Whitehorse, Yukon

Wednesday, April 28, 1993 - 1:30 p.m.

Speaker: I will now call the House to order. At this time, we will proceed with Prayers.

Prayers

Recognition of National Day of Mourning

Hon. Mr. Brewster: I rise today in memory of all Yukon workers who have been killed or disabled on the job.

Today, April 28, is the National Day of Mourning for all men and women who have died, been injured, or who have suffered from diseases due to workplace hazards.

Work-related disabilities and deaths exact high emotional, social and economic costs. No one is immune to the dangers of an unsafe work environment. I am certain most Members of the Assembly have, at some time, witnessed the hardships families and individuals have been subjected to as a result of a breadwinner being injured at work. With respect, Mr. Speaker, I wish to acknowledge the suffering your family endured when your grandfather died in 1919 of ptomaine poisoning in a workplace accident.

The prevention of industrial injuries and diseases is clearly better than their cure. In the Yukon, we have come a long way in improving workplace health and safety and benefits to disabled workers and their dependents.

Much has changed since 1917, when the first Workmans’ Compensation Ordinance became law.

In 1992, the Occupational Health and Safety Unit was amalgamated with the Workers’ Compensation Board. This has been regarded as a positive step toward facilitating greater coordination in the area of accident prevention and risk education, as well as increasing stakeholder participation in occupational health and safety. Work-related health and safety problems are an ongoing concern. Workers, employers, the medical community and legislators should all share in the promotion of a safer and healthier work environment.

Mr. Speaker, would all Members of the Assembly please stand and join me in two minutes of silence in remembrance and recognition of all workers who have been killed or disabled on the job.

Speaker: I would ask that everyone stand for two minutes of silence.

Mr. Harding: I have just a few comments I would like to make with regard to this very important day, the Workers’ Day of Mourning. It was very nice to see today that the Yukon Workers’ Compensation Board was organizing and took on the task of an observance at noon today at the Elijah Smith Building. Since the last observance of this day, Canadians and Yukoners both have been given additional reasons to reflect on the hazards workers can face in the workplace and the situations that have led workers to organize and fight for their rights.

I would like to take this opportunity to reaffirm my party’s commitment to workers’ rights, in particular the right to refuse work they believe is unsafe. Our belief is that, in situations where safety is a question of judgment, the benefit of doubt should rest firmly with the workers. This is a day to remember those who have lost their lives and have been injured in their line of duty.

Mr. Cable: Part of my real education, I guess one would call it, has been working in chemical plants and working on assembly lines where I have shared with the other people in those plants exposure to sinister chemicals and the dangers of dismemberment and death on the assembly lines. It makes us mindful of the health and safety laws that are necessary and of the safety committees that are necessary in our factories and in our mines and in our chemical plants. I would also like to share with this House and with the Member for Faro the respect for those workers who have died or have been dismembered in the course of their employment.

DAILY ROUTINE

INTRODUCTION OF VISITORS

Mr. Harding: Under the introduction of visitors, I would like to introduce to the Legislature today some real Yukoners - some people from the community of Faro who have come today to hear the legislative debate and to try and encourage the government to take some new positions with regard to the situation with Curragh Inc. and the jobs and businesses that are facing collapse in this territory. I would ask the House and the government to welcome, along with me, the people here to this Legislature.

Applause

Speaker’s Statement

Speaker: I, too, would like to welcome the group from Faro to our Legislative Assembly, and your Legislative Assembly. I recognize a lot of faces I saw at a meeting last night in Faro. I would like to personally thank you for inviting us to that meeting. I would also like to thank you for coming here today.

I would like to remind everyone, especially those people from Faro in the gallery, that the rules are slightly different in this Legislature than they are at Faro. At the meeting last night, we were all encouraged to participate, and all welcomed to do that. In this House, the gallery is not to participate, but to watch. You are represented by your Member, Trevor Harding from Faro. As you know, there are many other sympathetic MLAs here today; therefore, I would ask that you keep your participation to a minimum and listen carefully to the debate.

I recognize it is very emotional, and some of your futures hang in the balance. We will be talking about your future, to a certain extent, later this afternoon. If you feel overly emotional, though, I would ask that you express that emotion outside the doors of the Legislative Assembly, and then come back in.

Welcome.

Hon. Mr. Phillips: I have several guests to introduce today. First of all, I would like the House to welcome the co-chairs of the Canadian Labour Force Development Board who are here with us today: Mr. J. Laurent Thibault, the business co-chair and past president of the Canadian Manufacturer’s Association, and Mr. E. Gerard Docquier, the labour co-chair and past national director of the United Steelworkers of America.

They are both here in Whitehorse to hold initial meetings with groups representing labour force participants, with a view to establishing a Yukon Labour Force Development Board, which will be affiliated with the national board. I ask all Members to welcome them to the House today.

The second group of guests that I would like to introduce today is Mr. Nino Ricci and Ms. Jane Urquhart, who are in the gallery here today. They are well-known Canadian authors who are in Whitehorse to participate in the Young Authors Conference being held this week. They will be doing readings of their works, and also helping our young authors to fine-tune their writing skills.

I would like to thank Nino and Jane, and also thank the organizers of this particular week. Other writers participating are Roque Carrier and the Yukon’s P.J. Johnson. I would like all Members to join with me to welcome these guests from the east for their first trip to the Yukon and to our Legislature here today.

Applause

Mr. Harding: I would like to extend greetings from our caucus to the guests who were just introduced by the Member for Riverdale North. I would also like to say that in regard to Mr. Docquier and Mr. Thibault that I really think it is the wave of the future and the only way that our economy will continue to prosper in this country is when we get representatives from business and labour working together to find a common ground for solutions to our economic problems in this territory and in this country. I also extend my greetings to them.

Applause

Speaker: Are there any Returns or Documents for tabling?

Are there any Reports of Committees?

Petitions.

Introduction of Bills.

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

Notices of Motion.

Are there any Statements by Ministers?

This then brings us to Question Period.

QUESTION PERIOD

Question re:  Faro contingency plan

Mr. Penikett: It is important to note today that the rules of our House prohibit questions on the subject that we will be debating later; namely, the Grum stripping program; so I will ask questions about other subjects.

I would like to put a question to the Minister for Health and Social Services and ask him why some Faro residents who were forced to leave this territory  because of this administration’s lack of economic leadership, are being asked to promise not to return to the Yukon as a condition of government assistance to relocate.

Hon. Mr. Phelps: I will have to look into the situation and report back.

Mr. Penikett: When the Minister is looking into the situation and the question of loans to assist people moving out, which is one thing, while an implied threat to prosecute those who come back is quite another, could I ask the Minister what signal does he think his, “Get out of town and do not come back or else” message sends to the people who live in communities like Faro or beyond the suburbs of Whitehorse about this government’s attitude toward the social and economic development of communities such as a place like Faro?

Hon. Mr. Phelps: I will have to look into the issue raised.

Mr. Penikett: Let me ask the Minister a general question; perhaps he will know this.

As a function of the so-called contingency plan, has the Minister of Health and Social Services developed any new policies or procedures whatsoever to deal with the various social crises at Faro, which have been aggravated by this government’s complete failure to deal effectively with the mine shutdown.

Hon. Mr. Phelps: The policies of the department are being applied to this closure, as they were applied to previous closures in the Yukon.

Question re: Faro contingency plan

Mr. Harding: The situation in Faro is very unusual and demands that policies be developed immediately.

I want to move on to another area. I want to ask the Minister of Economic Development a question regarding the contingency plan.

The B.C. government committed over $13 million to do a proper job in assisting Cassiar in their efforts to adjust to the terrible mine closure there. The Yukon government committed to Faroites and to this Legislature that a contingency plan would be in place January. I now ask the Minister of Economic Development what the Yukon territorial government budget commitment is to work projects, retraining, social assistance, severance and relocation?

Hon. Mr. Devries: Again, I will stress to the Member that we do not have a set budget, as such. We are helping the people in any way we can to make sure that there is no undue stress and to help them meet basic needs.

Mr. Harding: So far, this government has made a conscious decision not to provide help to support the jobs and businesses in the Yukon that will suffer from these mine shutdowns. Therefore, the government must take ownership and responsibility for the problems that they have helped create.

I ask the Minister of Economic Development again: how can the government hope to do a proper job without even assigning a budget to the task?

Hon. Mr. Devries: Again, I will stress to the Member that I have spoken to some of the people who were involved with the Cassiar project. There were many problems created by announcing the budget that was initially put forward. There were many instances where people who left Cassiar got nothing from government and others got substantial amounts. The other problem we have in the Yukon is that there are many people outside of Faro who are affected by the problems at Curragh.

It is very difficult to get a handle on how one could put a per capita dollar figure on something like this. It must be on a one-by-one basis; as people come forward and talk to the appropriate authorities, they will be assisted within the parameters we have to work in.

Mr. Harding: This is a consistent pattern with this government. Whenever they encounter a problem, the answer is to do nothing.

Does the Minister really believe that a solid plan is in place in Faro to handle the terrible circumstances that are occurring in my community?

If he has talked to the officials, will he explain to this House specifically which part of the plan is working smoothly?

Hon. Mr. Devries: Again, I have heard very few complaints about the plan to this point. No one has phoned me. I assure the people that the stripping loan is still there. It would be a substantial investment by this government. As of next week, the Industrial Adjustment Services committee will have access to funds to assist people if they choose to move. Also, there is a training program for heavy duty mechanics, there is assistance in resume writing; the list goes on and on.

Question re: Tax increases

Mr. Cable: I have some questions for the Government Leader relating to the proposed income tax increases.

Has the government examined the effects of the personal and corporate income tax increases on the operations of Northwestel - an employer of approximately 400 people.

Hon. Mr. Ostashek: I thank the Member for the question. Yes, we have examined it.

Mr. Cable: In view of that response, would it be fair to say that in the Government Leader’s opinion the corporate income tax increases will be passed on to the users of the telephone services?

Hon. Mr. Ostashek: That is a question that should be put to Northwestel.

Mr. Cable: I think it is common knowledge that a regulated utility will automatically pass on those rate increases to the users of the service. In view of the different personal income tax rates here and in the Northwest Territories, would it not be fair to say that there will be an incentive, on the part of both the employer and the employee, to move more employees to the jurisdiction where there are lower taxes, namely the Northwest Territories?

Hon. Mr. Ostashek: All these things were taken into consideration when putting the budget together. I do not believe for one minute that is going to happen. The Member opposite is fully aware that the budget just passed in the Northwest Territories implementing a payroll tax.

Question re: Faro contingency plan

Mr. Harding: I am going to go back to the contingency plan once again. We heard that the part of the program that was working so well was a federal program - the IAS committee - and the Minister is quite proud of one course that has been offered to the people in my community.

The vast majority of Faroites would like nothing better than to remain in the Yukon, but it seems as if the government has a strategy to get people to leave the territory and become someone else’s social assistance problem. What make-work projects and capital works is the government planning to fund for Faro, and why could the Grum stripping not be done in the same vein - I know Curragh would cooperate.

Speaker: Order please. Before the Minister answers the question I would like to remind the Member that the Grum stripping issue is scheduled for debate this afternoon; I do not want the questions to get into that area specifically.

Hon. Mr. Devries: As far as a contingency plan goes, there are numerous capital projects taking place around the Yukon. Most of the people who work on these capital projects leave their homes and stay at camps. The people of Faro also have the opportunity to apply for these positions with the various contractors.

There are some make-work projects that have been put forward. However, some of the problems with that type of project is that the people are now on UIC, and many of those projects are very short term. Therefore, it is not to their greatest advantage to put those projects in place until UIC runs out at a later date, although there are still some that are available. These are the lower paying jobs.

It is a reality of the situation. I would be happy to be able to say that there are all kinds of great things, but there are limited finances available. What more can I say?

Mr. Harding: The reality of the situation is that this government is not prepared to do one darn thing to protect the people of my community and get some work and hope going in that community. That is the reality of the situation.

The economic development officer in Faro has been given no new money for make-work projects or capital works in my community. Having his hours doubled will not help the people get to work. When will the government initiate work projects in Faro that could put hundreds of people back to work? We have lots of ideas.

Hon. Mr. Devries: Again, the reality of the situation is that much of that is dependent upon the future of Faro. We do not want to have what happened in Mayo. During the course of the next week or so, we will have a much better idea of the future viability of the community. We still have the Grum stripping money available. The investors who are interested in putting money into Curragh are aware of this. It is a tremendous undertaking by this government to put $29 million into that project to entice investors to invest in Curragh.

Mr. Harding: I love the logic of this government. They are going to wait to see what happens to the mine-

Speaker: Order. Order please. I hope this is a one-sentence preamble to a final supplementary.

Mr. Harding: Wait for my conjunction, Mr. Speaker. The government waits to see if the mine shuts down before they decide to do capital works projects, which they say if the mine shuts down they will not do anyway. Wonderful.

I have a question for the Government Leader regarding these contingency matters. A group of Faroites is here today to discuss the mine situation and contingencies with the government, if the government will allow it to. Will the Government Leader meet with the Spotlight Faro Committee delegation, either today or tomorrow morning, to discuss these pressing issues?

Hon. Mr. Ostashek: I, for one, am happy to see the Faro delegation here today - happy to see them here because there can be a lot of misconceptions cleared up in the debate this afternoon. I would be happy to meet with a couple of representatives from the committee.

Question re: Del Van Gorder School

Ms. Moorcroft: At the public meeting in Faro last night, I heard Faroites express many concerns about the Del Van Gorder School and what the government’s plans were for it in the event of a permanent mine closure. People are very worried about their children’s future. Would the Minister of Education commit to providing the same existing course selections for grades 11 and 12 at the Del Van Gorder School that currently exist, regardless of the mine situation?

Hon. Mr. Phillips: We are going to continue with the current program at the school until the end of this school year and then we will look at the number of students in that school and assess the need at that time.

Ms. Moorcroft: The people in Faro are waiting to hear what the Department of Education will do to decide about their futures. Students who graduate from high school in the Yukon receive a significant benefit if they choose to go to university. Will the Minister commit to ensure that students in Faro will still have the opportunity to receive these advantages by being able to complete grade 12 at Del Van Gorder School?

Hon. Mr. Phillips: I wonder what the Member is asking me, because there are some schools in the territory where there are not enough students for a complete program so we have perhaps one teacher for grades 11 and 12. If that happens to be the case in Faro, where there are enough students, yes, we will provide those courses. If we change the formula in Faro, we will have to change the formula all over the territory that has been in place for a while. We will provide an adequate education, including a grade 11 and 12 education, for the students all over the territory.

Ms. Moorcroft: I would like to ask the Minister to clarify exactly that. What has the Minister decided to commit to as a student-teacher ratio for Faro in the event of a continued mine shut down? And will he give his assurance that present ratios will be reduced to ensure that students are offered the same course selection that they now have?

Hon. Mr. Phillips: There will be no change in the school system until the end of this school year. I asked my officials yesterday if they would request from the people of Faro how many people may be there next year; I understand there are quite a few uncertainties as to how many people may be staying or might be going, and it is a little early yet to try to determine who will be there next year. We will maintain the ratios at the Faro school, as we do at all schools in the Yukon. They are the lowest ratios across the country, and I think that bodes well for our education system.

Question re: Faro contingency plan

Mrs. Firth: I have a question for the Government Leader regarding Curragh and the people of Faro. The Government Leader has said publicly that it was not the government’s responsibility to put Curragh back to work, and that the government could play a role in it, and that Yukon government workers have been in Faro every week doing everything that can be done. I was in Faro last evening, and people were telling me that nothing was being done. I would like to ask the Government Leader if he can tell us specifically this afternoon, what “everything” is that is being done.

Hon. Mr. Ostashek: I am not sure whether the Member is asking about what is being done for the people of Faro, or what is being done to get the Faro operation back to work.

Mrs. Firth: I would like to ask the Minister specifically, what is the government doing to assist the hundreds of unemployed heavy equipment operators, truck drivers, heavy-duty mechanics, mill workers, and other workers, to find jobs, especially with contractors or government agencies, which will be overseeing 700 seasonal jobs primarily in road construction. Has the government done one thing to assist these people in finding these jobs?

Hon. Mr. Ostashek: I thank the Member opposite for her question. If we could get on with the business of this House and get into getting our budget passed so that we had those 700 jobs, we could put some of the people of Faro to work.

Mrs. Firth: It is becoming more obvious every time the Government Leader stands up that the government is doing nothing.

Applause

Speaker: Order please. The question please.

Mrs. Firth: My question is this: instead of just moving Yukoners out of Faro, is anyone in the government assisting the community by looking at alternatives to the mine, or looking at potential secondary industries? How are they doing this, and what suggestions has his government come up with?

Hon. Mr. Ostashek: The Member opposite is fully aware that our first priority is to get the Faro mine operation back to work. That is the way to salvage the community of Faro. There are things that are beyond this government’s control. It will be dealt with in a timely fashion as this thing plays out.

Question re: Maternity care for rural women

Ms. Moorcroft: I have a question for the Minister of Health and Social Services. My colleague from Faro has sent two letters to the Minister asking what is being done for rural, pregnant women. No adequate response has been received. What services can be expected for pregnant women who must come to Whitehorse from the communities to give birth?

Hon. Mr. Phelps: The policy has not changed since her party was in power. A small per diem is available to people who come to Whitehorse, while they are awaiting the birth of their child. That has not changed since the Member’s party was in power.

Ms. Moorcroft: The Minister has spoken of a review of the medical travel program to be done in early spring; what will the review of this program consist of and when will it be done?

Hon. Mr. Phelps: All medical programs are under review. I can tell the Member that particular review is not at the top of the list. We are concerned with cost containment, because, as the Member probably knows, under the previous government health costs were out of control. Some programs were running 300 to 400 percent over what was estimated to be the true cost, when they were introduced by the side opposite. We have a duty to try and bring health program costs under control.

Ms. Moorcroft: We have been contacted by pregnant women who live in Ministers’ ridings and expect to have to rely on their credit cards to pay for their two-week stay in Whitehorse, when their babies are due to be born.

What is the Minister’s own position on assisting rural, pregnant women when they come to Whitehorse? Will the Minister tell us if he plans to augment or reduce the costs of this program?

Hon. Mr. Phelps: There is no intention to reduce the program; however, I am concerned because I seem to be getting mixed messages from the Member; on the one hand she wants to increase the amount of money that this government spends on all programs in various ways, and on the other hand, she is totally against any tax increases. I am not sure what the Member’s position is.

Question re: McLean Lake zoning

Mr. Penikett: When the issue of the McLean Lake zoning was discussed last Tuesday in the Legislature, the Minister committed to consult with McLean Lake residents, stating in Hansard, “If there will be any change to the current zoning that will affect the lifestyle of McLean Lake residents, I will consult with those residents before I proceed.”

Three days later, the Minister signed the document completely changing the zoning of their area, which will affect the lifestyle of the McLean Lake residents.

Can the Minister tell the House if he consulted with the Members of the Legislative Assembly, the local residents, the citizens’ association or anyone else before he took the position on the city’s request?

Hon. Mr. Fisher: I would like to point out to the Member opposite that there is no change in zoning in the McLean Lake subdivision.

Mr. Penikett: Is the Minister then saying that news reports describing the city council decision, or the Minister’s signing of the city request to change the zoning are in error? If so, could the Minister say what has happened to his representation to allow for a residential zoning, rather than urban-residential zoning in the area?

Hon. Mr. Fisher: I am not sure what reports the Member opposite is reading but, as I said, there has been no change to the zoning; there has been amendment to the official community plan.

Mr. Penikett: Since the Minister said the other day that, based on legal advice, he did not think he could change the decision of the previous Minister, could the Minister tell the House exactly what the change to the official community plan will do in terms of the lifestyle and the lot size of the people who live in the McLean Lake area?

Hon. Mr. Fisher: The change in the official community plan actually enhances the previous Minister’s commitment to residents of McLean Lake.

Question re: Infrastructure funding from federal government

Mr. Penikett: En passant - I would say to the Minister of Community and Transportation Services that if he manages to satisfy my constituents and City Hall, he is an absolutely brilliant man. We will find out if that is true later.

Let me ask about another subject, about which I was asking yesterday, in respect to the $10 million announcement from Mr. Jean Corbeil. Yesterday, I asked the Minister if he could tell the House what conditions were attached to this $10 million offer from the federal government and if he could confirm that a condition of matching funds from YTG would have to be provided.

Hon. Mr. Fisher: That is my understanding.

Mr. Penikett: That is an extremely interesting answer, because it may have a bearing on a number of the statements made by other Ministers on previous days with respect to this matter.

Is the Minister ready to table in this House a list of projects to which the government intends to apply this $10 million and say whether or not that project list would be changed at all by the conditions attached by the federal government?

Hon. Mr. Fisher: I can probably provide a preliminary list for the Member opposite; however, that list may change before the talks are finalized.

Mr. Penikett: The Minister has indicated that the talks may not be finalized. Word of this program decision is already out in Ottawa. Can I ask the Minister when he and his federal counterpart, or, when the Government Leader and the Minister of Indian and Northern Affairs, will be making the second or third announcements of this program?

Hon. Mr. Fisher: I do not know at this time when that date will be.

Question re: Seniors, services for

Ms. Joe: I have a question for the Minister responsible for seniors regarding election promises to improve services for them. On Monday, I asked the Minister a number of questions regarding those services to seniors that have been cut. The following morning I received a letter informing me that one senior was appalled by the Minister’s answers and they were an insult to all seniors.

I would like to ask him, since he is a part of this happy coalition, whether he intends to live up to those election promises by the Yukon Party to improve services for seniors?

Hon. Mr. Phelps: Of course.

Ms. Joe: My next question is in regard to cutting programs for seniors. Taxi services for staff serving seniors have been cut - a much needed service.

How does the Minister intend to replace that much-needed service for seniors?

Hon. Mr. Phelps: The Member is referring to an across-the-board policy that applied to each and every government department and was put in place through Government Services. The department in charge of seniors and Health and Social Services does have discretionary money for such things as taxis where they are urgently required to take seniors shopping and that sort of thing.

Ms. Joe: Since these questions are going out to all seniors that I know of, they will be happy to hear that.

I would like to know, because I have been asked by seniors, why the Minister has cut the pioneer utility grant by $44,000 - that does not appear to be an improvement in services for seniors?

Hon. Mr. Phelps: The intention is to ensure that the grant goes to people who need the money for energy - particularly in the wintertime. This money is not for the seniors - as was under the previous administration - who leave and go south for the winter.

Question re: Land claims legislation through Parliament

Mr. Abel: I have a question for the Government Leader. There are reports that the Yukon Indian land claim settlement legislation may not be passed by the Parliament of Canada prior to the next federal election. This is of great concern to the Vuntut Gwich’in and all Yukon First Nations. Can the Government Leader advise the House if these reports are true and, if so, what measures is the Government of the Yukon taking to urge the federal government to see that the Yukon Indian land claims legislation is passed before the next federal election?

Hon. Mr. Ostashek: I thank the Member for Vuntut Gwich’in for the question. I am sorry I have to report to this House that it is true that there are concerns being raised as to whether or not there is going to be enough time to get the land claims legislation passed before the federal Parliament closes for the summer. It is a very serious concern, and we have already started to address it.

Yesterday morning, we were informed that there were concerns being raised that the legislation would not be ready in time to get through Parliament.

Speaker: Order please. Would the Government Leader get to the question and try to conclude his answer.

Hon. Mr. Ostashek: I am just about to do that. As of 12:30 today, I was on a conference call with CYI to Ottawa.

Mr. Abel: Since the Yukon First Nations and other Yukoners have been working so hard for the past 20 years to finally settle the Yukon Indian land claim, will the Government Leader work in conjunction with the Council for Yukon Indians and Yukon First Nations to impress upon the federal government the importance of passing the settlement legislation now, rather than waiting for a new government to be formed, which would cause major delays?

Hon. Mr. Ostashek: Yes, I have no problem at all giving the Member that assurance. As I said, the process has already been started. We had a conference call with Mr. Siddon at noon, and we will be contacting other Ministers in Ottawa who can have some influence on speeding the legislation through Parliament.

Mr. Abel: Is the Government Leader prepared to go to Ottawa to lobby federal Ministers to ensure that the Yukon Indian land claim settlement legislation is passed before the next federal election?

Hon. Mr. Ostashek: Yes, we are planning to go to Ottawa. Right now, the discussion with CYI is that, if we can get the legislation into Cabinet, then we will be going to Ottawa to put pressure on them to make sure it gets through Parliament before it closes for the summer.

Question re: Faro contingency plan

Mr. McDonald: With respect to Curragh Inc. and Faro, the Minister responsible for Economic Development has indicated that he has put no budget forward, has no ideas for keeping the people of Faro working, and he is not prepared to do anything until he knows whether the mine will collapse first, and if the mine does collapse, he will offer no help.

Is the Minister saying that Faro, as a town and community, will not survive and will not receive any government support unless the mine is operating?

Hon. Mr. Devries:  The Member is taking what I said out of context. As the Member very well knows, and as I have stated in this House many times, as early as a couple of months ago people from my department and other government departments were in Faro getting lists of projects that the people would like to see happen in Faro and in the surrounding areas. We are well aware of those and we will be proceeding with those on a one-by-one basis.

Mr. McDonald: Is the Minister willing to provide real funding for community projects within the town boundaries of Faro?

Hon. Mr. Devries: I think that any major projects within the town boundaries of Faro would be an unrealistic request at this point, in that we must be certain of the long-term viability of the community. I think that Yukon taxpayers would be very upset with us if we decided to do that.

Mr. McDonald: Is the Minister not aware that Faro is a community in and of itself. It is not beholden to Curragh, nor to any other particular employer. There are community residents there who are long-time Yukoners who want support from the government, who pay taxes.

Disruption from the gallery

Speaker: Order please. I have asked those in the gallery, who are very welcome to be here, to try to withhold participating in this debate.

Mr. McDonald: Is the Minister not aware that the Town of Faro has a future, in and of itself, without necessarily being connected to Curragh Inc., and will he not commit funding to this community, like any other community, to see the people of that community over a very difficult period in their history, so that they may continue to work, at least on some projects that will help the future of their community?

Hon. Mr. Devries: Yes, I think we are in favour of doing that. I am certain that we are.

Question re: Handicapped access to public buildings

Ms. Moorcroft: I have a question for the Minister of Government Services. Yesterday we were discussing a Government Services memo on service to clients. The Minister stated that, “Disabled access under section 4 will still proceed as anticipated.” However, the Government Services memo states, “Services relating to the fourth priority will be curtailed significantly.” Can the Minister tell us how he plans to proceed as anticipated, while curtailing, significantly, access to public buildings for people with disabilities?

Hon. Mr. Devries: Perhaps I was a little unclear yesterday. The fact is that, from the information I received, the majority of our buildings do have handicapped access. What I was referring to in number 4 is that there would not be a blanket approval of everything that just comes up; there would be approval on a project-by-project basis. I am certain that handicapped access is one of the priorities of this government, and in the context of category 4, it would be given priority.

Ms. Moorcroft: I thank the Minister for attempting to clarify his answer. Let me put the question this way: is the Minister committed to abiding by the Yukon Human Rights Act and making all public buildings accessible for the physically handicapped?

Hon. Mr. Devries: Again, as I mentioned yesterday, we will be doing everything we possibly can within the fiscal limitations we have to ensure that that will happen.

Ms. Moorcroft: The Minister has said that it is a priority for this government to provide disabled access to public buildings. However, the Government Services memo reads that convenience items, such as upgrades to handicapped access, will be curtailed significantly. Is the Minister committed to making public buildings fully accessible to persons with a physical disability, or not?

Hon. Mr. Devries: Yes.

Question re: Government year-end purchses

Mrs. Firth: I have a question for the Government Leader. Some days ago, we were debating the supplementary budget and the Government Leader stood up in this House and scoffed at Members of the Opposition when they raised questions about a year-end spending spree by government departments buying computers.

Information tabled in this House shows that, excluding the Department of Education, 123 computers were purchased - 83 of them being purchased in the last quarter, from January to March - two-thirds of the computers.

I would like to ask the Minister why he authorized this spending spree and then stood up in the House and said that it did not happen.

Hon. Mr. Ostashek: That question might have been better put to the Minister of Government Services, whose department is responsible for buying the computers. At the time I stood in this House, I was not aware the computers had been purchased.

Mrs. Firth: The Government Leader seems to be developing a bad habit in this House-

Speaker: Order please. I would caution the Member.

Mrs. Firth: Yes, Mr. Speaker, I will be very cautious; I appreciate your warning.

This question is again directed to the Government Leader, because it was his comments to which I am responding. The spending spree also occurred after Consulting and Audit Canada told the government that there was no more money - or, as the Government Leader told Yukoners: we were broke. I would like to ask the Minister why he authorized almost half a million dollars worth of computers to be purchased if the government was broke.

Hon. Mr. Ostashek: As I said, that question would be better put to the Minister of Government Services.

Mrs. Firth: Is the Government Leader saying that because he does not know the answer? Is he saying that because he does not know why the computers were purchased, or is it because he just does not care?

Hon. Mr. Ostashek: The Member for Riverdale South makes much of this spending spree. The fact remains, I sent a memorandum to all departments requesting that they not purchase anything unless it was absolutely required.

Speaker: The time for Question Period has now lapsed. We will proceed to Orders of the Day and Government Motions.

ORDERS OF THE DAY

OPPOSITION PRIVATE MEMBERS’ BUSINESS

MOTIONS OTHER THAN GOVERNMENT MOTIONS

Clerk: Motion No. 38, standing in the name of Mr. Harding.

Motion No. 38

Speaker: It has been moved by the Member for Faro

THAT it is the opinion of this House that the Government of Yukon should show economic leadership by actively supporting the immediate stripping of the Grum ore deposit in the vicinity of Faro as an infrastructure investment to stimulate economic activity, to keep thousands of Yukon people working and to stave off private sector economic collapse due to the lack of any other immediate private sector opportunities of comparable scale.

Mr. Harding: I rise today to debate what I consider to be a very important motion for the future of the Yukon.

I could probably speak about this matter for a long time, because we have been discussing it since November inside and outside of this Legislature, but I will keep my comment succinct, because I think that it is very important that all Members get a chance to speak today and that we get to vote on this very important motion.

I hope that the government shows responsibility to the people of the Yukon and that they do not filibuster this afternoon, but that they get to their succinct points on this motion so that we can get to a vote on this motion.

I want to read this morning’s newscast, and I want to read a quote to the Government Leader, “I went to Faro before I knew what the situation was like; when we had 600 hostile people that thought it was the government’s responsibility to put Curragh back to work. I do not think that it is the government’s responsibility to put Curragh back to work; the government can play a role in it, but it certainly is not our responsibility.” The Government Leader went on to say, “We have to face the fact that there are some other mining communities in the Yukon that closed down and the Town of Faro is tied to the mine operating. That is the reality of the situation, as sad as it is. It is not the first mining town that has faced this situation.” The Government Leader went on further to say, “The government has no control in this situation.”

Are these the comments of a leader? Does this sound like a man who is ready to seize the day and find solutions to the most pressing economic problem facing this territory? Or, is it the comment of a broken, defensive man, devoid of effort and will who is beginning to sound more and more ready to let the economy of the Yukon die without a proper fight?

I say it is the latter.

This problem cries out for economic leadership. All we get is defeatism from the Ministers and the government when they speak in the debates and when the Government Leader speaks in the media and this House. They have given up. When those defeatist doom and gloom comments do not get anywhere, the blame starts. They blame everybody. They blame the previous administration, Curragh, the people of Faro, the federal government and everyone but themselves for this situation. They are the people in control of this government.

The Government Leader said in Question Period that he is glad Faroites are here today so that some misrepresentations could be cleared up. I certainly hope he can do that in his speech. I really feel that the only misrepresentations that have been made have been by the Government of the Yukon to the people of the Yukon.

I know what the government says. They have a standard line whenever we talk about this subject. They will blame the NDP. They will say that the NDP lent $5 million to Curragh and got no security for it and they now have to go to court to get their security.

That loan was secure, but let us just take the hypothetical situation that it was not. At least that economic leadership put 1,000 people to work in the territory for one more year. I call that pretty good economics.

They talk about the comments made by the former Government Leader, the leader of my party, about the amount of money that has been talked about in this equation. The effects of Westray, low metal prices and increasing tonnage on the world metal markets have all created different situations. As the fallout from Westray dissipated, it had a tremendous effect on Curragh. It chewed up their capital. The loan was called on Sa Dena Hes. The working capital was gone.

The situation then is totally different from the situation now. It is incumbent upon the government-of-the-day to recognize that and realize that they must seize the day. If they do not, they will not show any leadership.

In his radio comments this morning, the Government Leader said that Faroites thought it was the government’s responsibility to help Curragh. Nothing could be further from the truth. The people of Faro believe that the government’s responsibility is to exhaust all efforts to see crisis economic problems resolved. The people of Faro believe that the government has a responsibility to ensure that the economy remains strong or do whatever they can to ensure that that is the case. They also believe that it is the responsibility of the government to help Yukoners. If that means that Curragh has to receive some form of support to save thousands of jobs and many businesses in this territory, then so be it. The issue is not Curragh and the responsibility to help Curragh; the issue is the responsibility of government to create a strong economy and to make all efforts to ensure that is the case.

Applause

Speaker: Order please. I would like the Member to be able to complete his speech without interruption from anyone in this House.

Mr. Harding:  In this situation, it is not all the government’s fault. There is no question about that. We realize that; Faroites realize that; everyone realizes that. However, they have had a very definite impact on the way things have fallen together in this situation, in the CCAA situation we are in now. There is no question. When the request was first made of them to fund the whole amount - the first time that request was made in November - their indecisiveness was followed by many delaying and stalling tactics and refusing to adopt a negotiating mandate. If it were not for that indecisiveness, we might not be in the situation we are presently in, and the company might not be so bad, and the situation might not be so bleak, and the people in my community might not be in such dire straits.

Unfortunately, they chose to wait, because they had a belief, all along, that they wanted Curragh to restructure and that, for some reason, the banks would swoop in, restructure the whole situation and everything would be fine. Well, I do not know if that is going to be the case.

While Curragh has made some bad decisions and metal prices are low, it appears, on a daily basis, that the situation is crying out for some optimism. The government can help. It has the ability and the responsibility to help, because there are no other options on the horizon for this territory in the private sector.

This is not British Columbia, which is a port province. It has major tourism; it has mining; it has logging; it has fishing; it has a diverse array of industries to help support the economy. In the Yukon, we have tourism, government and mining, and the mining industry is largely made up of the two mines in Faro and Watson Lake. When you close those mines, you destroy one-third of the territorial economy.

It is incumbent that government do all in its power to ensure that they do not allow that to happen. What have we received from the government? They have thrown two offers on the table with impossible conditions, tantamount to empty offers, and then said that was good enough, Curragh has refused.

Curragh has not refused. The banks have refused. The banks will not accept the deal the government put forth. Therefore, when you are in negotiations, you have to adopt a new position if you want to be successful. Sometimes, it will take the toughest commitment you could ever make to a situation to see it through. Unfortunately, we do not get that from the government. Every day, they appear more and more ready to flush it down the toilet, to let it go, and that is terrible.

When metal prices are low, it does not mean you have to have a shutdown. It means that the challenge for the company, and for the employees, and for the territory, is to ensure that the mine stays open during the low metal prices, so that they can flourish when prices pick up.

There may be some modified way of doing the operation to get production costs Idown temporarily. It may take some work on behalf of the banks. It may take some work on behalf of the government. It can be done. There are many mines operating today that are operating on a negative cashflow basis because they are simply trying to stay in business - while others are going out of business - and being competitive and trying to survive. Sometimes they need some help along the way.

The question is, is it a good investment for government. I believe it is in this case. There is a simple reason for that. That reason is, as I have stated before, we do not have a lot of other options in this territory, not to mention that this year there is a proposed $483 million budget before this House. That is half a billion dollars for 30,000 people. That is $16,000 for every man, woman and child in this territory; that is more than anywhere else in this country. That in and of itself, makes it very important, when there is nothing else on the horizon, that the government take some risk to stimulate the economy, and not be so worried about what is in their bank account, but start to worry about how many people are working in this territory and contributing to the economy. That is what makes an economy strong. It does not seem as if the government realizes that.

We all realize that government money alone will not save these jobs. I do not think there is much disputing that. I know when I talk to people in my community, they are well-informed of this situation and a lot of them express that to me. They also realize that it is an important part of the equation. It is my belief that a combination of three things will have to happen in order to see this mine survive.

One of them is investment of some sort by the private sector to create some working capital for the company. Perhaps this could be the sale of the Stronsay asset in northern B.C., or a combination of both of the two to raise some working capital. Secondly, there is the Grum stripping, a major capital intensive project that is going to require some extra help, while these prices are low. That is where the government comes in. They can work to ensure that they give some kind of a commitment. The third thing is that it would be very beneficial if the bank would agree to some form of restructuring of their debt and repayment. There is no question about that. I would agree with the Members opposite that that is an arrangement that I would like to see happen. But I do not agree with their waiting for the other two things to happen, without putting something forward, at least conditionally upon the other two players doing something - one being Curragh, and two being the banks.

They are just waiting. They have thrown it out there and they say that if we get the other two things, they will help - sort of. That is not the right way to tackle this. That is why we suggested that all the players be brought together in this equation - the employees, the banks, the noteholders, the government, Curragh officials - bring them together to talk about the situation.

The government has raised a valid point. They say they do not want to put any money into the Grum deposit, only to have it increase the value of the asset when the banks foreclose so that they can get more money on the dollar as a creditor. I support that. I do not want to see that either. That is why the government has to get together with the banks and with the company and strike a deal that gets an agreement, that says that the banks will not foreclose. That is how you deal with that. You do not just say no.

The Government Leader says that kind of a conference would not accomplish anything. Going to Faro would not accomplish anything. The Government Leader has a crystal ball. He knows what is not going to accomplish this, and what is not going to accomplish that. What he has not told us, from reading that crystal ball, is how does he accomplish anything? He has not told us that at all. All he can do is feed us comments and take a negative, defeatist approach to the critical economic situation we are in in this territory.

I want to talk about the form of commitment to Curragh. As far as I am concerned, they can throw the $34 million out the window. They can throw the $5 million out the window as it stands right now. Let us get creative. Let us work out some way so that we can give some positive financial commitment, on a conditional basis with the banks and Curragh, if they would like. I would probably support them. Let us take another look at the situation. Let us look at if we can make a monthly incremental contribution, based on certain things, to stripping Grum. That would get some activity going on the mine site, get some people in my community back to work, and create a bit of a buffer zone so that Curragh can go to work to try and raise some more working capital to get through these low metal prices.

It is not going to be rosy. There is no question that we have some tough times ahead. If we have the leadership, and if we have the political will, and if we have the determination from the government, I believe that it can be accomplished. We have thrown out all kinds of suggestions. The Liberal leader has asked for an all-party committee. I would support that approach, as long as there was some kind of real commitment on behalf of the others in the Legislature on that side to really working things out, provided they stop listening only to Yukon Party supporters and start listening to other people in the territory who have a stake in jobs and businesses and start taking a leadership position rather than a populist position of playing to anti-Frame/anti-Curragh that is easily picked up on by people in this territory. That is the easiest thing to do.

True leaders take a minority position, try to educate, talk and consult with people to try and bring a consensus and understanding to the situation - instead of defeatism. The easy position is the populist position; the tough position is the leader’s position - that has been void from the Members opposite.

The issue of security is a very important issue. I would never deny that. Whenever we talk about security, the Members opposite stand up and ask, “You would like to give them an unsecured $5 million loan like you did last time. You would like to hand them $29 million unsecured?” That is not what we say.

We put a motion forward on March 17, and debated it in this House that said, “It has been moved by the Leader of the Official Opposition that it is the opinion of this House that the Government of Yukon conditions for the Curragh loan guarantee must be tough but realistic; and that the Government of the Yukon must show fiscal and economic leadership when they negotiate these conditions with Curragh in order to protect the taxpayers and ensure the security of the jobs in Faro.”

We support attempts to get as much security as possible, but we also support the taking of some risk, in the balance, to try and get people working again in this territory. That is our position, but the government will not tell us what has been offered for security. They will only tell us that they did not get first charge on assets. That is all the information we get. All we can do is assume that that is all they are prepared to accept - as for the $34 million, they told us that was all they were prepared to accept when the Government Leader went Watson Lake and said that the first condition was not negotiable.

There are some people here from the Spotlight Faro Committee who would like to talk to the Government Leader about that and he said he would discuss it with them, and I am glad to hear that.

We do not say, “Hand over the money.” We would certainly support some kind of an incremental contribution or some kind of formula worked out in conjunction with the players that will protect the taxpayers of the Yukon.

I want to tell the Government Leader something. The people of Faro are taxpayers, too. They have a right. They have a say. They are telling him something, but he does not listen to them.

The government showed, in the context of our motion where we called for economic leadership contribution, they show their leadership by hiring the high-priced Burns Fry Company - Toronto lawyers - to negotiate on behalf of the Yukon Territory in Toronto. They did not send one Yukon official until much later into the discussions and they did not send any political people. Is that the will to see a deal? No. Burns Fry is looking at the bottom line and, as far as I am concerned, they were working under the direction and guises of the federal government who, all along, wanted to see Curragh restructured and Mr. Frame out of the picture - that was their agenda. I believe that was what Burns Fry was doing all along.

I am not beholden to Clifford Frame. I am not beholden to Curragh Inc. As a matter of fact, they did not make any donations in the disclosure book that I saw, to our party; they made them to the Members opposite, not to our party. What I believe is that the issue is not Curragh. The issue is jobs, the economy and Yukoners and, if it involves Curragh, then so be it.

What we have seen so far from the Members opposite are empty offers. They say they are doing something. I believe it is for political looks, to tell the people. After the March 4 demonstration, when people came in here and talked to the Government Leader and tried to get some media attention and tried to get the message out to people, there was a feeling of elation when the government put forward the position that they were prepared to help if Curragh obeyed some conditions. Right on that very day, I, too, was elated; I felt a sense of relief but also a sense of foreboding and cautious optimism, as did many of the Members of my caucus. When I went out to talk to the people from the community, the demonstrators, and when I went home that weekend, they all said to me, “Ah, this is just another way to get out of it to make themselves look good and Curragh look bad.” Well, they turned out to have a better crystal ball than the Government Leader because that is, indeed, what the government’s approach to this situation was.

It was wonderful politics but it was damn bad government, I think. Very poor leadership.

My apologies for the “damn”, Mr. Speaker.

How long did the government take to formulate their position? The people of Faro know how long they took. The request was made in November to fund the entire project, and there is no question that it was a tough request. I have some empathy for the Government Leader. It is a tough situation, but I certainly would have approached it from a different angle. Right off the bat, gloom and doom was spread. The comments came out that there was discussion among the party, that they did not believe philosophically in investment in private enterprise. Those are all wonderful, wonderful philosophical and ideological beliefs and I believe in creating an economic environment where the government does not have to help private enterprise on an individual basis as well. I have no problem with that. I do not believe in nationalizing industry but, in this situation, I think ideology should take a place far, far up in the 300th row. That is where it should sit, because the solution to it does not lie in ideology.

The solution lies in practicality, political will and determination.

Yes, you are going to have to negotiate hard with Curragh and yes, the banks are not going to do anything unless they are forced to do it, but you can still accomplish those tasks without spreading the negativity the Members opposite have done and without showing the lack of will to approach the situation in different ways.

There is no question in my mind that the Members opposite have delayed and delayed because they felt all along that they had to play tough guy with Curragh, and particularly, Clifford Frame, which becomes readily apparent when the two Members for Ross River-Southern Lakes and Kluane get up and talk about their feelings about Curragh and how they are not going to let this cigar-chomping guy from Toronto tell them what to do.

I do not like that any more than they do, but I am prepared to rise above my feelings about the company, its officials and everything else. I suggest to the Members that they implement tough conditions, tying Curragh down so that the money does not leave the Yukon. All of that is very important and we supported that, but we do not take the approach that they do.

Any government money that Curragh has been loaned has been paid back and we have realized a value on our investment thousands of times over in this territory. It was a great deal for the territory: seven years of great economic activity stimulated by those mines.

The economic stimulation cannot be overlooked. Is that not, in itself, worth some risk? Are the people of my community who have put in seven years stimulating that economy not worth some risk? They are taxpayers, they pay a lot of tax, they contribute to this territory, they love this territory and they want to stay in this territory, but they need the support and the will of the government to do that. I am not convinced that the government will is there.

When I read the comments made by the Government Leader - no matter what the Member says after I speak - the people of Faro and the people of the Yukon heard the defeatism in his comments. When the Government Leader talks about Faro in the past tense, it does not lend a lot of hope to people, no matter what he says today. Why does he take that approach?

Security in this equation is important and as much security as can be extracted is beneficial. If $29 million to $34 million is too much for the amount of security that we can extract, then we should look at other options, such as interim financing or bridge financing.

Again, there has to be the will to do it.

The Government Leader is going to stand up and say how hard they have been working on this situation. I think it is going to fall on pretty deaf ears. I do not care how many hundreds of meetings they have with Curragh officials, if they are going to throw 14 conditions on the table, do it all behind closed doors in Toronto with Burns Fry, tell the public nothing except about the conditions, go on radio phone-in shows, put a full-page ad in the paper, publicize and politicize the conditions and then tell the people of the Yukon that they are not prepared to talk about what is going on in the negotiations, I think they have some other agenda that involves getting people in the Yukon back to work. I think that is an obvious point to a lot of people here in this territory.

I am going to end my remarks because, again, I want everyone in this Legislature to be able to stand up today, make their succinct points, cut to the bone, separate the wheat from the chaff, get to the heart of the issue and have a vote. I do not want to see filibustering from the government. This situation cries out for leadership and determination and political will. I will do anything I can to help. I pledge that to the Government Leader. I will be involved in any party committee. Again, however, there has to be that will.

I hope that the Members opposite in the government are listening and do not filibuster today, that they let people speak, get people on the record and have a vote on this motion.

I implore the government to get more aggressive in their approach to this situation. I implore them to show economic leadership, to quit blaming others and take responsibility for the situation. They have been in government for seven months; they must give this equation the spark of commitment and give the Grum the spark of commitment it needs to create activity at the mine, give Curragh time to raise money and help the mines, the jobs, the businesses and the people of the Yukon get back to work.

Speaker’s Statement

Speaker: Just before the Hon. Government Leader begins his speech, I would like to say to those in the gallery that I expect you will all respect this Legislature and allow the Government Leader to complete his remarks uninterrupted.

Hon. Mr. Ostashek: I want to say again that I welcome the people of Faro to this Legislature today. I am happy that they are here; I am happy that this debate is going on, because we are going to clear up a lot of misinformation in this House this afternoon.

Misinformation has been put out to the public by some of the Members opposite, and we are going to get on the record this afternoon to clear up those misconceptions.

I would have great difficulty supporting the motion in the present text put forward by the Member for Faro. The wording of the motion is not accurate, and I will get into that later.

The Member for Faro says he does not want to see any filibustering. I would say that the Member for Faro has quickly learned how to filibuster in this House. Perhaps we should have made an agreement, prior to coming in, that if they would quit filibustering the supplementaries and the budget, we would not filibuster anything else they brought forward.

It is not our intention to filibuster, but it is our intention for every Member on this side of the House to get on the record on this very serious problem facing Yukoners. I welcome the people from Faro being here to listen to this debate.

I am going to go back over some ground for the benefit of the people in the gallery. It is important that they hear something of the history of this whole transaction, not from when we took power, but back to November, 1991, when the previous administration was in power and the first request for help for Curragh came forward.

It is important that we cover that ground, because there has been a tremendous flip-flop on the other side of the House, now that they are in Opposition and not on the government side.

I want to go back to the second reading debate on the Faro Mine Loan Act and to comments in Hansard, on April 27, by the then-Government Leader: “We also believe that our willingness to invest money in the Faro operation will send the appropriate message to the banks and financial markets, thus making it possible for the company to raise money in another manner. Nonetheless, no business transaction is without risk.”

The last few words he said were perfectly correct, and we are fully aware of that.

He goes on to say, “First, we must have faith in the mine’s viability. That is the best security of all. Second, we have made the best arrangements we could secure for the loan of this money. The registered legal security for our loan is the unencumbered portion of Curragh’s concentrate inventories and accounts receivables.”

I want the record to show today that the security we had for that loan seems to have evaporated. We are told by the courts that we can expect, if the most drastic situation happens and Curragh goes into bankruptcy, to collect $1 million to $3 million on that, if we are fortunate. I want to put something else on the record at this time. Not five cents of interest has been paid on that loan by Curragh Inc. - not five cents of interest.

I want to continue on to May 21, 1992, on the debate on the Faro Mine Loan Act and, again, comments by the then-leader of the government, “Thirdly, we anticipate that this loan will be seen by financial markets as a vote of confidence on behalf of the Legislature and the people of the Yukon in the Faro operation. This may well improve Curragh’s access to funds from these markets and permit the Grum stripping program to be financed in a more conventional manner.”

At that time, I believe zinc was at 54 cents a pound, and it did not work; Curragh was still unable to raise money from private sources. How could it work now, when their debt load is tremendously greater than it was then and the price of zinc is at 45 cents. The reality of it is that the viability of the mine is tied to the price of zinc.

The then-leader of the government went on to say, “We are confident that the security arrangements are more than adequate to protect the investment in the company, and they are, in any event, the best we could get.”

As I said, we did not have much for security.

I want to go on to something else the then-Government Leader said. I want to set the groundwork for this before I get into the quotes he made in this Legislature. As you will recall, in the debate in May, 1992, the then-government - now the official Opposition - was projecting a $30 million surplus as of March 31, 1993. That was what Yukoners were going to have to work with. Still, he says, and I quote the now-Leader of the Official Opposition, Mr. Penikett, “Throughout these discussions, we have made it very clear to the company that, as important as the mine is to us, there are limits to what we can do as a territorial government. That is why we are not involved in a more significant undertaking at this time.” That was said with projections of a $30 million surplus as of March 31 this year.

As of this morning, the Government of the Yukon is overdrawn at the bank by $10.6 million.

The Member goes on to say - the then-Government Leader, now Leader of the Official Opposition - as to whether or not Curragh would be back for more money, “As to the question of their coming back, yes, it is possible, but the Members have to understand, in the discussions we have been having, we have had to be clear about what our limits are.” This was said with a $30 million surplus being forecasted. They were not under the financial constraints this government is under today. We cannot carry a $34 million loan guarantee, or anything like that amount, for Curragh. “They understand that, and they understand our mutual interest, which is why, even given their tight circumstances, they put in $5 million of their scarce resources and we are making a loan of $5 million in order to get a program going  so we can eventually get to the next ore body.”

In that same debate, the then Government Leader went on defending that he could not bargain in public, that this is a terrible way to be doing business on something like this. He has been very good at bargaining in public since he has been Leader of the Official Opposition. He has been very good at putting on public pressure.

This government has tried very hard all winter long to resolve the issue in Faro and keep the mine going in the interest of all Yukoners, including workers at the mine. I have gone through debates in this House and laid out what this government has done and the actions we took. Yet, the Member for Faro gets up and goes through the same rhetoric today, as he has been doing all winter.

When Curragh filed for CCAA, one of the statements in the papers was, “Curragh is actively engaged in discussions with a view to the sale of all or part of its interests in Stronsay reserves in British Columbia. Transaction is being actively discussed and would provide Curragh with $5 million to $15 million U.S. by the end of April, and $35 million U.S. by the end of July.” It is almost the end of April, and nothing has happened.

I believe in Faro. I believe that the assets are there. I believe that the ore body is there.

In his debate, the Member opposite said that the problem is bigger than our getting involved in the Grum stripping. Curragh has a tremendous debt load that they have to deal with. I will get into the Grum stripping in a minute, and what offers we have made on it. However, even if the Grum stripping were going on today, it would not put all of Faro back to work. I do not believe that Curragh is interested in putting the operation back to work until zinc prices improve. That is the message that we are getting. Other zinc producers have shut down during these low metal prices, rather than continue to operate at a loss.

This government is prepared to get involved in the Grum stripping. We have made that quite clear to the company, and we have made that quite clear to the courts.

As I said, there are two problems here. One is stripping the Grum ore body, and this government is prepared to get involved in that. The other, far greater problem, is the restructuring of Curragh. During the winter, from the time that the officials of Curragh first approached this government for assistance - and I will say for the record once again - it was on the same basis as they had approached the previous administration, that of cost-shared support between us and the federal government. It was not until February, I believe, that they asked us to foot the entire bill.

We had great difficulty finding out from Curragh what they actually owed; they were not prepared to tell me how much they owed their creditors and what their accounts payable in the Yukon were. They were not prepared to give us that figure. How can anyone expect a government, which is going to act in a responsible manner, to get into an arrangement to advance another $29 million of taxpayers’ money when we do not even know what the company owes and the company is not prepared to tell us.

It was not until the Burns Fry report came out in the middle of February that we were able to get an accounting of what the company owed. To this day, we still do not know who the noteholders are.

I believe when Curragh filed their year-end books of December 31, 1992, they had in excess of $40 million outstanding in accounts payable. The total debt load in documents filed with the court is $221 million.

The Government of Yukon does not have enough money to get involved in the salvation of that company. It would be an impossible undertaking.

When Curragh filed for court protection, there was still $37 million of liabilities that were already incurred or that would fall due on March 31. The Members opposite are asking us to advance another $29 million without being able to get any security for the people of the Yukon; we could not get any kind of security from Curragh, and zinc prices have fallen. There was nothing left of the feeble security that the previous administration had - the 35 percent of the concentrate. That was not even any longer available.

There was nothing there, outside of the Faro assets, which they were not prepared to even talk about.

We would have been involved in the Grum stripping a long time ago if we could have received any kind of security. I do not think anyone, even the people from Faro, would expect the government to advance money without any security at all.

One of the difficulties in dealing with Curragh Inc. was the layers of companies.

Our concern during the past winter was that monies that we may be advancing for the Grum stripping would be bled off for Curragh to use in more pressing areas in order to keep them afloat. We knew they were having cashflow problems.

There are five different companies, besides Curragh Inc., all intermixed in this, and it is very difficult to try to track something through all of these companies.

As I said, Curragh’s first priority right now is in restructuring the company. We found that out, and I said it in this House in the debate of Monday, April 5. It does not appear to matter what we say on this side of the House, the Member opposite does not want to believe us. I stated in this House on April 5 that we were prepared to put up $4 million to $5 million for four to six weeks to start the stripping operation moving immediately, as long as the money was secured in some manner. We did not even ask for a first charge; we asked for some security. At that point, April 5, the company was under court protection. How could one advance unsecured funds to a company under that situation?

We did not want to be advancing money that was going to be going to pay off debts at the Bank of Nova Scotia or to enhance the assets if the company was unable to restructure their debt.

That is still on the table. That is there for the Grum stripping; the minute the company wants to accept it, it is there. It has been there for the whole month of April. The Member for Faro is shaking his head. Maybe he has some inside information of which I am unaware.

That offer was refused by the company and the banks. We are prepared to put the workers back to work on the Grum stripping program and it is still there, the minute the company wants to accept it. All we need is some type of security so that the taxpayers of the Yukon will not be out that money.

We did not ask for a first charge for that $4 million or $5 million. We did not ask for it at all.

What more would the Members opposite like us to do? We cannot just go in there and strip the Grum deposit; it does not belong to us. We cannot go in and call it infrastructure and start stripping it; it is not our property. The company is under court protection. Nothing happens without the sanction of the courts. Is that that difficult to understand? We are prepared to move at any time.

As I said, the company feels at this point that Grum is a secondary problem. Its priority is to raise funds so that the company can be viable. There is no doubt in anyone’s mind that if the company is not viable there is not much benefit to being involved in the Grum stripping.

As I said earlier, even if the Grum stripping were to start, how many people would be employed - 70 to 75 people? Curragh will not start shipping zinc until the price comes up. It is the reality of the metals market and the large quantity of zinc that is already on the market.

We received a metals summary the other day that forecasts that zinc will not be moving from 45 cents a pound until late this year. The Members opposite know full well that the company cannot operate at 45 cents a pound for zinc - even with government assistance. We do not have enough to help them with their cashflow - we do not have that amount of money.

This has to play out through the courts. At any time that we can get involved and have some security for our money, we are prepared to advance money on a day-by-day basis for the stripping of the Grum deposit. We have been, since they went in under CCAA. We would have helped prior to that, if we could have gotten security, but we could not. All this government is concerned about is that the money goes to the Grum stripping, and not to help Curragh with their debt problems.

There seems to be a great sense of alarm in anticipation of the date of May 3 arriving because that is the date beyond which the banks said they would not guarantee not foreclosing on the company, but the fact remains that there is nothing that can be done before May 5. The banks are not prepared to move and the company is not prepared to start the Grum stripping. How could we start the Grum stripping?

This has to go through the process. Curragh has to be able to raise some money. The fact that the Government of the Yukon said it is prepared to get involved to the tune of $29 million is enough of a message for the financial market, but it did not help. When the now-Leader of the Official Opposition gave them $5 million one year ago, it did not help them raise money in the markets. It is a difficult market out there for zinc producers. That is the sad, but realistic, truth about what is happening in the world zinc markets.

The Members opposite accused us of stalling all winter. That is certainly not the case. As I said at the start of my debate, when Curragh officials first approached the Leader of the Official Opposition, in his capacity as Government Leader in November, 1991, it took until late March, or early April, for them to put together an arrangement to advance $5 million. We were not stalling. If we could have gotten the information we needed, we were prepared to move ahead.

When we do not know what the total debt of the company is, what the schedule of payments are, or if they are going to survive to the middle or end of the month, how could any responsible government advance funds in that situation? It is just not realistic to expect the government to throw away money without knowing where it is going. It is not going to help the people of Faro; it will just prolong the agony.

Let us just get this thing settled. If the company restructures, we will advance the money for the Grum stripping, and there will be a future for the mine in that area. I do not believe that the people of Faro want to go through this again three months from now. That is exactly what could have happened, if we had started advancing money during the winter, not knowing if the company could restructure their debt, not knowing if they were going to be successful.

I want to touch on a couple of other issues under the CCAA to show you, Mr. Speaker, and the people from Faro the kind of hurdles we were facing in trying to negotiate with this company, prior to their going under court protection.

Under court protection, a payment schedule for the month of April set out what they could spend and what they could do with it. One of the amounts of money that the company saw fit to set aside, while facing the serious financial constraints they are in - the millions of dollars they owe to creditors in the Yukon and other areas - was $4 million in advance payment for legal help they would require down the road. They set that money aside. Now, the creditors have to go to court to get that money back so they can get some of their money back, if they have to. They set aside a substantial amount of money for their head office operation in Toronto - $500,000 for office expenses for the month of April. That is where monies are going that are owed to Yukon creditors. That is what they had approved under the CCAA.

The Member for Faro alleged that Burns Fry had a hidden agenda - that they were working for us, but they had a hidden agenda and that they were working for the federal government. I wonder if that Member would have the courage to make those statements out in public, where he does not have the protection of this House. I am sure Burns Fry would be in touch with him very quickly.

Burns Fry is a reputable, professional firm, and they were acting on behalf of the Yukon government, not the federal government.

I would like to speak a little bit about the motion that is in front of us. The motion says that it is the opinion of this House that the Government of the Yukon should show economic leadership. Well, that is redundant. We have been showing economic leadership. We have been working all winter. The Leader of the Official Opposition is shaking his head. I wonder if he would have shown the same economic leadership on this issue as he showed for the Watson Lake sawmill. I wonder if he would have shown the same kind of economic leadership. That was $16 million of the taxpayers’ money that could have gone to Curragh.

We have been showing economic leadership. For the government to support a motion such as this, calling the Grum stripping “infrastructure investment”, and there is no doubt that it is infrastructure for a mining company, would be leaving the door wide open for every mining company to come to us and ask us to strip their ore deposits as infrastructure. We could have the Casino people come and say, “well, fine, we will operate the mine if you will strip that as infrastructure spending”. We are prepared to help strip the Grum deposit, but not under those kinds of terms and conditions.

Stripping of the Grum deposit will not keep thousands of people working in the Yukon. It will keep less than 100 people working in the Yukon during the stripping of the Grum deposit. The Faro mining operation, the mining of zinc, will not take effect until zinc prices come back up. There is no doubt that we are going to have to help with the stripping of the Grum deposit, even if Curragh is successful in restructuring their debt. We are prepared to do that.

It is my understanding that there is about one million tonnes of ore still in the Vangorda pit that could be mined if the company was interested in mining it at this point, but they are not. We will be getting involved in the Grum stripping if the company is successful in making arrangements with their creditors to be able to keep operating.

Curragh’s chairman, Mr. Frame, is in Asia right now trying to raise some capital. I talked to Curragh officials yesterday. They had not heard from him in a day or so, but the last time they heard from him, he said things were very encouraging. Whatever that means, I do not know, but that was what was passed on to me.

The people of Faro have every right to be in a state of anxiety. When a mine is on the verge of shutting down, or it is not known whether it will shut down or continue to operate, it is probably the worst case scenario one could be in - not knowing whether the company was going to be successful in restructuring and continue the operation, or be unsuccessful, with jobs lost.

We have done everything in this government’s power to date.

Inaudible from the gallery

I wonder if the people in the gallery have some suggestions of what they would like to see this government do.

Speaker: Perhaps outside the Legislature, but not here today.

Hon. Mr. Ostashek: Thank you, Mr. Speaker.

The reality of the situation is that we have very depressed metal markets in the world; we have a company that has used up the existing ore bodies; we have a company that has a tremendous debt load; and they are going to have to restructure that debt if they are going to survive and be able to carry on the operation in Faro.

For anyone, government or otherwise, to get involved with advancing monies without the sanctions of the courts, is just impossible. It has to be done through the courts, and that is where it will be done.

I am going to let other Members in this House speak. I am sure everybody wants to speak to this issue.

When the time is right, when we can get involved in the Grum stripping, this administration is prepared to do so. There is $5 million on the table, without asking for a first charge on the assets, but asking for some security for the Yukon taxpayers’ $5 million. Any time the company wants to take it up, we will enter into negotiations with them again.

Mr. Penikett: I welcome the chance to enter this debate and follow the Government Leader in discussion of the most important economic problem facing the territory.

The Government Leader used the word “misinformation” in his speech and then said that he was going to correct the misinformation. He did not do that. In fact, we have very little new information, and getting information on this subject is like panning for gold on the Alaska Highway.

The Government Leader accuses the Opposition of a filibuster on the supplementaries, yet two days ago he made a ministerial statement that changed his own budget, made cuts in a number of departments and changed the tax regime, but he wants us to get on to debate this budget when we have not been told what the budget is.

We know no more about the new budget than we know the real story about what has been happening in negotiations with Curragh and the banks.

The Member quotes from Hansard about discussions that were going on one year ago, as if we would have been in a position a year ago to be able to predict the future - perfectly, as he now claims to do.

The Government Leader misses the obvious point when he talks about security evaporating. We had the same kind of security as the banks and if we had any hope of recovering our investment in the mine, the mine has to be open and operating. Otherwise, we will not only lose the money that we have invested, we will be losing an awful lot more in the economy.

The Government Leader again uses the tired old claim about the dire straits of the government’s finances when, even by his own admission, the government still has, in consolidated financial terms, an accumulated surplus.

Again, by the Government Leader’s own admission today, the government squandered hundreds of thousands of dollars on computers in the fourth quarter. The Members opposite want to have computers, but they do not want the opposition to have equipment or, it turns out, information.

The Government Leader quotes me as saying last year we could not handle “a more significant undertaking at this time”. He raises questions about whether Curragh would be back, which of course, is a concern to us.

We did not claim that we could predict the future perfectly then, any more than we can now - even though the Government Leader claims greater powers.

He claims he did not know what Curragh owed until February, when the Burns Fry report came out. Yet, I heard him on January 21, in Faro, saying that he was ready to sign an agreement - just fill in the numbers as soon as the Burns Fry report came in. That was January. Since then we have seen February, March and almost April pass by. Nothing of substance has happened in the negotiations.

We are here today to talk about Curragh, the Grum stripping, the Yukon economy and the people of Faro, Watson Lake and Whitehorse. As the Government Leader has described them, Curragh’s problems are well-known. They have been well-known since we began debating this matter in this House one year ago. It is well-known that this government lent Curragh $5 million to begin stripping the Grum ore body. That contribution helped keep the company going, people working and kept the prospects of them finding private sector solutions to their financial problems alive. We helped maintain employment and economic activity. The people of Faro are here today to ask the government to do the same.

We all know that since we began debating the matter last year, long before the election, a lot has changed. There has been the Westray tragedy and the subsequent criminal charges against the corporation. The chair of the corporation has become a pariah in the national media. Senior federal Cabinet Ministers no longer want to be seen in the same room as Curragh officials. The company has been plagued by continuing low metal prices. There is a glut on zinc markets and their financial problems have gone from bad to worse. It should not surprise anyone that Curragh’s officials and the chair of the company’s board are fighting for their lives. That should not surprise anyone. I am told that is what corporate executives do.

Yukoners did not create these problems. They are not our fault, but we have to live with them. Out of this situation, we have to understand perfectly clearly that the Yukon has problems - not Curragh. There are some obvious social problems, which I will not talk about today, and some obvious economic problems. There have been massive layoffs at our major mines. We have people losing their homes and family conflicts about money and many other things at a time like this.

You have children, unbelievably stressed, trying to go to school and continue their education. You have an exodus of skilled workers from this territory, who are people we cannot afford to lose. We have a decline in business activity, in the capital city, as much as anywhere else. We have layoffs in the service sector in this town. There will be, if this situation continues, small business bankruptcies. Keep in mind that this is the only jurisdiction in Canada, under an NDP government, that had no bankruptcies last year. This year we will be right near the top of the list, I predict. I predict that we will have a great decline in government revenues, not the transfers from the federal government, but in terms of tax volumes.

Our competitors, not just Curragh’s competitors, in the world markets, the Comincos and the Australian mines, will be fighting to displace us in the Japanese and Korean markets. We know that if the mine stays shut for any long period of time, it will be very, very hard to work our way back into those markets. I know that as well as anybody in this House, because I had to go to try and deal with smelter companies and Curragh back in 1985 when we re-opened the mine. It was not an easy job.

In the end, we will have a recession here. It will be deep and hard. It will be a recession that I say will be very much of this government’s making. We will have pessimism, despair, frustration, defeatism, and, as the Member for Faro says, gloom and doom. We have to be very clear-headed about this.

Faroites are not asking us, in this Legislature, to solve all of Curragh’s problems. They want the government of all the people in the Yukon to act on Yukon’s problems. The people of Faro want us to recognize that it is in our public interest to take responsibility, to face up to the hard realities, and deal with our problems - the social problems at Faro, the economic problems at Faro, and the ensuing crisis in the whole territory.

The answer to those problems starts with the stripping of the Grum ore body. There are eight, nine, 10 years of reserves at Grum - the Government Leader is wrong when he says there are only a few dozen jobs there. If we strip the Grum ore body, there is the prospect of continuing work for 1,000 people in this territory. The Minister of Economic Development has promised in this House that, if the Grum ore body is stripped, those jobs will go to the people of Faro - I heard him - even if it is only 70 jobs.

The stripping of the Grum ore body is a necessary precondition for economic recovery in this territory. It is necessary to put miners back to work, to put mill-hands back to work, to put truckers back to work, to put people in the service sector in Whitehorse back to work. It is necessary to keep the mines at Watson Lake and Faro alive. It is necessary to keep them alive until the price of zinc on the world markets rises again, as it surely will. I do not know when; I cannot predict that, nor can the Government Leader, but we not only have to have some hope, we also have to have some faith that it will happen, as I said a year ago - not the kind of pessimism and negativity that has been shown by the other side.

It is only when we have a financially healthy government, as a result of a healthy economy, that we will be able to deal with the health of communities in this territory, wherever they are - from Ross River or Pelly Crossing. We have to understand that we have a very narrow economic base, as the Member for Faro says. It is a three-legged stool, if you like, of tourism services, government and mining. The dominant parts of the mining sector in this territory for the last few years have been the lead-zinc mines owned by Curragh Inc. So, if we are going to deal with our economic problems, we have to deal with first things first; we have to strip Grum. That is what we have to do.

How we do it is, let us all admit, a difficult question. Whether we do it by way of a loan or a loan guarantee or a contribution agreement, or direct government expenditure as the federal government did through John Munro back when Faro was last shut down in the early 1980s, or whether it is done through a development agreement such as we tried to negotiate in 1985, I do not know the answer to that question. Nobody in this House does, but I do know that the only way to get to the answer is to negotiate, and I know that we have to be tough but realistic in the conditions we set in the negotiations. I know also, having watched from afar, what is not happening in Toronto - we have to bring the negotiations home, to here. We have to give the public some access, some comfort so that they know what is going on and they know he is doing it.

Further, I say that these negotiations have to involve all of the stakeholders. The people of Faro who have been making the greatest sacrifice of all have been kept totally in the dark. The union that represents the employees has had arrangements made in its name, and on its behalf, proposed by the government, without any consultation with them whatsoever.

We have to involve people who care. Burns Fry may be very professional people; they may be very nice gentlemen; they may be kind to their children and their pets, but they will get paid whether they fail or whether they succeed. But they do not live here, they do not pay taxes here and they do not care about the people of the Yukon, the people of Faro or the future of our economy. For them, no matter how good they are, it is just another job. For us, the jobs at these mines are our only hope for economic recovery right now.

The Government Leader can talk about railways to Carmacks, pipelines to Watson Lake and other megaprojects in the future, but none of them will create jobs in 1993.

How do we make this work? Whether it is a summit conference or some other arrangements, we have to get the policy makers to the table. We have to get their decision makers there. That means Clifford Frame, the chairman of the board of Curragh Inc. and it also means - for as long as he is there - the Government Leader of this territory. The Government Leader has to take responsibility, go to the table and make some decisions.

It is all very well to talk about how one has been in communication by phone with the other players and has given them instructions, but we have not seen any demonstration of economic leadership or any demonstration of real political will on this question. Yes, the choices are tough, but the government has to choose and that is what the people on the other side of this House are there for. In our system of government, we on this side do not get to make the decisions. The Members of Cabinet have to make the decisions - they are tough decisions, but that is what they are paid to do.

We have watched the negotiations and we have watched this dance go round and round. We have heard the Government Leader say, “Blame it on Curragh, blame it on the banks, blame it on the previous administration, blame it on the feds.” Everybody is sitting waiting for someone else to make the first move. Maybe the time has come for us to make the first move.

Who has more at stake than the people of Yukon in what happens here?

The Government Leader has slightly amended the Yukon Party position in his statements today. The fact remains that he publicly stated that the number one condition for a loan guarantee for stripping the Grum was a first charge on security, something that, as far as we know, no bank in Canadian history has ever agreed to or is ever likely to agreed to.

Worse yet, he went to Watson Lake and gave a speech to the Chamber of Commerce and said that this condition was not negotiable. The Minister of Economic Development confirmed, in questions from myself, that when the Government Leader and his party floated the offer of a $5 million loan to do the stripping at Grum, the condition was the same first condition - a first charge on security; the same impossible condition, a condition that Curragh would not agree to because it could not, because the banks would never agree to it.

The Government Leader says today that he would be happy with any security. That is an important change in position and we want to pursue that. I notice that the Government Leader was quoted in the internationally respected journal, Metals Week, a couple of days ago in an article about the Curragh situation. Metals Week says, “Curragh has turned down the $5 million it was offered by the Yukon government to restart the lead-zinc mining operations in Faro after the company was unable to satisfy the government’s demand that it have first right to any collateral put up against the loan guarantee. Loan negotiations are effectively on hold pending further action from the company, Yukon Government Leader John Ostashek told Metals Week,” - two days ago.

The Government Leader has also told us that he must have a guarantee of the viability of the mine. I understand the concern on that score. Nobody in this House or anywhere else can guarantee the viability of a mine. I am not absolutely convinced that God can do that, but I am pretty sure that God is not represented in this Legislature - at least not by any Member sitting here. Even if God were making a prediction, He would have to do it on the basis of certain price assumption and almost everyone in the business, including the professionals, has been wrong about their assumptions about price, pretty regularly.

Now the world economy has been in a recession, zinc prices are low and there is a glut in world markets. If we have a recovery and industry turns around, I predict prices will go up, but obviously the recovery in metals has been slower in coming than in other areas of the economy. However, I do not think that justifies us in doing nothing.

The Government Leader has said, proudly, that there has been no change in his position since the beginning. I know enough about negotiating to know that if there has been no change in a negotiating position from the beginning to the end, there has been no negotiation in good faith. To take a fixed, rigid position may, as the Member for Faro said, be popular. It may win applause from certain kinds of reactionary groups, but it will not get a deal. The art of negotiation is not to get to “no, no way or never”. The art of negotiation is to get to “yes” - a solution, a resolution and a win.

We have been deeply disappointed about the lack of information. We have been deeply disappointed that the government has not developed any new positions, new ideas, imagination or leadership. The Yukon government’s position has been, from the beginning and reaffirmed by the Government Leader today, that they must have financial security for the government. That is a very important position for the Members opposite. If they were to make any further loans, there would have to be very good security. The position was, until recently, first charge on security - perhaps even as recently as two days ago.

The Government Leader says that they cannot afford $34 million. I do not think anyone has ever asked for $34 million to be paid out all at once. That is certainly, as I understand it, not what Curragh is asking. The government said they cannot do anything because they are broke. None of us on this side of the House believe that the government is broke. We all recognize that, while we may not be able to afford what Curragh is asking, we cannot afford to do nothing. The consequences are worse.

The Government Leader’s approach, which is to take a look at the financial bottom line of this question, is necessary, but that is not all there is to it. The bottom line here is not just about dollars. The bottom line for us here has to be jobs for Yukoners - that should be our economic bottom line.

The Government Leader talks about financial security for the government, but we have to ask about economic security for the people.

I know enough about the formula financing arrangement to know that if the mines at Watson Lake and Faro go down, and stay down for years, the federal transfers will continue to flow in here. We will have, in relative terms, a very rich government and a very poor population. That would be an absolutely obscene situation, to use the Government Leader’s words. The only thing that is necessary to create that situation is for the government to continue to do nothing.

What about economic security? What about the economic security of the laid-off workers? What about the economic security of people who are in danger of losing their homes? What about the security of the people whose lives have been disrupted? What about the economic security of the people with businesses that are in danger of failing? What about the economic security of the territory, which is sliding inevitably into a recession? What about the possibility that we should look at what is being asked for here as an investment, rather than simply as an expenditure; something that will build revenue in the future, rather than just add to costs today.

The Government Leader criticized us for likening the Grum stripping program to an infrastructure investment. It is infrastructure. In fact, it is quite comparable to the work that is done on roads or dams. The same kind of equipment is used. The same kind of people do that work. In fact, the same kind of money is used. The difference is that stripping the Grum overburden gives us access to a Yukon asset that can put hundreds of people to work for years and years to come. It makes economic sense. Given the current economic crisis, it is one of the few things that makes any economic sense.

I believe that the government has to show some economic leadership on this question because, in the end, government is not about bookkeeping, it is not only about financial bottom lines, it is about leadership. It is about demonstrating some heart. It is about showing that you care for people. It is about demonstrating some compassion for people who are crying out for support. I know that Faroites may not fit some people’s definition of real Yukoners. To me they are Yukoners, as much Yukoners as anyone in this House. They live here. They work here. They pay taxes here and they deserve our support.

I hope we do not end up filibustering today. I hope the Members opposite do not equivocate. I hope they do not pass the buck. I want to implore the Government Leader to make the tough decisions, to lead, to roll up his sleeves on this one and go to work, or people will be asking him, as the old expressions go, to lead, to follow, or to get out of the way.

The Government Leader said today that nothing can be done until May 3, as if that was some point in the distant future. May 3 is next week. Time is a passing, people are dying, children are being born. The lifeblood of our economy is slipping away. There is nobody else in the territory to take charge of the problem except the Government of the Yukon. The leader of that government has to take charge. The leader of the government has to lead.

I am begging the government to show more flexibility, more imagination, to work a little harder, bring the negotiations here, get the people affected involved, consult with parties. They have not truly been consulted about this issue from the beginning. He must recognize that this is everybody’s problem and get everyone who has a stake in it involved in the final solution.

I ask that not for myself, not even only for the people of Faro, but for everybody who works, lives and pays taxes in this territory.

Hon. Mr. Devries: I also rise today to speak to the Member for Faro’s motion.

I can fully understand the upheaval and agony the residents and employees of Curragh Inc.  are experiencing both in Watson Lake and Faro and around Whitehorse. My family has lived through mine and forestry shutdowns and I know what it feels like to be down to one’s last dollar. I take no pleasure in having to debate this issue today, and I wish I could stand here with all kinds of encouraging news for the people of Faro.

Contrary to what the people from Faro may have been told, we on this side of the House are not a bunch of rich guys or anything; we have all worked hard for our families and our livings and we have all got to where we are through doing what we know best - putting our noses to the grindstone, working with our families and contributing to our communities, much like the people of Faro have done to get to where they are in Faro today - or were, a few months ago - I am sorry.

The real issue here today is about what we can do to help Faro reopen. I would first like to give this House some background on Curragh and the Government of Yukon’s relationship. The Yukon government’s objective is to have the Curragh mine up and running. We have attempted to do this by offering the loan guarantee support to Curragh to aid in Grum stripping. Yes, there were conditions and, contrary to what any one of the Opposition says, I know for a fact that those conditions could have been met if the will to meet them existed within Curragh Inc. and with the financiers of Curragh.

We also offered a $5 million loan, which was subject to reasonable security, and I know that the Leader of the Official Opposition said that I had said it was subject to the same conditions - that may have been a misinterpretation on my part, but we all do make mistakes once in a while.

There are limits to how far a government can go in the financial rescue of a privately owned company. In the case of Curragh, the following facts need to be taken into account in this regard.

There is the need to spend approximately $20 million on pre-stripping done on Grum before ore can be released in significant quantities. At present, even if Grum was pre-stripped at a cost of approximately $20 million and ore exposed, it is currently uneconomic and would require continued government support, probably in the order of $30 million per year for the first two years of operation at present zinc prices.

I have some notes here on the Grum deposit. To ensure that everyone is aware of some of the problems with the situation, I would like to go back and reiterate some of the difficulties.

Once the waste stripping is completed, we will still have a waste ratio of 5.3 to 1. To be optimistic, we will make it an even 5 to 1 ratio. This is almost double the waste of the Vangorda deposit - this was after the Vangorda and Grum were stripped. The ore content of the head grades of these two deposits are almost identical.

I am not a mining expert, but from a practical point of view, the difference of a waste ratio of roughly 2.6 of the Vangorda and, I believe, 3.7 at Faro - it could be the other way around - versus the Grum - 5.5 is substantial. It does not take a scholar to realize that is almost 50 percent more waste per tonne of ore than in the other deposits.

We also know that right now zinc is at a 10-year low. We also know that Curragh lost money during the last two years mining the Vangorda and Faro deposits.

At present prices, we are only fooling ourselves if we think that Curragh is going to start up operations even with the Grum deposit stripped. I do not think that their creditors would allow them to operate with the substantial losses that they would suffer by trying to operate with zinc prices at 47 cents.

I know that there is the remote possibility that some of the smelters may consider lowering smelter fees, which would be in Curragh’s favour.

Even knowing all this, this government has still shown that it is willing to risk $29 million of taxpayers’ money, provided the company can raise the equity to get its cashflow and O&M going and basically get itself back into a secure position, capable of operating and meeting its day-to-day obligations.

My understanding is that, when they stopped stripping the Grum, there were 40 employees and 35 Pelly Construction employees working on the project. Curragh’s current estimate is that if the Grum stripping resumes, it would employ approximately 80 people on the project. I realize that this would be a good signal to the people of Faro that, in the long term, the mine would be viable.

There is no doubt that, at some point, with the stripping proceeding, the mine would possibly become viable; however, there would be no assurances, if we started the stripping today, that the mine is going to open six months or even one year from now.

When I look at the different waste ratios for the Grum deposits, I can see that it would take at least 55-cent zinc to break even. I know that whenever we talk about mining or whatever, there is an element of risk. There is an element of risk with the forest industry, because we do not know if it will stay at the wonderful high it is at right now. We are very happy to see it in Watson Lake, as it is helping to reduce the impact of the Sa Dena Hes shutdown.

We know that during the last year there has been a great deal of uncertainty at the Faro operation.

Speaker’s Statement

Speaker: Dr. Bamford, if there is one more remark from you, I would ask that you leave the gallery. I would like you to allow the Minister of Economic Development to speak uninterrupted.

Hon. Mr. Devries: I know that the people of Faro would appreciate it much more if I could stand here with nothing but good news for them. I would love nothing better. The reality of the situation is that there are low world zinc prices and Curragh is having tremendous financial difficulties and problems surrounding the Westray disaster. We, in this Legislature, have been dealing with Curragh’s present financial problems since April 27, 1992.

The previous government introduced the Faro Mine Loan Act. It is not like this is all new news to us. I would like to quote to this House some of the concerns raised regarding the future of Curragh.

The Member for Riverdale South, on page 77 of Hansard, April 27, said, “It is fine to give a big emotional speech about jobs, the town, mine shutdowns and the costs involved to get it running again. None of us disagrees with that emotional argument that has been presented, but we have to look at whether or not it is good business sense, as well. If the banks are not prepared to support this initiative, I have to ask why the government is so eager to do it?”

We all know now that, as much as the government had good intentions when it put the $5 million up, if we had addressed this whole situation at that time, the company would have been in a better position right now. We failed to do that.

The statement ends, “Perhaps the Government Leader has information available to him that we do not know.”

Much of the information I presented here today was public information. I find that I cannot help but feel, when I listen to the Member for Faro, as much as I know he is very passionate about his community, and I do not blame him - it is a good community - he should also try to make the people more aware of the true serious problems and the seriousness of the situation we are faced with in trying to make these decisions. If, for instance, we did the Grum stripping and, for some reason or another, Curragh Inc. could not get its act together to get its financing and the company still went down, yes, it is true that it would be there for someone else to pick up, but it is also true that our $34 million would basically end up going to the Bank of Nova Scotia and other creditors. We would actually be doing them a favour, rather than Yukoners.

I cannot support this motion, as it presently stands. We are looking at this project as an investment. If we have some certainty that Curragh is going to survive as a company, I am certain this situation will come to a conclusion that will be in the interest of all Yukoners and Faroites alike.

Ms. Moorcroft: I rise to support this very important motion that the Government of Yukon should show some economic leadership by actively supporting the immediate stripping of the Grum ore deposit in the vicinity of Faro.

I would like to comment briefly on the word and the practice of filibustering. In the Oxford English dictionary, to filibuster is to obstruct progress in a legislative assembly. Last Wednesday, this Legislature debated and passed three government back bencher motions. These were important motions on trapping and on the Top of the World Highway. I have previously commented on what I sometimes consider to be unnecessary repetition indulged in during debate in this Assembly. I would like to ask that the government cooperate today and keep their remarks brief so that we can vote on this important motion before us today.

On alternate Wednesdays, Opposition motions are debated, and if we do get to a vote today, it would be the first Opposition motion to come to a vote in this session. I think that the gravity of the situation in Faro deserves that we conclude debate and hold a vote on the motion put forward by my colleague, the MLA for Faro. Also, I believe that we should be very pleased to have people in the gallery to add some life to this debate today. I have certainly heard much more heckling from both sides of this House than the few comments and groans coming from the gallery.

The Yukon Party vision, Toward Self-Sufficiency in the 21st Century, includes railroads to Carmacks, pipelines to Watson Lake, roads to resources, and stairways to heaven. I would suggest to the government that stripping the Grum ore deposit in the vicinity of Faro is an infrastructure investment that would keep hundreds of Faroites working now. There is a town, there is a workforce, and there is a need to invest in an existing community to keep the Yukon private sector economy healthy.

It is not just the Town of Faro that will suffer from the effects of a mine closure. We have seen unemployment rise dramatically in the past few months since Curragh laid off its first workers in December. Many people in Whitehorse have also lost their jobs. Last night, I visited the Town of Faro, to listen to what the community members had to say. Over and over again, they asked us, as Opposition Members of the Legislature who were willing to go and hear their concerns, to convey the message that Faro is their home; Faroites will stay.

We have talked about anniversaries in this Legislature; 1994 is Faro’s 25th birthday. The residents of Faro want the government to take their heads out of the sand and work to keep Faro alive. Does the government understand that Faro is a town, not a mining camp? In the last five years, more than 54 babies have been born in Faro, and other Faro women have had babies who were born in Whitehorse.

The Government Leader may not think that mine workers are real Yukoners because many of them move here from other areas of Canada and the world, but I say they are real Yukoners. I say a real Yukoner is someone who makes the Yukon their home - that is all of us here today, and many more people besides.

Faroites have a real commitment to their community. Their children were born here. There were many young people in the school gymnasium last night, who attended high school in Faro and who want to graduate in the Yukon in their home town.

I have heard Ministers of this government praise the efforts of volunteer activity. Certainly, there are many sports and community volunteer groups active in Faro. However, in the face of a mine shutdown and the economic devastation of Faro today, there has been a tremendous rally of volunteer effort on the part of the Spotlight Faro Committee, who demand respect for their contribution to Yukon life and the Yukon economy.

The people of Faro want to know if the Members of this Legislature will support their demand that the condition that the banks give up their first charge on assets be dropped. This condition on the Curragh loan guarantee is that the debt secured by the government would take priority over existing debts. This has been described in Faro as an impossibility clause. How could the banks renegotiate their loans in this way and thereby set a precedent to industry across the country?

If the Grum ore deposit is stripped, it could provide the security for an additional eight years of employment in Faro. With the mine operating, the taxes derived from working people in Faro will be an asset rather than a liability to the territorial economy. Is it not wiser to spend Yukon money in an economic investment to keep jobs alive than to support a welfare community?

To send Faro workers who have lost their jobs on planes or by bus to towns and cities outside the Yukon, where they will still be unemployed, is not problem solving. Doing nothing is not leadership. The government must be creative and show some economic leadership, meet with the people of Faro and the members of the Spotlight Faro Committee who are determined to save their town.

The people of Faro are honest and hard working. They do not want to be a drain on the social assistance budget of the government. They want jobs and a future. The people of Faro do not want assistance to move out of the Yukon. The kind of assistance they want is to keep their jobs in the Yukon.

There are many families in Faro who have almost paid for their homes. Their children enjoy attending school in Faro and the recreational opportunities in the town. Those people spoke to Opposition Members of the Legislature in Faro last night and they asked us to bring their message to the government, since the government refused to go to Faro and listen to them in person. We are now facing the biggest economic crisis we have faced in the Yukon for many years, and the government will not even show up to talk to the people who are being hurt the most.

The revenues created by the Faro mine operation contributed to the healthy Yukon economy during a time when the rest of Canada was in a recession. It is obvious, as the Government Leader has said, that the government is not in complete control of the situation, but the government does have a role to play, and they are not doing an effective job.

The government hired a Toronto-based financial services group, at great expense to the Yukon taxpayer. The government did not themselves go to the table to negotiate to save the town and the mine. The Government Leader said that he would not be supporting this motion, because he has already demonstrated economic leadership. Refusing to go to the table to negotiate is not economic leadership.

The government does have the ability to act, show some leadership and work with the Members of this House and with the people of Faro, whose future hangs in the balance. I urge them to do that.

Putting Faroites back to work must be a priority of this government, and stripping the Grum ore body is a way to do that. If people are not put to work stripping the Grum, the people of Faro will have virtually no option but to pack up and move - something that none of them want to do.

The desperate conditions currently being endured by the people of Faro have been ignored by this government. Nothing has been done to put Faroites back to work, and nothing has been done to support Faroites during their unemployment. The survival of the community of Faro, and the overall economic well-being of the territory, are dependent upon Curragh remaining open for business and the Grum deposit being stripped.

This government has remained inactive on the matter. The economic development officer in Faro has no budget for a contingency plan, and the government refused to go to Faro to meet with the citizens. As we heard during Question Period, there are no make-work projects planned or budgeted for. This government’s reluctance to take leadership in this situation has allowed the living standards in Faro to deteriorate.

During Question Period today, the Minister responsible for Economic Development stated that he has not heard complaints and that the Faro contingency plan is working well. Perhaps, if the Minister would return his phone calls to people in Faro, he would have a different picture of how well things are going th