Whitehorse, Yukon

Wednesday, March 31, 1993 - 1:30 p.m.

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

Prayers

DAILY ROUTINE

Speaker: We will proceed with the Order Paper.

Aboriginal Languages Day in Canada

Mr. Abel: I would like to acknowledge this day as being Aboriginal Language Day in Canada and I would like to say a few words to the House in my own language, if the Members will give me that privilege. After I do that, I will translate my comments to the House in my second language, which is the English language.

(Address in Vuntut Gwich’in)

Having said that, thank you to the Members in this House, who have given me this privilege to speak in my own language today.

I would like to take this opportunity to acknowledge today Aboriginal Languages Day in Canada. On March 31 for the last five years, aboriginal languages have been recognized as an important part of native peoples’ culture that needs to be preserved. The aboriginal language program has been in place in the Yukon for a long time, for which I thank the Yukon government.

I also would like to ask that the Government of Yukon continue to give support for aboriginal languages services in the Yukon.

I would especially like to thank this House for giving me the opportunity to speak today in my own language, my first language of Vuntut Gwich’in. The Vuntut Gwich’in language is spoken to me by my elders in Old Crow, and to them I am grateful for helping me to understand and preserve my culture. I hope that we can continue to do this for the next 50,000 years or so.

When I am at home in Old Crow, I always make a concentrated effort to speak to my two-year old grandson, Troy, in his own language. At his young age he is picking the language up quickly and easily, and will someday pass on the Vuntut language to his children.

Now I would like to ask that the government make continued efforts toward preserving our languages and to support the Native Language Services in the Yukon.

Mr. Joe: What I want to do is speak straight to Hansard using my own language.

[The following English translation was provided]

It is an honour to speak in my language in this House today. I am proud of my language. It is the language of my parents, and their parents before them. I am talking through them today - their language is my language. To use one’s own language is a way to identify yourself. This is how we know who we are; how we know our own people.

First Nations  people from all over Canada should take pride in their language; they should come together with the rest of the First Nations on this day to celebrate their own language. It is for our children. They must learn how to talk with their elders so that they will learn their ways. This is our culture, our ways.

I would like to thank the previous government for their support of the aboriginal languages program, for getting the interpreters in the communities and for putting our languages into the education system. It is important to have our language and our culture taught in our schools. Schools need to teach both languages. This way they will learn the things they need to know in two ways - one in English and one in their own language. We must never be embarrassed about our language. We must be proud of the language that we have been given.

Mr. Speaker, I want to tell you a little story about the arrival of the first white man to the Yukon. It was at this time that we gave you a name. We called you K’uch’an; it means a different nation all together and different looking people - different eyes, different hair, different colour - good-looking people.

We gave you a good name. You should appreciate that. You should not turn around and call us an Indian who came over from India. We gave you a really good name. Thank you again for letting me speak my language.

Ms. Joe: I would just like to say that I am one of those unfortunate people who never learned to speak my own language, which is the Halq’emeylem language that the people in the larger part of the Fraser Valley speak. Here is just a brief history of why that happened. My grandmother died 18 years ago at the age of 96, and she was the last person, in my family at least, who was able to speak her own language. She was also a victim of the residential school system and therefore was taught that speaking your aboriginal language was not something that you were supposed to do.

My father, who is now 86 years old, could understand the language, but was never permitted to speak it, because of the kinds of things that were passed down from my grandmother. Fortunately, quite a number of years ago, when my grandmother was still alive, there was a linguist who came up from California, learned the language from older people, and it is now being taught again in that area; a lot of younger people are speaking it.

I stand here today and acknowledge Aboriginal Languages Day in Canada. It is my hope that the languages will not die. They say that if we are lucky, there will only be three languages that will remain. I hope, as a result of the efforts across Canada by governments that are working toward reviving languages, that we will be able to speak as many languages 10 years from now as we are able to speak today.

Mr. Penikett: I cannot let this day pass, in noting this event, without giving thanks to my teachers: Dihinjik Trinlay, Nay Sha, Thee Del Tho, Ngl Nah, Hah Jal Nii, Hahbeen, Tahmoh, Lahlil, Yahsan, Zzungee, Gwinis Chees.

Mahsi-cho

Speaker: Introduction of visitors.

INTRODUCTION OF VISITORS

Mr. Harding: I am pleased to rise to ask the Members of the Legislature to help me in welcoming a special guest who is here in the gallery from Faro, Mr. Bob Gault.

Bob is the Mayor of Faro, and he has been heavily involved in the Curragh process we have been going through in the last few months. I wish him welcome.

Speaker: Are there any Returns or Documents for tabling?

TABLING OF RETURNS AND DOCUMENTS

Hon. Mr. Brewster: I have a legislative return to a written question on March 24, from the Member for Faro.

I also have a game farming policy and the proposed regulations.

Speaker: Are there any Reports of Committees?

Petitions.

Introduction of Bills.

Notices of Motion for the Productions of Papers.

Notices of Motion.

Statements by Ministers.

MINISTERIAL STATEMENTS

Curragh Inc. negotiations

Hon. Mr. Devries: I rise today to make a ministerial statement on the issue of Curragh Resources.

As the House knows, the reason for my recent trip to Toronto was to meet with mines Ministers from across Canada to discuss the Whitehorse mining initiative and to attend the Prospectors and Developers Association conference.

I can report progress to this House on issues related to both the initiative and the Prospectors and Developers Association conference at a later date.

On the subject of Curragh Inc., I can report that, while in Toronto, I and the Deputy Minister of Economic Development met with Burns Fry Limited, the company we have hired to negotiate on behalf of the Yukon with Curragh Inc. They provided me with an update on the negotiations.

As this House knows, the company is currently undertaking a major equity issue to raise new operating capital. In order to ensure the success of this issue, they have asked us not to discuss publicly the details of our negotiations. As I think every Member of this House wants the negotiations and the company to succeed, we have, as everyone knows, agreed to honour this request.

However, I want this House and the people of the Yukon to know that some progress has been made in our negotiations; but, as is the case with any negotiations, and especially in this case where we are negotiating the terms and conditions of a $34 million loan guarantee, we still have some distance to go. Negotiations are ongoing and we will continue every effort in pursuing a successful conclusion.

I know the people of Faro are looking forward to having this matter resolved. I know their lives are on hold. I would love to be able to give them and the rest of Yukon an in-depth explanation of the negotiating process but, if we are to be successful, according to the traditions of negotiating and the advice provided to us by Burns Fry, the best way for us to reach an agreement will be at the negotiating table.

Mr. Harding: I rise today to respond to the ministerial statement by the Minister of Economic Development. Certainly, we in the NDP caucus would support the work on the Whitehorse mining initiative that was started largely by the former Minister of Economic Development, Mr. Maurice Byblow. We think that that kind of work is helpful to economic development in the territory.

But I would like to turn quickly to the primary issue that was talked about in the ministerial statement and that is, of course, Curragh Inc., and the discussions between the territorial government and their agent, Burns Fry, and Curragh Inc. regarding the $29 million loan guarantee request and the subsequent offer of a $34 million loan guarantee by the territorial government.

I would like to point out to the Member opposite that the problem that we are hearing is being experienced with regard to the equity offering that Curragh is trying to float is that there has been no positive announcement on the loan guarantee. I am sure that Curragh Inc. would have absolutely no difficulty if a positive announcement would be made on the loan guarantee, because that would create a very positive feeling in the market for investors and that would increase the opportunity and the chances of any equity offering being successful.

I would like to impress upon the government the tremendous urgency of the situation in my community and, I might add, the rest of the Yukon. The situation currently facing Curragh Inc. has an effect on many, many Yukoners, not only the people in Faro or Watson Lake.

There are contractors leaving the site in Faro, because they are afraid. They perceive the offer the government has extended to Curragh to be unachievable, and the contractors are taking their equipment and leaving the site.

The suppliers for Curragh Inc. are accepting only cash, no credit, because they are afraid of the same thing. The suppliers are afraid of a mine closure.

People in my community are hurting. I speak to them every day. There are people who are suffering as they await this long, drawn-out process. They also perceive the government offer to be unmeetable. We do not know what is happening in the negotiations.

People are trying to make a living in Faro. Most of them love living in the Yukon, and would stay here for the rest of their life, as long as they had a reasonable expectation of being able to make a reasonable living. I do not think that is unreasonable.

Yukon Alaska Transport owner/operators are also being told the service of their rigs is no longer required. That is a significant amount of income being lost to this territory.

I plead with the government opposite to cut to the quick in the negotiations with Curragh, get to the bottom line, see where the offer is reasonable and that the conditions can be met by Curragh, and let the chips fall where they may on that basis.

I also plead for a release from this - as far as I am concerned - insane blackout on matters that are so important to all Yukoners, especially in light of the politicizing and the announcement that resulted in the 14 conditions. There are many conditions in that offer that people in the territory do not know can be met by Curragh. It is important that Yukoners know whether those conditions are still on the negotiating table or not. I do not see how that would hurt the negotiation process in any way, shape or form, unless the conditions are unprecedented and unreasonable.

I make those pleas to the government. I hope they are listening, and I hope they will respond.

Mr. Cable: I am pleased to see that what was perceived to be the deadline has been extended; that the door is not closed.

I would also like to suggest to the Government Leader and the Minister that the communication strategy not be completely driven by Burns Fry. There are people who have to make decisions on their lives, on whether they move their children out of Faro or put them into school, and whether or not they should obtain other jobs.

As the issues are taken off the table - and I am sure the issues will be dealt with one at a time - perhaps the people of the Yukon can be advised on the status of those issues so they can make decisions in their personal lives.

Hon. Mr. Devries: I appreciate the comments of the Members opposite, and I am certain that the Members of the Opposition know that my riding is also seriously affected by this situation. I am also under pressure to see a quick outcome to these negotiations.

Again, I stress that I firmly believe that at this point the blackout is in the best interest of Faroites, Watson Lakers and all Yukoners.

Game farming: revised policy and regulation proposals

Hon. Mr. Brewster: I am pleased to table today the Yukon government’s revised policy on game farming and proposals for game farming regulations. These documents will now be distributed to the public and interested groups for comment prior to formal consideration by the Yukon Fish and Wildlife Management Board and the Agriculture Planning and Advisory Committee. After this review process is completed, Cabinet will give final consideration to this matter.

The regulation proposals were based on a review of existing practices, in consultation with the industry and other stakeholders and a review and analysis of regulations in other jurisdictions. This review began last year, with the release of a discussion paper called “Regulating the Yukon game farming industry”.

Under the revised policy, game farming would continue to be managed as an agricultural activity, although game farming regulations would be passed and enforced under the Wildlife Act. The regulation proposals are intended to ensure that development of this industry proceeds in a manner that safeguards public safety and protects our wildlife populations.

The proposals are designed to cover all aspects of game farming, from licensing game farmers to the sale of meat or other animal products.

There are six operating game farms in the Yukon, and all of them are in the Whitehorse area. The game farming policy recognizes that game farming is controversial and may not be supported elsewhere in the Yukon. It therefore requires that new licensing areas be developed only with the support of local residents and with the approval of First Nations, as set out under land claims agreements.

As an interim policy, new game farm operations will not be permitted in areas where there is potential competition with wildlife species for critical habitat.

Until the policy regulations are finalized, the current moratorium on new licences will be maintained, with the possible exception of a new licence to assist us in dealing with our problem bison. The terms of such a licence would require compliance with the draft game farming regulations.

Once finalized, the game farming policy and regulations will help us meet our commitment to the Yukon Conservation Strategy and the Yukon agriculture policy.

I believe that all Yukoners would agree that current game farm operators should be congratulated on their record of responsible management to date and their cooperative participation in the policy review and regulation development process.

Through the efforts of all these people who have contributed to this process, we believe we have developed proposals that will provide the framework necessary to support the industry’s development while protecting our environment and wildlife populations.

We would encourage all Yukoners interested in this industry to obtain the documents and to provide their comments on them. Renewable Resources officials will be available to answer questions at any time.

Thank you.

Mr. Harding: I am pleased today to be able to rise to respond to the ministerial statement made by the Renewable Resources Minister.

I certainly am glad to have the opportunity to speak in response to this somewhat controversial issue of game farming. It has a major impact on the territory. There are a lot of opinions in the debate regarding the merits of game farming. They range from people who are philosophically opposed to ranching and the domestication of our wildlife, to those who are just worried about the potential for escape of domesticated animals and the potential for cross-breeding of the escaped animals with our indigenous wildlife here in the territory.

Some people also have concerns about the potential spread of disease of farmed animals to our precious wildlife resource here in the territory. Incidentally, this has forced other jurisdictions in the country to make certain changes with regard to their direction and their policies on game farming. I am pleased today to see the government make a more firm announcement of exactly what direction they are going to be taking with this industry, so that the people of the Yukon can be consulted and have some input into the direction, and also start to formulate a bit of a discussion around the issue.

The third range of opinion is the opinions of the game farmers, game ranchers, veterinarians and others who have an economic stake in the industry. To them, it provides, substantially, their livelihoods. You cannot overlook that. It is a major factor in this equation. I think those people believe very strongly that it is a viable and safe industry. I think that there is also an important range of opinion in this equation.

I believe that the consultation and the regulations are an important step in the right direction toward coming to some consensus on this controversial issue.

I would strongly urge that the First Nations people of the territory be consulted and given all the information they need in order to make an informed and educated opinion on the issue. They certainly have concerns and I believe that the protection of indigenous wildlife is a major priority of First Nations people in this territory.

We are concerned that the moratorium on the bison issue was not honoured by the government. Bison are only considered domesticated at birth, and all through their life they are inside the realm of being domesticated - that is when they are not considered farmed animals. That is not the case of the bison in the territory; they came from the wilds. We believe the government would have been better to have held off a little and complete the consultative process over the bison issue and the game regulations in general.

I think the taxpayers would have been willing to bear the burden of the animals just a little while longer to allow this process to unfold.

The NDP applauds all groups and all citizens who have participated, and will participate, in this process; we look forward to the outcome.

Mr. Cable: I have had a chance to talk with game growers, First Nations people, the Fish and Game Association people and environmentalists. While there are some absolutist views in relation to game farming and game ranching, I think there are a large number of people who do not hold absolutist views. These views may be reconcilable, but I think the first thing that is necessary is for there to be some common information base on the issue of disease transmission. I would hope that the Minister, before he gets too far down the road, would encourage some sort of consensus to be built around the issue of disease transmission so we do not get into an argument such as, “Our experts are more important and their opinions are more important that your experts”.

Hon. Mr. Brewster: I would like to thank the Member for Faro for his comments. I agree with a great number of them. There are problems on both sides of the fence, although I do realize that he has not had a chance to read this yet.

Game ranching is a different subject and I am not prepared to get into it at this time, although I could point out that technically the former government got into game ranching when they turned buffalo and elk loose. I guess when the government is game ranching, it is a little different from other people game ranching. Surprisingly, some First Nations are interested, some are not. This is why we had the public review. I expect that they will all be there and I hope that they all bring their problems up and that we find a satisfactory resolution. I agree with the Member for Riverside. In fact, he and I sat at the meeting and he knows how volatile this situation is.

Some Hon. Members:   (Inaudible)

Hon. Mr. Brewster: The previous government was notified of that when things were a little hot and heavy and we really do not have a problem with that. We try to do what we think is right for most people.

The only other thing I would say is that the remarks about my problem buffalo - and I have almost got them all named; I have been at this so long with them - is that the only time they were not behind a fence was the few years they ran here before we started locking them up. They came from Elk Island, which is behind a fence, and they were completely looked after. We will not get into an argument here, but this was an extinct species - it was protected immediately and locked away from other animals because it is an endangered species.

Speaker: This, then, brings us to the Question Period.

QUESTION PERIOD

Question re: Curragh Inc, finanancial assistance

Mr. Harding: I am quite anxious today, after hearing that ministerial statement. I have a question for the Minister of Economic Development.

The community of Faro, which is the riding I represent, is incredibly anxious to hear what is happening with the government’s negotiations with Curragh. People in my community are extremely worried that the government has placed impossible conditions on Curragh and that the deal is impossible to do. Today we heard the ministerial statement from the Minister, which did not tell us much. Could the Minister of Economic Development provide this House with an update and an explanation as to why the progress on negotiations cannot be relayed to the public and to the Members of this House?

Hon. Mr. Devries: I would like to thank the Member for Faro for his question. As the Member for Faro very well knows, once we start discussing the content of the negotiations it could create problems for Curragh Inc. in selling their equity issue. This is the reason they asked for the blackout. They want to be given a reasonable chance to sell the equity issue and this is what they have asked for. It is in the best interest of everyone at this point not to try and get into the nitty gritties of negotiations.

Mr. Harding: The only damaging impact that would affect the equity issue would be if the results of the negotiations were very negative. I would like to ask the Minister: when are the people in Faro and the rest of the territory going to know what the outcome of the negotiations will be? What is the time line for a conclusion to this long and painful process?

Hon. Mr. Devries: For the last few weeks, it seems that the Member for Faro has been complaining about the fact that there was a time line; now he wants us to establish a time line. It cannot be both ways. We are doing our best. We want to see a quick resolution to this problem, and that is all I can say.

Mr. Harding: I have never complained about a time line, but I have complained about the time line that the government has been using in these negotiations. It has been incredibly excessive and tough on my community.

The condition that has been described as the first charge on security has been determined by many experts within the mining industry to be unprecedented - except, perhaps, for the Minister of Economic Development’s dealing with the cattle ranch in Penticton.

Can the Minister please tell this House what progress has been made with the banks and the note holders on these negotiations?

Hon. Mr. Devries: I am not prepared to comment on that. I have agreed to a blackout of any comments on the negotiations, and I will stand by that agreement.

Question re: Curragh Inc., financial assistance

Mr. Harding: How can the government - when they went to such great pains to publicize, politicize, take out full-page ads and go on radio phone-in shows with regard to the conditions they set - now say that they are not prepared to talk about these important conditions, which affect all Yukoners, when the government has gone to great lengths to publicize them? Also, why do they obey a request from Curragh not to talk about the conditions when it is not in the best interests of all Yukoners?

Hon. Mr. Devries: I think the Member for Riverside hit the nail on the head, and that is the fact that negotiations are proceeding. That means there is some progress. Basically, the one established deadline has passed. Since negotiations are ongoing, obviously there is some progress. That is all that I can say.

Mr. Harding: I would like to ask the Minister of Economic Development a very serious question. Many people have reported to me that the Minister of Economic Development is somewhat of a comedian. I have been told the Minister has been telling an insulting joke, in Watson Lake, about my community. The joke is that the best way to raise the Yukon’s IQ 30 percent is to shut Faro down. Can the Minister confirm or deny if this is true?

Hon. Mr. Devries: I have heard that joke from other sources.

Mr. Harding: He will not deny it, so I can assume he has been the one spreading it.

Is the 1993-94 budget based on the assumption that the Faro and Watson Lake mines are open, operating and contributing to the territorial economy?

Hon. Mr. Devries: Yes, that is the case.

Question re: Child Care Act regulations

Mr. Cable: The current Child Care Act regulations were under review in the fall of 1992 to remedy a number of flaws. Is it the intention of the Minister for Health and Social Services to have this process completed in the near future?

Hon. Mr. Phelps: The Member is quite right. The regulations are still under review, and I am not exactly sure when that review will be completed.

Mr. Cable: Can the Minister give his assurance that all stakeholders will be consulted prior to the regulations being amended?

Hon. Mr. Phelps: That is our intention.

Mr. Cable: The Yukon Child Care Board is perhaps the most important group to be involved in child care regulations, yet I am advised that it is not functioning because there are four vacant positions on the board. Can the Minister say when he will make the necessary appointments to the board and will he ensure that these positions are filled prior to the establishment of the new regulations?

Hon. Mr. Phelps: Names have been put forward to Cabinet with respect to filling those vacancies, and the board will be consulted in the review with regard to the regulations.

Question re: Forestry transfer

Ms. Joe: I am following up on a question from yesterday that was asked by the Member for Riverside to the Minister responsible for Renewable Resources.

Yesterday, the Minister agreed with the Member for Riverside that an agreement has been signed by the negotiators on the transfer of forestry from the federal government to the Yukon. On the radio this morning, the Mayor of Watson Lake said they had, in his words, an indication that they will relocate some of his staff there.

Can the Minister tell us if he has a relocation agreement with the Mayor of Watson Lake? If he has, how many person years are we looking at?

Hon. Mr. Brewster: We not only do not have one, but I have never talked to the mayor about this subject.

Ms. Joe: Therefore, the mayor had no indication from this government that they were going to do any relocation.

Since negotiations have been going on regarding the forestry transfer, can the Minister tell us if the Council for Yukon Indians was involved in the negotiations?

Hon. Mr. Brewster: They were not involved. I wrote two letters to them requesting that they be involved, but they never answered either letter, nor have they returned my phone calls.

Ms. Joe: With respect to negotiations with the Mayor of Watson Lake with regard to any relocation of person years, if that should occur as a result of a transfer, whenever it does take place, would the Minister ensure that the First Nations group in that area will be involved in the relocation of those jobs?

Hon. Mr. Brewster: Yes, I cannot only assure that, but I am also trying desperately to get the Council for Yukon Indians to talk with me about this. I would like to sit down and talk and see what our differences are and see if we cannot get together on them. I am very sincere about this. I have done everything I could, including, when they were here on Monday, asking them for an appointment. They are busy, and I understand that. I am slightly busy, and we just did not get around to it. There have been two letters, and I am doing my best to get everybody involved. I would hope that they will come and talk with us now, as we go from here to try and finalize this agreement.

Question re: Government layoffs

Ms. Moorcroft: On a local open-line show this morning, the Government Leader stated, “We cannot reduce the size of government without massive layoffs.” Why has the Government Leader been lulling the government workers into a false sense of security about the future of their jobs, when he is really intending to conduct massive layoffs?

Hon. Mr. Ostashek: I think the statements are being taken a little bit out of context. I have said, time and time again that, if we were going to reduce the size of government immediately, it would mean layoffs. We have said that we are going to reduce the size of government by attrition. It seems the Members opposite have trouble understanding that. I have said this time and time again in this House.

Ms. Moorcroft: On the open-line show this morning, I heard the Government Leader talking about layoffs. Working people in the Yukon want to know if their jobs are secure, so they can pay their mortgages and feed their families. Why cannot the Government Leader be clear about the Yukon Party’s real agenda?

Hon. Mr. Ostashek: If the Member opposite will assure me that she will vote for the budget, so that we have the money to do it, I can assure her there will be no layoffs.

Ms. Moorcroft: The Government Leader cannot have it both ways - either he is committed to maintaining current levels of employment, or he is in favour of massive layoffs in the public service. Again, I ask, is he going to further contribute to a growing unemployment rate in the Yukon by massive layoffs in the public sector?

Hon. Mr. Ostashek: Again, I have no problem saying this again: we have made a commitment to downsize government. We have made no secret of that. We have also made a commitment that it will be accomplished by attrition and that there will not be massive layoffs in the civil service.

Question re: Curragh Inc., financial asistance

Mr. Penikett: I have a question for the Government Leader about the Curragh negotiations, without intruding on the blackout.

I wonder if I could ask the Government Leader if he would admit now that making the principal condition of the Curragh loan guarantee negotiations non-negotiable was a mistake.

Hon. Mr. Ostashek: I do not believe we made a statement that the conditions were non-negotiable. There are certain conditions that are non-negotiable. At no point have I ever said that all 14 conditions were not negotiable.

Mr. Penikett: It is the first condition, the most important condition and the one the Government Leader is quoted in the Watson Lake newspaper as saying is non-negotiable.

Given that public negotiations began with a YTG press release on the 14 conditions, which have now been followed conveniently with a blackout, would the Government Leader not agree that having a blackout now, after beginning the negotiations in public, heightens the anxiety of the interested people in Watson Lake and Faro?

Hon. Mr. Ostashek: I would say to the Member opposite that the public negotiations did not start with the territorial government releasing the terms and conditions to the public. They started long before that with an intense public lobby by the proponents of Curragh Inc. to put tremendous political pressure on this government to abide by their wishes.

I ask the Member opposite: does he believe that we should give Curragh a $34 million loan, unsecured?

Mr. Penikett: Nobody anywhere that I know of has suggested that Curragh should be given a $34 million loan guarantee, unsecured. However, we do believe that negotiations should have begun in December and January and not March - which is when they did.

Let me ask the Government Leader this: given what is at stake for our whole economy here, would he now concede that it was a major mistake to carry out negotiations in Toronto between two Toronto companies dealing with the fate of the Yukon economy, without a single Yukoner at the negotiating table?

Hon. Mr. Ostashek: Before answering the Member’s question, I would like to say that negotiations should not have started in December, 1992, they should have started in December, 1991, when that Member over there knew Curragh Inc. was in trouble and could not survive with a $5 million loan.

No, I do not think that it is a mistake to be negotiating in Toronto rather than in Whitehorse.

Question re: Curragh Inc., financial assistance

Mr. Penikett: Could the Government Leader explain to the House how negotiations for a $34 million loan guarantee should have begun in December 1991, when, to my knowledge, Curragh did not even ask for a loan guarantee for $34 million from this government until at least a year later?

Hon. Mr. Ostashek: It is my understanding that Curragh came to this government, hat in hand, in December 1991, which resulted in negotiations between the Leader of the Official Opposition, the federal government and Curragh Inc. The Leader of the Official Opposition is on record that the Yukon territorial government could not, by itself, afford to give this type of a loan to Curragh Inc. That is when the problem came to light and was not dealt with responsibly by the Members opposite.

Mr. Penikett: After dithering with this matter for several months, it is not only true that we cannot afford to make this loan guarantee, but it is also now true that we cannot afford not to.

Given that the company involved came to both the federal government and the Yukon government last year for a loan guarantee, but asked the Yukon government only for a minor share of the total loan guarantee, and the federal government was continually at the negotiating table, at least until the Westray disaster, by which time there was already a $5 million loan guarantee resolution, a legal instrument before this House, based on what information does the Government Leader believe that Curragh ever asked this government for a $34 million loan guarantee prior to the Westray disaster?

Hon. Mr. Ostashek: The Member opposite knows full well - and I will refresh his memory, if he does not remember - that negotiations were ongoing during the winter of 1991 with this government, and the federal government, for a portion of it, just the same as they were this last winter, from 1992 to March of 1993. The federal government was involved in it until the Burns Fry report came out.

Mr. Penikett: It is also a matter of record that, unlike the present government, the former government developed a negotiating mandate to deal with Curragh within a very short time after it was aware of the problem.

Again, since the fate of the Yukon economy may depend on this, does the Government Leader not agree that having the first and most important of his 14 conditions non-negotiable, as a matter of his stated policy, makes it extremely difficult, if not impossible, for third parties - namely Burns Fry, a group that, as far as I know, includes no Yukoners - to negotiate effectively on our behalf? Does he not agree with that?

Hon. Mr. Ostashek: With respect to the Member’s preamble, I believe it was irresponsible for the Member opposite to advance Curragh $5 million and let the federal government off the hook. That is what they did.

I did not vote for it; I was not in this House.

I do not think the terms and conditions that have been put on are irresponsible, and I am sure this can be resolved. We made two specific conditions: that we have security for the loan, and Curragh be able to raise some equity on their own, and they are trying very diligently to do that.

Question re: Education review

Mrs. Firth: I have a question for the Minister of Education.

On February 16, I wrote a letter to the Minister asking for details of the education review he had announced five days earlier. One month later I received a letter telling me he would soon be presenting a ministerial statement to the House, yet we have had no such statement.

It is interesting; I have just received, from an anonymous source, a document entitled Education Review, Focus Proposal Mandate. I would like to ask the Minister why he has kept this information from me and other Members of the Opposition?

Hon. Mr. Phillips: I will ask my officials to deliver the document that the Member already has, to her, as soon as possible. I apologize to the Member for not sending her the document at the same time the document was sent to the stakeholders. I will deliver that document forthwith; it will be delivered to her office today.

Mrs. Firth: I guess the Minister has said that the stakeholders have all received this document.

I would like to ask the Minister some specific questions about the document, which asks for a full task force review on education to be done at a cost of $40,000 and to take until early 1994 to complete. Is this the direction that the Minister has indicated publicly that he is taking, or has he indicated publicly that it was going to be a minor review?

Hon. Mr. Phillips: I do not know what document the Member is talking about. I do not recall, when the document was sent to the stakeholders, that there was a $40,000 figure contained in the document.

Mrs. Firth: The figure is in the Minister’s budget - $40,000 - there will be another apology coming up.

I would like to ask the Minister this question very carefully, because I think there is general support for the concept of having the impact of the new Education Act upon the quality of education examined. What the Minister is asking for is a complete task force, to take over a year, at a cost of $40,000.

Is that impression not different than the public impression he gave people about a very small review that was to take place?

Hon. Mr. Phillips: No, not at all.

To answer the Member’s first question: when I get into the budget debate on education, there is a misprint in that line item. I believe that line item should read “school councils” instead of “education review”. The education review is involved in other areas of the budget. It is a misprint in the budget. I have this in my briefing notes. The $40,000 is not an expenditure for that line item.

The review is simply that: a review of the education system. I gave the review committee a time line of one year, because there was some concern expressed by the stakeholders about how long the review would take. Many of the stakeholders felt the review could not take place over the summer because many people were away, like teachers and parents. The outcome was that much of the work would be done this fall, with a report coming out sometime in the spring of 1994.

Question re: Government entertainment

Mr. McDonald: Much as I would like to continue on with this discussion, I would like to direct a question to the Government Leader.

The Yukon Party government has been entertaining a lot recently when wanting to influence select groups of Whitehorse residents about the benefits of such things as the Yukon conditions on the Curragh loan and the main estimates budget for this coming year. Given that the government has been inviting select groups to be entertained and briefed on the government’s version of political events, can the Government Leader indicate what the government’s entertainment policy is under these circumstances?

Hon. Mr. Ostashek: I do not call this entertainment. I call it very serious business. We are briefing different people within the communities as to what the government is doing. That is part of being an open, accountable government.

Mr. McDonald: In some people’s minds, horror movies are also considered entertainment, and I would class these events in the same category.

How many meetings have been held, and who has been invited to these meetings, over the course of the last month? Would the Minister be prepared to provide that information?

Hon. Mr. Ostashek: A lot of members of the public call this Legislature entertainment also, in that light, but I have no problem getting that information for the Member opposite.

Mr. McDonald: I would agree that, at times, the entertainment value of the Legislature is also like a horror movie.

Can the Minister also indicate to us whether or not the government has rented hotel space in town to provide this information service and what the cost of these briefings has been to the taxpayer?

Hon. Mr. Ostashek: Yes. I will have no problem at all in getting that information for the Member opposite.

Question re: Yukon Alaska Transport

Mr. Cable: I have been approached, as I believe the Minister has, by people who own trucks under contract with Yukon Alaska Transport, an American corporation. Seven of these lessee owners have recently been given rather abrupt notices of termination of their contracts. As I understand it, these lessee owners own the tractors that pull the Curragh trailers and concentrate pots, and many of these people have substantial investments in their tractors and have homes in this city, but they are being left high and dry. Can the Minister of Community and Transportation Services advise the House as to the status of what he is doing on their behalf?

Hon. Mr. Fisher: I have written a letter to Lynden Transport expressing my dismay at Lynden’s actions after being led to believe there would be a continuation of lease operators on the Curragh haul. I have made it very clear that this is a breach of a verbal commitment that was made to me back in January that the lease operators would remain on the Curragh haul.

Mr. Cable: The trailers and pots are owned by Curragh, as I understand it. They have a contract with Yukon Alaska Transport, which I gather is a subsidiary of Lynden Transport. Would the Minister undertake to contact Curragh and have them put some pressure on Lynden Transport, with a view to maintaining those contracts and not abruptly terminating the arrangement with these local people?

Hon. Mr. Fisher: The letter going to Lynden Transport is carboned to Curragh. I will go along with the Member opposite’s suggestion and contact Curragh directly and have them also put some pressure on Lynden Transport.

Question re: Aishihik Lake, possible ecological damage

Mr. McDonald: I have a question for the Minister responsible for the environment. During the last election campaign, the Yukon Party made a promise to stop, and I quote, “Stop the environmental devastation of Aishihik Lake.” The Yukon Energy Corporation now says they want to lower the level of the lake by eight feet next spring. That is only one foot above the minimum allowed. Does the Minister of Renewable Resources think this will cause environmental devastation?

Hon. Mr. Brewster: There are several committees studying this now and I am certainly not the great expert. I certainly think that if they take that much water, there will be problems. The committees that are looking at this will make the decision on that.

Mr. McDonald: This is the first time we have heard about committees deciding whether or not the reduction of water levels at Aishihik Lake will cause any environmental devastation. The Yukon Public Utilities Board has agreed to a reduction in the water flow over Otter Falls. Given the Member’s previous statements regarding the protection of that historic landmark, what will the Minister responsible for the environment do about this particular situation?

Hon. Mr. Brewster: This is another project that involves three or four departments and we will be working together to try to come up with the best solution.

Mr. McDonald: The tone of the Member’s response is nothing like what we heard only a year or two ago, when we heard expressions of tremendous outrage and anger about the lowering of the water levels at Aishihik Lake and the water flows over Otter Falls. We were given to believe that, if we had suggested that a committee study this problem the last time the questions were put by the Members opposite, it would have been the cause of some ridicule.

As a final supplementary, will the government encourage the Yukon Council on the Economy and the Environment to develop a consensus recommendation about the use of Aishihik Lake and the need to protect the environment of the area?

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

Question re: Carcross Road dump site

Ms. Moorcroft: My question is regarding the Mile 9 dump on the Carcross Road. The Minister of Community and Transportation Services has received representations from the hamlet council regarding the establishment of a transfer station to replace the dump. Can the Minister indicate how the government is assessing this request and when he believes a decision will be made on this matter?

Hon. Mr. Fisher: The transfer station in place of the landfill dump at Mile 9 is being reviewed by the department at this point in time. I hope that we would have some sort of a positive response within the next few weeks.

Ms. Moorcroft: Does the Minister support, as a policy, the concept embraced by the local residents that establishing transfer stations is better than new or bigger trench and burn dumps, and that we should encourage conservation or recycling of resources?

Hon. Mr. Fisher: I certainly agree with the concept. However, we have to look at a reception area for the refuse. Until we address that, I am not sure that we can deal with just transfer stations.

Ms. Moorcroft: Because the Mount Lorne residents, as well as residents in other parts of the territory, do not want PCBs and other toxic wastes dumped at the Mile 9 dump or other local dumps, because there is no proper facility, can the Minister assure the House he will be making an early decision on a safe and secure storage site and facility for hazardous wastes for all Yukoners?

Hon. Mr. Fisher: Yes.

Question re: Yukon Alaska Transport

Mrs. Firth: I want to follow up on a question that was raised regarding the lease operators who have just received their layoff notices and termination of leases.

Could the Minister of Community and Transportation Services tell us exactly what he meant by verbal commitment? What was it, and who did he receive it from?

Hon. Mr. Fisher: I could not remember the gentleman’s name from Lynden, so I was just looking at a card in my pocket. It was Jim Jansen from Lynden who gave me the verbal commitment.

Mrs. Firth: I asked him what the comittment was and now I am having to lose a supplementary because of it. What was the commitment?

Hon. Mr. Fisher: I asked for confirmation from Yukon Alaska that they maintain a minimum of the 10 lease operators who are currently on the haul. Mr. Jansen said that he saw no problem with maintaining those 10 lease operators.

Mrs. Firth: Is the Minister aware that it was part of the original agreement that they were to maintain 50 percent Canadian content and that this is the last remaining Canadian content in that particular arrangement?

Hon. Mr. Fisher: I was also under that impression when I became Minister of Community and Transportation Services; however, I can find no record of that being in any written agreement - that in fact there be 50 percent Canadian operators. I was under that same impression and I have had the department look at previous agreements. So far we have not come up with a written agreement.

Question re: Yukon Alaska Transport layoffs

Mrs. Firth: I will follow up, if no one else has any questions. I would like to ask the Minister in regard to this matter what he is going to do regarding the Canadians losing the remaining portion of the contract. If the verbal commitment was made, is he going to challenge the individual who made that commitment and ask why they have chosen to remove the last seven Canadian operators?

Hon. Mr. Fisher: As I indicated to the Member for Riverside, I have written a letter to Lynden and expressed my dismay with their move. I do not know if we are in any position to insist, or have any legal means to force Curragh Yukon Alaska to reinstate the lease operators.

Mrs. Firth: I guess I have to ask the Minister then why he was prepared to accept only a verbal commitment on behalf of these people and these jobs. Why did he not do the responsible thing and get something that was more binding so these people and their jobs could more protected?

Hon. Mr. Fisher: Actually, I have asked the department to look at including that particular point in the bulk-haul agreement we have with Yukon Alaska, and they are exploring that possibility at this point.

Mrs. Firth: What happens to these individuals and their families and their mortgage payments and their truck payments in the interim?

Hon. Mr. Fisher: As I said before, we have no legal means of forcing Yukon Alaska to take these people back. There have been some moves by Yukon Alaska to try and get them on another truck haul - or some of them at least. I believe three of them are remaining until something like the early part of April.

Question re: Yukon Alaska Transport layoffs

Mr. Harding: I would like to follow up on this questioning about the owner/operators. The Minister is giving confusing messages to the Legislature; on the one hand he is saying that a verbal commitment was given to him and that, in and of itself, forms a contract. Could the Minister tell us why there is no ability to mount any kind of legal challenge on behalf of these Canadian owner/operators who are now going to be in very serious financial trouble?

Hon. Mr. Fisher: I am not able to comment on whether that verbal commitment given to me is actually legally binding.

Mr. Harding: I am not asking the Minister for comments. I am asking the Minister for action on this issue, and there is a big difference. The Minister has stated to the Legislature that he has a verbal commitment. Will the Minister then at least commit to investigate the potential for formulating some kind of a challenge to ensure that these operators, who are in financial trouble, get their rigs back on the road and back to work?

Hon. Mr. Fisher: Certainly I can give that commitment.

Mr. Harding: I am glad the Minister has made that commitment and that he will undertake to try and mount some kind of a challenge to this policy that has put these people into tough financial straits. Could the Minister give me a commitment as to the time when he will undertake to do this?

Hon. Mr. Fisher: As I have stated twice before, I have written a letter to them and I said I would also check into what legal means we have of forcing Yukon Alaska into putting these people back on. Until I get some information back, I cannot give a firm date as to when I will be able to give an answer.

Speaker: The time for Question Period has now elapsed.

We will proceed now with Orders of the Day.

ORDERS OF THE DAY

Speaker: Opposition and Private Members’ Business; Motions Other Than Government Motions.

OPPOSITION PRIVATE MEMBERS’ BUSINESS

MOTIONS OTHER THAN GOVERNMENT MOTIONS

Clerk: Motion No. 32, standing in the name of the Hon. Mr. Penikett.

Motion No. 32

Speaker: It has been moved by the Leader of the Official Opposition

THAT it is the opinion of this House that the tax increases contained in the 1993-94 budget will kill jobs.

Mr. Penikett: I welcome the opportunity to begin the debate today on this proposition. Since during the robust and entertaining intervention of the Member for Ross River-Southern Lakes yesterday, we were challenged to make the case that would be supported by any first-year economics student - that tax increases kill jobs.

I know that Members opposite have recently come under the malignant influence of the British Columbia Social Credit Party, who have different economic theories. I never can remember if it is A + B = something else or if it is just A = B. The Clerk will advise me later if I need to speak a second time on that particular exotic economic theory, attributed to a gentleman by the name of Major Douglas.

The proposition before us and the reason for this motion is that we think that the Yukon economy is in very serious trouble. We think that the budget presented by the Members opposite is entirely the wrong remedy. Indeed, the worst prescription of all for what ails us is a tax increase.

Let me just briefly sketch the economic environment for Members in this House. Let us begin with the situation of the largest private sector employer in the territory: Curragh Inc.

This company is in serious trouble; no one disputes that issue. Most of us here in this House agree that the economics of the ore bodies in that company’s control - the lead-zinc properties at Faro and Watson Lake - have considerable potential, but through no fault of the people in the Yukon, the company has financial problems.

It is a matter of record that last year the former government loaned Curragh $5 million, which was matched by another $5 million from Curragh, in order to start the stripping program on the Grum deposit, which was designed to remove the overburden from a new ore body, so that the company could get at that ore, maintain their operations, have a flow of cash that would enable them to maintain employment and economic activity in this territory’s mining sector, transportation sector, service sector and - not the least important reason - to continue to provide this territory with important tax revenue.

On a number of occasions, the Government Leader has misinformed this House on certain facts in respect to this matter, particularly in relation to the activities of the former government. I am going to take a moment to correct the record, because I think it is important to do so.

The Government Leader has alleged that Curragh Inc. came to the former government a year ago and asked for a $34 million loan or a loan guarantee. I am here to say for the record, and I will swear it, and I will state on my word: no such thing occurred.

Curragh Inc. went to the federal government for a $34 million loan guarantee, asked us to help - initially, on the proposition that we might make the same kind of sharing of responsibility - in the way that occurred when we acted to help open the mine in the first place; in other words, an 85/15 percent sharing of cost.

Early discussions with the federal government indicated that they prefer a sharing on the kind of basis that we had under the recent Economic Development Agreements - in other words, 70/30 - and discussions, at least at the officials level, proceeded on that point.

It is a matter of fact that while the federal government was unenthusiastic, especially since free trade, when this kind of support could be deemed a subsidy by competitors, they were, nonetheless, talking to Curragh. We moved to match Curragh’s $5 million, by way of a loan in this House. At that time it seemed agreed by both sides that this was a wise course, in order to prevent an ore gap; in other words, a long shut-down. Both sides of the House seemed to agree at the time; we are on record in this House as saying that that was necessary. We all agreed it might not be sufficient, but we all agreed it was necessary to begin removing the overburden and get at the ore in order to keep the mine working and keep the Yukon economy going.

It is a matter or record that we had made that decision and brought that legislation to this House. It was being debated and supported on both sides of the House, on the assumption that discussions were continuing with the federal government. While they had not concluded, they were continuing. It is also a matter of fact that once the Westray disaster happened, Curragh was essentially an unwelcome visitor in Ottawa. Nobody wanted to have much to do with them.

That only became finally apparent to Curragh, from conversations I have had, last December. It was obvious to many other people, but I think, from the conversations that I had with the officials of the company, they still believed there was some hope of federal action late last fall and early this winter.

My reason for mentioning this is that I want to correct the record in terms of the assertions made by the Government Leader, but also to point out how ridiculous the position is that he presented to the House today, namely that the Yukon government should have done nothing and that we let the feds off the hook. That was the proposition that he made today; not the proposition, I hasten to add, made by his party when they were the Opposition. We are used to this kind of contradiction.

He made the proposition today that we should have not done anything; we should not have gotten the stripping program started. What we should have done was to keep negotiating with the feds.

It is an interesting argument. It would have been an interesting argument if it had been made last May and June. This is an argument that is made now, after the Westray disaster, when we know for a certain fact that the federal government is not prepared to do anything. He is arguing that knowing what we know now - that the federal government was prepared to do nothing, especially since Westray - we too should have done nothing. What would have been the result of that? The result of that would have been very much like the situation now. Curragh would have been on the ropes. There would be hundreds and hundreds of people in a state of high anxiety about their jobs, their homes, their children’s future and their prospects for a living and a life. Nothing would have happened at the Grum ore body. Nothing would have been stripped. No overburden would have been removed at all. The mine may well have shut permanently by now, and what would the Government Leader, the leader of the Yukon Party, be saying? You have guessed it. He would be doing what the Member for Faro calls the blame game.

He would be saying it was the NDP’s fault, and that is a constant theme of the Members opposite. Whatever we would have done, the results are our fault and even when we did what they recommended, what they agreed to, it was a mistake and the consequences were our fault.

Let us look at the Yukon economy. Curragh Inc. has been in a state of absolute crisis for several months. The Government of Yukon did not start negotiating in earnest with this company until March, even though they knew about the problem, knew how serious the problem was and how urgent it was back in December.

Taga Ku is dead. The biggest aboriginal enterprise ever started in Canada was slain by the hands of the Members opposite. Garrotted. Snuffed. Crushed. Destroyed in the most cavalier manner - after, I am told, the impression being created, in meetings with the Members opposite, that the government was all in favour of the project; but the chop did not come until, ironically, shortly after the private financing was in place and the project was ready to proceed. Only then did the government opposite cut them off.

Since this government has come into office, we have heard nothing but gloom and doom, pessimism, despair and totally preposterous assertions that the territorial government was broke.

One of my constituents said that the Government Leader reminded him of a man with a big, new mansion and a brand-new Cadillac, and some homeless person stopped him in the street and asked him for a dollar for something to eat; the Government Leader opened his wallet and said, “Sorry, I’m broke. I’ve got nothing. I can’t afford anything.”

That is a new definition of “broke”. It is the kind of broke that we think many Conservatives aspire to because, even though they may not have a deficit, there is a strong sense everywhere in the country that Tories particularly yearn for a deficit so that they can have an excuse not to do some of the things that need doing.

Adding to the depressed state of the public mood around here have, of course, been Mr. Miller’s musings about how we were all just wastrels and welfare bums and how we should be contributing more from our pocketbooks to the running of government and how we should be contemplating big increases in things like fuel taxes and even considering sales taxes - something to which I know for a certain fact the vast majority of Yukoners are opposed.

What do we have now? We have a situation where the territory is clearly sliding inexorably into a recession.

We now have a 14-plus percentage point unemployment rate, which is higher than last year’s. Everywhere in this territory, we have deep anxiety, great frustration and considerable nervousness about what is going to happen to us and the economy.

A condition like that is not one that cries out for taxes as a response. As I said the other day, in classic theories of public finance, there are two good reasons why a government will make tax increases, especially a half-dozen tax increases all at once, such as this government has done. The first is to cool off an overheated economy, and there have been places in the world, in the last couple of decades, where one can observe that there was full employment, factories operating at near 100-percent capacity, people who had previously been marginally attached to the workforce being drawn into jobs, sometimes for which they were not well qualified and sometimes there was runaway inflation.

It is quite appropriate, in those circumstances, for a government to bring in temporary tax measures as a means of cooling off the economy. One of the problems of tax measures is that they are almost never temporary. In fact, the income tax in Canada was introduced during the First World War as a temporary measure. As far as I know, we still have it, and I do not think there is much likelihood of it going away.

The second reason for bringing in big tax increases would be if the jurisdiction had a big debt. In his speeches, the Government Leader has made selective reference to the experience of other jurisdictions. There is no doubt, if you were Premier Rae of Ontario, coming into office with something like an $8-billion deficit, and a recession, on the heels of free trade, which cost Ontario something like 400,000 manufacturing jobs, you would have to do something about your revenues if you were going to maintain basic services - not frills - basic services such as health, education and transportation; or if you were inheriting the administration of British Columbia, after the beknighted leadership of Premier Vander Zalm, who was a great promoter of that province, but left it billions of dollars in debt.

Worse, if he were poor Roy Romanow coming to power in Saskatchewan, he would discover that the previous Conservative premier - a man whom I sat across from at conference tables and heard give fiscal-conservative speeches over and over again - had left Saskatchewan $15 billion in debt.

It so happens that the bond rating agencies in New York did not do anything to Mr. Devine but, as soon as Mr. Romanow took over and had to deal with Mr. Devine’s debt, they lowered the credit rating of the province. That is a funny thing.

The new premier then found himself in a position where he could not even borrow enough to close the gap between their expenditures and their revenues, even if he wanted to. He was absolutely forced to raise taxes, which was no choice.

What is the situation in the Yukon? Do we have an accumulated deficit? No. If you look at the cute, little budget book - I do not have one right in front of me, but I am referring to the tiny, little one, the pricey one. There may be one on the Clerk’s table - there are some very interesting communications arts demonstrated in this one. In the small print on page 3, where it talks about Yukon government accumulated surplus/deficit. Even though we do not know what the position will be for 1992-93 yet, they have little bars showing a deficit in 1993-94. In tiny, tiny print, which my grandmother could never read, it says, 1985-1992 are actuals from public accounts; 1993 and 1994 are forecasts. We all know what to do with forecasts, since we spent time with the Consulting and Audit Canada document and its many errors.

We have established from the Government Leader that, since we began the year with a $92 million accumulated surplus in consolidated terms - or, if he prefers, $60 million sum in cash - and since he has now said that he is going to lapse at least $15 million, there is not a deficit. Even he conceded the other day that there is probably going to be a $7 million or $8 million surplus. Yes, he did, on the record in this House. I know he is a new Member, but those of us who have been here for a while take those statements seriously. We know that the Government Leader would not want to mislead the House.

What we are arguing about is not whether or not we have a deficit. We are arguing about the size of the surplus.

We are not talking about the condition the Tory leader of Saskatchewan left that province in, or the condition the Social Credit premier left B.C. in. We are arguing about the size of the surplus in the Yukon.

It turns out that is a moot point. The Government Leader has made it quite clear that the tax increases are not really to balance the budget, which may not be balanced anyway.

The tax increases are not to make sure that we still have a surplus. The tax increases are symbolic. Why do we have new taxes? We have them because, as the Government Leader has explained to us, Mr. Siddon made him do it. We have tax increases because the federal Conservative bureaucrats were right and the Yukon Department of Finance, for these last many years, was wrong. When it came to the debate about the efficacy and the legitimacy of the perversity element versus the level of taxation in the Yukon Territory, all of us who sat in this Legislature from 1985 to 1992 were wrong. He and the federal Tories and bureaucrats, were right.

The argument has been about whether the perversity element - which was not negotiated into an agreement, but was imposed on us, without us even being at the table - punishes us for not raising taxes the way the federal Conservatives have done since they came to office in 1984, or whether we were right to argue, as we did, that the tax burden of Yukoners was already at or above the national levels. I have tabled plenty of documents over the last few years in this House from the Department of Finance of the Yukon government - and they still have the same people there; they have not fired anyone there yet, as far as I know - making that case convincingly. No one in this House or in the Yukon Party ever challenged them. No one ever asked questions about them. No one in the Yukon Party ever suggested there was anything wrong with those arguments, until now.

The federal government was trying to force the Yukon government to do something that we believe was wrong. They were trying to force the Yukon government to raise the tax burden of Yukoners, which was already at or above the national level, even higher. What they did was criticize us for not making what they called a sufficient tax effort. They looked at a long list of taxes and compared those tax levels from some of the poor Atlantic provinces to the relatively wealthy western provinces, and they argued that this territory - which did not yet have the full range of services provided in all those jurisdictions, or, indeed, even yet have the responsibility for providing all those services - should have a tax burden even higher than them.

What was the response of the government of the day? The NDP government said no, thank you, sir. We were very polite, but we said no. Every time they tried to tell us to raise taxes, we said no. The Government Leader was wrong. It was not because the perversity element was not, in some sense, costing us money, but because it was a matter of principle. The federal government was wrong, and we were right, and we were going to insist on our position.

The reason our tax burden was high, even though the rates were low, was because the cost of living is higher here. The cost of almost everything is higher here. As a consequence, people were paid a little bit more in order to compensate and that put them into higher tax brackets. And, once you have consumption taxes like the GST, added onto a higher cost of living, that too adds to the tax burden of Yukoners. Someone has estimated that it is in fact in the hundreds of dollars more that northerners have to pay as a result of the GST, on top of our higher cost of living, than southerners pay.

The tax burden problem became worse after the GST, an insidious Tory tax that is opposed to, even today, some years later, by the vast majority of people in Canada. I suspect it is opposed to by a similar number here.

When the federal government was trying to force us to raise taxes and the Yukon NDP government was saying, “no, no, no”, what was the position of the Yukon Party? Mr. Speaker, you can search the Hansard record and you will not find a single incidence of Yukon Party Members - the Member for Kluane or the Member for Riverdale North - standing on their feet and saying, “you should raise taxes, it is unfair to the federal government if we do not raise taxes; we must be kind to the federal Tories because they are very decent chaps and it is not fair that we are not raising taxes when they are”. You will not find that, Mr. Speaker. What you will find is incredibly visceral, powerful, aggressive criticism of the NDP government when it even increased fees slightly - campground fees, or any other fees.

We were absolute scallywags, bounders, cads, drunken sailors or what have you for raising fees even slightly.

What was the position of the Yukon Party during the last election campaign? The position of the Yukon Party, heard by the dozens of people who listened to CBC radio during the debate was that to increase taxes, given how much money we were getting from the federal government, would be obscene.

What is the argument made by the Government Leader now that we should raise taxes? So we can get more money from the federal government. What this budget before us shows, which we will be debating tonight and tomorrow and until the end of time, is that they are getting $31 million more from the federal government in this budget, but we have to raise taxes on Yukoners by another $8.8 million.

When they were in Opposition, they were opposed to tax increases. During the election, they were opposed. In fact, they said they would be obscene. Now, it is Tory all the way; let us tax, tax, tax, tax, tax, tax. There are six tax increases, plus liquor price increases.

I am sorry he is not here to hear everything I say when I say it. Yesterday, the Member for Ross River-Southern Lakes gave a wonderfully entertaining speech, full of the kind of flim-flam rhetoric that we have come to enjoy over the years from that Member. He quoted Egyptian royalty, as I recall, in saying that the NDP was “prone to agree” with the federal government. Those were his words. Let me say now that the Member for Ross River-Southern Lakes, the Member for Porter Creek, the Government Leader, the Member for Kluane and the Member for Riverdale North are not prone, they are supine.

In his negotiations with Mr. Siddon, the Government Leader has laid back and said, “tickle my tummy, Tom, make me happy.” He gave up. He is not prone, he is supine.

Just look at what we have in the record of the relationship between the Conservative government nationally and the people of the Yukon. I am mindful of the wonderful bombast from the Member for Ross River-Southern Lakes who, once again, wanted to do his Whitewater Willy speech about the tough guys going toe-to-toe and duking it out. Look at the record and pattern of betrayals from the national government in the last few years. Look at how those folks on the other side of the House have responded.

There was the famous Shamrock Summit, where Mr. Mulroney and Mr. Reagan sang “When Irish Eyes are Smiling” together and, at the last minute, amended the Pacific salmon treaty to exclude the Yukon River from it, a treaty that would have given Yukoners half of the salmon in the river and, instead, left us upstream with less than 10 percent or less than five percent, a tiny fraction of the catch, of salmon in the river.

I do not recall, even though we listened carefully, that there was a peep of protest from the Members opposite. There was not even a peep, not a pip, not a squeak, not even a little murmur, not even a little muttering behind their hands. Yet, the people who have depended on that salmon fishery for thousands of years suffered a grievous injury at the hands of the national Conservative government.

My colleagues and I protested. We went to bat and appeared before parliamentary committees. A former colleague, the former Member for Watson Lake, David Porter, went toe-to-toe with the feds about it, but it was too late. Once the President of the United States and the Prime Minister had done a deal, we were shafted, and not a whisper of protest came from the Members opposite.

Look at the next betrayal, the one we were talking about involving Mr. Wilson and the perversity element. Now the Government Leader seemed to imply yesterday that somehow, when Mr. Wilson, without us even being in the room, announces, a fait accompli, an ultimatum, a deal - not a negotiated deal, but an arrangement - that he is going to impose on the two territories. At that time, remember that the leader of the Northwest Territories’ government, I think, was a Conservative; there was going to be a deal, a take-it-or-leave-it ultimatum on formula; sign it or you do not get the cash. He is seriously saying that the NDP should have put everything in this territory at total risk by saying no, we will not sign it; we will not take the cash. We will depend on our own local revenues. You would have to be certifiably psychotic to have taken that position. Only an absolute megalomaniac, of the order of magnitude of Mr. Qadaffi in Libya or that strange megalomaniac who used to run Albania, the Ceausescu family, to take a position that you were going to force such incredible suffering on the people of your territory to make that point.

The hypocrisy of that is made even more absurd because, while the Government Leader is saying now that we should have done that, there was not even a hint from him, or from any of his colleagues, that that is the position that we should have taken then. My colleague, the Member for Mount Lorne, read into the record yesterday the news reports about what happened. How did we find out that the deal had been made or imposed on us from Ottawa? We got a news report. This was done in the same way Mr. Mulroney  handled the Yukon River salmon. Mr. Wilson did it, again not with us at the table, not looking us in the eye and saying, “Tony, I am going to shaft you.”

It was not done like that. What happened with Mr. Siddon and the Tetlit Gwich’in was done behind our backs.

The Member for Ross River-Southern Lakes suggests that, somehow, we should have organized an army and gone to war, found the contemporary equivalent of Colonel Black, organized a battalion and gone to war over the thing. I do not know where we would have marched it to; up the Dempster Highway, I suppose, to reoccupy the land.

Unlike the party opposite, in another case he mentioned, we supported the aboriginal rights of the people there. What we objected to - once again, behind our backs; not at the negotiating table, but when we were not there - was the federal government making a deal in Ottawa with the other party without us even being there.

He implies that, somehow, we went off quietly into the good night. Quite the opposite: we did something that has not been done for several decades in this country. We called an emergency session of the Legislature and passed a resolution of censure against the federal Minister. Tell me where else, anywhere in the country, any other Legislature has done that in recent years, and tell me what stronger message could be sent.

The Member for Riverdale North, a strong and devout Tory - or perhaps he is a Reform Party member, I do not know; one of the two - as far as I know, did absolutely nothing. Did he write the Prime Minister? Did he do anything other than giving a speech? I know we did. I also know what we did effectively, which he did not do. We went back to the negotiating table and got an agreement on the UFA - which you will find, because you have just passed it here in this House - which makes sure it cannot happen again.

Ah, the horse was out of the barn. It was not our barn and it was not our horse but, somehow, it was our fault: the classic theme of the Yukon Tory. Whatever happened, whatever the federal government did to us, whatever the federal Tories did to us, it was the NDP’s fault. Whatever the federal Tories did to us, the Yukon taxpayers have to pay. Is that not classically Tory? Blame the victim. You find somebody in the ditch, covered in blood, and there is a man standing over him with a club, and it is the fault of the person in the ditch.

What did the Members opposite do in response to Mr. Siddon and the Tetlit Gwich’in? What did the brave Tory champions do? I will tell you what they did. They ran and hid. They went off and changed their names. They said, we are going to show you, Tom Siddon. We are going to change our name so we will not be associated with you any more - at least not in public. We are not going to call ourselves Conservatives anymore. While we may be Conservatives in our heads and in our hearts, we are going to change our hats so people will not know. We do not want to be seen on the same street as you, Mr. Siddon, so there. That will show them.

I know from talking about the subject in a frank and comradely way with senior federal Ministers that the reaction of local Tories, including those like the Member for Kluane, who was expressing enthusiasm a few months ago for the Reform Party, was regarded as a bit of a joke, because the effectiveness of their response to what Siddon did to us was like being attacked by a dead sheep.

The fact of the matter is that, on the debate between the perversity element and the tax burden of the Yukon people, I still believe that Yukoners are right. I still believe that the Yukon Department of Finance was right. I still believe that Members of this House were right, and I believe that the federal government was wrong. I believe that Mr. Wilson was wrong. I believe that Mr. Siddon is wrong and, with respect, I say that Mr. Ostashek is wrong.

Let us have a look at the new taxes, which the Member for Ross River-Southern Lakes - a man of no modest means, as I understand - suggests to us are modest. There is a great line by Winston Churchill about Clement Attlee. Someone once told Mr. Churchill that Clement Attlee, the great post-war British Labour Prime Minister, was a very modest man. Mr. Churchill said that he had a great deal about which to be modest. That was an unkind cut from Mr. Churchill. I want to say to the Members opposite that, in my book, these are not modest tax increases. They are not modest in terms of the pocketbooks of many of my constituents. They are not modest, coming as they do after the several years that we held the line against the federal demands that we raise taxes and said no, no, no, it is not fair, we will not knuckle under, we will not collapse, and we will not surrender.

What is most appalling about the Government Leader’s surrender on this is that we got nothing for it. In most peace treaties, one gets reparation payments, or something. We got nothing. In fact, I do not know what share of the perversity element is being removed, but I would be willing to bet another $100 with the Government Leader that it is not 100 percent of it. In fact, I would be willing to bet it is not even 50 percent of it.

Given that he has already collapsed and surrendered, the only way that the federal government will remove 100 percent of the perversity element - I predict - is if we do one of two things, or both: one, that we continue to raise taxes, not only this year, but the next year and the year after. Or, that we agree to take less and less money under the Formula Financing Agreement next year and the year after. Or both. Either way, the ordinary working people of this territory are diddled by their own Government Leader, the guy they elected to go to bat for them at the big tables in Ottawa.

Look at the new taxes: the corporate tax rate is up 50 percent; the income tax rate I think is up 11 percent; the small business tax is up 20 percent; some of the fuel tax is 38 percent; gas tax is 47 percent; aviation fuel tax is 57 percent; tobacco tax is 156 percent and liquor tax - taxes are not up, but prices are up, because those prices are administered by the territorial government.

One, two, three, four, five, six, seven, eight - seven or eight tax or price increases, and all this coming in a year when the city property taxes have gone up, power rates under the command of the Member for Ross River-Southern Lakes are going up. This is on top of the GST, which people are still groaning about, from the government’s kissing cousins in Ottawa, the federal Tories.

If you take a look at the total, added tax burden, it is a considerable burden on the average family. City taxes are up; YTG income taxes increase; there are electrical-rate increases, fuel tax increases, and if you add the fuel tax impact into prices for food and other services, along with the GST, there are hundreds and hundreds of dollars. For some people, many people in my constituency, the tax increases are tough, very tough.

The Government Leader and the Member for Ross River-Southern Lakes - he who is infatuated with the rhetoric of the Egyptian queen - thinks it is modest. Well, for a man of a certain age, certain affluence, certain prominence such as himself, it may be modest, it may be insignificant, it is a mere bagatelle, almost nothing. For someone who is a single-parent, who lives in Lobird Trailer Court, or in an apartment or duplex in Hillcrest, it is not only the month’s rent; the cumulative effect is a major proportion of their annual income.

Let us look at what these taxes do. They increase the cost of everything. They increase the cost to individuals. They increase the cost of doing business. They are going to increase costs for the mining sector, which is having a tough time. The Minister of Economic Development has told us what wonderful, magical things he has done by wandering around a hospitality suite with a badge saying, “Hi, I’m John, I’m open for business.” These tax increases are going to do a lot more harm than -

Some Hon. Member: (Inaudible)

Mr. Penikett: The Member says I am jealous. Well, we will see if he ever achieves anything of any consequence. I do not know what I could be jealous of. I suppose I could be jealous of the Member’s chutzpah for making I.Q. jokes in his own constituency about something which is not very funny at all. We are going to have reduced purchasing power for every individual taxpayer here. That reduced purchasing power is going to affect every Main Street merchant and every supplier of services. That is going to impact on their ability to hire people, not only for the tourism season but on into the fall. It is going to have the effect, in a narrowly based economy like ours, where the public sector is so large relative to the private sector - and thanks to the activities of the Members opposite has grown larger, relative to the private sector - of shrinking the private sector even further.

This really gets my goat; the worst impact is the thing they do not understand. They talk about our lower tax rates - and that is true, we have the lowest tax rates in Canada on some things - but given that the cost of almost everything in this territory is higher than almost anywhere else in the country, except the Northwest Territories, the only competitive advantage we had in all sorts of areas was a lower tax rate.

The Government Leader is shaking his head. I would like him to argue in this House how a lower tax rate is not a competitive advantage for us and how it is good for business to have higher taxes. I doubt that even with an entirely friendly crowd he could get a resolution like that passed - even at the Chamber of Commerce.

Just take a look at one of the taxes, the fossil fuel taxes. Look at the Yukon reality. We are a small population with great distances between our communities, great distances from our few producing mines - now, unfortunately, shut, thanks to the efforts of the Member for Watson Lake - and in a cold climate. The importance of fossil fuels, in terms of the total cost structure of this economy, are immense. It is not just tens of millions of dollars, but probably the import costs here are over $100 million.

Fuels are involved in heating our homes, providing us transportation and operating most of our industry. If you raise those costs you hurt the businesses and you hurt the ability of those businesses to hire people. I remember that one of the first things the NDP government did - the Member from Klondike was shaking his head as if he had not heard this or did not believe it - was to reduce off-road fuel taxes for farmers, trappers and placer miners to zero.

Why did we do that? We did it as an incentive to economic activity. In those days, under the ennobled leadership of the Member for Ross River-Southern Lakes - as he now is, but then was leader of the Yukon Party - he was, I believe, in favour of it too. They were in favour of it then, when we were just coming out of a recession. Now, as we are just going into one, they want to do the opposite: raise the taxes on those same industries and on those same people.

Hardly anybody operating in any of those sectors operates exclusively off-road. They have to use the highway system. We will increase their costs if we increase these taxes. At a time when we are going into a recession - a recession created entirely, I believe, by the government opposite - it makes marginal, small businesses even more marginal. We create the risk of putting them under. Remember, this is the only jurisdiction in Canada that had no businesses bankruptcies last year - none.

Mr. Speaker, I would be willing to bet you, in a friendly sort of way, $1.00 that it will not be long, under this new government, before we start to have small business bankruptcies here as a result of a number of the steps they have made, not the least of which includes these tax increases.

These tax increases are going to hurt low-income people. It is going to hurt their purchasing power. I do not claim that it creates many jobs, but I am told that the fact that we have had a lower corporate tax rate has meant there has been a significant number of companies registering here.

Some Hon. Member: (Inaudible)

Mr. Penikett: The Government Leader says it was costing us money. That is interesting. The Government Leader is going to say that having these companies registered here was in fact costing us money and he is going to solve that problem by raising taxes.

That is of course not the reason he is raising taxes. He is raising taxes to make his federal friends happy.

The Member for Riverdale North is shaking his head. There is no way in the world that these taxes help people here; these taxes hurt people here. That should be obvious.

Let me talk about a typical constituent in my riding. For example, let me talk about someone who works in the hotel industry - perhaps a cleaner. They live in the Lobird Mobile Home Park or a duplex in Hillcrest or, perhaps, an apartment in Granger. They earn minimum wage or perhaps a bit above it. Their annual earnings are about $12,000 a year. They might have a small, older car that they drive to work. Perhaps they smoke a pack of cigarettes a day. Perhaps their one form of recreation is that they go out to bingo once in a while or to a movie and restaurant once a week.

As a result of the efforts of Mr. Mulroney, Mayor Weigand, the Minister responsible for the Yukon Energy Corporation and the Government Leader in this House, that person may be paying as much as $1,000, or more, to the various levels of government and the power corporation out of their very small income.

That kind of cut in their real income puts them well below the poverty line, to the point where they have to really consider whether or not it makes sense for them to continue in the work force - whether they can afford to work any more, or whether they might be better off - and this is a ludicrous form of economic development - to be on the social assistance rolls of the Minister of Health and Social Services.

Just consider, if you would, the impact on a small business of this person, who does not have much purchasing power, let us admit. I worked in the hotel and restaurant business for a while. If this constituent of mine went out on a Friday night and went to a movie and for a bite to eat, even if they only had a $10 meal, probably 30 percent of the cost, in the restaurant business, is for labour. Of the $10 he or she paid for the meal, perhaps $3 was going into wages. If one multiplies the effect of reducing the purchasing power of people like my constituent hundreds of times, because they cannot afford to go to the restaurant any more and cannot afford the kind of recreation they had before, there will be fewer sales, a smaller payroll and a reduction in jobs - dozens and dozens of jobs.

If you add the cost of electricity and new taxes on to the small business, unless they can pass them on to the customer, who also a lower real income now, the consequences for the small business and the economy are very serious.

It is axiomatic that more taxes means fewer jobs and less economic activity in the private sector.

In a very confused way, in the last few days, we have had an extraordinarily puzzling statement from the Government Leader - that is, compared to, I think he implied, Governor Hickel and the late John Diefenbaker, we in the NDP had no vision; we, who brought people together to create things like the Yukon Economic Strategy, the Education Act, the home care initiative, the Conservation Strategy and the numerous other pieces of legislation, which were widely supported in this territory and which represented, as I said, the shared vision of thousands and thousands of Yukoners, were lacking in vision because we supported this democratically developed world view and put it into legislation, dealing with the concerns of people here and now, and that we were somehow less visionary than the Government Leader and a few of his friends who put together his Toward Self-Sufficiency in the 21st Century document - a century that is only seven years away - and which concluded things like railways to Carmacks, pipelines from Watson Lake to Whitehorse, and convention centres.

We are still waiting to hear who is sponsoring this railroad. We still want to know when, in the next seven years, this railroad is going to be commenced; but at least we know now from the Minister of Economic Development that it is not going to happen unless the feds do it - the feds, who have not built a railroad in several decades, might build this railroad and if the feds do it, then somehow, miraculously, we become less dependent and more self-sufficient.

It is likewise with the pipeline project. I do not know how one can make an economic argument to move gas from Watson Lake 300 miles to Whitehorse to what is, in terms of the gas market, a relatively small market and make money, but I do know that if one could do it profitably, surely Foothills Pipe Lines would have done it long before now. In fact, the Foothills pipe line - where they were talking about moving gas from Alaska to the Yukon - was a multi-billion dollar project and there is no way in the world, except as a tax collector, the Government of Yukon was ever going to have any role in that beyond being a regulator and a tax collector. It certainly was not going to be a financier of it.

We all know how fragile those projects are. I remember that back in 1975 a lot of people thought it was imminent. Now here we are, 18 years later, and we cannot even see any dust on the horizon in regard to that project.

Then there is the convention centre - another one of those projects. We had the potential for a convention centre. It was called the Taga Ku project. That was one of the projects listed in their dream schemes in Toward Self-Sufficiency in the 21st Century, but when it was here and now and within reach and attainable, and it just required a couple of sensible decisions from the Government of Yukon, what did they do? It killed it dead; it slaughtered it; it smashed the hopes and dreams of the Champagne/Aishihik First Nation.

We still do not know whether or not they did it for political reasons, or as they said, they were opposed to the hotel portion. They were opposed to the hotel portion when they were in Opposition, but they said they did not want the convention centre to go ahead, because the convention centre did not now have the hotel portion. We never did figure out the logic of that decision.

Their Toward Self-Sufficiency in the 21st Century, which I thought originally meant we were going to be self-sufficient in seven years, I now understand from answers given by the Minister of Economic Development, that we are talking about self-sufficiency by the year 2199 or 2200. Perhaps, the Minister thinks that is the beginning of the 21st century, I am not sure.

In any case, it is quite clear that, while there may be some mines on the horizon, some mining projects coming to fruition, with some jobs down the road, all of which is well and good - the fact of the matter is that we have two mines in the territory, Sa Dena Hes and the mine at Faro, which are fighting for their lives here and now - not in the 21st century, not in the 22nd century, and not at some vague point in the future, but here and now.

As I pointed out in Question Period today, Curragh Inc. did not ask for $34 million a year ago, despite what the Government Leader says, and they were talking to me not to him. What they did was ask the federal government for $34 million and ask us to pay a share.

We were prepared to share the burden with the federal government on something like that, but I think it became painfully apparent to all of us by December that the federal government was not going to do anything. I told the Government Leader that I would have been willing to go to Ottawa to try and persuade the federal government otherwise. I was pretty sure, based on what federal Ministers told me after the Westray incident, they were not going to touch them. That put the buck back in the territory; the buck stopped right here.

Given the federal reluctance to assist in maintaining the largest private sector company in the Yukon, the cornerstone of our economy, given their refusal to do what was reasonable and fair on that score, for that reason alone I would have refused the federal demand that we raise taxes. I would not have knuckled under to Tom Siddon’s request.

There is no doubt of the result of taxes, taxes of the kind that we are talking about, when our economy is in a recession, perhaps teetering on the verge of something worse, when there has been so much gloom and doom spread by the government, when the purchasing power of ordinary working families in this territory is going to be reduced, when the operating costs of businesses are going to be increased, all of which is going to have a negative effect on unemployment. The Member for Ross River-Southern Lakes is, no doubt, going to come in and say, “But, Mr. Speaker, as Queen Cleopatra might say, ‘This is the biggest capital budget ever’”. Is it really?

I am only going to make this comment in connection with the tax motion here, but I want to say to the Members, that given - as we pointed out before - that Community and Transportation Services has never spent its land budget, and given that they are proposing to do so much development in my constituency, which is nice, I am forced to remind them of what happened when we did develop Granger in anticipation of the Foothills pipeline - the land sat there for years and years.

I think it is good that the government is trying to keep ahead of the demand. If you keep the supply a little bit ahead of the demand, that is smart, but if you get so far ahead of the demand that you end up holding the land for a long time, carrying costs do accumulate. I do not think that is smart.

If the $20 million is just parked there so they will have some money to use for things like the Dawson sewer and water system, according to the negotiated arrangement with Mr. Jenkins - which we have been told is a commitment of $5 million - then of course the whole impact of the $20 million is different. When it is in the land budget, it is shown as a recoverable item. If you move it out of that line and move it into some other capital expenditure, it is not recoverable. That changes the bottom line in your budget. You would not, just on that account alone, be able to call it balanced any more. We know that unless the Member for Ross River-Southern Lakes has not only become, in the last 24 hours, a physician, and a woman, but indeed something of a witch doctor, there is no way in the world he is going to spend $14 million on the hospital project in the coming fiscal year.

Some Hon. Member: (Inaudible)

Mr. Penikett: I want to see it, because I do not believe it. We have not had the announcement about Treasury Board today, which he indicated might come. Mr. Speaker, if you are not going to spend the $20 million on land, and you are not going to spend the $14 million on the hospital, you do not have the biggest capital budget ever.

That is interesting because the great virtue of the capital budget is that it is a provider of jobs, but we are going to be asking more and more questions about where those jobs are, as we get into the debate on that. That is going to be more and more of a complex problem for Conservatives and for supporters of free trade because one of the things that we know, and it is happening in the Northwest Territories as much as here, is, whether we like or not, more and more contracts are going to go to southern companies and southern employees as a result of free trade agreements that they support.

I have always found it ironic that we can have people like the Minister of Tourism who want to bring tourists here but close the door to outsiders, except when they are outsiders of their own political persuasion, of course. The fact of the matter is, you cannot have free trade only in one direction, even though I am someone who believes the really successful economies in the world, especially the six dragons of Asia, are countries that do not have free trade. What they have is very aggressive import substitution and very powerful export-based economies, not that I am suggesting that we could duplicate that here for a second. I remember when the Member for Ross River-Southern Lakes was singing the praises of Singapore some time ago, which is a country that has been discarded as having a capitalist economy under a Leninist government or a one-party state, which was highly authoritarian, and that was necessary for that kind of growth.

The fact of the matter is that, if the government opposite is bragging about the big capital budget, I find this argument ironic. Is that not what they, for the last several years, have been attacking the NDP for? Has it not been their argument that, because we had big capital budgets, we were overspending, and that big capital budgets were inevitably going to cause us to have tax increases? I think some form of that argument has been made by Members opposite in recent years. I am here to argue that it is the tax increases that kill some of the jobs they create in the capital budget.

Of course, many expenditures in the capital budget will not create jobs. I mentioned the hundreds of thousands of dollars - perhaps almost $1 million - in the total budget for computers. That will not create many jobs locally.

I want to say something about the O&M budget. This O&M budget is the biggest ever, yet some of the big cost centres in it remain untouched. The Member for Ross River-Southern Lakes said yesterday, when he was comparing some of the low estimates of some of the expenditures with some of the high forecasts from last year, that it was not the biggest O&M budget. It is funny, because he says we should not take federal transfers or devolved programs into account when we are comparing O&M budgets. Funnily enough, I sat through six or seven years of him making the argument that, just because the feds transferred a program and the operating money to us, we should be taking that into account when we are talking about our dependency and that this was evidence of a greater dependency on the federal government.

My colleague and I were amusing ourselves one night, comparing the number of times he had made that totally fallacious argument. If he was allowed to exercise that kind of bumptiousness when he was in Opposition, I think we should, too. I do not want to do it myself, but I should probably reserve the option for the Member for McIntyre-Takhini, the Member for Faro, the Member for Mount Lorne and the Member for Whitehorse Centre, if they choose to make that argument, because what is good for the goose is good for the gander. We should all get our turn there.

The fact of the matter is that this is a very big spending operating budget. Some of the biggest cost centres have not been touched. I would predict, when they are making the claim of being balanced, that some of the areas of high cost overruns in previous years are likely to be a problem for them, too.

In fact, they will be coming back to the House, if they have the chance, as soon as possible, with supplementaries, for more money in those areas. Let us say the interdepartmental committee that the NDP created comes forward with some recommendations that propose some-long term solutions to the social assistance cost balloon, based on the analysis of what other jurisdictions have been doing. It may turn out that the $3 million extra that the Member from Ross River-Southern Lakes has put in his budget for that item this year is not going to be enough.

Some of those big cost items are not job creating and unless this government starts to recognize, as most governments in the western world have had to do in terms of income support payments, and unless an increasing percentage of them is used for direct job creation or for the training and retraining of people, rather than income support, we are going to continue to have not only the expenditure problem, but the economically depressing effect of having a large number of citizens unprotected.

Let me concede that, of course, in terms of the face lift that the government has done on some of the departmental expenditures, there has been a nip and tuck here and there, and a little bit of rouge put on some of the numbers, but there are many hidden costs. I look forward, when we get to discussing this with the Government Leader, to discuss some items like the land claims estimate - and I have had to put an estimate on what we are going to spend on that for years - where there is not much control that can be exercized over it. If negotiations go quickly and well, they will have to be fully staffed up and the budget will probably go over what we have estimated. The same is true of other items here, such as money for personnel costs. There is a whole set of negotiations that may determine what the outcome is there.

The fact is that the O&M budget was written, in the Government Leader’s own admission, in order to reduce jobs in the public sector - not massive layoffs, he says, but fewer managers here, fewer people there, winding up jobs there, tightening and trimming.

I think my colleague, the Member for McIntyre-Takhini, has made a convincing case that this probably is not a balanced budget. We have not had the real analysis of programs, the real hard look at whether some programs should continue on. We have not had a real tough look at some of the standard objects. We talked about travel freezes in this past year, but we have not talked about some of these standard objects among the expenditures, in terms of bringing the budget into balance.

I argue that the restraint budget, supposedly on the O&M side, which has given us the biggest O&M budget ever, and the capital budget, the big projects of which are all either NDP initiatives or 100 percent funded by the federal government, or both, are not, either of them, designed to deal with the problem of the recessionary situation that we now have. When you add taxes on top of that, you are going to create a further cooling effect on the economy.

We needed that. What we should have done in this situation is have a jobs budget. There is a perfectly adequate, economic computer model around. I know the Member for Kluane does not like computers.

Some Hon. Member: (Inaudible)

Mr. Penikett: The Members keep wanting to transport us to another place where they would feel more comfortable and do not have to deal with the here and now of reality. It is either the 21st century or some other province. Let us deal with the here and now.

The here and now is that we needed a jobs budget. We needed to analyze every single expenditure in the Yukon government, not in terms of the number of jobs that were cut, or in terms of the possibilities for tax increases, but in terms of the impact on the private sector in terms of job creation.

When we were still in a recessionary period in 1985, the NDP government-of-the-day did that. We went through every single expenditure in the budget to look at the job creation impacts on the private sector of every line and every expenditure. Not only did we get Faro up and running, but we also made a conscious decision back then - which was not the decision of the previous government - to put the formula money we got from the federal government into the capital budget - because it was not immutable, or there forever.

Therefore, for the last several years, in percentage terms, we had the highest capital budgets of any jurisdiction in Canada.

I know some of the Members opposite did not like all the capital projects. Let me tell them a secret: neither did I. I did not like the way some of the capital projects were handled or managed, but I am not alone in that respect. I will tell you, Mr. Speaker, that the total impact, gross and net, of the capital budgets we spent was to create hundreds and hundreds of jobs in the last few years. The best of those expenditures created jobs not just for a season, but employment that continues today.

The total effect of the government’s budget we have here is for fewer jobs in the public sector and fewer jobs in the private sector, because the capital budget, in real dollar terms, is probably smaller than the last one of the NDP government, for which we were attacked by the Members opposite for it being too large and adding to the deficit, or creating a deficit, or something.

The unkindest cut of all, when you look at items in the budget and consider the lower personnel dollars - we will wait and see what the actuals are at the end of the year - and you look at the removal, or decentralization, program and what that does for rural economies, rural gas stations, rural restaurants and rural employment; you look at how the non-government organizations have been cut, which employ people at much lower wages than YTG, and what that will do to employment, you will understand that this budget is negative. It has a depressing effect on the local economy, but the biggest job-killer of all is the tax grab.

I want to conclude by saying that, in my view, this is all part of what the Member for Ross River-Southern Lakes used to call the government’s hidden agenda. I never did understand why he kept going on and on about the hidden agenda because, unfortunately, I think our government was quite transparent. Not only did we promise to do certain things, but we did them. We did what we promised, and we were probably criticized for doing that. I know that the Member opposite did not like a lot of what we promised.

It now becomes plain that one of the reasons he was obsessed with hidden agenda questions is that he had always had one. While he never told us this when he was leader of the government, or of the Opposition, part of the Tory hidden agenda, here in the Yukon, as in Ottawa, was to raise taxes on ordinary people. I do not think it is only spiteful, but it is part of the Protestant, puritanical approach that it is good for people to suffer; poverty builds character; if workers are earning a little less, maybe they will work a little harder.

Who was it? Don Blenkarn, the Chair of the Conservative Finance Committee, when explaining the new Conservative theme of competitiveness, said, “What competitiveness means is that, if Canadian workers want to have jobs, they better learn they are going to have to work for less.” One of Mr. Reagan’s champions said that, if workers in North America want to have jobs, they better understand they are going to have start competing with Mexican, Korean and Japanese robots.

Much has been said about the Government Leader’s implied promise during the election not to raise taxes, about how he said that would be obscene, and about how I believe these tax increases are pornographic.

Let me remind the Member opposite what we said during the election: We said we were not going to raise taxes, but we also said that money was tight. We could, at best, offer a platform, and we suffered for it. It would perhaps have involved $2 million worth of new expenditures. We also said that we would have to shave other expenditures in order to meet them. We were not like the Members opposite, who offered tens of millions of new promises, ridiculous promises, like pipelines and railroads, things that will never happen during their lifetime.

Whether they are visionary or not, whether they have tunnel vision or a drug-induced vision, it is not going to happen. I am proud to say that we kept our promises. We kept our promises not to raise taxes. I want to say that the Government Leader is going to have to politically live to account for breaking his promise and for breaking his word.

No, the Yukon Party seduced that 37 percent of the population that supported them. Now, they have abandoned them again, after getting back in bed with the Mulroney gang. They spread gloom and doom. They precipitated a recession here. There has been a complete lack of economic leadership. The taxes that are proposed in the budget are not there to create jobs in a capital program. These taxes are here as an act of contrition, as a gift offering to the federal Conservatives and as a peace offering to the federal bureaucracy. They raised costs and cut the purchasing power of every citizen and every business in this territory. They take money out of the economy, and they are going to take money out of the economy for years to come. Worst of all, in the current state of our economy, they are going to kill jobs.

Speaker: I would like to remind Members that it has been sanctioned by usage that a Member, while speaking, must not refer to the presence or absence of specific Members. The previous speaker slipped up at one point and I would remind other Members to be careful of that prohibition.

Mr. Penikett: I willingly and enthusiastically apologize for my error. I know the Member I mentioned was here in spirit and perhaps even within earshot.

Hon. Mr. Ostashek: It gives me great pleasure to rise and speak on this motion in front of us today. We have heard statements from the Leader of the Official Opposition. There is no doubt that some points he made are valid points. Raising taxes, not done with caution, can cost jobs in the community, in the private sector. It can cost jobs. It is one of the challenges that faces a government when they have to make those decisions.

I get somewhat bewildered here by the allegations and charges made by the side opposite that we enjoy raising taxes. We are a minority government; we know we are a minority government; we know we have not been in power very long after sitting on the Opposition benches for many years. I ask the Members opposite: do they think we want to go back to the Opposition side of this House? That this is a staged plan to go back to Opposition? We, as a government, could have taken the easy route. I do not know what the condemnations from the other side would have been then, but I am sure they still would have been there. No matter what we did, it would not have been done right. There is no doubt of that, as far as the Members opposite are concerned. But we, as a government, weighed all the options open to us and thought very, very hard about decisions we were taking, knowing full well that when one has to raise taxes, it is not a popular decision.

It is especially not a decision that a minority government would want to make, unless they were really forced into the position where they had to make that decision. We decided to take what we feel is the most fiscally responsible route when putting this budget together.

I disagree with the Leader of the Official Opposition when he says that this budget will not create jobs. I believe this is a job-creating budget. I truly believe that, and I will touch on some of the reasons in debate today, as well as when we move into debate on the budget.

Before I get into that, I just have a few comments I would like to make on some of the remarks made in debate yesterday by Members opposite. Also, I want to speak a little bit to the accusation by Members opposite that I am putting out doom-and-gloom messages. If there is anyone who is putting out doom-and-gloom messages, it is the Members opposite. They are the ones who are crying that we are going to kill jobs in the Yukon. They are the ones saying this is not a balanced budget. They are the ones who claim we are misleading people and have no commitment to creating jobs in the Yukon and no commitment to Curragh Resources.

I think the Members opposite should be a little more careful about some of the statements they make in this House. I can see by some of the statements that were made yesterday by the Member for Faro - who has said in this House, several times, that he is a commerce graduate - that the Leader of the Official Opposition must have seen that he was issued with his socialist calculator when he assumed a seat on the side opposite.

I want to refer to a couple of the statements made by the Member for Faro, and I will quote from Hansard on March 30. He said, “The budget was announced in British Columbia today and, yes, there were some tax increases. They amounted to about $60 million. I am not sure that the Minister opposite realizes that British Columbia has 1,000 times the population of the Yukon.”

If you were to put $60 million on the same relative base as the Yukon, it would represent $60,000 in tax increases in Yukon, not $9 million. That had to come out of the socialist calculator.

First of all, I am sure that Members opposite, as well as you, Mr. Speaker, and other Members in this House, have had a chance to listen to the budget in British Columbia. In fact, there is going to be over $600 million in increases in the first year. When the first full year comes around, it will be over $800 million, not $60 million. A thousand times the population of the Yukon is the population of British Columbia? I suggest to you, Mr. Speaker, that it is closer to 100 times the population of the Yukon. The Member for Faro went on with some other misleading statements in the House yesterday. He implied that there was going to be a heating oil tax. There is no heating oil tax in the budget. He also went on to say that aviation fuel costs were going to be taxed at an additional four cents a litre. That is not true. Those statements are very misleading. He went on to say that there is one thing the public will not tolerate, and that is misleading them. This will come back to haunt politicians time and time again. The Member opposite was absolutely right in making that statement.

I want to go on and talk a little bit about leadership and the accusations made by the Members opposite, that this side lacks economic leadership and we are selling out the Yukon.

It was the Members opposite who were in power when the perversity factor was put in. They said they did not have a chance to negotiate it, that it was imposed on them. They accepted it and they did nothing in the remaining term of office to try and have it removed except to bury their head in the sand and say, “No, we will not accept it; no, we will not tax Yukoners; no, we are going to show the federal government that they cannot tell us what to do.”

That reminds me a lot of a child who is ready to leave home, wants to go out on his own and be responsible for his own actions and not have to have his parents make any decisions for him any more. He wants to take full responsibility for his own decisions, but he still wants his parents to keep paying the greatest portion of his rent and his car expenses and everything else. If we want the responsibility to look after ourselves, then we best accept that responsibility and act in a responsible manner.

I truly believe that when the Members opposite were in power they did not realize what an enormous burden the perversity factor was going to put on Yukoners over the long term. I really think they would have fought harder or tried to negotiate with the federal government to have it removed. In Hansard yesterday, the Member for Faro gave some quotes that the Member for McIntyre-Takhini made at the time that amounted to about $4 million. While I do not have the articles in front of me, I can remember the discussion at that time saying, yes, it was going to hurt Yukoners, but it was only a matter of $4 or $5 million.

The perversity factor has now grown, as I stated in this House earlier, to where it has cost Yukoners $60 million in the last three years, and it will cost Yukoners another $60 million in the last two years in the life of this present agreement. Along with the gross domestic product cap - for which I did not blame the Members opposite at all; it was something imposed by the federal government, and it is being very unfairly imposed upon Yukoners, because it is based on economic activity in southern Canada and the gross domestic product - it will cost us about another $80 million.

No matter how this is cut, $200 million is a lot of money to the Yukon. It is a lot of money that we could do things with in the Yukon. It is incumbent upon whomever is in power to try to get rid of that perversity factor. It will not do any good to beat our head against a wall and say no, we are not going to raise taxes; no, we are not going to cave in to the federal government; we do not care if it is costing taxpayers of the Yukon $120 million in five years, we are not going to give in. I think that is a very irresponsible approach to take.

In his debate today, the Leader of the Official Opposition went on about Curragh, and I would just like to touch a little on Curragh to, as he put it, correct the record. He says Curragh did not ask them for $34 million. When Curragh first came to us, they did not ask us for $34 million, either. They asked us for cooperation, the same as they did the Members opposite, to go to the federal government and try to resolve this problem. They were still trying to get federal funding. We worked in that direction, on the same basis as did the previous administration. We were prepared to pay a percentage, quite willing, even up to what they negotiated, which I believe was $17.5 million that they would guarantee a loan for.

Go back in Hansard to May of last year, during the debate on the $5 million loan to Curragh. The Member opposite now says we were fully in favour of it. Go back and look at the debate, I say to him, and see what the Leader of the Official Opposition was saying then. He was very concerned that the $5 million was not going to solve the problem, and it would just leave the door open for Curragh to come back, hat in hand, to the government again. He brought that up in this House over and over again. I sat in that gallery, and I listened to the debate.

On top of that, the Leader of the Official Opposition - the then-Government Leader, said, “No way, no way could Yukoners afford to foot this bail-out on their own. No way could they do it. They could not possibly do it.” Yet, for political expediency, when this party gets into power they hammer on us that we should have done it immediately, with no security, but to get that operation going.

This administration acted in a very responsible manner. We want to see that operation continue. We want to see it continue for the long term. Members opposite know the $34 million is not enough to save Curragh in today’s depressed metal markets. They know that they have to raise equity from somewhere else. This government has given its commitment that we are prepared to become involved. This should give some assurances to the investment community if they are at all interested in buying the equity issue that is being sold now.

I do not believe that the government has to advance the money first. The government’s commitment that they are prepared to go ahead