to, will be providing information that will come to the House about the impact of higher food costs, new electrical rate increases, municipal taxes and other costs, such as the ones in the budget, will have on the local economy, including jobs in this sector?

Hon. Mr. Ostashek: We are certainly doing an analysis of the tax increases and I will check with Economic Development on the other points the Member opposite raised. When we start talking about jobs in the economy, it seems that the Members opposite were concerned all winter that term employees would not be rehired and that auxiliary employees would not be recalled -

Speaker: I would ask the Government Leader to conclude his answer.

Hon. Mr. Ostashek: The budget was a balancing act to see that we did not cause layoffs in the Yukon community.

Question re: Helicopter contract

Mr. Cable: Last week, I asked the Minister of Renewable Resources whether the contract for helicopter services relating to the wolf kill had gone outside the territory. The Minister advised that it had gone to a Watson Lake company.

I gather the Minister has since discovered that this is not accurate, that the contract was originally let to an Inuvik-based company. Could the Minister confirm that?

Hon. Mr. Brewster: I would like to point out that we had six helicopters from six different outfits operating. The one that had been brought to my attention was the one from Frontier. I also sent a message over and apologized to the hon. Member. He was talking about the Canadian one. I made it very plain then - and I will make it very plain now - that if there is a difference of $14,000 between contracts, I will take an outside contractor.

Mr. Cable: It is my information - and correct me if I am wrong - that the Canadian Helicopters contract was not performed by Canadian helicopters. Is that accurate?

Hon. Mr. Brewster: That is not completely accurate. When the helicopter first arrived here, it lost a motor. They had to put a motor in, and there were three or four days where it was unable to fly due to problems with fuel. However, when they did not fly, Trans North got the contract, and Canadian paid for it, not the government or the taxpayers of the Yukon.

Mr. Cable: Were the contracts that were let to rectify the problems with the Canadian Helicopters contract retendered?

Hon. Mr. Brewster: No, they were not. It was simply on a call-in contract in an emergency.

Question re: Public Service Commissioner, appointment of

Ms. Moorcroft: The Public Service Commissioner is appointed for up to 10 years to avoid being vulnerable to accusations of political tampering with hiring. The Public Service Commissioner is, by law, at arm’s-length from government, which is supposed to ensure an unbiased approach to staffing. My question for the Minister for the Public Service Commission is: why was the current commissioner appointed for only six months? Is she on probation?

Hon. Mr. Ostashek: Not at all. She is not on probation. It was an arrangement made between me and the Public Service Commissioner.

Ms. Moorcroft: What is the process for the review at the end of the six months? Will there be a review of this position at the end of this period?

Hon. Mr. Ostashek: I fully intend that the person who is now Public Service Commissioner be appointed for a substantial length of time.

Ms. Moorcroft: It is very troubling to hear allegations about ministerial interference in hiring people into lower-level jobs. Will the Minister acknowledge that there was no attempt to influence, by way of this short-term employment, the decisions of the commissioner in any government department?

Hon. Mr. Ostashek: I have no problem with that. There certainly was no attempt at all.

Question re: Full-time equivalency employee system

Ms. Moorcroft: On April 1, the Yukon government will be implementing a full-time equivalency reporting system. On the surface, this is a system of accounting for the public service, but underlying this is a way of employing people without benefits offered under the collective agreement and the person year system. Will the Minister tell this House why this system is being implemented?

Hon. Mr. Ostashek: As the Member opposite knows full well, the person year method of reporting employment was not very accurate, and one could not really follow how many people were employed in government. Last year’s main estimates showed something like 1,550 person years and there were over 2,000 people on the payroll; it just was not accurate. We feel the FTE system will give us a better method of following the number of people employed in government; reports would be made on a regular basis as to how many people are employed and it also gives the managers some ability to manage their departments in a more cost-efficient manner.

Ms. Moorcroft: Can the Minister confirm that, like the Socred government in B.C., this is just another way to cut at the public service costs by denying workers the benefits they deserve?

Hon. Mr. Ostashek: Nobody has made that statement on this side of the House and it was not the intent of the FTE system. The FTE system was to provide managers with some ability to employ people rather than having to go to service contracts in order to get work done when there were no person years available. I believe it will be better for the people employed in the public sector as well as for the government and the people who are managing departments on behalf of government.

Ms. Moorcroft: When the hiring is done directly with the department, there lies the potential for biased and favoured hirings. Under this new system how, then, will the Public Service Commission, which is supposed to be at arm’s length, monitor the progress on the government’s employment-equity policy and reintegration of disabled employees?

Hon. Mr. Ostashek: I believe I stated earlier that a monitoring process will be put in place so that the Public Service Commission can monitor it to see how the system is working. I also believe the federal government is going to this system.

Question re: Convention centre, Winter Cities Conference

Mr. Harding: It is amazing how much influence the federal government is having over the territory these days.

I have a question for the Government Leader. The Mayor of Whitehorse has returned from Yellowknife with bad news - the capital city of the Yukon, Whitehorse, lost its bid to host the 1997 Winter Cities Conference, due to a lack of convention facilities. Can the Government Leader indicate whether or not his government supported the bid by the City of Whitehorse for this conference?

Hon. Mr. Phillips: That question should be more correctly put to me as the Minister of Tourism. Yes, we did support the bid. We assembled a display and took it over there; we pay $25,000 a year to a convention coordinator who works out of the TIA office and that individual was there. I wrote several letters of support to all the individuals who would be reviewing the bid, and that was the support we took over to the Winter Cities convention.

Mr. Harding: It is nice that the government helped to assemble the display. It is too bad they did not help assemble the convention centre.

This government killed the Taga Ku project, a project that could have made it much much more likely that the Yukon could attract major conventions of all kinds. Given that the Yukon Party campaigned on a platform to provide a convention facility and, given that they pitched for major money from Ottawa in the 21st century document on the basis for a convention facility, can the Government Leader say just when this government will come to its senses and get on with the convention centre project for the Taga Ku proponents?

Hon. Mr. Phillips: I do not know if we can ever get down to the project by the Taga Ku proponent, because they already announced that their project is dead.

I can tell the House that the Tourism Industry Association is doing some work now on the need for convention facilities in Whitehorse. It is hoped that this work can be done early this spring. I am looking forward to seeing what recommendations they are going to make and what steps can be taken in the future to provide adequate convention facilities.

Mr. Harding: This question is most probably better directed to the Government Leader. When will the government admit that it should review its position and policy with regard to Taga Ku? The government should know full well that Taga Ku was in the best position and was the most likely project to bring a major convention facility to the Yukon’s capital city.

Hon. Mr. Phillips: The Government of the Yukon’s position never changed with the Taga Ku proposal. The proposal was simply the agreement that was made with the previous government: if they would put the hotel in the proposal we would go ahead with it. Taga Ku decided they could not meet that. They have decided to withdraw their whole proposal.

Question re: Game farming

Mr. Harding: I guess I will change direction on the Taga Ku question.

On December 17, 1992, the Minister of Renewable Resources confirmed in this House that a moratorium on game farming was still in effect and would continue pending the outcome of an ongoing review of the industry. Given this morning’s news report, in which the Minister announced plans to privatize a herd of wood bison and turn them over to a contractor, can the Minister confirm that the moratorium on game farming has been lifted and that the government’s review of the industry has been completed? Is he prepared to table a copy of that review in the Legislature?

Hon. Mr. Brewster: No to all the questions he asked.

Mr. Harding: “No, to all the questions that he asked,” he says; no the review is not complete.

Okay, since the Minister suggests that nothing has changed regarding either the moratorium or the game farming review, can the Minister explain why he has made an announcement that appears to contradict his commitment to the moratorium, and to completing an industry review before new game farming initiatives are permitted in the territory?

Hon. Mr. Brewster: Quite simply, once in awhile people use common sense.

Some Hon. Member: (Inaudible)

Hon. Mr. Brewster: You all laugh, that is fine, but you know that we had animals being killed on the highway and we spent a million dollars on them. We decided that the animals should be kept safe, so we locked them up. Rather than the government and the taxpayers paying for the animals, we have put out a contract for the care of the animals. The contractor will take these animals and repay us with animals.

Mr. Harding: The fact remains that the Minister committed to a moratorium. Common sense does not necessarily mean ramming things down the throat of the people of the Yukon.

According to the CBC news story, the Minister indicated that the contract for the bison is yet to be tendered and that he hopes to award the contract by this summer.

Can the Minister explain the apparent contradiction between this commitment and advertisements, which appeared in the Whitehorse Star some months ago calling for proposals on the bison and a wide-spread public understanding that the bison have already been committed to a Mayo Road farmer who is not currently active in the game farming industry?

Hon. Mr. Brewster: I really wonder how, when we have not yet let the contract out, the Member opposite knows a Mayo Road farmer got the contract.

Question re: Taxation policy of government

Mrs. Firth: I have a question for the Minister of Finance. My question is a policy question regarding the government’s taxation policy.

Governments can raise taxes with the intention - particularly, this government - of becoming more self-sufficient and less dependent on Ottawa - requiring less money from Ottawa or the government can raise taxes with the intention of getting rid of the perversity factor, which means that we will be getting more money from Ottawa.

I would like to ask the Minister if he can tell us exactly what his government’s policy is regarding taxation?

Hon. Mr. Ostashek: I guess I would have to ask the Member opposite if she feels that we should not get rid of the perversity factor, and that we should continue to let the federal government penalize us to the tune of $120 million over the length of the agreement.

Mrs. Firth: The Minister did not answer my question. I want to know what the government’s policy is regarding taxation.

Hon. Mr. Ostashek: The Member asks what our policy is regarding taxation. We have several challenges ahead of us. The first one was trying to balance a budget without losing any jobs in the Yukon. By raising taxes the amount we did, we accomplished two things. We showed the federal government that we are going to be fiscally responsible and were able to put a budget together that would not cause any layoffs in the civil service.

Mrs. Firth: It is obvious that there is no taxation policy. What is the Government Leader’s policy regarding taxation? I will be more specific and give him a hint. He is asking me to be more specific. He does not have a policy regarding taxation, and I will be more specific.

What determines which taxes will be raised and which ones will not? I am sure that would be part of the policy, and perhaps he can answer that.

Hon. Mr. Ostashek: When we were putting the budget together, we looked at all classes of taxation in the Yukon. One of the questions the Member opposite is trying to ask is why there is an increase in the rate of territorial tax. That was to offset medicare premiums.

Question re: Hospital transfer

Ms. Joe: I had to stand up, because I was a bit jealous that the Member for Riverdale South is getting more questions lately than I am.

Over the years, we have always heard the excuse that the building of the hospital was dependent on Treasury Board’s decision to give us the money to build a hospital. I understand that Treasury Board is meeting sometime in the very near future.

Is the decision to approve funding for the hospital on the agenda for the Treasury Board? If it is, on what date is it going to be discussed?

Hon. Mr. Phelps: It is this Wednesday.

Ms. Joe: Over the years, I have heard exactly the same kind of information, so I worry about whether or not it actually is going to take place. The Minister responsible for Health and Social Services assures me that it is.

Would the Minister inform this House the day a decision is made to approve funding for the hospital? If the decision is going to be made Wednesday, I would not mind hearing about it on Wednesday or Thursday.

Hon. Mr. Phelps: You bet.

Ms. Joe: This is very serious, because we have heard the same story over and over again about Treasury Board decisions being made. I am still talking about the building of the new hospital. We have all talked about it. Has the Minister consulted with local contractors, or unions, to determine the concerns they might have in regard to the construction of a new hospital?

Hon. Mr. Phelps: My department and the Government Services department have had those kinds of discussions with the contracting community.

Question re: Yukon Energy Corporation, feasibility studies

Mr. Cable: I have a question for the Minister responsible for the Yukon Energy Corporation. In December, the Yukon Public Utilities Board issued a decision indicating that, with the exception of some water-flow data that was to be collected on four rivers, the Yukon Energy Corporation should stop all feasibility studies because of the financial risk on the system. In view of the Minister’s previous public posture on the development of low-cost hydro for economic development, could the Minister indicate and confirm that funding will be provided to either the Yukon Energy Corporation or some government department to permit the feasibility studies to proceed?

Hon. Mr. Phelps: This is the kind of thing contemplated by the Yukon Development Corporation, which would not have the harsh restrictions placed on it that are placed on the Yukon Energy Corporation in order to comply with the wishes of the Public Utilities Board. In addition, at this time the Economic Development department is studying the field of energy as well, in various ways.

Mr. Cable: I notice there is a $1.00 item in the Yukon Development Corporation’s budget. Am I to assume then that the feasibility studies will not be proceeded with in the coming fiscal year?

Speaker: Before the Minister answers, I would like to remind the Member of Standing Order 12. The question is out of order if a debate is scheduled for that day on the same subject matter. We will be debating the budget later today, so a question on the budget is out of order. I will, however, allow the Minister to answer that question.

Hon. Mr. Phelps: The Yukon Development Corporation, for some time, has always had the $1.00 item in the budget. The Yukon Development Corporation does have an income. It is receiving monies from the old Yukon College and some other projects, as well as trying to collect some of the money that is owed it by the Watson Lake sawmill fiasco. It does have money that it can use to at least partially fund some of the matters contemplated by the change in mandate.

Mr. Cable: Is the Minister aware of the costs that would be associated with the continuance of the feasibility studies on the four rivers that were mentioned in the Public Utilities Board’s report?

Hon. Mr. Phelps: Well, not at my fingertips, but the Yukon Development Corporation, once the mandate is changed pursuant to the legislation being brought forward, will not only be concerned with feasibility studies on the four rivers that the hon. Member speaks about, but we are going to be looking at other alternate energy forms; the company will be looking at doing a complete inventory of energy potential throughout Yukon. We will be looking at such things as wind, water, coal, gas, oil and so on.

Question re: Dawson City sewer and water

Mr. Millar: I would like to ask the Minister of Community and Transportation Services if he could let the House know what steps are being taken to determine the dollar value of the Dawson City water and sewer problem.

Hon. Mr. Fisher: The Dawson water and sewer project is in the 1993-94 capital budget as a $1.00 item to identify the project. There is no amount there because there was no time during the budget preparation to determine the actual cost of the project. The department has studied a feasibility and project analysis of a report done by Shiltec Corporation to determine the actual repairs that are necessary and the dollar amount.

Mr. Millar: What is the time frame for resolution of this long-standing problem?

Hon. Mr. Fisher: Cabinet has named a member of the Department of Community and Transportation Services to negotiate with the city on the amount of funding that will flow from the Yukon government and the time frame for the completion of the project. I suspect that those negotiations will start this week or next at the latest.

Question re: Extended care facility, opening of

Ms. Moorcroft: The opening of the extended care facility is long overdue. Potential user groups, as we read in the newspaper on Friday, are pleading with this government to open it. I ask the Minister of Health and Social Services: when can the public expect this facility to open?

Hon. Mr. Phelps: It is almost a budget question because, as the Member will know, there is a considerable sum of money set aside in the budget for the opening of the extended care facility. There has yet to be a decision made in Cabinet as to the exact date.

Ms. Moorcroft: The facility should have been opened last fall; and the facility could and should have been opened many months ago. Surely the Minister will be able to tell this House what day patients will be admitted to the extended care facility?

Hon. Mr. Phelps: If the previous government had opened it last fall, the Member would not even have to stand in this House and ask the question.

Ms. Moorcroft: Would the Minister brief this House on what progress has been made in developing a hiring policy for hiring the necessary staff? How many staff will be hired for the extended care facility?

Hon. Mr. Phelps: We are getting into the very issue that is before Cabinet - the phasing-in of the facility. The best estimate for the first phase is that 42 people will be employed there, 10 of whom are currently at Macaulay Lodge. There will be roughly 32 new positions.

Question re: Bison herd, privatization of

Mr. Harding: I would like to follow up a bit more on the wood bison issue with the Minister of Renewable Resources. The Minister responsible for Renewable Resources has said that the contract has not been tendered yet for the privatization of bison yet there was a request for proposals from independent and existing game farmers several months ago in the Whitehorse Star under the moratorium on game farming.

Could the Minister please explain what these proposals were all about and why they showed up in the paper some months ago?

Hon. Mr. Brewster: It was simply a matter of getting a contract that would protect the taxpayers’ interests to see that they get their buffalo back, to protect the buffalo and see that they are not mistreated, and to see that they are enclosed within the proper wire fencing. It is an ordinary, normal contract that we had to undertake. Being government, we had to take it to the Justice department and a few others. It takes a while to move these things through government.

Mr. Harding: I am confused with the contradiction here. On the one hand, the contract is supposed to go out for tendering at some time in the very near future, but on the other hand one was awarded previously, some months ago. Can the Minister explain to me why he would undertake to break this moratorium, with no consultation with the Yukon people, no completion of the review on the game farming industry and no discussion with Yukon people about the changing of the policy regarding the moratorium and creating new game farms when a moratorium currently exists?

Hon. Mr. Brewster: I wonder if the hon. Member would tell me which one of those questions he wants me to answer. I am sure the Speaker would call me out of order if I answered all of those.

Mr. Harding: I appreciate the candid answers from the Member opposite. I do not know if I have enough time in Question Period to get an answer from him. Perhaps I can ask this again: why did the Minister of Renewable Resources authorize a contract with regard to breaking a moratorium on game farming when there has been no consultation with the people of the Yukon, no completion of a review regarding the industry and no discussion on the moratorium?

Hon. Mr. Brewster: Mr. Speaker, do you want me to stand up here for 10 minutes and explain all that?

Speaker: Very briefly.

Question re: Taxation policy of government

Mrs. Firth: I want to go back to my question regarding the government’s policy on taxation.

The government has revealed today that it does not have a policy in place regarding taxes, that there is no directive as to which taxes will be raised and which will not. Could the Minister tell us what his policy is regarding long-term plans with respect to taxes. How does the government determine when to raise taxes again?

Hon. Mr. Ostashek: With respect to the Member opposite’s preamble, that is not the case at all. Taxes are reviewed when one needs to raise revenues and to balance a budget.

The Member was asking what our policy will be in the future. We are hoping that, with this tax increase, we will not have to face this situation for several years to come.

Mrs. Firth: I believe we have heard that song before. It is the obscenity song.

If the government has no policy in place and they do not know which taxes to raise and when or even if they are going to do it again, I would like to ask the Minister if he will ever have a policy in place regarding taxation.

Hon. Mr. Ostashek: The Member opposite has been on this side of the House. I am sure she is fully aware that taxes are not something any government wants to increase. I do not think there are any hard and fast guidelines as to whether they will be increased this year, two months or six months from now. A government looks at tax increases when revenues need to be raised for a balanced budget, as I said earlier.

Mrs. Firth: I guess I have a concern about governments that make decisions without firm policies in place. The Minister responded earlier today to a question that was asked by one of the other Opposition Members about information that had been compiled for a cost-impact study of potential taxes. I would like to ask the Minister if he will be prepared to table that impact analysis in the House this afternoon.

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

Question re: Hazardous waste storage facility

Mr. Penikett: I have a question for the Minister of Community and Transportation Services.

From comments that the Minister made on the radio this morning, it sounds like instead of having a hazardous waste facility, we are going to have a $100,000 fence.

Can the Minister of Community and Transportation Services indicate what good a fence will do, when a safe, secure, storage facility is what the Yukon public has indicated they want?

Hon. Mr. Fisher: I do not really know what good a fence would do, but the intent of this side of the House is to look at the hazardous waste facility in total. The previous government had created some sort of a conceptual idea of the hazardous waste facility, which in fact would have cost $4.2 million for handling five to six truck loads of special waste per year.

We feel that cost is a little more than necessary to handle the waste in a safe manner. I have asked the department to go back to look at alternate methods of dealing with the special waste. If-

Speaker: Would the Minister please conclude his answer as briefly as possible.

Hon. Mr. Fisher: If there is enough money in the $100,000 that we are using for looking at the facility, we will probably fence the current site.

Mr. Penikett: A fence might be okay if you had some toxic buffalo, but since the project we were proposing, I think, was about half the cost the Minister is now stating when he talks about $4.2 million, can the Minister assure the House now, that all the time, effort and money spent on developing a secure facility, according to public wishes for toxic substances, was not itself a waste?

Hon. Mr. Fisher: I am not going to say whether it was a waste of money or not. I am not sure what the previous government did, but it is fairly important to know that the previous government did not do anything in seven years.

We are going to look at the need for the special waste facility and we will probably be carrying on some sort of construction in the following year.

Mr. Penikett: Whatever the previous government may have done in the last seven years to develop this facility, it appears that the Minister is prepared to throw it on the scrap heap. There was a lot of consultation, a lot of money spent, a lot of drilling and a lot of engineering time spent to try to meet the public’s demand and expectations that there would be safe storage in this facility.

What assurances can the new Minister give that any alternatives he examines will be consistent with the publicly expressed wishes of the people in this town and this territory, and that the right to public safety and environmental protection from these toxic wastes will be realized according to the wishes expressed by our citizenry?

Hon. Mr. Fisher: I believe I have already answered once in the House that public safety would not be compromised.

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

ORDERS OF THE DAY

GOVERNMENT BILLS

Bill No. 7: Second Reading

Clerk: Second reading, Bill No. 7, standing in the name of the Hon. Mr. Ostashek.

Hon. Mr. Ostashek: I move that Bill No. 7, entitled Interim Supply Appropriation Act, 1993-94, be now read a second time.

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

Hon. Mr. Ostashek: Bill No. 7 is necessary to provide the Government of the Yukon with spending authority for the month of April 1993. We will not have debated a new budget prior to the beginning of the fiscal year on April 1. This bill will provide government departments with temporary appropriation authority until such time as the main estimates for the year have been approved by the House.

Given that many grant and contribution expenditures are paid by the government in advance, this bill requests more monies than what would be arrived at by dividing our projected annual expenditures by 12. The expenditures projected in this bill have been derived from a canvass of departments, and Ministers will be prepared to answer any questions Members may have in Committee debate.

Mr. McDonald: I would like to put on the record that the Official Opposition supports this particular measure. It is important that we, as a Legislature, permit the normal operations of government to continue while we are debating the main estimates in the House.

Our position is also that, should there be planning for capital works that would be anticipated in the main estimates, that planning should continue. We do not want to be in the position where our debate holds up the normal course of government business and, ultimately, the contracting activity that may take place this coming summer.

This is a standard measure that has taken place in the Legislature before and consequently we have no trouble at this time supporting this measure.

We would like to point out that this support does not necessarily telegraph support for the main estimates. I will have more opportunity to explain that at slightly greater length later on this afternoon.

Motion for second reading of Bill No. 7 agreed to

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

Speaker: It has been moved by the Government House Leader that the Speaker do now leave the chair and the House resolve into Committee of the Whole.

Motion agreed to

Speaker leaves the Chair

COMMITTEE OF THE WHOLE

Chair: Committee of the Whole will now come to order. At this time we will take a brief recess.

Recess

Chair: I will now call Committee of the Whole to order. We will be discussing Bill No. 7, Interim Supply Appropriation Act, 1993-94.

Bill No. 7 - Interim Supply Appropriation Act, 1993-94.

Chair: Is there any general debate? If not, we will proceed with clause-by-clause debate.

Hon. Mr. Ostashek: I have a few comments to make. Mr. Sanderson, Deputy Minister of Finance, is with me should anyone have any questions for him.

Most Members of the House are familiar with this bill as it is a bill that is required almost every year.

The new fiscal year begins April 1 and no budget for the coming year has yet been approved. The bill will provide the government departments with appropriate authority to carry on operations until April 30, 1993.

As mentioned in second reading remarks, some areas of the bill do not equate to one-twelfth of the total departmental expenditures. Many payments are made by government to municipalities and non-governmental organizations in advance, and there is, in additional, no particular reason why cash flows should not vary from month to month.

The Legislative Assembly requires more than one-twelfth because costs are higher when we are in session.

The Department of Community and Transportation Services has a very high O&M expenditure in April, since there is a requirement to pay municipal grants in that month.

Education expenditures are large, mainly because Yukon College’s grant is paid in April.

The Department of Finance requires a fairly large proportion of its annual budget so that the public utilities income tax transfer monies can be paid to the Yukon Energy Corporation.

The Department of Health and Social Services also experiences many up-front expenses.

The same is true for the Department of Justice, which pays the Human Rights Commission grant in April.

There are, of course, several departments that require less than one-twelfth of their budget. Community and Transportation Services does not require a proportional share of its capital budget because the construction season will not have yet gotten under way. The same applies to capital for Health and Social Services and Yukon Housing Corporation.

If there are  any questions regarding these matters, the Ministers are prepared to answer them at this time.

Mr. McDonald: We said what we needed to say at the second reading. We do not have any questions.

Chair: We will now turn to Schedule A.

On Schedule A

Schedule A agreed to

Chair: We will now turn to Schedule B.

On Schedule B

Schedule B agreed to

On Clause 1

Clause 1 agreed to

On Clause 2

Clause 2 agreed to

On Title

Title agreed to

Hon. Mr. Ostashek: Mr. Chairman, I move that you report Bill No. 7, entitled Interim Supply Appropriation Act, 1993-94, out of Committee without amendment.

Motion agreed to

Hon. Mr. Phillips: I move that the Speaker do now resume the Chair.

Chair: It has been moved by Mr. Phillips that the Speaker do now resume the Chair.

Motion agreed to

Speaker resumes the Chair

Speaker: I will now call the House to order.

May the House have a report from the Chair of Committee of the Whole?

Mr. Abel: The Committee of the Whole has considered Bill No. 7, entitled Interim Supply Appropriation Act, 1993-94, and directed me to report it without amendment.

Speaker: You have heard the report of the Chair of Committee of the Whole. Are you agreed?

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

GOVERNMENT BILLS

Bill No. 6 - adjourned debate

Clerk: Second reading, Bill No. 6, standing in the name of the Hon. Mr. Ostashek. Adjourned debate, Mr. McDonald.

Mr. McDonald: I have been an elected Member of this Assembly for approximately 11 years and I have been a sitting Member of the government for approximately seven years. During that period, there were long hours of debates on sunny afternoons, there were weeks of debates on departmental estimates and many comments made about one particular piece of legislation or another.

I thought that I knew what to expect from my political opponents should there come a time that they had to introduce a budget in our Legislature. There were criticisms levelled while they were in opposition about the NDP government - what they saw to be high spending practices and budgets that seemed to increase every year, irrespective of the fact that they were balanced or showed a surplus - and criticisms in 1986 for increasing the liquor and smoking taxes - I believe those measures took days and days to debate. I remember the criticisms we received when we attempted to raise things like licence plate fees and campground permits. I remember the furor and storms quite clearly. Some of that criticism has stuck with me and probably taught me some good lessons.

I remember hearing criticism about our consultative practices and our ability to take a reading from the public about various measures and then following up on the public’s direction.

Even though we had created new mechanisms for consultation, broken new ground and done more than any government had done previously, we were still the butt of the severest sort of criticism from the Members who are now the government. I recall that, when there were proposals by the electrical company and the Energy Corporation to raise electrical rates, there was no end to the criticism. The questions were put to us over and over again as to whether or not we understood the impact on the rate payers, and whether we understood the impact on the economy, whether we realized that the energy requirements for the domestic user were so significant because of the northern conditions in which we were living. All the criticism is still fresh in my memory.

I have been through four political campaigns in this territory as an active participant and I remember, whether it was the Progressive Conservative government or the NDP government, in the past there was always some concern about governments carrying through on commitments or promises they had made - whether or not they were going to carry through more quickly or whether the campaign literature was describing those initiatives just right; whether or not the government was really showing the kind of commitment the campaign platforms had identified.

I have been through those campaigns and while I have seen promises made and most promises kept and while I have seen criticism about some promises not being kept or not being kept on time, I have never seen anything like what has happened in the last four months of the Yukon Party government.

The question we have to ask, and which I have asked myself, is what “obscene” means. That has been part of the lingo in the territory for approximately six months. Would it be obscene for the Yukon Party to raise taxes, when they promised not to? Would it be obscene to complain about the amount of money spent by the Yukon territorial government and, then, spend more than the NDP government had done, by at least $27 million? Would it be obscene to complain about the level of financial dependency on the federal government and then become more dependent on the federal government by a wide measure?

Would it be obscene to promote self-sufficiency and say the budget direction was wrong, then not have the budget direction change at all? Would it be obscene to claim to tighten various departmental budgets and, instead, show significant increases over the actual money spent only a year ago? Would it be obscene to operate on the assumption, for income tax purposes, that Curragh is going to be operating in the next year and, then, to cut maintenance and capital on the Campbell Highway by a large amount?

Would it be obscene to cut from the volunteer sector, to cut from crime prevention, to cut from municipalities, even the anti-litter campaign, which we have heard so much about over the last seven and one-half years, when the Yukon Party government championed all these causes and said nothing about cuts in these areas during the election campaign?

A lot has been said in this Legislature about what the Yukon Party was promising during the election campaign. They have even gone so far as to say in this Legislature that they do not need to consult Yukoners because they made an obscure reference to something-or-other during the election campaign in some of their election propaganda.

We have heard a lot about a number of initiatives and promises made by the Yukon Party. We have heard that the Yukon Party absolutely intends to abolish the Yukon Development Corporation. We find, now, that abolishing meant, as they rationalize and restructure their statements, that they are going to amend its mandate.

We heard a lot during the election campaign about the Yukon Party’s desire to keep Curragh Inc. operating, both in Faro and the Sa Dena Hes operation in Watson Lake. Now we see that the government promotes the operation of Curragh Inc. only after applying impossible conditions for its reopening, and only after the most severe public protests over their rather reluctant way of handling the issue in the first place.

We heard during the election campaign that there was a real desire not to cut services. Yet, in this budget there are cuts to services. We heard during the election campaign a lot of talk about wanting to proceed with zero-based budgeting - the only reasonable way of establishing a budget that would, in fact, be efficient and effective. They have abandoned that approach. We have heard nothing about it since the election campaign.

We heard that they wanted to listen more to government boards and committees. Now we hear that they either want to cut expenditures to boards and committees, or they are more than prepared to argue with them publicly in the media, over and over again.

We heard about promises to provide more effort to stop family violence. Now we have a budget that cuts expenditures for safe places for the victims of family violence, battered women.

We heard from the Yukon Party that they believed in the freedom of public servants to speak their minds, and freedom of public servants from political intimidation. Yet, even today, we heard the Government Leader stand in this place and talk about the Public Service Commissioner being put on a six-month term. I will get back to that later.

We heard about the need to provide funding for the ombudsperson. These are promises. These are all part of the election lingo - what we lived and breathed for 30 days last year. We heard a call for an ombudsperson. Now we know that they are only prepared to think about it and there is no financial commitment toward this position.

We heard a lot about the need to support mining. What we have got in return for that are a couple of attendances at conferences outside the territory and some warm words. The only actual program that supported mining infrastructure, the resource transportation access program, has been cut a certain percentage, not a small percentage - 100 percent is cut from the budget.

We heard during the election campaign, and prior to the campaign, how terribly awful it was for the utilities in this territory to request electrical rate increases. What do we have now? We have the utilities asking for electrical rate increase requests and the Minister supporting them in the Legislature, saying it is all just a bureaucratic decision, for rather mundane reasons.

We heard during the election campaign that water and sewer issues in Whitehorse had to be addressed. “We are tired of studying Whitehorse water and sewer options. We are tired of hearing about governments promising to get around to something, promising to provide a proper sewage disposal system and it is time for the government to put the money on the table and get the job done.” I heard that on doorstep after doorstep.

What do we have now? We have a situation where there is, after a couple of years of studies and engineering work funded by the Yukon government, a proposal to spend more money - a small amount - on studies. We do not have the large capital commitment for the sewage disposal system.

The promise during the election campaign about wanting to spend $25 million to see this project get done has now reverted to $13 million in the budget book as the total commitment by the Yukon government.

We have heard about a commitment from the government to build another lane on the bridge to Riverdale. In fact, there were three candidates I recall driving past holding placards and saying, “Vote for us, we will provide the financial support, because we think this is a high priority.” In the budget, I have not been able to identify a single penny for this project.

There was a commitment, there were many commitments throughout the territory, but there are a number that I will mention.

There was a commitment to provide water and sewer for Dawson: capital replacement. We have a grand total of $1.00 being committed to this project in this budget - in this balanced budget; a $1.00 commitment. We know that you do not build much by way of sewer system replacements with $1.00. You do not even buy a lot of goodwill with $1.00.

There was also a commitment to provide $300,000 to the water and sewer users in Dawson - $300,000 that would have gone toward the deficit grant. Where in the budget is that money? Where is that commitment, which effectively, by most accounts, got at least one Member of this Legislature elected?

We heard, over the course of the last seven years, how much the Yukon Party supported block funding to municipalities, how it would provide for consistency in treating municipalities, how it would provide for a dependable, reliable source of funding for our junior level of government, which we all spoke so favourably about in speech after speech, year after year.

We now appear not only to be providing less funding, making this source of funding less reliable, but we also appear to be turning to the old project-by-project approval system to municipalities, which essentially made this Legislature the decision maker for a multitude of projects around the territory, instead of the municipalities, where those decisions belong.

We heard a lot over the course of the last few years about decentralization and about the need to move government offices from Whitehorse to the rural communities. Where in the budget address is the need to provide for some decentralization? The only thing we have identified, through our contacts with departments, is that there is some initiative to recentralize various positions in the government to Whitehorse.

Where was all this talk during the last election campaign? Were the people, during the last election campaign, aware of the fact that the Yukon government would immediately enter into a new term of office and preside over an economy that showed unemployment rise dramatically? Were they aware that the government was going to try, in such a thorough and comprehensive way, to depress the economic climate here so much that consumer spending has gone way down in most communities? The only area I have been able to identify that has shown any life or any vibrancy at all is the sale of RRSPs.

Do you think that the people, during the election campaign, had any inkling that taxes and electrical rates would go up? What has happened is that unemployment is up, consumer spending is down, municipal taxes are up in some cases and food prices are the highest in the country and are soon to be higher as a result of the increased transportation costs brought about by the fuel tax.

What we have seen here - and I have only provided a sample - are broken promises and shattered expectations.

What has been the Yukon Party’s response to an economy that is now truly in a recession, largely engineered by their gloom-and-doom talk about being broke? We have to understand what their definition of being broke is. By their definition, it is being in the hole by about $5 million - a suggestion we take serious issue with, but I will get back to that later.

The Yukon is nothing like the rest of the country, which suffers from considerable debt and governments that have clearly overextended themselves by a wide margin. Those governments, which preside over those jurisdictions, have not been trying to depress their local economies with gloomy talk. They have done everything they can to enhance the economic atmosphere in those jurisdictions in order to ensure that there is some economic vibrancy.

What has the Yukon Party done? They have done two things, aside from talking gloom and doom: they have produced what they call their economic plan - their dream scheme for megaprojects - and they have introduced the main estimates we are debating today.

The infrastructure plan they submitted to federal Ministers has proven to be the laughing stock of coffee shops and workplaces around this territory. What makes it worse is that that document, which is the butt of so many jokes by so many people, has been paraded before federal Ministers, including the Deputy Prime Minister himself, as the Yukon Party’s prescription for economic recovery over the next seven years.

That dream scheme talks about megapower projects, both on the generation and distribution sides. As an aside, it is interesting to note that there was talk about various jurisdictions - Alaska, the Yukon, British Columbia - all wanting to trade power, but all three jurisdictions want to sell power to the others; they all want to be the seller. Who is going to be the buyer? They all imagine themselves being Robert Bourassas, presiding over James Bays and making megabucks from power megaprojects, when the reality is that we are talking about relatively minor power projects, and everybody wants to be the seller, but nobody is prepared to be the buyer.

We talk about mining megaprojects. They made a list of all the projects that are at various levels of development throughout the territory and decided if they provide some road access and power, these mining projects will simply proceed, as if metal prices had nothing to do with it, nor the cost of transportation, by truck or rail, nor whether or not they can sell the metal.

We have seen them talk about pipeline megaprojects. The old Alyeska Pipeline, which generated a lot of interest 15 years ago, produced nothing more than broken dreams and dashed expectations. There is hardly a serious oil company today that is actively talking about the revival of the Alyeska Pipeline proposal.

We have also heard about pipelines from the Kotaneelee gas fields to Whitehorse, a pipeline project that is the imaginative creation of the minds of the Members opposite, but for which there is no cost-benefit feasibility that would support it. I took great exception to that when the promise was made, because I remember people in my new constituency telling me that they wanted jobs on that pipeline, and they would do almost anything they could to get jobs on that pipeline.

Now we have a situation where they are promising pipelines, mining megaprojects, power megaprojects and maybe or maybe not railways. These would all presumably be funded by the federal government, or some magic private sector partner. This is supposed to be our prescription to economic self-sufficiency over the next seven years. The fact that most of them are proposed to be funded by the federal government is surely ironic. This is certainly not a sign of our declining dependency on that level of government.

Now when the economy is collapsing around our ears, the Government Leader is talking about wanting to monitor food prices. He does not know what it means yet to have the highest priced food basket in the country.

The unemployment rate is rising dramatically. The Government Leader takes comfort in the fact that it is only a few percentage points higher than it was last year.

Now we have got the Yukon territorial government’s prescription for our salvation. That is what we are facing today. We have a budget that is calling for the most comprehensive list of tax increases, across the board, that I have seen. We have a budget that shows a transfer of more federal funding than I have ever seen. We have the biggest spending budget ever, both on the operations and the capital side. Worst of all, the one last thing that the Members opposite were clinging to: we have not even got a balanced budget. The most obvious feature of this budget is the tax increases. These tax increases have been dismissed by the Government Leader as symbolic, or pocket change. We should not get worked up in a knot about this 11 percent increase in personal income taxes, two cents a litre at the gas pumps and the cigarette tax. After all, this is pocket change.

I have to tell the Members opposite, for the people whom I represent, a few hundred dollars is an awful lot of pocket change.

They are not wealthy people; most of them are not wealthy people at all. If I were to go to my constituents on behalf of this Legislature and ask them for an extra $300 and call it pocket change, I would be kicked out of the trailer in a lightning flash. They do not have a lot of money. They spend their money on essentials, they look for sales, they complain about relatively small increases to rental stall fees in the trailer parks. They are working people who do not make a lot of money. To suggest for one second that this is a minor matter, this is only a symbolic gesture on the part of our Legislature - to what turns out to be federal bureaucrats - is for them outrageous.

What was the history of the tax increase? What were the reasons for the tax increase? We got a little bit more information today in Question Period, but I think we have a fairly clear picture of what has happened here.

During the election campaign, the NDP, who were the government at the time, made the statement that they were proud not to have had to raise taxes over the course of the last six years. The only taxes that were raised were the smoking and liquor taxes. Both increases were heavily criticized by the now-Yukon Party Members in government for having been an outrage, a tax grab and wrong-headed.

During the campaign, while the NDP were saying that they had not raised taxes, we heard from the Government Leader, in his words, that “it would have been obscene to raise taxes with the amount of money from the federal government.”

The now-Government Leader had made the statement that, given the amount of money that we are receiving from the federal government through transfers and other mechanisms, it would have been unjustified for the Yukon Government to secure any further taxes from the pockets of the Yukon citizenry.

I would venture to guess that that statement, by itself, was one of the most effective messages made during that election campaign. The statement resonated throughout the territory. I would say that statement played a large part in seeing the fortunes play out in the election campaign as they did.

The now-Government Leader indicated very clearly at the time that if the NDP had raised taxes during that period it would have been inappropriate.

The election has passed and fortunes have changed. The Government Leader takes his seat and Ministers take their seats at the Cabinet table. The economic and fiscal planning for this territory starts to change.

We now hear from the mouth of the Government Leader himself that the Yukon NDP government should have raised taxes, starting as early as 1987-88, on the grounds that we were penalized by the federal financial transfer agreement for having tax rates at the level we did.

I will bring you back one small moment to that period in 1987-88, when the negotiations for the Formula Financing Agreement were underway. Members will remember that when the arrangement was made public, before there was an agreement, the Yukon government-of-the-day made it very clear that the new arrangement contained the perverse factor that if the Yukon government did not raise its tax rates, the federal government, particularly the federal bureaucrats, would penalize us in the transfer payment. In those days, in order to remove the penalty factor from the Formula Financing Agreement, it would have cost the Yukon taxpayer a 36-percent increase in the tax rates.

The Yukon government had argued strenuously with federal finance officials that the tax burden on taxpayers in the territory, given the high cost of living, was already above the national average. The take-home pay that people could use to buy food, pay their car bills, buy clothes and go to a movie was already less than average Canadians, given the cost of living in the north. We made it clear that we could not justify, in those days or now under the circumstances, an increase in tax rates, because it would do a number of things: it would put Yukoners at a disadvantage compared to other Canadians; it would dampen the economy when it needed support and, even though there were restrictions on the money the government had available to spend, the government did not need the money as much as it knew the taxpayers needed the money for themselves.

We resisted that clause; the clause in the agreement was subsequently imposed upon us and subsequently did cost the Yukon government some extra federal funding. But we were proud to stand up to the federal bureaucrats; we were proud to take the position of principle that we did, because we knew it was right - not only for the health of the territorial finances but also for the economy of this territory.

Now we are told by the tough negotiators in the Yukon Party that we should have raised taxes, that we could have received more money from the Canadian taxpayer and we would have voided the penalty factor. Who was being penalized? Is the Yukon government now worried more about the government being penalized or the taxpayer being penalized? It is fairly obvious now that the Members opposite are more concerned about the government losing revenue than they are concerned about the taxpayer in this territory being treated poorly in comparison to the Canadian taxpayer.

We found out today that the reason for the tax increases is simply because the government wants to balance the budget. They are more concerned about getting revenues to support their expenditure platform than they are about what impact that tax measure is going to have on the economy of the territory and on the citizenry of this territory. When asked what policy there was for taxing the Yukon public, there was no answer other than their concern about balancing the budget.

What we have, then, is an expenditure-driven policy. The government sets the expenditure pattern it wants to pursue and then it simply puts taxes up to get there, without determining precisely what the consequences are going to be on the territorial economy and on the average citizen.

We also hear that the people the government has been talking to, who have told them that they must raise taxes in order to avoid the perversity factor, are federal civil servants. I draw Members’ attention to March 24, last week - who was the Government Leader talking to? Who told the Yukon government that they had to raise their tax rates to meet the federal agenda? It was none other than the bureaucracy in Ottawa, according to the Government Leader.

Who is driving this territory? Who is controlling the budgeting process in this territory? Who is determining the fiscal framework for this territory? Who is standing up for the taxpayer of this territory? Who cares about the person who is living in a trailer park trying to make ends meet? If it is not the government and not this Legislature, then it will be nobody because as caring as one might imagine, in their most generous moments, a federal civil servant to be, I am virtually certain that they are not thinking about my constituents when they are designing tax policy and bargaining with the provinces over tax room.

I must say that after hearing so many comments made by Members opposite over the course of the last seven years, when we were in government, about standing up to the federal bureaucracy, this latest initiative to raise taxes in the territory simply is astounding.

There is a postscript to this. In 1987 and 1988 - the perversity factor came into effect in 1989 - when the Yukon Government Leader today says we should have been raising taxes, the budgets that we were presenting in this Legislature were balanced and showed a surplus; even by the standards of the Members opposite they were considered to be reasonable budgets.

They have been talking about the budgeting practices of 1991-92 and 1992-93 as being a time when things, in their view, seemed to go astray. So even when we were balancing our budget, creating surplus, by the words of the Government Leader himself, we should have been raising taxes in order that the Government of Yukon not be penalized by, in his words, $120 million.

We should have caved in to the federal bureaucrats’ tax policy. A policy that was driven by factors in other parts of the country, not here in the Yukon; a policy that was, irrespective of everything else, fundamentally unfair to northern taxpayers, because the tax burden factor was higher, in those days, for the average Northerner than it was for the average Canadian. I do not think the federal bureaucrats ever disputed that, but they had a higher issue to address: that was, how they were going to negotiate tax room with the provinces.

They needed to be able to show those provinces that they were prepared to be tough and play the “heavy” with northern governments, in order that they could really prepare themselves for the much more difficult political fights that they were going to have with the provinces.

Even though one might understand their objectives, it is the duty of this Legislature, and it is the duty of the territorial Finance Minister, not to cave in to those pressures when they know it is not right for Yukon taxpayers.

Last week we heard in the media that the Government Leader had indicated that there probably would be no more new taxes. He did not actually say, “Trust me”, or “Read my lips”, nor did he say that it would be obscene to raise taxes again, but he did say that he had learned some lessons. The one lesson that I do not think he had learned, and one lesson that I do not think has been learned, is that he has to understand that there is more to think about in developing tax policy than simply using it to raise revenues.

What is worse - if it can be worse - is that the revenue projected to be received from all these taxes, combined, amounts to just over $8 million per year. That means that these new revenues will account for approximately 1.5 percent, or maybe less, of the total expenditures of this government. One would think, under the circumstances, that one could have avoided this tax increase by simply reducing the expenditures by the same amount. Then, we would not have had to face a situation where taxpayers, many of whom are now unemployed we have discovered, would not be kicked when they are down. That is one element of this budget. It is an obvious feature in the budget, and it alone would make it impossible to vote for.

There are other elements of the budget that I could pursue a little bit because I think they are worth noting.

One of the things that the Member’s budget address made a significant point of was that this was a balanced budget. Mr. Speaker, you will notice, in the budget address itself, the very first title of this long speech is called “Providing responsible, accountable government - a balanced budget”. We do not have a balanced budget here. I know we do not, and I think the Members opposite also know we do not.

I am not saying that some of the traditional things, like keeping a reserve for public servants’ wages, and that sort of thing, are a reflection of my concern about this not being a balanced budget. They have already made it clear that, in their collective bargaining, they are even looking for a reduction in expenditures for public servants.

The reason I know this is not a balanced budget is because they made a lot of commitments that will have to be fulfilled this year and are not in the budget. The Dawson water and sewer replacement is one of those things. In Question Period today, we heard that, at some point during this year, we are going to be facing some significant expenditures in the Dawson area. We are given to believe - contradicted by the Mayor of Dawson, in conversation with me - that we really have not come to any conclusions, and have not even talked about the ball park yet, when it comes to making some expenditures for the City of Dawson in the coming year.

We know that we are probably talking hundreds of thousands, if not millions, of dollars in this fiscal year. That makes this budget not an honest budget by itself.

There is also the water and sewer deficit grant. I have not been able to detect where this $300,000 commitment is in the budget. Given that there is no line item, and given that the operating grants for municipalities have gone down, it would be a fairly safe bet that they have not put this in the budget at all. If there is a commitment that, this year, we will expend $300,000 in a deficit grant to give relief to the users of the water and sewer system in Dawson, that $300,000, in itself, uses up what tiny surplus they say they have.

We have talked a little bit about the sewage treatment plant. Are they going to ignore this commitment altogether? Maybe it is somewhere in their seven-year, or their 107-year plan, however they want to interpret undertaking all of these infrastructure proposals by the next century.

It was very clear during the election campaign that the time for talk was finished; the time for action was here on the Whitehorse sewage treatment system.

I briefly mentioned the third lane on the Riverdale bridge. If I remember correctly, there was an election commitment of $500,000 for this particular project. Where is this commitment? This issue has not even been resolved at the city council stage yet, but where is the commitment in the budget?

We had a commitment during the election campaign for an abattoir. I am afraid you do not buy much of an abattoir for $1.00. You cannot even buy a coffee for $1.00, some places, except in our cafeteria here, I might hasten to mention. You do not buy an abattoir for $1.00.

There are a number of other $1.00 items in this budget. Vehicle purchase for Government Services - we did not hear anything in the election campaign about this, but certainly it appears - even though they are going to be spending heavily in the computer end - they apparently are not going to spend anything on vehicles. Probably, that is the first time in Yukon government history. I am certain we are going to hear some sort of policy statement supporting that particular initiative.

The point of the matter is: this is not a balanced budget. There are commitments out there that have to be met; commitments out there that Ministers said must be met, in this fiscal year.

Now, if they are saying simply that they are going to have to rearrange the budget before we have debated it, then what is it about this budget that they are not committed to? Are we about to debate a budget that they are already planning to rearrange as they go out and make other commitments? Is this a real budget, or should we sit back and wait for them to table a real budget? It has got to be a real budget, because it has the Yukon Party racing stripes on the cover. It has got to be the real thing.

There are a few other elements in this budget that I think are worth noting. We heard, over the course of the last seven years - particularly from the Member now for Ross River-Southern Lakes - how unfortunate it was that the Government of Yukon would actually submit expenditure estimates, when there was little likelihood of those expenditures being completed in the time the budget anticipates.

What we find is that it will not be completed at all and these projects have to be lapsed into the following year. Not only was there a concern that the government was increasing expectations, but also about the honesty of the government’s budgeting process. In those days, there was a concern that if we were to put some figure in the budget we should ensure that the money is actually expended in the time we said.

That Minister has brought in an estimate for $14 million to go toward a new hospital in Whitehorse. That is $14 million of a $30 million or $40 million capital project. That same Minister has indicated in the Legislature that the likelihood of going to construction in this fiscal year is limited, but that there may be some room for site work and hole digging. We have been given no assurances that we are ready for tender or that this project will go ahead at all over the course of the construction summer.

I will remind Members that in 1985, when a similar sized project was going to tender and was slated for construction - the Yukon College - we only spent a small fraction of this amount doing the same kind of site work that they are proposing will take place this summer for the hospital. I would not be surprised if 75 percent of this figure lapses in the coming year.

There is a $20 million expenditure for land development, albeit mostly recoverable. This is a particular line item that, from past experience, I know for a fact is overstated and is always underspent.

At the same time, for some reason we are proposing to tell the contracting community out there that they have to buy the tax increases and this budget and, in exchange, there will be lots of work. I will be surprised if they spend even a fraction of $20 million for land development. If they do, it will be the first time in the 11 or 12 years I have been in this Legislature.

We heard a few messages delivered in the budget address that seem to be slightly unreliable - that is the word the Speaker suggested I use rather than some other, less parliamentary, language.

We heard the personal tax increase billed as a five-percent increase. We heard some confusion later on when it was made known that the five percent increase over 45 percent is an 11-percent increase.

We were also told that, despite the fact that this is going to be a record budget and despite the fact that there are cuts to a whole variety of areas, we should all take heart from the fact that a number of government departments showed real decreases in spending and that that, by itself, should demonstrate that the government itself is committed to a greater efficiency in restraint.

I would invite everyone who can get a hand on the budget to look more closely at that claim. If one were to go through the budget and look at the various line items that show expenditure reduction, looking at the column showing actual expenditures for 1991-92 and the main estimates for this year, one will see immediately that in the majority of those instances where there is a claim that expenditures are going down, it will become clear that those expenditures are going down from the inflated forecasts that they are suggesting will be the case for this year and not from the main estimates for this year. They, in fact, go up.

We will have a lot to say about those inflated forecasts for this year. For those people who have not been paying much attention to the supplementary debate in this Legislature, I think people understand that the claim that we are going to be spending $57 million is already considered by both sides of the House to be unrealistic - that there will be considerable lapses; and that the expenditure estimates are not reliable.

Yet it is important to point out that, not only has the government complained about there being a $57 million overexpenditure for last year, they are planning to spend that much plus another $27 million for next year.

We have also heard a little bit about the restraint measures that have been taken government-wide to ensure that the government is managed in a much more efficient and effective manner and that the government will not hire any more people than they need.

We know that as of October of last year, after the election, there were 3,233 people on the payroll. Now, after months of restraint, after months of the star chamber burning the midnight oil, we have a situation where the individuals on the payroll have gone from 3,233 to 3,316, giving us a magnificent example of restraint in controlling the growth of the public service.

I am afraid we have a credibility gap here. I am afraid we have a situation where the Yukon Party has said something in Opposition and during the election campaign, and has done something quite different - and in fact in some respects, the opposite - while in government. They have talked a lot about dependency. In fact, we used to get into long debates about what reliable indexes could be used to determine how dependent we were going to be on the federal government during the course of the budget year that we were debating. I remember we had pictures of pie charts in front of us. We were trying to decide whether or not we should roll in established program financing figures, or whether it should just be the formula grant, or whether we should be talking about recoveries as well. I remember the Members opposite, particularly the Member for Ross River-Southern Lakes, arguing quite strenuously that it should not only be the federal transfer, it should also include recoveries for various programs, and that we should include the established program financing and roll it all in one great big bundle. That would be a reflection of how dependent we were going to be on the federal government in the coming year.

I have never seen a budget such as the one that we have in front of us that showed such a high degree of dependency on the federal government. The transfer payment is going up $31 million. That is better than the $1,000 for every man, woman and child in the territory.

We have capital spending going up for large projects, albeit projects that we support such as the Alaska Highway and the hospital construction - that probably will not be built in this fiscal year, but in the future.

What we have seen here is a situation where not only are the increased expenditures coming largely from the federal government, they also have an economic plan that wants to encourage even more federal spending on the territory.

I have never bought into their argument about dependency. I have never bought into their argument about showing concern for federal expenditures in the territory, if they are well-directed and they have a useful purpose. But I find it truly ironic that they would wrap a budget address around the issue of dependency when the federal transfers to this territory are skyrocketing. They ought to be ashamed of themselves, ashamed of themselves, ashamed of themselves for having supported such rhetoric in the past.

We used to listen, year after year, to concerns about the overall spending pattern of the Yukon government. We used to hear concerns about how much the Yukon government was spending, in comparison to the gross domestic product of the rest of the territory - what the private sector was doing.

We used to hear concerns, irrespective of whether or not the budgets were balanced - and they were - irrespective of whether or not we had produced a surplus - and we did. We heard long debate from Members opposite about how awful it was that the Yukon government was prepared to spend so many millions of dollars in this territory and play such a large role in the economy.

Again, we did not buy those arguments, because we felt there were good reasons for the things we were doing. We felt that many of the projects we were involved in were good, not only for the Yukon, but also for Canada, and that the Canadian expenditures, funneled through the Yukon government, were justified. We used to listen to this phony argument about the NDP government having spent $2 billion over seven years, and how self-sufficient were we? What had we done to promote a self-sufficient economy, where we could simply cut the shackles from the federal government and from everyone else, and from the one big mining company, and go it on our own.

This rhetoric still rings in the farthest reaches of this Legislature. The echoes are coming back to us now - “keep the money in the bank”, coming from the Yukon Party, or “the government is too big compared to the private sector”. We now have a budget that is the biggest spending budget in the history of the territory. It is close to half a billion dollars and, once they actually fulfill their commitments, it may be half a billion dollars. They are planning to do in three and one-half years what we did in seven years, in terms of overall spending.

I will ask a rhetorical question. Given the expenditure pattern that we have in front of us today, is this government, in three and one-half years, in spending the money in the way they are proposing to spend it, going to be substantially more independent of federal transfers, or more economically self-sufficient, than they are today? In three and one-half short years, after they have completed spending $2 billion, will we, as a territory, be more self-sufficient?

I think the answer has to be no.

We have seen cuts in the mining roads programs, cuts to Yukon College, to community-based volunteer-run organizations, like the Child Development Centre, the Women’s Transition Home, and in areas like community crime prevention.

I seem to remember something about crime prevention during the election campaign. That is the last thing I thought would be cut, in terms of budget priority - putting your money where your mouth is - and it has been substantially cut.

I went over the Yukon Party promises, as I was writing this speech, because I wanted to get a good sense of where we were going as a territory. I remember seeing lots of information at Yukon Party headquarters about the need to do something about alcohol treatment programs. I do not recall one word from anybody that Crossroads in Whitehorse was not efficiently spending money, but there were lots of warm sounding words about wanting to do more for alcohol and drug prevention. Yet, what do we have in this budget? We have a cut to the only residential treatment program in the territory.

We have a variety of other cuts: environmental protection is down 36 percent. We have heard a lot about funding cuts to those hard-working school councils, and that shows up in the budget - those volunteers who put in 20 to 30 hours a month and get $40 to $50 a month for their efforts.

We also see some remarkable expenditure increases, particularly in social assistance, which is projecting $3 million more over the inflated forecasts for this year. This cost centre was something we were led to believe should be a priority for controlling, yet we have heard nothing of significance with respect to its control, other than that an extra $3 million will be spent in that area.

We have a budget here that claims to be balanced, and it is not balanced. It claims that we should be controlling our expenditures, but it is a record budget in terms of expenditures, both on operations and the capital side. This is a budget that tries to justify increases in taxes to an already long-suffering taxpayer - taxes that were needless and are the agenda of the federal bureaucracy and not, nor have they ever been, the agenda of our Legislature. They are not justified, in terms of the national average. We have a budget before us that, ultimately, claims to tighten various departmental budgets. Apart from hitting non-government organizations, overall, it does not do very much to control their own budgets.

We have a budget that increases dependency on the federal government, despite seven years of claims and angry words to the contrary from the Yukon Party in the past. We have a budget that is going to hurt Yukoners. It is ultimately going to kill jobs, apart from the road-building community, which is going to receive some much-needed assistance. We do agree with expenditures on the Alaska Highway. After all, we did negotiate them.

This budget is going to do a lot to dampen the economy. We can only hope that the tourism industry has a good record year. That is something we have been promised. That way, there will be some semblance of a private sector economy in the future.

During the budget address, the Government Leader tried to set the stage for this scenario. He went to great lengths to talk about what was happening in virtually every other jurisdiction in the country. He talked about the federal government’s debt and the provincial governments’ debt. He talked about the budgets in Saskatchewan, Newfoundland and British Columbia. What he failed to mention is that the debt situation that is the case in every other jurisdiction is not the debt situation here. We have been arguing about whether or not there has been some minor deficit for this year and whether or not there will be an accumulated deficit in cash. I think we have already come to the conclusion that there will not be. We do not have debt servicing to pay for here.

The government went to great lengths to suggest that we had to be doing the same kinds of things as other jurisdictions in order to just get by; we had to raise taxes because everyone else was. There was no justification, other than following the lines of the federal bureaucracy, for raising those taxes. Our debt and tax situation was different and we knew it. Yet, we succumbed and caved in to someone else’s agenda. It was not the Yukon people’s agenda, but someone else’s agenda. We did not have to.

The budget suggests that we were at a financial crossroads. Somehow, we have been going down the wrong track and now we must go on this tax-and-spend track that was announced in the budget. They have not shown that we have a $57 million deficit. They have already admitted to being $15 million off target as it stands. We have already seen the Consulting and Audit Canada report, which was their first forecasting mechanism and which is a nightmarish embarrassment to this government and will continue to be.

I am convinced that the Yukon Party decided they needed a deficit to have anything they did look good. This budget does not look good. This budget hits the taxpayers when they are down. It depresses - and will depress - consumer confidence even further and will make life more difficult for the small business operator.

Consequently, this budget is one that is impossible to agree with. The assumptions are poorly considered. The result will be bad for the economy. “Infrastructure”, which is the going buzzword in Yukon Party circles, will not be advanced by this budget.

While there are a few things that we do support, there are a number of things in this budget that we cannot support. Consequently, we will be voting against the budget, because it is the right thing to do.

We have in our hearts and in our minds the agenda that has been set by the Yukon taxpayers - by Yukon people. We cannot, in all conscience, follow the agenda of the federal bureaucrats. Despite the fact that the government seems to have bought their arguments in their entirety, we cannot support this government’s expenditure proposals while they seem to riding the coattails of people who are not elected by us, who are not known by us and who do not follow our best interests.

Having said that, once again, we cannot support this budget, in all conscience.

Hon. Mr. Brewster: In speaking to this budget, I first would like to say that I support this budget. Even though it is a tough budget, it is a responsible budget. One thing that we are going to see  is that at the end of next year we will have a balanced budget. That means quite a bit to me.

It is an honest budget. The taxpayers have been told that they have to face the facts of life. It is not a pleasant budget; none of us on this side are happy about it.

We spent many, many hours trying to figure out how we could develop it. We tried everything that people are criticizing us for not doing. We bounced those ideas one against the other to do what was right and that would not hurt the average person in Yukon. We did our best and the people of Yukon will make the final decision on this budget.

On the revenue side we have $16 million in capital expenditure for the Shakwak project. Over the next 5 years, $89.6 million will be spent on the Shakwak project.

At this time I would like to make mention of the Hon. Maurice Byblow, who worked very, very hard for this project. I think maybe some of my persistence from this side may have helped this project, but I am sure all of the people of Kluane and the Yukon are very happy to see this federal transfer, which should have happened many, many years ago. It is now here.

It is rather ironic that the first time that Erik Nielsen ran for office, I can recall one of his promises being to hard surface the highways from the British Columbia border to the Alaska border.

It took a lot of time. He did not fail this project, but he finally played out and stepped down. However, in the next few years we will be able to see the light and we will have the highway hard surfaced from the British Columbia border to the Alaska border. That alone is a great improvement for the Yukon, and it has been many years coming.

There is another $6.7 million project to do work on Two-Mile Hill and more road reconstruction at Swift River. There will be another $5.1 million spent during the next few years on the Alaska Highway, from the British Columbia border to Alaska. When these two roads connect, we will have a hard-surfaced road down to the ocean and up to the Alaska border, completing a dream that many people in the Yukon have waited a long time to see.

If the savings in any way match the savings of $1 million a year that was achieved on the short stretch from Haines Junction to Haines, Alaska, rest assured the O&M budget in the Yukon will be going down by a tremendous amount of money. There are great savings. If one puts a road in properly, it costs a lost of money but if it is put in properly - and this has certainly been proven on the Shakwak project - O&M falls immediately.

I can recall a letter from a Cabinet Minister in Ottawa who wrote to me to tell me that I did not understand how hard it was to build through muskeg and things like that. I would like to inform that Minister that we must have found a way because they gave us the money to do it.

A number of mines appear to be trying to open; they are at the drilling stage and this is when the government has to put the infrastructure in place - roads and electricity - so we will not always be dependent on one mine.

I would be very forgetful if I forgot to mention the Windy Craggy project. A few on the other side said I am dreaming. Maybe I am. I do not think people, unless they have talked with these people and know them, realize just what is in that area. There is much more than the one mine. In fact, I am told now that even on the Alaska side there are two projects that could go ahead.

We will not make the decision on this; it will be decided by the B.C. government and the environmentalists out there, but we, as a government, must give all the support we can to get those projects going ahead.

I do not know if people realize how many people would be employed in the spinoffs from it. This is a mine much bigger than Faro ever was and look at what Faro and Curragh have done for us in the years they have operated.

I will speak a little on Renewable Resources. We have been able to cut our O&M budget by six percent and the capital budget has been reduced by 16 percent. This means that some projects are going to be delayed. That is inevitable, but we have done our best to get the ones we needed included. Believe me, the deputy minister and his organization spent many, many hours on this. Time after time we went over the budget to try to do the least harm but to get the budget down.

I would like to congratulate all the people in the department who worked very, very hard and spent a great deal of time, even after hours, trying to figure out how they could do this.

It is going to be a great challenge now for us to see if we can hold it there. Believe me, we will do our best to do so.

I might, however, warn everybody that with land claims coming closer and closer to completion, the department’s next budget will be requiring money to honour the commitments to the First Nations people and also to get the game into condition to be usable by the First Nations people. As I have repeated in here several times, game in Yukon is in a very serious position.

They are not going to be able to get this by having a wish list. It is going to be hard work and it is going to cost money. We have to save the game. I do not care what anybody says, that is the number-one priority, and it has to be done.

We are going to have to spend a lot of that money to convince people in the United States, southern Canada, and even in Whitehorse. When you give them facts and figures, surely they would look at them. It makes me wonder to hear an upstart just out of university saying to a biologist, with 14 years’ experience in the Yukon, that he does not know anything. When are we going to grow up? Common sense and experience out in the bush is worth an awful lot. When a man has spent 14 years out there, do not insult him by saying he does not know anything.

The compensation department has been reorganized. This was with a study made by the former government, and it is nearly completed. They tell me it is much nicer now, but I tread very gently over there. The Opposition does not like me over there, so I do not go over.

I hear them talking about what everybody said during the election. Yet, I went door-to-door, like everybody else, and I went into a new area where I did not know many people. The thing I was dodging all the time - and I was not fighting the NDP - was fighting Meech Lake. Every house I would go to, people would ask how I was voting on Meech Lake, before I would even get in the door. Then, they would start on Meech Lake.

Perhaps the people in the Kluane area are different from others. I guess I have to include the Ibex in that, because they asked me there, too.

Some Hon. Member: (Inaudible)

Hon. Mr. Brewster: That Member over there would like to speak, Mr. Speaker.

Some Hon. Member: (Inaudible)

Speaker: I would ask the Member to take her seat, or she may lose her right to speak at second reading. I know she does not want to do that.

For the Minister of Renewable Resources’ information, what the interruption was trying to do was distinguish the Meech Lake Accord from the Constitutional Accord. The Meech Lake Accord had already been killed. It was the Constitutional Accord that was alive at the time of the election.

Hon. Mr. Brewster: Thank you, Mr. Speaker, for the correction. That might explain why 60 percent of the people across Canada voted against it. They did not understand what was going on with the politicians.

Sunday, I had one of the biggest meetings I have ever had in going on 12 years. The only other meeting as big as that, I had the first time they nominated me. I guess they came to see what kind of a queer duck they were going to nominate. Now, they are kind of used to him.

I hear everybody is going on about the budget and complaining. They asked questions, but they were prepared to listen. It was not a rowdy meeting. I have been at rowdier ones. I have been in meetings, for example, when I was trying to get a nurse for Beaver Creek, and they were a lot rowdier than anything I have ever had. Another rowdy meeting I was in was at the placer mine, when all the placer miners came down. We were having lunch, and I remember the chairman asking me if I thought the boys were really going to get rough. I said no, if we could hang on to them, they would be all right. Two of them had got into the beer parlour, and we were keeping them away, because they might be rough after a while.

There have been a lot of complaints that the Yukon Liquor Corporation did not raise their taxes. For your information, they have raised them quite a bit. In April, 1992, they raised them anywhere from 25 cents a bottle up to $1.25. They go up every time the suppliers outside raise their prices. Every time we do that, it is a tax increase.

We have also raised the licence fees in all the lounges by 20 percent. We have told them they will have another 20 percent increase next year. The Yukon Liquor Corporation raises quite a lot of taxes as they go. In fact, after they have the supplier’s cost increase on the next one, they will raise one percent over and above on all products.

I would like to thank you, Mr. Speaker. As I make mistakes, and the lady across the road likes to correct me, I will sit down, so I do not make any more.

Mr. Penikett: I rise to join the debate on this budget, and to make a response to the budget address of the Government Leader which, as my colleagues pointed out, are printed, for the first time, in the colours of the government party. That was probably appropriate, since this was probably the most political budget speech we have ever heard in this House.

The budget speech began by misappropriating the thought of the great American poet, Robert Frost, taking the closing words from his poem, The Road Not Taken, which I quote, “Two roads diverge in the woods, and I, I took the one less travelled by, and that has made all the difference.” That is a great poem, but certainly not a statement of Conservative philosophy, nor any kind of theme of right-wing ideology.

In fact, I think the idea that the Members opposite have taken the road less travelled is a misappropriation. What the Finance Minister here has taken is the well-beaten track that began when the cave-dwellers came out of their hole in the ground with their clubs in their hands and continued on that well-travelled path taken by every aging roue, as he went out on the town, and every snakeoil salesman, since the dawn of commerce.

This is the tired, old trail of every Tory since the beginning of time. This is not a Robin Hood budget. This is not even the Sheriff of Nottingham’s budget. This is King John’s budget.

This is a budget that robs the meek to give to the powerful. It is a budget that punishes Yukon taxpayers in order to make the federal Tories happy. It is a budget that is just a few steps further down the muddy track of megaprojects, booms and busts, divide and conquer, taxes, taxes and more taxes, Taga Ku, broken promises and three Rs. Not only do we have the misappropriation of poems but, as I am going to say later, we have some very interesting Tory arithmetic.

The less-travelled road, suggested by Robert Frost, is one that we have been pursuing the last few years as we negotiated land claims, initiated self-government agreements, consulted about initiatives on Yukon 2000, developed economic strategy, conservation strategy, training strategy, tourism strategy, the whole sustainable development agenda, our healthy communities initiatives and initiatives to improve democracy here like the Public Government Act. These were the visions not of a few privileged insiders, but the shared vision of thousands and thousands of Yukoners.

In contrast, we have the Government Leader speaking admiringly not too long ago of the kind of vision demonstrated by the Governor of Alaska - another elderly gentleman for whom I have a great deal of affection, but whose political philosophy I do not share. He is a man who, in his short time as Governor, proposed a $13-billion plan for a new pipeline to carry Alaskan natural gas to the world - that is the same gas we thought was coming our way back in 1975, when we put a whole bunch of money into something called the Granger subdivision and then had to sit and wait 15 years for someone to come along to buy the lots. He has another proposal to help the Californians with their drought problem: a $150 billion freshwater pipeline to carry Alaska snow under the Pacific Ocean to Los Angeles. He has another proposal for a global rail system by building a $40 billion rail tunnel under the Bering Straits to Siberia and another one that is a 2,000 mile rail link to the Trans-Siberia railway as well as the tunnel - in fact, it is connected to the tunnel.

I agree that my friend, Governor Hickel, has vision. Many Alaskans call it tunnel vision. I think that vision is a very archaic one. It is appropriate that the Government Leader should talk about the Diefenbaker times, because that is the last time in this country that the government put up $100 million to a publicly owned railroad - CNR - to build a road to a CPR owned mine at Pine Point. That kind of public financing for railways and pipelines simply would not be done in this day and age because the taxpayers would not stand for it.

I really fear that this budget before us is a step backwards; it is a step backwards to the “bad old days” of “good old boy” government.

I said that this is a mean budget, and I meant that; I also think it is a dumb budget, because I think it is a wrong budget for our economy.

Let me deal first with the expenditure side of the budget. I have listened for all of the years that I have been an adult to people of conservative political persuasion talking about how government spends too much and government spending has to be cut. In the last few years, I have listened to stories in this House of the horrible NDP who kept overspending the budget, could not get control of the financing; just spend, spend, spend. Read the old speeches of the Member for Ross River-Southern Lakes, who would have us believe - or used to have us believe - that any territorial government that spent $300 million or $350 million was behaving like a drunken sailor and that anyone who spent $400 million was certifiably insane.

We have heard for the last several years, again and again during the last election campaign, that the proof of what irresponsible people the New Democratic government were was that they spent $2 billion in seven and one-half years.

What do we have before us? We have a budget that proposes to spend $2 billion in half that time: in four years. This comes from the people who used to call us the irresponsible wastrels, the drunken sailors, the certifiably insane. This budget comes from people who used to tell the public, time and time again, that they knew how to control public expenditures; just give them a chance and they would put our fiscal house in order.

Well, what we have here is the fattest, biggest spending budget in Yukon history. Not only in capital terms - as some of those numbers may be inflated, as my colleague from McIntyre says - but in the operating budget. The operating budget that they told people they were going to get under control is bigger than ever. It adds six percent to the forecast expenditures for this year, which we know are already inflated. In fact, the Government Leader has admitted that the expenditures may be inflated to the tune of $15 million.

There are, throughout this budget, expenditure commitments, such as the one made to the Mayor of Dawson to the tune of, we believe, some $5 million, that are not even included in the budget. There are campaign commitments, such as the $20 some million promised to the City of Whitehorse to build a sewer and water system, that are not included in the budget. There are other commitments, such as the building of the third lane in the bridge to Riverdale. I could go on.

The claim is made that this is a balanced budget and that expenditures match revenues. There is some serious doubt about it being a balanced budget. One of the justifications that has been made for having $8.8 million, almost $9 million, in taxes is that the Government Leader, the Minister of Finance, told us that they need that to balance the budget.

Mr. Speaker, if you are spending $483 million, the biggest budget ever, almost half a billion dollars in one year, and you are going to tell the citizens of this territory that you cannot manage to trim that budget any more to bring the revenues and expenditures in balance, then you do not belong in government. If that is your proposition - just to balance the budget - you do not need to bring in taxes to it, all you do is just delay $9 million in expenditures, such as the Member for Kluane said he intends to do in the Department of Renewable Resources - $9 million is less than one and one-half percent of the total budget. These great fiscal managers, these financial conservatives, are telling us that in order to meet the expenditures in the most bloated budget ever, they have to raise taxes.

For most ordinary Yukoners, that seems absurd. If somebody from Old Crow were coming down to Whitehorse to do their grocery shopping, and they were in the Extra Foods store going around with their food basket, and they found that they had $483 worth of groceries when they got to the check-out counter, and found that they were $9 short, what would they do? They would put something back on the shelf - the Member for Vuntut Gwich’in is nodding. They would put something back on the shelf. They would not go to the bank to get a loan. They would not go get it from someone else, their neighbour. They would put something back on the shelf.

One of the most extraordinary things about this budget is the operating part. For all the years that I have been in politics in the Yukon, I have listened to Tories, and most recently the Member for Ross River-Southern Lakes, tell us that we needed less social spending. We needed to cut social spending. We needed to reduce it. It was too high. When we were discussing the health costs or the social assistance costs in previous years in the budget, the Member always said they were too high. So, what has the new Minister responsible for these expenditures done? He has added to the budget.

When we ask what has happened to the interdepartmental committee that was looking into social assistance costs that we commissioned some time before we left office - and it should have reported this some time ago - the answer we get is, “Stay tuned; wait for a report; we have not been able to do anything about those expenditures this year and maybe we will not next year, because we are forecasting to spend several million more, but in the fullness of time,” as the Member for Ross River-Southern Lakes used to say, “we may get around to it.”

Ironically, though, we thought at first this might be a function of the new social conscience that was widely advertised - the social conscience they had just adopted or passed a resolution on just before the last election. But when we look at some detail in the budget, some of the most needy organizations in society, some organizations that are staffed to some extent by volunteers or relatively less well-paid workers - in areas like the Child Development Centre or family violence initiatives - we see their cuts. We see the Child Development Centre grant going down. We see contributions for Safe Places, which is the major part of the family violence initiatives, going down. We see the youth services and community crime prevention going down. Imagine that - crime prevention, which was a major initiative of the Conservatives in my constituency and I think in every constituency in Whitehorse. And what is the financial expression of the commitment to a new interest in crime prevention by the government? It is cut - cut to less than the NDP was spending, yet just a few months ago they were telling us we were not doing enough.

They cut the Women’s Transition Home; they cut Crossroads; they cut child care operating grants and in fact changed the basis of the operating grants, I understand, to the disadvantage of some of the child care centres.

This is a government who said they were going to do more for mining. I found fascinating the president of the Chamber of Mines’ comment that, while this budget did not do anything for mining, they would support it. An example of not doing anything for mining is the fact that they have cut RTAP, a program we initiated. They have cut it. This is the program that does what the Minister of Renewable Resources talked about - getting roads to the new mining properties. Have they expanded it or added money to it? No, they cut it, and they cut it at a time when they have the most bloated budget ever.

They have cut school councils. As the Member for McIntyre Takhini says, the school councils are groups that have given an unbelievable amount of time and energy and thought to the kind of education reforms that we went through over the last several years.

When I look at the capital budget, I do not see the jobs that I expected: the jobs for carpenters, for plumbers, for electricians. In fact there is a lot of, now-you-see-it-now-you-do-not stuff in this budget. In regard to land development, the $20 million, which is supposed to be for Granger in my constituency, was mentioned by my colleague for McIntyre-Takhini. This is interesting because he is right when he says that it has been the experience of Community and Transportation Services that it has never spent its land budget. In no year that I can remember in this House have they ever spent the money that was voted. Consider our present situation. We are now in a recession, a recession very much created by the Members opposite. We are asking ourselves: is this money going to be spent on land development? Everybody wants to see the Granger area developed and expand and many people are looking there for new homes, but the last time we put a lot of money there, which was in anticipation of the pipeline that Governor Hickel now wants to send the other way, we developed the land and then waited 15 years for a market.

Because of the way the policy of cost recovery operates in this government on land development, we had a huge carrying cost for this land. What happened? If I remember correctly, the government had to write it off because the price of the lots would have been so high that no one would have bought them.

We also have, as my colleague from McIntyre-Takhini mentioned, the hospital. No one in their right minds believes that $14 million is going to be spent on the hospital construction project in the next fiscal year; nobody. Therefore, any claim by the government that this $14 million is part of their big capital budget is pretty questionable.

We have as well the question of the $20 million that has been mentioned for land development. It is 100 percent recoverable. It works neatly in the budget. You can put it in one column and put it on the other side. But if you use it for something else, as some people suspect they might, such as the Dawson sewer and water project, you have the shark problem that the Government Leader introduced us to tonight, of the $1.00 being represented in the budget, and then the $5 million that you do not see costing you an arm and a leg underneath. Many of the capital projects that are in this budget, such as the $27 million Alaska Highway project, mentioned by the Member for Kluane, are excellent work. I congratulate the former Minister of Community and Transportation Services, the Hon. Maurice Byblow, who is no longer with us, who negotiated that agreement with the federal government. It is an excellent agreement. And I congratulate my former colleague, the Hon. Joyce Hayden, for having negotiated the hospital agreement.

We will only get jobs from those capital expenditures if they actually happen.

There are lots of capital initiatives in here. I noticed one for $400,000 for computers. That will not create any jobs locally.

Some of the money, though, such as the highways and hospital money, is 100 percent federally funded. I do not know how one can argue, as the Government Leader did, that the highway money we negotiated is a brand-new expenditure and is 100 percent recoverable when it was in our budget, but somehow when it is in his budget, it is a brand new, bold capital initiative that will create many jobs.

The Member for McIntyre-Takhini has raised the question of dependency. There is $31 million more here from the federal government. We do have projects like the hospitals and highways that are 100 percent recoverable. We even have, as the Minister of Economic Development talked about the other day, in the 21st century document, in terms of the railway and pipelines that are in there, where we will only do it if the federal government approves it and pays for it. None of this is about self-sufficiency. It is about increased dependency. We are not even sure now whether or not that document, when it talks about the 21st century, refers to the beginning of the 21st century - in other words, in seven years - or in 107 years, because it is quite clear that most of the megaprojects listed in there are not going to happen.

Let me say something about the taxes here. I do not believe they are necessary. I have had some problems, as the CBC did, with the Government Leader’s arithmetic the other day. He talked about going from 40 percent to 45 percent in terms of income taxes being only a five-percent increase. Of course, it is an 11-percent increase. CBC was quite right to correct him. If one has a socialist calculator, one can figure these out.

That, however, was not the most astonishing thing. This budget statement of the Government Leader claims that the corporate tax increase from 10 percent to 15 percent is a five-percent increase. In fact, that is 50 percent. The small business increase of five percent to six percent is not a one-percent increase; that is a 20-percent increase. The fuel oil tax from 5.2 percent to 7.2 percent is a 38-percent increase. The gasoline tax from 4.2 cents to 6.2 cents is a 47-percent increase. The aviation fuel from .7 cents to 1.1 cents is a 57-percent increase.

The Member for Kluane said there is no increase in the liquor tax. There is an increase in liquor prices of one percent. The reason they did not go to a tax increase for that is because we own the Crown corporation and the taxes are in public control. The tobacco tax is a 256-percent increase, but even this budget does not claim it as a revenue initiative. It does not seem to be able to make up its mind whether it is a revenue or health initiative. The bottom line is that the tax burden for ordinary working families in this territory is going up at least $500, probably closer to $600 or more. That is not minor or small change. That is an awful lot.

The Government Leader said before the election that tax increases would be obscene. I have said since that these increases are pornographic. The Government Leader has said since then that he may not, or he probably will not, or maybe he will not, increase taxes again.

I remember when the Member for Ross River-Southern Lakes, the Member for Kluane and the Member for Riverdale North were on the other side of the House, and we made minor fee increases, minor tobacco tax increases, little liquor tax increases - it was the end of the world. It was an incredible socialist conspiracy. My how the tables have turned.

The point has been made that we have the lowest taxes in Canada. It is funny how they never talked about that when we were on the other side. There is a good reason why we have low taxes and a good reason why we kept taxes low.

I will tell you what it is: it was one of the few competitive advantages this jurisdiction had. When you look at all the other costs of doing business here, whether they are all in the cost of transporting goods here, adding the GST on top of that - at the transportation costs, heating costs, small population and big distances; when you look at all of that, one of the few advantages that we had was a lower tax rate. Those tax rates were consciously held down by our government.

What are the traditional reasons in public finance for raising taxes? There really are only two. One is if you have an extraordinary over-heated economy. If you have full employment, and you are starting to have a serious problem with inflation, governments will traditionally bring in taxes to cool it off and slow things down. That is obviously not the case here as we are driving down the wrong road into a recession.

What is the other reason? You have massive debt and you want to reduce that debt. If we were so unfortunate as to have the several billion dollars that Mr. Vander Zalm and Dale Drown left British Columbia with, we would have a problem. Or if we had the $15 billion that Dale Drown and Grant Devine left Saskatchewan with - a population of less than one million people - then you would be talking about raising taxes. We do not have that problem.

In fact, even though it has been like trying to get blood out of a stone, we finally had the Government Leader admit in the last few days that even this year we are probably going to have a surplus. It is not a big enough surplus for him and that is fine, but we do not have an over-heated economy and we do not have massive debt. We do not need these tax increases.

I want to say something that I believe sure as anything. These tax increases will kill jobs. These taxes will raise the costs of doing business. The increases will add costs to employers and that will make them less able to take on new employees this summer and people to work for them.

These new tax increases will take money out of the pockets of working people, they will have less purchasing power and that in turn will affect the retail sector and the small business sector. The taxes will kill jobs. The tax increases are totally unnecessary and totally wrong at this time. Worst of all, as we go into a recession, they will kill jobs.

The other night, the Government Leader told us that territorial finances were fine until 1991. There were large surpluses, and expenditures were under control, according to him. That is not what they said at the time, of course, but it is what they are saying now. However, we should have raised taxes in 1987 and 1988. Why? Because federal bureaucrats told us to. That was the argument - that we, a democratically elected government of the people of this territory, should have taken orders from federal bureaucrats and raised taxes. Can you imagine any self-respecting government in any democracy anywhere in the western world taking orders from the national bureaucracy to raise taxes? No, this has certainly never happened before now.

We made the case to the federal bureaucrats, and we made it persuasively to the public that, while we had low tax rates - because we had a higher cost of living and people had higher incomes to compensate it - we had a higher tax burden. The federal government kept saying we were not making enough of an effort in taxes, but we proved that the burden was similar to, or higher than that of Canadians right across the country. We believed in that argument. We never heard one word of criticism about that argument from the government when they were in Opposition. Not a word. Did we ever hear them say, when they were over here, that taxes should be raised, we are not paying our share, we are not doing enough to help the poor federal government?

The Government Leader says we have to do it to change the perversity element in the formula which, by the way, was not negotiated until 1989, not 1987 or 1988. It did not come in until 1989, but we should have raised taxes in 1987-88, according to him. I cannot figure out the logic of that.

It says we require taxes to deal with the perversity element. It suggests that, somehow, Yukoners are to blame; they should have their taxes raised, because the federal government imposed this perversity element on us, that the problem is that we are not paying enough taxes.

The problem is not that we are not paying enough taxes; the problem is the perversity element, and the government opposite should have been doing what we did, which is to stand up firmly to the federal government, and say it is the perversity element that is screwed up. It is a rotten, stupid and corrupt measure that does not work; it acts as an economic disincentive here so that, when we open a new mine, they take more money from us. That is idiotic. If the federal government wanted us to develop and become more self-sufficient and diversify our economy, they would take away the perversity element, and we would have an incentive to do it. So would they, because they would also benefit.

The Members opposite talk about self-sufficiency. The worst way to have self-sufficiency is to knuckle under in this perversity debate. Look at what happened to the Yukon economy during the last seven years, when there was another government. The gross domestic product doubled. We added 3,000 jobs. We were not doing badly economically.

They have to make some tough decisions. Every government does; however, the Government Leader, in his budget speech, talks about having a meeting with Mr. Siddon, where he agreed to deal with this perversity element. We do not know the elements of the deal he made with Mr. Siddon, but it sounds suspiciously like a secret deal that disadvantages Yukoners.

I believe the Government Leader may be the first Government Leader in the history of the Yukon who has gone toe-to-toe with the feds, and not only blinked, but folded his cards. Every time the federal government leaned on us, whether it was Michael Wilson, or Mazankowski, and said we had to raise our taxes to deal with the perversity element, the Member for McIntyre-Takhini, or myself, looked him in the eye and said, no, we are not going to screw Yukoners to make the federal government happy.

The truth is slowly coming out. They screwed up, and it is going to cost the people of the Yukon $8.8 million - the average working family of this territory, $2,000 - over the next four years. The masks are off. These are indeed Tories in disguise. All the deification of John Diefenbaker makes sense in this context. The Members opposite are sheep in wolves’ clothing.

Instead of standing up to the federal government, and saying the perversity element was not fair, it acted as a disincentive here, and there is no reason why Yukoners should carry a higher tax burden than other Canadians, they knuckled under - the first time any Government Leader in the history of this territory since responsible government has gone face-to-face with the federal government and collapsed - they wimped out. This is the first time ever, and who pays: the average working family of this territory, with unnecessary tax increases. They could quite easily have balanced this big, big, big budget if they would just trim, trim, trim a little bit, or shelve a couple of things. However, they have used that to justify the Siddon-Ostashek deal, which is $8.8 million in taxes this year, next year, and on until the end of time. The Government Leader says he is not going to raise