Whitehorse, Yukon

Monday, April 5, 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.

Condolences to family of Willie Porter

Ms. Joe: I rise today to express condolences to a former Member of this House, the Hon. Dave Porter, who lost a brother in a tragic car accident last week on the Stewart-Cassiar Highway. Dave’s brother, Willie Porter, was one of four people killed in the accident; four others were injured and required hospital care. This accident, with so many victims, has caused considerable horror and grief for family members, both in Yukon and northern British Columbia. The Yukon communities of Watson Lake, Upper Liard, Lower Post and the northern B.C. communities of Good Hope Lake and Dease Lake are in mourning. This accident came as a shock and, once again, we extend our condolences to the people and families in the communities affected by the tragedy.

Hon. Mr. Devries: I also offer my condolences and prayers to the families; we also pray for those who were hospitalized by this tragedy.

Mr. Abel: I, too, would like to offer my condolences to former Member of this House, David Porter, and his family and the other families affected by this tragedy.

Mr. Speaker:  Introduction of visitors.

INTRODUCTION OF VISITORS

Hon. Mr. Phillips: It is my great pleasure today to introduce two members from a group of people who have recently done the Yukon very proud in international competition.

The concert band from the F. H. Collins Senior Secondary School has recently returned from the Pacific Basin Music Festival in Honolulu, Hawaii. It was one of only two bands representing Canada, among other groups from Australia, Singapore, Japan, New Zealand, Guam, California and Hawaii. The band received enthusiastic response whether in an outdoor shopping mall for the public, or on the festival stage for some very fussy adjudicators. I am told the band was so busy with clinics and workshops that the poor kids hardly had any time to spend on the beach.

As the Minister of Education, although I wanted to go with the band, due to the travel freeze I could not get that past my Cabinet colleagues. However, the band did an excellent job while in Hawaii.

At the end of the festival, the F.H. Collins Band received a silver standing from the judges, reflecting “an exceedingly high standard of performance”.

It is not only their musical achievements that deserve our recognition. The students raised almost $100,000 to get to the festival. In many cases they received support from their parents, but in other cases the students paid their share on their own, either from after-school jobs or by selling oranges and grapefruit door-to-door.

To represent the 42 excellent musicians from the F. H. Collins Concert Band, I would like to introduce the six students who were chosen to play in the festival’s select, or honour band: Keren Estabrooks, flute; Andrea Hureau, alto saxophone; Anna Seipp, trumpet; Jenny Snell, trombone; Lisa Turner, trombone; and Jamie Ayers, tuba.

Their conductor is Ross Peterson, who is with us in the gallery today. Mr. Peterson has been the music director at F.H. Collins for three years, since coming from Porter Creek Junior Secondary.

The other person that I must introduce you to is Bertha Ayers, president of the Band Parents Association, without whose support and volunteer time, these students would never have went to the festival. Bertha was also the Parent Association president at Porter Creek, and Ross says she has been his right arm in fund-raising and support for years.

Of the 42 students who went to Honolulu, 21 are in grade 10 this year, so we can continue to expect great things from this group in future.

I would like to ask the Members of this House to join me in congratulating everyone associated with the F.H. Collins School Band for a job superbly done at the Pacific Basin Music Festival.

Applause

TABLING RETURNS AND DOCUMENTS

Speaker: Under Tabling Returns and Documents I have for tabling the report of the Chief Electoral Officer of the Yukon on contributions to political parties during 1992.

Are there any further Returns or Documents for tabling?

Reports of Committees.

Petitions.

PETITIONS

Petition No. 3 - Received

Clerk: Mr. Speaker and hon. Members of the Assembly, I have had the honour to review a petition, being Petition No. 3, of the First Session of the Twenty-eighth Legislative Assembly, as presented by the Leader of the Official Opposition on April 1, 1993.

This petition meets the requirements as to form of the Standing Orders of the Yukon Legislative Assembly.

Speaker: Petition No. 3, accordingly, is deemed to be read and received.

Are there any Introduction of Bills?

Notices of Motion for the Production of Papers.

Notices of Motion.

Are there any Statements by Ministers?

MINISTERIAL STATEMENTS

Initiatives of Yukon government regarding assistance to citizens of Faro and Watson Lake during shutdown of Curragh Inc.

Hon. Mr. Ostashek: This morning, in Toronto, Curragh Inc. filed an application seeking protection from creditors under the Companies Creditors’ Arrangement Act. During this interim period, Curragh will work with the Bank of Nova Scotia to restructure its financial affairs.

Curragh believes its assets base, including extensive mineral reserves, is solid and given time to identify and implement a restructure will return to financial health. Curragh will continue to seek an equity infusion and pursue selling their Stronsay holdings.

Negotiations between Curragh Inc. and the Government of the Yukon on financing the stripping of the Grum deposit will continue. Given this latest development, a senior official from the Department of Finance is going to Toronto today to participate in these on-going discussions with Curragh. These negotiations are a priority for this government.

I will stress that there is nothing the Yukon government can do to reverse the mine closures. These closures are not related to the loan guarantee talks.

As I said earlier, this latest shutdown is due to low metal prices; in fact, they are the lowest metal prices in many years. We hope that metal prices will rebound enough so that the mines will reopen. However, the Yukon government does not have enough money to subsidize the day-to-day operations of Curragh Inc.

Our first priority is to assist the people of Faro and Watson Lake during this period. For Faro, in particular, the government is starting several initiatives:

There will be a task force consisting of six different departments and led by the Departments of Economic Development and Finance, which has established a contingency plan.

A Faro information line for inquiries about assistance has been established and is now operational.

The activities of the contingency plan are being coordinated through a Faro desk in Economic Development.

The Department of Economic Development is looking at possible projects that could be funded under economic programs. This has been a top priority of our business and community development officer.

In conjunction with Canada Employment an Industrial Adjustment Service will be established within a week. The IAS will provide financial incentives to businesses, organizations, communities and sector groups to help employers and workers meet the challenges in adjusting to industrial change. The Yukon government and Canada Employment are working together to clarify the application of UIC rules related to several specific problems identified by individuals and groups in Faro - for example, payment of tuition and relocation limits.

Upon the request of YTG, the EIC is sending two staff to Faro today. The Department of Health and Social Services’ regional services has been given authorization to provide additional services.

Three staff from the Department of Education are in Faro this week to assist with upgrading, career counselling and to help coordinate services provided by that department.

All goverment services, including the school, will continue to operate as normal.

The Yukon government is committed to assisting Curragh Inc. and the residents of Faro through this difficult time. I stress that negotiations on loan guarantees with Curragh Inc. are ongoing and continue to be a priority for this government because we want to see these mines reopened.

Mr. Penikett: I thank the government for the one minute’s notice we had on the content of this ministerial statement. To state the obvious, most of this ministerial statement is not a ministerial statement of new policy at all, but a reiteration of things that we have heard in the news, such as that Curragh is seeking a chapter 11 type protection from the courts this morning, and that Curragh is trying to sell Stronsay and restore the company to financial health.

We did not need the ministerial statement to tell us all that. What is astonishing is the ministerial statement, which arrives just before we come to the House, says that a senior official from the Department of Finance is going to Toronto to participate in these ongoing negotiations today, something that should have happened a long, long time ago.

The point is, it does not matter how competent, or how capable the people from Burns Fry are, they are, first, Torontonians, not Yukoners, and secondly, no matter how professional they are, they do not care about the Yukon the same way as Yukoners do. They are not people whose lives depend on this mine being open. They will be paid whether the negotiations succeed, or fail. We should have had negotiators at that table from the beginning. In fact, I think we should have had the negotiations here. The fact that the government began the negotiations late, by adopting a late mandate, the fact that they had non-negotiable conditions, the fact that the whole government’s approach has compromised Curragh’s ability to obtain money from the markets, and the failure of the Government Leader and the Cabinet to directly involve themselves in these negotiations to bring them to a quick conclusion, for the sake of the whole territory, is an absolute disaster.

The Government Leader talks in his statement about how we hope metal prices will rebound. I understand that there was some indication of movement this morning, with 50-cent zinc.

The rest of the statement goes on about the provisions that are being made by various departments and agencies to help the people of Faro and Watson Lake - the employees of the Faro mine and Sa Dena Hes. Essentially, it is a doomsday scenario, which assumes that the mine is going to shut down and stay shut for a long time. We did not need to wait until today to hear this statement about these initiatives. We know that many of these steps have been in the works for some time.

The very fact that the government concentrates so much of the statement today about contingencies for an eventual shutdown, rather than committing Cabinet time and energy, much less senior officials, to the actual negotiations of getting to the table, is very disappointing. I am sure the Government Leader will come to realize that, whether it is land claims negotiations, negotiations to open a mine, or any other major negotiation, unless and until the leaders of the government become directly and personally involved, they are not likely to get a successful solution.

I am very disappointed in the ministerial statement today, coming, as it does, on a day when we have had the news of Curragh seeking bankruptcy protection, following the news of Friday, where the company announced extended shutdowns of the mines in Watson Lake and Faro.

Hon. Mr. Ostashek: The Leader of the Official Opposition says he is very concerned. It does not appear to me that he is at all concerned, when he is still prepared to play politics with a very serious issue.

We are very serious about this, and we have been very serious about it. Negotiations have been ongoing. We have been in touch, more than once a day - probably on the hour - with our negotiators in Toronto, as negotiations have been ongoing.

The reason for the senior official going down there now is because it is in front of the courts, and the situation of negotiations has changed dramatically in that scenario. Burns Fry are very competent in these types of negotiations. They do them every day. They are far more competent than anyone we have employed in our government. The political people would have taken over when they had gotten the base work done and were closer to some agreement.

The Member went on at great lengths about a doomsday scenario and what we are doing for the people of Faro. I could just hear the furor from that side of the House if we had not even mentioned it, of if we had had no plans. We have been accused of that all winter. I say to the Member opposite, let us get down to the seriousness of the situation and quit playing politics with it.

Speaker: This then brings us to the Question Period.

QUESTION PERIOD

Question re: Curragh Inc., financial assistance

Mr. Penikett: I want to get down to the seriousness of this situation, which the Government Leader has been dithering with for months and about which we have been told we can have no reports on the negotiations.

Let me ask the Government Leader now, since he has been negotiating through a third party, a Toronto-based company rather than Yukoners - people who care about what happens here - does he not think it is now time for him to get personally involved, directly, in negotiations with Clifford Frame and the other players in order to bring a resolution to this situation, which is affecting the economy of the entire Yukon Territory?

Hon. Mr. Ostashek: If the Member opposite will get on with discussing the supplementaries and get them out of the road so that we could get this House adjourned, I would certainly do that.

The negotiations are ongoing. The legal people are working in the courts; it is not the place for a politician to be involved right now.

Burns Fry is working on instructions from us on a daily basis.

Mr. Penikett: If the Government Leader wants to go to Toronto to take part in these negotiations, I am prepared to say I will pair with him right now. But, more to the point, if he brought the negotiations here, he would not have to have a pair. It is absurd that the fate of the Yukon economy is being negotiated in Toronto.

I would like to ask the Government Leader: does he not agree that given the urgency now facing us, arising from Friday’s announcement of extended shutdowns and today’s announcement about application to the court for bankruptcy protection, it is now time, instead of working banker’s hours on the negotiations, to instruct our negotiators to work around the clock until we get a resolution on this question?

Hon. Mr. Ostashek: I do not know where the Member opposite is getting his information. I was just on an hour- or hour-and-15-minute-long phone call with our people in Toronto this morning. They have negotiated through the entire weekend.

This matter is in front of the courts now. It will be dealt with accordingly. We have a senior official from Finance there to deal directly with Burns Fry and who can get back to us as quickly as possible on any major issues that arise.

Mr. Penikett: This has been a crisis since the end of the year. In a crisis, whether it is the land claims negotiations or labour negotiations, we should have been at the table negotiating around the clock the whole time.

Let me ask the Government Leader if he does not think that we would be better off at this stage, given what is at stake, to move the negotiations here to the Yukon Territory where people can get some idea of what is going on and give our negotiators, the Burns Fry people, some appreciation of what is at stake for our economy.

Hon. Mr. Ostashek: The Member opposite is trying to say that the crisis has been ongoing this winter. I would suggest to him that it has been ongoing for about a year, when the negotiations were in front of this House for a $5 million loan guarantee. He would not deal with the much bigger issue of seeing that the company could survive in the long term, but did a patchwork job on it.

There is no need to move the negotiations to Whitehorse at this point. I say again for the benefit of this House and all Yukoners that the negotiations are for the stripping of the Grum deposit, not to put the Faro mine back to work before the financial issues of the company are resolved. We have always said that there are two problems here, not one.

Question re: Curragh Inc., financial assistance

Mr. Penikett: I think the Government Leader is going to have to understand that it is time for him to start taking responsibility for things and not blame other people.

Does he not agree that the fact this matter of a loan guarantee by the Yukon government is not resolved has had serious negative effects on the ability of this company to raise money on the markets and to position itself for the recovery we all want?

Hon. Mr. Ostashek: Nothing could be further from the truth. This government made a serious commitment one month ago to get involved with the Grum stripping. That should have sent a positive signal to the financial markets around the world. This government was prepared to commit $34 million to this operation - an additional $29 million to the $5 million already advanced. The fact that the money was not being put in the ground immediately should not have had a negative impact on Curragh raising additional funding. The commitment was there.

Mr. Penikett: I am glad that the Government Leader is now admitting that he did not really do anything of consequence until one month ago. More needs to be done.

Given that the Government Leader’s first condition, as reported from his speech in Watson Lake was “not negotiable”, and given that the Government Leader, in public statements, has talked about the dire consequences facing this mine and operations in Watson Lake, will the Government Leader not agree that the conditions he has set and the lateness of his coming to the table - plus the fact that we have failed to have Yukoners representing us at the table - has in fact added to the problems that the company is now facing?

Hon. Mr. Ostashek: I could not disagree more with what the Leader of the Official Opposition has just said. I would suggest to the Member opposite that if he would have had some better, professional people negotiating the $5 million loan guarantee, we would not now have an unsecured $5 million loan.

Mr. Penikett: Of course, the loan that was made last year is not unsecured. As the Government Leader has chosen to put together an inter-departmental committee to preside over the shut-down of Faro, I ask him: did he consider using the model that the NDP government used in 1985, which is an inter-departmental committee of Yukoners, to negotiate the opening of the mine, and in this case now, in 1993, the reopening of the mine?

Hon. Mr. Ostashek: We have all of the negotiators in place that we need for the reopening of the mine. We have contacted and consulted with many professional people to put this arrangement together. We have been negotiating with the company all winter. The company was adamant that they could survive and deal with their financial crises without having to seek the protection of the courts.

As far as the government being involved in the Grum stripping - as sad as it is that the company is under CCAA now, it may lift a burden off the negotiations and enable Yukoners to obtain adequate security, to permit the company to begin to strip the Grum deposit as soon as possible.

Question re: Infrastructure funding from the federal government

Mr. Cable: I have a question for the Government Leader that may be more topical, now that a major corporation appears to be insolvent.

The government made a claim to have negotiated $10 million for infrastructure from Mr. Mazankowski. Can the Government Leader tell us what the status of this commitment is?

Hon. Mr. Ostashek: Officials met in Ottawa, I believe a week ago Friday, and exchanged letters. My understanding is that it is coming forward and I am hoping that Mr. Siddon will be making an announcement when he is in Whitehorse on April 16.

Mr. Cable: It appears that there is, in fact, something in writing on this. Is the government in a position to table the exchange of correspondence so that all Members can be brought up to date?

Hon. Mr. Ostashek: I have no problem bringing the Members up to date. I am not exactly sure what we could table at this point, but I will look into it.

Mr. Cable: Since it would appear that these additional funds are not in the budget, can the Government Leader inform this House as to how he anticipates the $10 million will be spent?

Hon. Mr. Ostashek: The reason they are not in the budget is because they came out of a federal economic statement. I do not believe there will be a direct transfer to us, but we have had major input on how the monies will be spent. It appears the government wants to spend the money on highway upgrading in various areas in the Yukon. It is my understanding that the money will be dispersed through the federal budget once the programs are identified and agreed to by them.

Question re: Curragh Inc., financial assistance

Mr. Harding: I have a question for the Minister of Economic Development. The Minister of Economic Development has said in the Legislature that the blackout regarding the Curragh conditions is to protect the equity offering that Curragh currently has on the market. I would like to ask the Minister: specifically, how would a favourable progress report on the negotiations and a detailed discussion of what conditions have been taken off the table hurt the equity offering, unless it is a negative statement?

Hon. Mr. Ostashek: The blackout is like any other blackout during ongoing negotiations. There are discussions that go back and forth that, if not taken in their proper context, could be detrimental to negotiations. As soon as we have something to report, I can assure the Member opposite that we will be making a statement in the Legislature.

Mr. Harding: The Government Leader did not answer my question. What I would like to know specifically is: how would a favourable progress report on the negotiations, and an understanding given to this House and the people of the Yukon on this critical matter, unless they were negative comments, hurt the equity offering, which is crying for some positive news?

Hon. Mr. Ostashek: The Member opposite is asking for positive news. We gave positive news a month ago when we said we were prepared to loan the company $29 million. We gave positive news then. That should have given some financial assurance to the financial markets that we were prepared to get involved. I do not know what more the Member wants. We have made several announcements - both ourselves and the Curragh officials - that the negotiations were proceeding. No negative information came from us or from Curragh.

Mr. Harding: They opened the door on March 4 with the conditions, and they slammed it tight and boarded it up on March 10 with the unprecedented 14 conditions on the loan guarantee, which were scoffed at by investors in the industry; that is the problem. The offer was contingent on too many tough conditions that cannot be met. That is why the progress report is so important.

Today in the news on the CBC, as well as in the ministerial statement, the Government Leader said that the mine closures are not related to loan-guarantee talks. How can the Government Leader claim that the loan-guarantee discussions are not related directly to the ability of Curragh to raise equity and working capital on the world markets, as well as sell Stronsay? Investors are waiting, following the news today, to buy Stronsay for a nickel.

Hon. Mr. Ostashek: The Member opposite seems to think that Curragh is the only lead-zinc producer in the world that is having difficulties today. Let us look at the reality of the situation. Mine after mine after mine has had to  curtail production because of low zinc prices.

The Member opposite was in Juneau with us when the Green Creek mine shut down because of low metal prices. We have always stated that we will get involved in the stripping of the Grum deposit, but we could not and do not have the ability or the financial resources to get involved in the cashflow problems of the company.

Question re: Curragh Inc., financial assistance

Mr. Harding: I am fully aware that zinc mines throughout the world are in trouble, but this is the only show in town for our private sector economy, and that makes it all the more important. Some zinc producers are going to need a lot of help to get through these tough periods.

What I have to say to the Government Leader is that there is no way for the company to sell that equity offering and sell the Stronsay project without some positive news on the loan guarantee talks. Will the Government Leader give the House, today, a detailed progress report on what is going on in the discussions?

Hon. Mr. Ostashek: If the Member would have asked that question first, I would have answered it first. It is in front of the courts. That is where the negotiations are now. Until this is settled under the Companies Creditors’ Arrangement Act, we will be dealing with it in that forum.

Mr. Harding: Now that they have filed for creditor protection, is the Government Leader telling this House that he has no ability to tell the elected representatives, who sit in this House, and the Yukon people what is happening with regard to the conditions and the progress that is being made? Curragh Inc. needs a positive signal on this loan guarantee situation if they are going to attract investors.

Hon. Mr. Ostashek: We are not only in touch with Burns Fry, but we are also in touch with Curragh on a daily basis. They are fully aware of what our position is. Negotiations are ongoing. When we have something to report to this House, I will make certain it comes here immediately.

Mr. Harding: I would say that the news we got on Friday, and the news we got today, are important to this House. Every Yukoner has a right to be concerned about what is happening.

What are we getting from the government? Absolutely nothing but rhetoric. There is a contingency plan, but the emphasis should be placed on getting people back to work. Will the Government Leader tell us if they are really committed, given that they dawdled for months on this question, placed impossible conditions on Curragh, and had nobody at the negotiating table until they made this announcement today? Why are they not making this a priority, because it is going to affect all Yukoners?

Hon. Mr. Ostashek: I am a little bewildered - the Member opposite has made many statements in the House about somebody misleading the public, but he just went through a whole bunch of rhetoric that misleads the public.

We have negotiators. They are negotiating. We are committed to Faro. We are committed to stripping the Grum deposit. What more does the Member want?

Question re: Curragh Inc., financial assistance

Mr. McDonald: I also have a question for the Government Leader about Curragh’s operations in Faro and Watson Lake. I would like to begin by saying that it appears that the government has accommodated a possible shutdown with more determination and confidence in the contingency plan than they are putting into the reopening exercise.

We have heard, from the economic development Minister, that there was a contingency plan when the Government Leader and the Minister of Economic Development were in Faro in January or February. I would like to know when the contingency plan was developed and whether or not it is written down - whether or not there is anything beyond the ministerial statement of which we should be aware?

Hon. Mr. Ostashek: The question may have been better addressed to the Minister of Economic Development. I am certain things are being written down. We worked on the development of the plan in January and February this year, and it has been continually updated to meet the changes in times as things went on. As different things became a concern, the departments kept updating the plan almost on a daily basis, so I am sure there is something written down.

Mr. McDonald: I will ask the question of the Minister of Economic Development as I am certain there should be something written down, as well. The plan itself is a fairly conventional plan but it makes a great deal of two things: first of all, a Faro desk and also the fact that the local regional community development officer is going to give Faro a high priority.

Can the Minister indicate what this Faro desk is and who staffs the desk? Secondly, is the community development officer in Ross River the lead agent in the government’s efforts to reopen or to provide for some economic diversification in the area?

Hon. Mr. Devries: We have sent additional personnel from the Department of  Economic Development in Whitehorse to assist in staffing the desk. Likewise, in Watson Lake the existing economic development officer and various agencies within the community have been working together, coordinating activities there. So, the majority of the people in Faro have been sent there from Whitehorse; in Watson Lake, we have been mainly using the existing people we have available there.

Mr. McDonald: I am not quite sure what to make of the answer. It appears that the Faro desk is going to be established in Faro. Is that correct? Will the Faro desk be staffed by senior people from the Department of Economic Development or by the people already staffing those offices in the communities?

Hon. Mr. Devries: The Member is partly right. We have an 1-800 number that people can reach in Whitehorse. These people work in conjunction with the Faro desk in addressing various problems regarding UIC and make-work projects that are available.

Question re: Faro, economic diversification

Mr. McDonald: I am not too impressed by the 1-800 number for Faro residents to get in touch with people in Whitehorse to ask about potential make-work projects.

What I would like to ask about is not make-work projects but about a full chance for economic diversification for the Town of Faro. I would like to ask whether or not the Minister has charged his department with the responsibility, in conjunction with the Town of Faro and the Faro Chamber of Commerce, of developing a plan for economic diversification that will give the town some hope. That way, even in the terrible and unlikely event that the Faro mine goes down, there will still be some economic life so that the town can carry on.

Hon. Mr. Devries: Yes, there are various projects, but, again, it all depends on what happens with the mine in the short term. There are some short term make-work projects. In the long term, there is some consideration of work on the Campbell Highway. The Grew Creek project is one of the possibilities and the Chateau Jomini has been mentioned, but, again, it all depends on the long-term viability of the community. Right now, we feel that we do not want to jump into something with both feet. We are trying to address it from an approach of trying to get as many people as possible to work on short-term projects and, if the shutdown looks like it is going to continue, we will go into the next stage of the long-term projects.

Mr. McDonald: I am trying to encourage the Minister to think about promoting the long-term viability of the mine and town instead of just waiting for everything to collapse before responding.

The Minister has indicated that he is not going to be pursuing a number of projects until such time as there is a greater certainty about the mining company in Faro. At the same time, the government issues a press release today that basically plans for the shutdown of the mine and the relocation of people should there be no work. What I would like to know is what the government is specifically doing, through projects like Chateau Jomini - which they cancelled - and other projects that may encourage more economic activity in Faro, so that the people in that town can plan a life in the community and worry less about their long-term futures.

Hon. Mr. Devries: The past government did very little to diversify the economy of Faro. If we look at the contingency plan, there is the stripping of the Grum that can be considered. First we have to make sure that we can do it in such a way that we have some assurances that there is security for money that gets put into Grum stripping; for example, first hold on the Grum property. There is some of the environmental work that can be done to the tailings pond.

Mr. McDonald: The obvious point to make here is that the NDP government was not presiding over the collapse of the Faro mine and was instead doing everything it could to keep the mine open, ensuring that there were jobs for the people of Faro, Watson Lake and Whitehorse.

The question I would like to ask is: given the fact that the government has already taken one opportunity it had, and let it slip through its fingers, particularly with respect to Chateau Jomini - I believe that particular project has been handed to Government Services or Economic Development - can the Minister indicate whether or not they are interested in pursuing the decentralization that was associated with that project, ensuring that more thorough federal government services were going to be provided to that community and ultimately a little more economic activity, that the community craves at this point?

Hon. Mr. Devries: During the last few weeks there have been ongoing discussion with the communities and we have asked them what projects they would like. We have put suggestions to them and we are asking the people within the community to provide recommendations back to us. We are not going to force something on them that they do not want. By the same token, we are open to anything they come forward with. There are several projects that they have indicated an interest in.

Question re: Communications advisor

Mrs. Firth: My question is for the Government Leader. It has come to my attention that the Government Leader’s communications advisor, who is now on staff with this government, is being paid in the base salary range of $72,000 to $93,700. The previous NDP government’s communications advisor was paid in the salary range of $57,000 to $74,600. This was the person whom the previous Members had touted as the John Trump of the North. Why should the Government Leader’s communications advisor be paid a salary in a range almost $20,000 more than the previous government’s?

Hon. Mr. Ostashek: Perhaps I should indicate to the Member opposite how the salary ranges were developed for employees. All employees submitted resumes. The resumes were given to the Public Service Commission and I asked them to make recommendations as to what the salary range should be.

Mrs. Firth: This is absolutely scandalous. These Members criticized the NDP government for the overpayment of their communications advisor and now they have one who is costing us $20,000 more a year - after all the talk, during the election campaign, about lower salaries. I would like to know why this person is $20,000 a year more valuable than the previous communications advisor.

Hon. Mr. Ostashek: I just pointed out why to the Member opposite.

It was based on recommendations from PSC as to the qualifications of people who were hired. We have reduced the overall cost of the office by 15 percent.

Mrs. Firth: They certainly can claim that they are getting value for their dollar.

I want an explanation from the Government Leader, not the Public Service Commission, why this person is worth $20,000 more than the previous communications advisor.

Hon. Mr. Ostashek: I just gave the Member opposite the reason why. The effectiveness of the people we have in our office has reduced the number of people we need in the office, and we have reduced the cost of the office by 15 percent overall, in excess of $1 million.

Question re: Fees, permits and licences

Ms. Joe: In our budget for this year, we are looking at proposed raises in taxes. Once again, we hear they may have added something else to that. We hear that they are now going to be raising the fees for permits and licences, and not just in one area, but right across the board. I remember the uproar from that side of the House, when they were over here, when we proposed to raise the fishing licences.

Could the Minister of Finance tell us, because it is such a very important part of the budget, why that was not mentioned in the budget speech to this House?

Hon. Mr. Ostashek: I do not know that it is such a big part of the budget. I am not sure how much capital will be raised by it.

Once we get into the line-by-line debate on the budget, the different Ministers would be better equipped to answer questions on increases in their own departments than I am.

Ms. Joe: This is absolutely scandalous, as was mentioned by another speaker in this House. When we were in government, we proposed to raise the fishing licences. They said it was akin to raising taxes, or even worse. Now, they have decided they are going to raise the fees for permits and licences right across the board.

Did Cabinet make this decision, or was it just something that was dreamed up by the Government Leader?

Hon. Mr. Ostashek: When we get the supplementaries out of the road and get into budget debate, we can answer all these questions. I believe the increase in fees is not coming in until next year.

Ms. Joe: It appears that the Minister of Finance does not know exactly what his government is doing, with regard to raising taxes or licence fees.

Since this increase is going to cost Yukoners more money - as is their proposed tax increases - I would like to know whether or not he has had any consultations with the general public, or did he only consult with party supporters?

Hon. Mr. Ostashek: As I said to the Member, once we get into the budget debate, she will have the opportunity to ask all kinds of questions that will be adequately explained to her.

Question re: Curragh Inc., court application

Mr. Cable: I assume the Government Leader has had an opportunity to be briefed on the court application, by either reviewing the documents or having the contents related to him.

Has the Government Leader reached a conclusion as to whether the nature of the insolvency of Curragh relates to their liabilities exceeding their assets, or whether they cannot meet their debts as they are coming due?

Hon. Mr. Ostashek: I have certainly been briefed on the documents, in a general way, as to what is proceeding before the court today. Once the filings are made under the CCAA, we will be able to see exactly what the problem is - whether it is too great a debt load or whether it is a cash-flow problem.

Mr. Cable: I would think that would be very germane to the nature of the negotiations that are ongoing through Burns Fry.

Has the Government Leader been able to determine from the court documents the amount of money owed to Yukon creditors?

Hon. Mr. Ostashek: We have not seen all of the court documents yet, but we have instructed our officials to do everything they can to protect the creditors in the Yukon.

Mr. Cable: Both the Government Leader, in his ministerial statement, and the Minister of Economic Development have referred to a contingency plan. Is the government in a position to table that contingency plan, so that the rest of the Members can review the plan?

Hon. Mr. Devries: Yes, I will table the plan tomorrow.

Question re: Property taxes, rural

Ms. Moorcroft: I have a question for the Minister of Community and Transportation Services regarding property taxes for rural Yukoners. During the past weekend, the Association of Yukon Communities passed a resolution entitled, “Tax Compensation for Municipalities”, which was sponsored by the City of Whitehorse.

This is the city council’s blatant tax grab that I questioned the Minister about last week. As the resolution calls on the Yukon government to participate in a committee to review what the city calls, “cost-sharing agreements between communities”, can the Minister state if he is aware of the resolution and whether or not the Yukon government will participate in this committee?

Hon. Mr. Fisher: I have not seen the actual resolution, but yes, we would certainly be involved in the committee that has a look at it.

Ms. Moorcroft: Last week, the Minister stated that the property tax rates for people outside the city have not yet been set for 1993. Will the Minister, when he sets this rate, ensure that this pressure from the City of Whitehorse is having no effect on his decision?

Hon. Mr. Fisher: Just to correct the Member opposite, it is actually Cabinet that sets the tax rate. In fact, this move by the Association of Yukon Communities, and/or the City of Whitehorse, will not affect that decision.

Ms. Moorcroft: Given the large tax increases in the budget on gasoline, and the tax increases on personal and corporate income, will the Minister do the right thing and stand in his place at this time and assure the taxpayers of rural Yukon that there will be no property tax increase on their properties in 1993?

Hon. Mr. Fisher: I noticed a brochure that came out by the Members opposite saying that the cigarette tax was going up two cents a litre.

Speaker: I remind the Minister that the answer should be relevant to the question and as brief as possible.

Hon. Mr. Fisher: I have forgotten the question. Again, I cannot speak on behalf of all of Cabinet, but it will be going to Cabinet very soon.

Question re: Agricultural policy

Ms. Moorcroft: If the Minister is going to forget the question, then maybe I will try a different Minister. In view of the debate at the Yukon Party convention this weekend on subdividing agricultural land for resale, could the Minister tell this House if the Yukon agricultural policy is under review?

Hon. Mr. Brewster: I must be the unknown Minister because I never even heard my name mentioned and that hurts me very much. I will try and answer. No, it is not under review. We simply suggested that we wanted to be very careful that we do not get all our agricultural land subdivided so that we do not have any agricultural land left.

Ms. Moorcroft: To clarify, does he support the existing agricultural policy, including section 253, which states that lands disposed for agricultural purposes will not be subdivided? Does the Minister support this policy?

Hon. Mr. Brewster: Yes.

Ms. Moorcroft: From the news reports, it seemed evident that Yukon Party supporters agree that agricultural land should be available for subdividing and resale. Given the pressure the government must be under from the party faithful and that the government often consults with party members on its policy decisions, will the Minister guarantee that designated agricultural land will be used for that purpose only?

Hon. Mr. Brewster: If she is listening to the news media and their really accurate reports, then she must have got one.

Question re: Education review

Mrs. Firth: I have a question for the Minister of Education regarding his education review.

The mandate the Minister has now made public refers, on its first page, to dealing with children with special needs, at least three times. When the Minister listed who was going to be appointed to the steering committee, there was a glaring absence of anyone to represent the association or children with special needs. I would like to ask the Minister if he will reconsider and put on that steering committee someone who could represent the association and the children with special needs.

Hon. Mr. Phillips: I will consider that request from the Member for Riverdale South. I should remind the Member that the education review committee is to look at curriculum and mainstreaming as well, so the makeup of the board must be fairly broad. There are 23 or so different groups who could have insisted on participating on that review committee and that would make it rather cumbersome. I would fully welcome and expect all groups and persons with special needs to make presentations to the review committee when it makes its tour around the Yukon in the fall, and I would expect they would make strong representation about their concerns in each and every community.

Mrs. Firth: Had the Minister not brought it to everyone’s attention in his mandate by listing that the department would be dealing with children with special needs and what to do with them in the classroom, it may not have been a necessity to put someone on the committee; they could have just received submissions from them.

I would like to ask the Minister if he will tell us when he is going to consider this, and could he give us a statement or report back to the House this week and tell us whether or not there will be a person on that committee to represent those special people?

Hon. Mr. Phillips: I do not know if I can get back to the Member this week, but I will give it consideration. There are two groups that would want to sit on this committee: one group that feels mainstreaming is a necessity and one that feels that very few of the children should be mainstreamed. I am not looking at increasing the board by one; I am looking at increasing it by two, three or possibly four, as other groups all want to be involved in the review.

What the Member is suggesting is that possibly we have 22 or 23 people on the review committee. It would be rather cumbersome and would curtail its effect.

Speaker: The time for Question Period has now elapsed.

MATTER OF URGENT AND PUBLIC IMPORTANCE
    (Standing Order No. 16)

Mr. Penikett: I rise because of the emergency situation occurring because of Curragh Incorporated’s shutdown notices for Faro and Sa Dena Hes last Friday, April 2, and their application for bankruptcy protection today, April 5. I would like to move

THAT the ordinary business of the Assembly be adjourned.

Speaker: The Leader of the Official Opposition provided me with the required written notice of this request. I understand that copies were transmitted to the House Leaders.

Under the provisions of Standing Order 16(4), one Member from each party may speak to the request for not more than five minutes. Then the Speaker will make his ruling.

Mr. Penikett: Curragh’s contribution to the Yukon economy is enormous. It is the largest single private-sector employer and contributes, directly and indirectly, 3,000 jobs to the Yukon economy. One out of every eight private-sector jobs in the Yukon is a Curragh job. Curragh purchases $100 million of goods and services locally each year. Unemployment in the Yukon is already at 14 percent. If these mines close permanently, the unemployment rate will go up and we will have lost perhaps one-third of our gross territorial product.

I, and many Members in this House, are deeply concerned about this government’s actions: their delay in adopting a negotiating mandate, their adoption of non-negotiable conditions, their failure to take direct responsibility for the negotiations, their negotiating through a third party, their failure to have Yukoners at the negotiating table and the fact that, instead of negotiating as if our lives depended on it - as it should have been and would have necessitated our negotiating around the clock beginning months and months ago - we have been negotiating part-time, in Toronto, under a news blackout and through a company that includes, as far as I know, no Yukon residents.

I think the situation is serious. I am proposing today that we set aside some time for debate on this emergency and that we do so without a vote at the end of it. This proposal is not for a vote - not a non-confidence vote, but simply an opportunity for Members to express their concerns and government Members can respond with some information. We desperately want information about what is going on and what they are doing about it.

The citizens of Faro are hanging on by their fingernails to any hopes and dreams they have had about life and work here. Many Main Street merchants in this town worry about the fate of the mine and many Yukon Alaska truckers worry about their futures, as well.

We are here, trying to function in a vacuum, without any news, information or any credible statements from the government about what they are doing at the negotiating table or whether they have negotiating positions that are attainable; nor are they giving us an indication that they understand the kind of seriousness this matter has for all of us or the kind of personal responsibility that the Government Leader and other Members of the Cabinet should be taking for this situation.

Mr. Cable: I would agree that the information that has been forthcoming in the last two or three weeks has been negligible. Any information we can pry out of the government through debate or an exchange of positions would be useful.

We have had two very important events happen in the last five days - the layoffs announced on Friday and the insolvency announced this morning. I am sure the Members would want to receive any information we can obtain on the nature of the insolvency and how that will affect the negotiations, and I am sure the rest of the Yukon would also want to receive it.

I will support the motion.

Hon. Mr. Phillips: I would like to speak briefly to the motion to adjourn the normal business of the House today so we can address the very important issue of Curragh Inc. We, on this side, have no problem discussing this issue, even though we see it may be contrary to Standing Order 16(11)(b), which states that the motion must not revive discussion on a matter that has been discussed in the same session.

We have discussed this matter by way of motion, and discussed it again today by way of many questions on the issue; therefore, it is contrary to that Standing Order. I would suggest that this is an issue that we have discussed probably more than any other issue in this House this session, in one way or another.

We also have some concerns about the letter that all Members received regarding the topic of Curragh Inc. and the reasons for the motion. The letter was written by the Government Leader. I might be naive, but I would have thought that this would have been an excellent time for all Members of this House to be compassionate to the people of Faro, who will be directly affected by today’s announcement.

Instead, the Opposition has chosen to be very bitter, and they are again choosing to play politics with these people’s lives. It is unfortunate that they have chosen that route.

Personally, I would have felt a lot better if the very bitter Opposition would have presented the reasons for debating this motion in a more positive manner. We should be sitting here, talking about how we could be assisting the people of Faro, in not only getting the mine open, but also helping them in the time of closure. That is the issue we should be talking about, rather than condemning the government and the playing of politics in the situation, which the Opposition seems to be trying to make hay out of.

We, on this side, are prepared to debate this issue, and we would urge you, Mr. Speaker, to allow debate to continue.

Speaker’s Ruling on Matter of Urgent Public Importance

Speaker: It appears that the House has decided that it will debate the issue of Curragh Inc. The Speaker is not required to give a ruling, because it is an agreement of the House. However, I would like to comment on the comments made by the Members with respect to this issue, in an attempt to focus the debate.

The issue of Curragh Inc., and the shut down of its operations at Faro and Sa Dena Hes, is a matter of critical importance to the Yukon economy. I think that all Yukoners are hanging on every word that comes forward, and every hour is critical.

The announcement, on Friday, of a two-month shutdown at Faro and a three-month shutdown at Sa Dena Hes, followed by the announcement this morning that Curragh would be seeking protection from its creditors, is new to us and has not been debated by this House.

The other issue of ongoing negotiations has already been the subject of debate in this House and, if it was only a discussion of the negotiations that are going on, I would not have found that it complied with Standing Order No. 16. However, I do find the two new issues - the shutdown of the mines for several months and the protection from creditors - is sufficiently urgent that it can be debated under Standing Order No. 16.

Under that Standing Order, each Member who wishes to speak has up to 15 minutes. After that, there will not be a vote, but we will simply return to the ordinary business of the day.

Motion to adjourn ordinary business of the House agreed to

Mr. Penikett: I thank the Leader of the Liberal Party and the House Leader of the Yukon Party for committing and encouraging this debate.

I want to say to the Government House Leader that his characterization of questions and resolutions on this matter as political is somewhat unfortunate, especially in a matter such as this.

An argument by a politician that something is political is always a strange thing to my ears, since I believe that almost everything we talk about in this House is political, and literal, as not.

The attribution to Members opposite of an attitude of bitterness is even more strange. The Member for Faro says, “bizarre”, and I would have to agree, because his constituents in Faro are entitled to feel some deep anxiety, great alarm, and perhaps even some bitterness about what has been happening to them, their families and their community over the last several months.

Mr. Speaker, you have correctly cautioned us that we should be debating the narrow issues arising from the announcement of last Friday and the announcement of this morning, which I believe heightened the sense of urgency, ratcheted up the degree of crisis, and indeed contributed greatly to the sense of emergency which all of us feel.

I believe that the Government Leader is wrong when he attributes Curragh’s problems simply to low metal prices. I believe the Government Leader is wrong when he says that the negotiations for a loan guarantee to strip Grum have nothing to do with the other problems. I believe that the Government Leader is wrong when he suggests the way this government has conducted those negotiations has nothing to do with Curragh’s other problems.

I think it is quite obviously the case that the financial crisis for Curragh Inc. is the biggest economic issue to face the Yukon this year, last year, and perhaps even for a decade. The Government Leader has continued to misrepresent the actions of the previous government in asserting that we were invited to make a $34 loan guarantee a year ago, which was not the case. Throughout most of last year, we were negotiating with Curragh, and Curragh was negotiating with the federal government to try to arrange an aid package similar to what is now on the table. To state the obvious, the situation for Curragh has gotten far worse since the Westray disaster, and I believe, as prices have been low, and stockpiles have increased, the situation over this past winter has become much worse.

The Government Leader will understand that I have some experience in negotiations, as have my Cabinet colleagues.

It is not exactly the same kind of experience he has as a proprietor of a business in the Yukon, but I have been involved in negotiations on behalf of this government on a number of fronts - whether we are talking about negotiations for a collective agreement with our employees, whether we are talking about negotiations at the land claims table, or whether it is negotiations to reopen the mine at Faro. One thing I know for sure is that, no matter how confident and how professional the people are who are conducting the day-to-day negotiations, no Government Leader and no Cabinet Minister can escape direct responsibility at two crucial stages in the negotiations - for that matter, all stages of the negotiations.

The Government Leader and the Cabinet have to, very early and very quickly, establish a mandate for the negotiations. The Government Leader and Ministers may also have to be involved at the closing of a deal, to close the gap between the parties. They also have to be intensely involved throughout the negotiations, perhaps even to the point of having to come to the table themselves.

This was my experience when we were negotiating to open the mine in 1985; it was my experience when we were negotiating to transfer NCPC to the Yukon Territory, where Bill McKnight and I had to conclude an arrangement; it was my experience during the negotiations of land claims, where, again, Mr. McKnight, I and the First Nation leadership here had to actually get to the table ourselves and close the deal - sometimes in all-night sessions.

I believe the situation we have with Curragh has not just now but has for some time been crying out for this kind of leadership, and I believe that the situation, following the announcement of last Friday and the announcement of this morning, was avoidable. It was avoidable if this government had adopted a mandate earlier and if it had become more personally and directly involved earlier, and if, in fact, it had adopted positions that were attainable and realistic earlier.

I am concerned about the negotiations that have been going on in Toronto - using as an agent the company Burns Fry, a brokerage house - which, I am told, does not normally do these kinds of negotiations on behalf of governments - a company that wrote a report for the federal government and for the Yukon on the prospects for Curragh Inc. and which is widely believed in Ottawa as having been asked by the federal government to write a pessimistic report.

I am sure that the people at Burns Fry are competent, caring professional individuals, but they lack one characteristic that I think is essential to the success of these negotiations: they are not Yukoners. They do not live here; they do not pay taxes here; they do not have children in school here; they are not involved in our life. They cannot possibly understand how important these mines are to our economy. I am sure that, to them, it is just a job - I am sure that it is a job that they will do well, but I am sure it is also true that they will get paid whether they succeed or fail.

If we fail, we will pay and pay and pay for years and years and years to come. Most of all, the people, the employees of Faro and Sa Dena Hes, will pay; so, too, will the suppliers and customers of Curragh.

The Government Leader says they were negotiating all through this last weekend, but one could have phoned Curragh Inc. any time in the last few weeks and asked how the negotiations were going and they would have replied that they did not know, that not much was happening, that they are not at the table and that the Burns Fry people are perhaps nine-to-fivers, working bankers’ hours.

I know that if one wants to get a deal, and if this government had said they wanted a deal, the same as in the 11th hour of labour negotiations or land claims negotiations or anything else, we would have been working round the clock; and if this was really important to the Yukon and to the Government of the Yukon, the Government Leader would have sent a signal about that by being at the table himself - not just having the Minister for Economic Development go to Toronto to meet with officials who had met with Burns Fry, who had met with Curragh.

I believe that in the end the way we are going to get an arrangement here is to recognize that there has to be a role to play for the Government Leader in demonstrating economic leadership, perhaps even to the point of sitting down with Mr. Frame here in Whitehorse to hammer out some essentials in order to get these mines open and get our economy back on its feet.

The government began the negotiations with a published list of conditions. It was widely mooted about that there were other conditions that were not on the list. The most troubling things about those conditions, as we have mentioned before, was that some of them were not negotiable. I have had some experience in negotiations but I do not know how you can negotiate non-negotiable conditions, especially when one of those conditions, we have heard, is totally unprecedented. To negotiate non-negotiable, unprecedented conditions, under a short time frame, I am sure has contributed enormously to the difficulties this company has had in solving its own problems: private sector borrowing, bringing new equity into the company and selling assets.

The government began the negotiations with a great blast of publicity, issued press releases, went on open-line shows and then as soon as it got serious there was a blackout. We have heard no more.

The Government Leader said today that now that Curragh has applied for bankruptcy protection - he seemed to be saying in Question Period that the matter is now in front of the courts, implying, I thought, in some of his answers, that some of these issues are only going to be dealt with before the courts, not on the negotiating table. We know also that there is someone from the Department of Finance going to Toronto to participate in the ongoing discussions with Curragh, something that we wished had happened a long time ago.

The government has announced today a very large and competent inter-departmental group to deal with the contingency plan for the shutdown of the mines. I find it ironic, when he says that we did not have any competent people on our staff, that in 1985 we put together that kind of inter-departmental group of senior people to carry out the negotiations to open the mine. We only brought the kind of professional experts, financial experts and third-party experts to have an objective look at what we negotiated in the meantime.

This is the most important economic question facing us. It is maybe more important than the fate of the tax increases proposed by the Members opposite. People in Faro have been suffering, waiting and going through agony for the last several months. When the Government Leader attended a meeting with 600 people in Faro he said that he would have a deal ready to sign as soon as he had the Burns Fry report. He said that in January, the Burns Fry report came out in March and we did not begin negotiating until March - that is now clear.

The Government Leader has finally sent someone from the Department of Finance to negotiate but I want to urge him now that he has to get directly involved himself. For the sake of the people in Faro, Whitehorse, Watson Lake and all citizens in the territory he has to start giving us some clear idea of what he is doing, what his direction is at the negotiating table, whether some of these preposterous non-negotiable conditions are really that, whether he is prepared to bargain in good faith and whether he is prepared to play a leadership role in this economy by getting more personally involved.

That is the question that we have today and I hope the short debate we will have this afternoon will allow, not only the Government Leader, but other Members opposite who want to participate to give us the information that the Liberal Leader has said we all want and need. I am not asking him to betray confidences; we just want to hear something about what are government’s real intentions at the table. If they just want to have conditions that cannot be negotiated, but they can say “we went to the table, we fought the battle, we came away, we took an honourable but hard-headed position and we could not get a deal; too bad”, we are going to have a big debate about that.

We would like to know that the government is negotiating in good faith. We would like to know that the Government Leader is going to get involved himself and we would like to know that he would recognize the urgency of the situation.

It is absolutely imperative now to get serious and recognize that this whole thing is going to fall apart unless we start to really put some energy and effort into it.

Hon. Mr. Phillips: I have a few words I would like to add to this debate. I am pleased to see we have the opportunity to debate it again, although it is something we have talked about from time to time in this House. Some new conditions have been imposed on us recently: Friday, Curragh Inc. announced an extension of layoffs until this spring, and there was the news this morning that the whole matter was going before the courts.

I take exception to the comments made by the Leader of the Official Opposition and the Member for Faro, when they keep asking us to publicly tell the people of the Yukon what is going on in the negotiations. I know that there are daily communications between the Government of the Yukon officials and Burns Fry. What surprises me about the request from the Members opposite, and especially from the Member for Faro, is because that individual used to be a union negotiator and knows that, in those types of negotiations, neither party exposes its side until the negotiations are complete.

We have given some positive signals to the general public, first of all, by agreeing to the $29 million loan, by presenting Curragh with conditions, by having Curragh accept those conditions as a basis of negotiations, by appointing Burns Fry to negotiate on our behalf, and by having Curragh Inc. and the Government of the Yukon state clearly that negotiations are proceeding. If there was a problem, and negotiations had broken down, that would send a clear message to the business community that this deal was not going to work.

We all have to remember what we are talking about here. We all knew, in the beginning, as we know now, that $34 million will not help Curragh Inc. operate.

It will not help them. It is not enough. It will strip the Grum deposit; it will provide the gem, or the lure, for other companies or individuals to purchase Curragh’s stock and help Curragh raise the $50 million.

We sent that clear message to those individuals: we want to negotiate an agreement with Curragh so that we can protect the Yukon taxpayers’ dollar.

The previous government knew back last year that Curragh was in some financial difficulty. In fact, we debated in this House, for some time, about a $5 million loan to Curragh. One of our biggest concerns at that time was whether or not this would be enough. The leader of the government at that time, who is the Leader of the Official Opposition now, said clearly that $5 million would be enough. It would help Curragh produce into the next century, were his words. I wish I had them before me here, but I would be more than happy to make them available to anybody who would like to read that. It is clearly in Hansard that the Government Leader said that this $5 million would help Curragh produce into the next century.

At the same time, the Government Leader at that time, now the Leader of the Official Opposition, stated just as clearly that no way could the Government of the Yukon loan Curragh the $34 million, which was anticipated at that time that they would need to strip the Grum deposit. He said clearly that there was no way the Yukon people could afford that kind of money.

Now, we have agreed to loan Curragh that kind of money. We have agreed to loan Curragh that kind of money on 14 conditions, some of which are negotiable. I would suggest that the one condition that is not negotiable, overriding all these conditions, is that we are just not giving them the money carte blanche. We have to ensure that the taxpayers’ money we give Curragh has some protection, that we have an opportunity to recover some of that money, or most of that money at a future date. That is what we are doing by those conditions and Curragh knows that.

I talked about the $5 million and I have strong concerns about that. I understand the $5 million has gone across the sea. It is my understanding that the $5 million is no longer as secure as we thought it was. We may not be able to recover any of that $5 million, no matter what happens now. If we do recover anything, it will probably be a small portion of the $5 million. Yet in this House, less than a year ago, the then-Government Leader, the Leader of the Official Opposition, stood in his place and said, “We have got tons of security and collateral for that. We hold a 35 percent share of the ore in Skagway.” Well, it is not in Skagway. It is in the hull of some ship going to some other foreign country. The people we talk to, the experts in the field, tell us that there may be a problem in recovering any of that money in the future.

That concerns me, because we were led to believe that that money was secure. What we should be talking about here today is what we can do, what we should be doing for the people of Faro with the latest announcement that has come forward from Curragh.

I can tell the Members opposite that we are preparing for the worst. If we were not, we would be severely criticized by the Members opposite for not doing so. We have assembled a contingency team that has been in Faro several times. I believe some members are on their way to Faro again today.

I want to assure the Member for Faro that, as far as I am concerned, all programs involved in my department, especially the Department of Education and the school in Faro, will remain as they are for the time being. There will be no changes whatsoever to the schooling in Faro. He can assure his constituents - the students and parents of the children in the school in Faro - that this school year will be completed, regardless of what happens to Curragh and regardless of what announcement is made in Curragh between now and the end of the school year.

Again, I just want to suggest to Members on the other side that it is too late to be attaching blame to people. We should be sending a message to the Yukon government, Curragh and others that we are concerned about the situation.

It was really interesting to hear on the radio this morning the Member of Parliament for the Yukon and the Leader of the NDP - Audrey McLaughlin - criticizing this government for inaction. I have yet to hear that Member speaking out for the people of the Yukon with respect to there being no federal involvement in this particular loan. There has been hardly a peep from that Member in Ottawa about the concern of the people of Faro and the Yukon. It is a shame that that Member has been hiding in the closet, trying to avoid this particular question, because she knows it is a sensitive one to her constituents.

I would hope that the Member for Faro would gather his constituents, en masse, much like when he marched on us, and march to the office of the Leader of the New Democratic Party - Audrey McLaughlin - and say to her that it is time to get off her butt and do something. Pardon the language, Mr. Speaker, but the Member used the same words publicly. I would hope that that Member would say the same thing to Audrey McLaughlin, because she has been silent on this issue. I think that is a shame.

It is time for the Government of the Yukon and others to work hard to try and get the mine up and running. I know that is being done.

The decisions that have taken place in the last couple of days are very serious. They point out clearly to me - more clearly than they have ever been - that we were right when we offered the money to Curragh and asked for security. If we had given the money to Curragh the way the NDP wanted to give it to Curragh a few months ago, with no guarantees whatsoever, we would be standing in line like everyone else with no security for the $29 million. We would be in the exact position we wanted to avoid.

We are in a good position now, and as the Government Leader said earlier today, the recent court action may even help us get the Grum deposit stripping moving a little faster. I know officials are working very hard on that, and I would hope for the sake of the people in Faro and for the sake of the Yukon, we can get this mine up and running as soon as possible.

Mr. Harding: Today, from the side opposite, we have a new person to blame: Audrey McLaughlin. She is concerned about the people in Faro, but we have a new person to blame. Absolutely incredible.

Our Member of Parliament has had press release after press release and meeting after meeting on this subject. She has come to the point where she had to publicly beg the territorial government to do something and they have not done a thing. To say that there have been no public comments regarding the federal government commitment is absolutely misleading, because I have heard the commitments.

The $5 million loan that was secured with concentrate is now the fault of the Leader of the Official Opposition. Although we were defeated in the October 19 election, perhaps it was a requirement of Mr. Penikett to stand by the concentrate pile in Skagway with a shotgun, to make sure Frame would not carry it across the sea. That is now our fault, too. This is absolutely incredible.

The Members opposite voted for that agreement, and they voted for the $5 million loan.

I take extreme exception to the statements made by the Member for Riverdale North, who stated that we were bitter, showing no positive commitment that we were not speaking in a positive manner - absolutely ridiculous. For months and months, we pleaded for action from this government. My emphasis is: what is this government doing to put people back to work? That is what I want to know. First and foremost, I want to know what they are doing for the unemployed.

The contingency plan is fine, it should be worked on, but it should not be the emphasis, and that is why I ask questions about what they are doing, because they do not bring anything into this House.

The Member for Riverdale North is quite right; I was a union negotiator. One thing I always did as a negotiator was keep my troops informed. In the case of the Government of Yukon, the troops are the people of the Yukon. The government has not kept the people informed; they have not even talked to the people.

It is not only the NDP, but the Member for Riverside has been quite vocal about being involved in the process, but they are so defensive and so afraid of the big, bad NDP, because they are doing such a pathetic job, that they continue to make us the emphasis of everything. They absolve themselves of total responsibility. They have been in government for almost six months.

I know that there is a limit to expertise on the other side of the House, as the Minister of Economic Development said, but there is no excuse for what has happened thus far with Curragh.

I then read the comments and ministerial statement of John Ostashek, Government Leader, “I will stress that there is nothing that the Yukon government can do to reverse the mine closures. These closures are not related to the loan guarantee talks.” Does the Government Leader expect the Members of this House to believe that? If you were an investor, Mr. Speaker, would you say, “I am going to buy some shares now; I am going to purchase a huge, multi-million investment in a private placement in Curragh, because I feel quite confident that the Yukon government is really committed to this project, because they placed 14 impossible conditions upon Curragh. I feel pretty good about that investment.”

I am waiting to see what the Yukon government does. I want to know if those conditions are negotiable. I want to know if they can be met by Curragh. I want to know if they are serious - some of those conditions are absolutely ludicrous. That is what one would do - wait. That is why we are in the situation that was announced on Friday and the situation that was announced today.

Yes, there is no question that prices are low and that is a contributing factor. I understand that today the price hit over 50 cents again; that is a good sign - a mine closes in Mexico. It is a very good sign. But to suggest that they are not linked is absolutely irresponsible and again it is the other side absolving themselves of responsibility.

There has to be some commitment on the loan guarantee. The 14 conditions are ludicrous, they are loony tunes, they are not going to work; yet, when we ask for examples from the other side to demonstrate what they have pulled off the table, so that we could draw some comfort that they were an opening mandate in the negotiations, they do not tell us anything. Then they wonder why we have this reaction. They wonder why we are concerned.

I was home all weekend at the big curling bonspiel and everyone I talked to doubts this government’s commitment to this loan guarantee - everyone I talked to.

No, $29 million will not save Curragh right now. They need to raise some working capital, but the trigger for that is the loan guarantee.

The government has gone to great lengths to try to convince people that the money has to be handed out in one $34 million lump sum and, if the mine went down the next day, the government would automatically have lost $34 million down the drain.

That is not the case. The money could be advanced on an incremental basis. As the bills for the Grum stripping come in, the company could go to the bank and get the loan. I am told it is probably in the vicinity of $3 million a month. As that commitment comes into play, it provides a buffer zone for investors to consider it with a new look. The share prices have taken a beating and, without positive news, it is risky; there is risk in it and I applaud efforts to get as much security as possible - what I am concerned about is the first charge on security being non-negotiable. That is where I think they have gone overboard. We have never said we want no guarantees whatsoever; never, never, never. As a matter of fact, we put a resolution forward that we wanted tough but realistic conditions. We want to see as much security as possible, but there is going to be some risk in the equation.

Unless we create the buffer to give some investors a chance to take a fresh new look at this, the mine is going to go down. The mine in Faro is going to go down, and the Sa Dena Hes is going to go down. To suggest that these events are not related to loan guarantee talks is absolutely unbelievable. What is an investor interested in buying the Stronsay property doing right now? Is he saying, “I should buy that Stronsay now for $35 billion because the company has today filed for creditor protection”? No, he is saying, “I want to buy that mine for a nickel when those buggers go under.” That is what the investor is saying. Until there is a loan guarantee or some spark, nothing is going to happen.

They are waiting for Curragh to go down. It is a risk, and I will admit that, but the only spark that will save this is if the government gets to the table, puts some work and real personal commitment into the negotiations, burns the midnight oil, gets the Burns Fry people here, if they need them, involves the Members of the Legislature and talks to us about what is going on.

We have one right in this Legislature, and that is to debate and ask questions. When we are not given any information, what else can we do but do what we did today. To us, this is an emergency. It is an emergency to the Member for Riverside, who also supported us on the motion. It is an emergency for this territory.

Talk about dependency on the feds. The Members opposite like to talk about moving to self-sufficiency. Do you know, Mr. Speaker, what is going to happen to our territorial economy here and the private sector? Now I know, under the perversity factory, the government might be saved for the time being with regard to the drop in income tax and gross domestic product. However, the fact is that it will bring us closer and tighter to the feds, and the ideas of self-sufficiency will go by the wayside.

The 14 conditions that were laid down on March 10 have been called “a clear message to the investors in the industry”. We have heard that the 14 conditions are the laughingstock to investors in the industry, because they do not believe they are achievable.

If they were in an opening position, we could accept that. If they came to us and said they had dropped this or that off the table, that was a little bit of padding, we have moved off that and are getting closer, then we would not criticize the conditions, because we would know that is what they are. However, we have been given no indication of that.

As a matter of fact, the Government Leader went to Watson Lake and said that the first charge on security was a condition that was non-negotiable. That gives us a great problem. My community is hurting badly. Those people are in Faro because they want to live in Faro, because they love the Yukon, and because they want to put a roof over their heads and food on their table. Time and time again, when I go home and they ask me what is going on, I have to tell them that the government will not tell me anything. They say they are not serious about it, and cannot be serious about it. They want them to move their office from Toronto to Whitehorse; they want 14 conditions, some of which are unprecedented; they want the note holders to postpone interest payments; they want Stronsay to be sold and 50 percent of the proceeds to be turned over to the loan guarantee - this, in a time when things are desperate. The Members themselves have said it: that $29 million will not save the company.

They are trying to take 50 percent of the proceeds of the sale of Stronsay back on the loan guarantee. We are robbing Peter to pay Paul because, when we do that, we giveth here and taketh there. That will not allow them to have the working capital to work through these depressed metal prices, and that is what it will take. It will take some working capital to work through the low prices because, at the price we have had for the last little while, they are going to have a depressed, or negative, cashflow. There is no question; they cannot operate at those low prices without losing a bit of money on the working capital side, which is why it is so important for the share and equity offering to work. That is why it is so important that they sell Stronsay.

There is one match that will spark that, and that is an around-the-clock effort by the territorial government, to bang out a deal and to give this its number one priority as a government. Instead, what have we had? We have had nothing but blame, blame, blame. The $5 million loan has been made so much of by the Members opposite. They voted for it. If they were concerned that there was not enough information, why did they vote for it? That is what I am asking.

Some Hon. Member: (Inaudible)

Mr. Harding: I did read the Hansard. I read what Danny Lang had to say. I read what Mr. Benner had to say. I read the whole conversation when he came before the House and appeared as a witness. I know what went on. They try and make the argument that they should not do anything, or we should not be able to ask questions because, for some reason, the Leader of the Official Opposition and the NDP government, when there was no request even made to them by Curragh for it to go alone on a loan guarantee, should have lent $34 million. There was no request. What they asked for was a portion, and that is what they got. That is what the Members opposite voted for.

In the meantime, there was the Westray fallout, which has taken awhile. I know the Member for Riverdale North has probably gone to get the Hansard, where the Leader of the Official Opposition talks about the timing of the announcement that the Leader of the Official Opposition made. What I am trying to explain to the Member for Riverdale North is, after that statement, the Westray fallout took some time to get to the point where it was well known to the Members in this House that the company could not survive on its own. There was just no way.

A lot of things have changed since then. At that time, there was no request for the $34 million. The Westray fallout was still occurring. The federal government had not said unequivocally that they were not going to provide any help. The prices dropped tremendously. Inventories rose tremendously. The equation is all changed now. To somehow parallel that time to now is absolutely ludicrous; it is absolutely irresponsible.

The government is now charged with the responsibility because they have been given a request that no one else has ever been given. That is why they should deal with it. They should deal with it on behalf of the people of the territory because it is an urgent situation that is affecting many, many people in this territory. We are only now beginning to understand what it is going to do. The people from Yukon Alaska Transport have now stopped the ore truck haulage. As their layoffs start to have a spinoff effect on the economy here in Whitehorse, it is going to become more and more apparent how pervasive the Faro and Watson Lake mines are on the Yukon.

I cannot for a minute relax my position of concern for what the government has done with regard to this issue for months and months. The request first came to go it alone in December - they were elected on October 19. They commissioned a study, only on January 11, at the request to the federal government to look into the financial situation affecting the company, through Burns Fry. They came to a public meeting in Faro January 21. What happened there? They made promises that the agreement in principle would be reached, and the numbers would be punched in once the study came back. That did not happen at all.

They waited from January 11, while the study is going on, to adopt a negotiating position. On March 4, they come out with a hastily typed news release saying that the loan guarantee was going to be approved, based on a number of conditions. Six days later, they come out with 14 flabbergasting conditions. There was no indication to the people of the territory, or to the Members of this House, as to exactly which are negotiable and which are not. You really have to question if they are serious about this. All along negativity is spread.

The Government Leader spoke, in stories picked up by the Globe and Mail, about how close to bankruptcy the company is. They may have been, but there is a very subtle difference between somebody on the street saying that, and the Government Leader, who is being asked to back a $34 million loan guarantee. I think that it is time for this government to make this its number one priority, to start giving the information that we require as elected people in this House, and for Yukoners to get the information that they need, because it is going to affect most of their lives. I think it is time that this government started accepting responsibility for getting people back to work in the Yukon.

Mr. Cable: I have been sitting here trying to think of some silver lining to speak about for the people of Faro and other people in the Yukon. I suppose that silver lining is that the Companies Creditors’ Arrangement Act provides some measure, short of bankruptcy, that permits a corporation to regroup and hold its creditors at bay for a short time. It also has the advantage of flushing those mysterious note holders out of the woodwork so that we can find out who they are and what they want.

The government has two hats on right now. It has one as a secured creditor with some rights under the Companies Creditors’ Arrangement Act and it also has some rights as a party negotiating with the corporation for further money.

I would hope that with its hat on as a secured creditor under the act that it will take a lead role in persuading the other creditors to help restructure the corporation. There has been a number of comments made in this House and elsewhere that the problem with the corporation is a liquidity problem and not one relating to its assets and liabilities. I hope that is the case. I hope that this application in court will provide a solution to that.

The government should realize - I hope it does realize - it now has two levers for levering the corporation back to some sort of health and keeping the overall debt structure in some sort of manageable form.

One point I would like to make to the Government Leader, in particular, is that the Members of the Opposition do not have a lot of high-priced help to analyze the financial wheelings and dealings that are going on now. If a deal is struck, I would hate to see it brought into this House in the same way as this ministerial statement this afternoon, just at the last minute, in the hopes that our hands would automatically rise.

I would hope that the Government Leader will keep the House informed as to what is going on, both in relation to the Companies Creditors’ Arrangement Act application and with respect to the Burns Fry negotiations that are going on in Toronto at the moment. We have not been informed adequately and we cannot form opinions at the last minute.

Mrs. Firth: I have been listening quite closely to the debate this afternoon. The concern I have, as a Member of this Legislature, and the question I have for the government is whether or not they are going to do something or are they just going to sit back and wait for something to happen and for the problem to solve itself. That is the concern I have had all along with this government’s action or inaction with respect to the whole Curragh situation.

It seems that all Yukoners, not just the people in Faro, are feeling it the most; they have felt like they have been kept dangling on this string. Everybody is waiting for something to happen.

The people in the Yukon can sit around and wait for something to happen, because they really do not have the ability to take the control and decision-making into their own hands. They are at the mercy of the government and other Members of the Legislative Assembly; therefore, it is my hope that the government is not going to just sit back and wait for something to happen, but that they are going to step in and make something happen, which we hope will be in the best interests of all Yukoners.

My preference would be that the Government Leader set some specific terms for the negotiations as to where they are going to take place and how much longer we are going to have this carry on, and whether or not he will be more forthcoming with which of those terms and conditions are negotiable. We, as Members of the Legislature, do not know which are negotiable and which are not.

The negotiations should be held here in the Yukon. There should be Yukon representation at the table. Perhaps, for the negotiating team to get a real flavour of the seriousness of the situation, the negotiations should be held in Faro, so they could see what people in that community are going through. That way, there would be no breaks for golf games, tea or whatever.

When negotiations are taking place, if there is a goal that has to be achieved, or a decision that has to be arrived at, people can lock themselves in a room and arrive at conclusions, make decisions, and take however long it takes to do that. Perhaps that is what we should be doing and the direction the Government Leader should be giving to his negotiating team.

My concern is not who did what when and whether it was right or wrong, or whether this side was better than the other side. My concern is for all the people of the Yukon.

The people in Faro are bearing the brunt of the stress right now. They do not know what they are going to do tomorrow. We are losing jobs. I understand the message is being passed on to truckers at Yukon Alaska Transport to look for jobs anywhere else in Canada. There is not a lot of optimism.

There are constituents, not only those whom I represent, who are now in a position of losing money because of what has happened. We are facing a budget that is increasing taxes for Yukon people. There is going to be lost business to Yukoners because of loss of population, if that is what happens as a result of Yukon Alaska truckers leaving, as well as Faro residents.

We have a budget on the table that we are debating, one that we have been told, by the government, is based upon Curragh being open and operating. As a Member of this House, I am going to be asking about ramifications on this budget of Curragh closing down.

I know that Yukoners are facing increases in the costs of their electrical rates and if Curragh closes down, the increase is going to go up enough more. Some of the officials at the Energy Corporation and Electrical Company have predicted that rates could go up as high as 40 percent if Curragh closes down. Whether that is accurate or not, I do not know, but that is going to have a tremendous effect on the people whom I represent and all Yukoners.

We have to, as Members of this Legislature, get our priorities in order. My first priority is for the people of the Yukon - not whether some other government did a worse job of negotiating, not whether the Member of Parliament is doing a good job, but what we are doing as 17 Members of the Legislative Assembly to help the people we represent.

I find it very unsettling and very disturbing that we are standing up in this House and asking Yukoners to accept this agonizing, slow torture as we debate this issue day by day, issue by issue and new development by new development.

When I received this ministerial statement, as other Members have said, a minute or two before we came into the Legislature, it gave me a sick feeling in the pit of my stomach because the government was announcing their contingency plan and it made me feel like it was all over, finished and that there was no hope. The information that I want from the government is to know if this is all that there is or is there some hope and can we be optimistic that maybe we can arrive at a conclusion or decision that is going to be a positive announcement and favourable for all Yukoners?

We are not protecting Curragh; we are not doing this for Curragh; we are not doing this for Clifford Frame; we are not doing it for anyone, other than the people we represent. At least that is the way I see it.

I want some answers from the government. I want to know if they are going to carry on negotiating? I want to know if there is going to be any direction to have the negotiations take place in the Yukon, either in Whitehorse or Faro? I want to know if we are going to have a Yukon representative at the table? I want to know if there is there going to be a time line, or some direction that once you get in that room, you do not come out until you have an answer one way or the other.

I would like to hear from the government what their contingency plan involves, in the event that negotiations do fail and that Curragh is not going to open again.

I do not think we can afford to debate this issue for too many more days in the Legislative Assembly without having some answers for all the people in the Yukon.

Hon. Mr. Devries: I also rise to speak to this motion.

I appreciate some of the comments that the Member for Riverdale South made, although I do find it interesting to hear the rhetoric that we have seen coming from most of the Opposition Members.

It seems to me that a few weeks ago Members on the other side of the House kept asking us over and over, “What is the contingency plan?” Today, in the ministerial statement, we indicate some of the parameters of the contingency plan, and all of a sudden they say it is doom and gloom, because we have tabled the contingency plan. Did they or did they not want the contingency plan?

Some Hon. Member: (Inaudible)

Hon. Mr. Devries: It may not have been mentioned in Question Period, but it was sure mentioned in some of the speeches.

I agree with the Member for Riverdale South, that, yes, the Yukon public is concerned to a certain extent; however, I think she is overemphasizing public negativity.

In my discussions with people on the street, and calls that I have been getting from Watson Lake - even from truck drivers for Yukon Alaska and for Gateway Transport - all indicate that we should hang in there and make sure the loan is secured. Indications to me have been that the company should restructure. These people probably know more about the inner workings of the company than any of us, because they work with them either directly or indirectly.

I want to go back to the question of the $5 million. In Hansard, I believe it was Mr. Lang who said, “Primarily, the question that I have is with respect to the $5 million, accepting the principle that the government lends the company the $5 million. Is it safe to say then, that with all of the known variables today, that this will be the only amount of money required of the government with respect to getting phase 1 into a position of being able to pay for the stripping program as well as the mining of a new deposit?”

Mr. Benner answered, “The $5 million contribution from the Yukon territorial government, matched by $5 million from Curragh Inc. - as of two days ago, we have had a change of name ... The purpose of the venture going forward was to enable Curragh, by the way of a loan from the government, to show the outside potential investors that there was confidence in the project. This would allow us to be in a position to move forward and seek further financing and funding.” This statement was made right before the $5 million was given to them approximately one year ago.

It has not worked. Curragh has not managed to raise the financing and the funding. The primary problem with Curragh today is the fact that they have a huge debt and low metal prices. The problem is not because the Yukon territorial government has not advanced the $34 million at this point.

Can I ask the Members if they seriously suggest that we go ahead and give that $34 million to Curragh, without at least having some security in place? All of the financial advisors, and people whom I have talked to, indicate those conditions are not unrealistic.

Mr. Lang went on to say, “Is Curragh going to be back here for more money in four months? Is the $5 million going to be sufficient to meet the objectives Mr. Benner has just outlined?

“The answer is that $5 million will not be sufficient to complete the phase 1 stripping of Grum. Further financing is required. We are currently having discussions with the federal government with respect to the financing.”

For the Opposition to be saying that they were not aware that Curragh was going to be coming to us for more money is irrelevant in this case.

I also find interesting some of the comments made by the Leader of the Official Opposition. Having followed some of the negotiations that went on in 1984-85 in relation to Curragh, this is a completely different matter. Then, there was basically the construction of a company taking place - a new company was moving in to purchase the assets of, I believe, Cyprus Anvil, which was in receivership; and there were the complexities of establishing markets and negotiations on the roads and power rates, and things like that. This is a much more complex matter, in that this is the restructuring of a company that already exists. I just do not feel that the Leader of the Official Opposition understands the complexity of this issue.

The majority of the negotiations have been taking place have been between Curragh and the banks, and between Curragh and the note holders. I feel the Leader of the Opposition is suggesting that we should go and talk to the banks as Curragh does not seem able to do it. But it is not that easy. We have to get permission from Curragh to talk to the banks and things like that. We cannot just jump in there with both feet. The other suggestion seems to be that maybe we should go and talk to the note holders for Curragh. Well, they will not even tell us who the note holders are. I feel this CCAA action is a restructuring of the company and it might help us resolve this important matter.

It is true - none of us like to see the workers at Faro out of work and the workers at Sa Dena Hes out of work, and it is true that hardships are being placed on the families. I am very aware of that when I think back to some of the problems we had in Watson Lake in the past. It seems to me that the Leader of the Official Opposition was also in charge then. Obviously, the negotiations he made on that project failed because we have an empty yard there today.

I do not really want to get into that. The other issue is: what are we doing for the people who are laid off and those who are out of work? I know of several incidences now in Watson Lake where individuals bought new pickups while they were working at Sa Dena Hes and have since had to return them. It creates a lot of stress and strain. We are fortunate that, during the last five or six months, we have had a counsellor in Watson Lake. This person has been kept very busy. Meanwhile, there are also people from Economic Development, who are working with people and assisting them in restructuring their debts in such a way that their needs can be met by the minimal amount of assistance they get from UIC and various things.

Much the same strategy is taking place in Faro. There is also training being made available for people who would like to seek different skills. There is resume writing for people who have decided they want to move on. At this point, however, much of the focus is not necessarily encouraging but, at least it is making it possible for the people to stay in the existing communities with the hope that the mine will be reactivated. That is really the end result of everything we want to see.

Again, the big fear I originally had, when we developed the contingency plan, was that, by releasing the contingency plan during the early stages of negotiation, we would be sending the message to Faroites and Watson Lakers that we had given up on Curragh Inc. The fact that it was mentioned today does not mean that we have given up, but it was basically because of pressure from the Opposition to show that we do have something in place. I am sure that once they see the particulars surrounding it, they will be quite pleased with what we are doing.

I believe it was the Member for Riverside who asked about the negotiations. I assure the Member that, yes, negotiations are proceeding. I do not think we are in a position to speak about them at this point, but I hope to in the near future - perhaps in the next three or four days - and we may be able to discuss them at some length.

I feel quite comfortable that we are doing whatever we possibly can for the people of Watson Lake and Faro and that, whatever happens in this case, even if the worst-case scenario happens to take place, it will be because there was no chance of the company surviving, and the monies this government uses to put the contingency plan in place, or to strip the Grum, will be used in the best interests of Yukoners and all the people involved with the two projects.

Ms. Moorcroft: Today Curragh was forced to file for court protection from its creditors, so it is imperative that we have this debate.

The announcement on Friday of the suspension of mining operations for Faro is having a critical effect on the Yukon economy. Yukon people believe that the longer we go without action, the less likely it is that these negotiations will succeed. It is not just imperative that we have this debate, it is imperative that this debate have some effect on Yukon government actions.

Workers in Faro are devastated by these further layoffs, but it is not just Faro or just the Sa Dena Hes workers in Watson Lake. Some of my constituents in Mount Lorne have been laid off. Working people all over the Yukon have lost jobs.

The people in Faro are not the only ones asking if this government is serious about negotiating a loan guarantee. Some of the 14 conditions, which were publicly laid out, have made the Yukon a laughing stock in national financial circles. What kind of politicians put forward a condition that they have prior repayment over other existing note holders and mortgagees?

We have some very grave concerns about how the Yukon government is paying big bucks for an outside brokerage company to negotiate Curragh loan conditions.

Given the admitted lack of expertise in financial matters on the part of the government, as stated by the Minister of Economic Development, perhaps they need to take some professional advisors with them. However, if I were to take a cynical view, I might suggest that the longer Burns Fry takes to negotiate, the more money they make.

This is having a devastating effect on the Yukon economy. We need to think about the amount of money that is being spent on negotiating this loan guarantee. Unsuccessful negotiations will continue the stress and the strain and will result in a devastation of the Yukon economy. We have to ask the government to take action and put a negotiator at the table.

Right now, we have a negative trickle effect on the economy, with jobs shutting down. This will become a flood if the negotiations fail. People will be going on social assistance and will not be able to pay the taxes the government wants to raise. None of this will happen unless these negotiations fail. I urge the government to take immediate action, show some economic leadership and put a negotiator at the table.

Hon. Mr. Ostashek: I welcome the opportunity to enter this debate. I want to put on the record that we certainly realize how serious the situation is.

I am not going to go too far back into the history of what has and has not been done, but I do have a couple of comments I would like to make. One is in regard to the Leader of the Official Opposition saying he was not asked for a $34 million loan. He was asked to cost-share a loan with the federal government. The same request came to me in December of this year: to cost-share a loan with the federal government.

Even though he was not asked, he still made the statement in this House, that there was no way that his government could afford a $34 million loan guarantee for Curragh. Even though he was not asked, he made that statement in this House. It is on the public record. Yet now, one year later, when metal prices are further depressed than they were a year ago, he feels that we should be able to make a $34 million loan to this company. I cannot believe it.

This government has negotiated in good faith. We have negotiated earnestly. Nothing was changed in the major conditions that were put forward to Curragh in early March of this year from what I told Curragh this government would need the first time I sat down with them. I said we would need some security for the loan and we had to see that the company had the ability to survive. Those were two main concerns of ours all winter. I think the transactions of the last two days point out how valid those concerns were.

The Members opposite condemn me for coming in with a rushed ministerial statement that was delivered to them minutes before the House started session this afternoon. I just want to tell the Members opposite that I had been working all morning long, right up to coming into House, with officials who are representing us in Toronto. Things are changing on a minute-by-minute basis. The statement was only prepared for me minutes before I came into the House.

It was not something that was done haphazardly.

The Members opposite are condemning us for stalling negotiations, and they are going to pooh-pooh me again when I say that it was Curragh that was stalling negotiations. Curragh was stalling negotiations. I stood in this House during an Opposition Day debate on Curragh a couple of weeks ago, and I listed off the dates when we met with officials from Curragh.

The Member for Faro said that I was going to have an agreement in principle together by the time the Burns Fry report was ready. I wanted that agreement in principle, but I could not get Curragh to move. They were not prepared to give us the financial information that was required. They would not tell us what debts they owed. We had to wait for their year-end statements to come out to find out that they have accounts payable of $44 million. They would not advance that information to us.

The negotiators - Burns Fry, who are negotiating on our behalf - are prepared to negotiate around the clock, and they have been since we engaged them. It was Curragh that was not prepared to negotiate. They were trying their best to avoid having to make the decision that they made this morning - to go in under the CCAA.

In my opinion, this gives us the best opportunity to salvage the company under this court protection. We are prepared to go ahead with the Grum stripping. We are prepared to go ahead without any conditions, as long as we have security for our money in the interim, so that Curragh can see if they can restructure their debt. Under the court arrangements, that may be possible. However, what is going to happen now is something that Curragh was not prepared to do three weeks ago, and that is to go to the banks and the note holders. Now, they have no alternative - they have to go to the banks and the note holders and, if we are going to put money in to start stripping the Grum, they have to be in agreement that that money is secured.

We are prepared to put $4 million or $5 million in for six weeks and start the stripping operation moving, as long as that money is secured and not going to go to pay off debt at the Bank of Nova Scotia. That has been our major concern all along.

Now that these papers are filed, I can reveal a little more information. I am sure that some of the Members opposite are aware of that information: Curragh Inc., as of March 31, 1993, was in technical default. We knew that, and we could not advance taxpayers’ money, not knowing whether the note holders were going to put them under at the end of the month. They were in technical default, and I think the Leader of the Official Opposition is fully aware of that. Along with that, we knew interest payments were due and that they would have difficulty making them. How could we, in a responsible manner, advance funds in this scenario when we did not know if it was even going to get the company through the next six weeks? Now, under the court protection, we are in a position where we can probably get some security for our money to strip the Grum, and we are prepared to start advancing monies to them, as soon as we can get that security. Those are the instructions we have given to Burns Fry and the official who went to Ottawa this afternoon on the airplane.

I am going to table the documents that were filed in court in Toronto today. They will not give the Members much information, but they will give them some information.

I want to say once more for the record that it was not the Government of the Yukon that had been stalling. We were prepared to move ahead when the company was prepared to move ahead. The company was trying to avoid this situation, and understandably so. They had an equity issue out on the market, and that was another reason why we could not make statements - it could affect that. We did not have the ability to start putting out the conditions in public and pour cold water on it.

The other thing is that I totally disagree with the impression the Members opposite are leaving that the conditions were irresponsible and unachievable. We had the best financial advice available to us, and it was that those conditions were achievable if the company wanted them to be achieved. That has been the stumbling block and, as the Member for Watson Lake said, they did not want us to talk to the bankers or to the note holders.

The Member for Riverside has suggested, time and time again, that we talk to the bankers. I would have loved to have been able to talk to the bankers.

I just want to go through some of the documents that were filed today. They basically state that the value of Curragh’s assets exceed its liabilities, as of today.

However, Curragh has failed to make a number of payments that came due on or before April 2, and is not able to meet its liabilities, as they generally come due.

Curragh has encountered significant liquidity and cashflow problems, principally attributed to costs and losses resulting from the Westray accident and to the low lead, and particularly low zinc, prices in the world market. Curragh’s excellent mineral reserves and operating resources position it to return to financial health.

I truly believe that, and I think they require this sort of protection, so they can restructure their debt and be a viable company.

On the Stronsay property, Curragh is actively engaged in discussions with a view to the sale of all, or part, of Stronsay. They could receive between $5 million and $15 million by the end of April and possibly another $35 million by the end of July, if they are successful.

However, they go on to say that all these initiatives will require more time to bring them to fruition.

As of March 31, Curragh had accounts payable of $37 million. The money we are advancing for Grum cannot address those issues.

Some of the other problems we encountered in dealing with Curragh are the number of layered companies. There are five subsidiary companies we had to try and track through negotiations. Without that information, it was impossible to see where the money was going. All along, our major concern was that the money we were advancing was going to the Grum stripping and was not being milked off by a subsidiary company.

We filed with the courts that we are prepared to go ahead with the Grum stripping, as long as we can receive security for our money. It is a position that attorneys, who will be in court on our behalf, will be putting forward to the judge. If we can get that security, we will start advancing monies for the Grum stripping to give the company time to restructure their debt.

As we have said all along, and which is no secret to anyone in this House, the company has had a liquidity and cashflow problem for many months now, back to a year ago, when the now-Leader of the Official Opposition was in my position and was negotiating with them.

According to the documents we have received so far, it appears that there is about $221 million in debt out there that has to be dealt with.

I want to make another point about the security for a $5 million loan, which the Leader of the Official Opposition and the Member for Faro say is a secured loan. From our discussions with our people, and it will be coming out in the court proceedings, it is our understanding that the line of credit to the Bank of Nova Scotia has been over-extended. Now we are going to have to fight in court to see if we cannot get some protection for what was supposed to be 35 percent unencumbered of that concentrate. That is how little security we have for that $5 million loan.

Our concern all along has been that we did not get the taxpayers of the Yukon into a situation where we would have these notes called, and we would be faced with the burden of this excessive debt, when, from everything we have seen, was not enough to salvage the company. I believe the fact that we agreed, in principle, to give them the loan guarantee, as the Member opposite did a year ago, as was pointed out by the Member for Watson Lake and also said by Mr. Benner in this House, that it would give some comfort to the financial market so that they could raise equity. They have not been able to raise equity for over a year, not just in the last three or four months. They have a serious problem.

I want to touch on another issue, that of our MP in Ottawa. According to the information we have received from Ottawa today, during the current sitting of the House of Commons, since 1991, neither Audrey McLaughlin, nor her NDP Energy Mines and Resources critic, Ross Harvey, have asked one single question about Curragh and the Faro situation in the House of Commons, after I personally briefed her in December. I visited her when I was in Ottawa and briefed her on the situation. We do understand that she did ask questions about Curragh and the Westray situation, but she has not asked about Curragh and how it pertains to the Faro operation. Who is being irresponsible?

In summation, this government has acted in a fiscally responsible and prudent manner. We are working very, very hard to see that the Faro operation survives in the long term, not a patch-work job that was accomplished with a $5 million loan by the Leader of the Official Opposition.

Mr. Joe: We have been here some four weeks now. We hear the same story, and we blame each other. What does it accomplish? In the four weeks we have been here, people have been having problems out there. They are asking the government for help. I think that is what we should be looking at, instead of blaming each other.

Sometimes I wonder why we are sitting in this House. We are supposed to represent Yukoners. Now, we are wasting more time fighting among ourselves. When we try to share our experiences, no one wants to take it. We just keep saying, “I do it better than you do.” I do not think there are people out there who like that too much.

If we cannot do our job in this House, we should give the people out there the chance to start with some new blood. They might run the Yukon even better than we do.

Sometimes, it is hard to speak in this House, when I hear you blaming each other. Sometimes, I find a very bad attitude. Shame on the government for acting like this. Let us deal with the problem and take some possible steps that might help the people in Faro.

I know from experience how it is when you do not have a job. Sometimes I would have to wait for a job for months. I would get tired of waiting and have to look for something else to do. I am pretty sure that a lot of the people in Faro are like that.

In my younger days, there was no welfare. I have never gone to welfare even once in my life. I always worked my way out, somehow. Sometimes, I would draw unemployment insurance when I did not have a job.

I know, when you are out of a job, that household banks go pretty fast, especially with today’s cost of living. Nowadays, $1,000 does not last too long. I think about my younger days, when $1,000 used to be big money.

Today, it is a different world altogether. I urge the government that it is time to take action and get people back to work in Faro, somehow.

Hon. Mr. Fisher: I do not want to speak too long and prolong this debate. There is not much that I would have to say that has not already been said. I have lived most of my life in the Yukon Territory, and I have seen hardship and mines shut down. There were good friends of mine in Faro when the mine shut down in the early 1980s. I had friends at Cassiar when it shut down many times over the past number of years. Tungsten has shut down at least three times I am aware of. It is very much of a hardship on these people.

I do not like it that we are in this House, trying to blame each other. I agree with the Member for Riverdale South, when she says for us to get on with it. I also agree with the Member for Mayo-Tatchun, when he says for us to get on with it and stop talking about it. In that respect, I would like to ask the Members opposite to get on with the supplementary budget. Let us get it out of the way. Let us get on with debate on the main budget.

On the supplementary budget, I think the Opposition has done what they wanted to do. They have smokescreened it, so it is old news now. People do not care any more. Forget it, and let us get on with it and finish it. We have things in our capital budget this year so there will be jobs in Faro. If worse comes to worst, and the mine does not reopen, there is some work in the territory. There is the community development fund, which the Member for Riverdale South is not very fussy about. In some respects, I am also not very fussy about it, either. However, in cases like this, it is very much a needed tool, as it was in Elsa, when it shut down in 1985 or 1986.

Let us do as your own Member from Pelly said: let us get on with it.

We have something like $28 million in highway projects, like the Shakwak project. We have the new hospital, the Teslin correctional centre and some school additions. There is work in the territory. Let us get on with the budget and get it completed so that some of these jobs can go ahead. Then, if worse comes to worst, at least some of the people have jobs.

I was in Watson Lake years ago, when a fellow rented a house from me. It was right next door from my house. He was running a logging truck. He owned the truck. He would leave for work and I would hear that Kenworth fire up in the morning at about four o’clock. He would go back in the house for a cup of coffee and the truck would run for about 30 minutes. He would never get home until after I was in bed. He did that six days a week. On Sundays, he was monkey wrenching the thing - he was his own mechanic. He hauled logs all winter. At the end of the winter, he could not even pay his rent. I had to lend him some money. I know about hardship. I know what the people in Faro are going through. The waiting is probably every bit as bad as when the news finally comes. It is horrible to have nothing to do and just sit around the house. I imagine there are all sorts of things going on in Faro. I wish the Member for Faro would get himself more concerned with those kinds of things and not try to stop us from going ahead with the budget we are here to debate.

Hon. Mr. Brewster: After 12 years in here, and I have often had problems with what has happened in this Legislature, this last four weeks has been an absolute disgrace. I see the whiz kid over there saying, “Hear, hear” and he is very good at these things but he has not faced the realities of life and he had better start.

Speaker: Before the Minister gets too wound up, we are discussing the news with respect to Faro: the announcement of the shutdown and the application for protection from creditors.

Hon. Mr. Brewster: I fully realize that, Mr. Speaker; however, I believe in the House one should have the courtesy to keep quiet when other people talk. I have always tried to do that and I would suggest it be done for me, too.

First, I would like to tell a little story about the mine at Curragh. A young fellow I know has a trucking business and he drove in from Haines, Alaska, with a load of oil and he was ordered to get it up th