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.
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 partys 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.
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.
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.
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 Manufacturers 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 Yukons 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.
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.
Speaker: Are there any Returns or Documents for tabling?
Are there any Reports of Committees?
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 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 administrations 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 governments 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 governments 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 Leaders 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 elses 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 governments plans were for it in the event of a permanent mine closure. People are very worried about their childrens 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 governments 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.
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 governments 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 Members 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 Ministers 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 Members 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 citys 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 Ministers 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 Ministers 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 Ministers 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 Gwichin 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 Gwichin 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 mornings 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 governments responsibility to put Curragh back to work. I do not think that it is the governments 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 governments responsibility to help Curragh. Nothing could be further from the truth. The people of Faro believe that the governments 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.
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 governments 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 leaders 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 governments 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: 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 mines 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 Curraghs 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 Curraghs 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, Curraghs 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 anyones 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.
Curraghs 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 governments 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 governments finances when, even by his own admission, the government still has, in consolidated financial terms, an accumulated surplus.
Again, by the Government Leaders 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, Curraghs 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 Curraghs officials and the chair of the companys 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 Curraghs 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 governments 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 Curraghs problems. They want the government of all the people in the Yukon to act on Yukons 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 governments 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 governments 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 Leaders 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 Leaders 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 peoples 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 everybodys 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 Faros 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 ones 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 Yukons relationship. The Yukon governments 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 Curraghs 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. Curraghs 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: 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 Curraghs 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 Faros 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 governments 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 there. That is the message I have for the Minister of Economic Development.
There is another message that I have from the people of Faro. It is not rosy in Faro; there is a great deal of hardship in the town. The people of Faro have heard enough empty promises, they have seen enough broken promises, and they want action and demonstrated leadership from this government.
Since a number of Faroites are here today, it is nice to hear that the Government Leader has agreed to meet with a few of them this afternoon - unlike last time when the doors to the executive office fortress were locked. I did notice that the doors are closed again this afternoon. I was somewhat surprised by this, given that all Members of the public have traditionally been welcome in the executive offices. Has the government changed their policy on this?
The Government Leader has said that there are limits to what he can do. Well we certainly have seen huge limits on his ability. But what we have not seen is the government being prepared to get involved in the Grum stripping.
The Government Leader has stated that he believes the Grum ore body is there. That is a fact that I am glad the Government Leader is aware of. The Government Leader also said that they are prepared to get involved in the Grum stripping and this afternoon he told the House he has made that clear to the government. That must have been in one of their closed-door Cabinet meetings because we on this side of the House and the people of Faro have not seen any evidence of that position - that the government is prepared to get involved in the Grum stripping.
I am sure that if the Government Leader is prepared to get involved in the Grum stripping, as he said, if the government still has money available for helping to strip the Grum deposit, as he said, then the Members opposite will support this motion - that it is the opinion of this House that the government of Yukon should show economic leadership by activity 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.
I look forward to the governments support of this motion and the governments support of the people of Faro and the people of Yukon.
Mr. Millar: I rise today to speak to Motion No. 38. I do not have any great answers for anyone on this, but I have some questions and comments. I do not believe I will be very long.
I want to start with what I know about Faro, which is not a lot. I have been to Faro a few times, mostly playing in hockey tournaments. I can say that they know how to throw a good hockey tournament.
The Member for Faro rose and asked if we knew that Faro is more than a mining town. I am not sure that I do know that. I know it is a mining town. I know that it will be celebrating 25 years soon. I believe all 25 of those years have been as a mining town. That is the mainstay of its economy and is a big part of the Yukon economy, as well. It is not the only mining activity in the Yukon - I would like to put that on the record. The placer mining industry is nearly as big an employer in the Yukon as is Curragh. We might fall a couple of hundred people short, but we are up there. We have been here for a long time.
I sympathize with what the people of Faro are going through right now. I know it is not an easy time for them. I can honestly say that I have lived through a very similar experience in Dawson City. In the late 1960s, when the Yukon Consolidated Mining Company shut down, everyone said that Dawson City would become a ghost town. It did not. I do not believe that Faro must, either.
I am curious, though, about what the people of Faro and the Members on the opposite expect, exactly, from the government. I do not think it is the governments job to have make-work projects for the sake of make-work projects. If there is a good, viable reason to do something and it will benefit the community and the territory, then, yes, I believe it is a good thing. I have a fear that the same thing could happen in Faro that happened in Elsa.
There was a lot of money dumped into Elsa, and no one stayed around to use the facilities built there.
Much has been made of negotiations and the fact that we are not moving on negotiations, we are not doing this and we are not doing that. I believe we are. We on this side of the House do not want to just throw the money in there and see it disappear and go through this whole exercise in another six months, and this being the bottom line. We do care; we do want to help, but we do not want to be going through this exercise six months from now, instead of just now. It does not make sense to me. If Faro or Curragh is a viable mining operation, then it should be able to mine on its own. I do not believe that government should throw money into private sector businesses. If they are there and they are viable, they should make it on their own. That is my opinion, and I believe that very strongly.
We have heard here today that we are willing to support the Grum stripping program, and we are. I do not personally know how much good that will do. I do not know if it will put everyone in Faro back to work. I do not see how it possibly can. My understanding of the situation is that, even if we were to advance the money for the Grum stripping, there would only be around 75 to 100 people going back to work. I am not even sure that they would be people from Faro. I understand there is a company that has the contract to do that stripping.
If the company wanted to be productive right now, I believe it could. I believe the Vangorda pit has some ore left in it. If Curragh really wanted to have that pit operating right now, it could be. The fact of the matter is that they have very severe financial difficulties and the Yukon government cannot afford to bail them out.
I said I would not be taking up much time here, and I will not. I wanted to get my thoughts on the record. I believe that this government is showing very good economic leadership in not throwing money away. If we can advance that money with securities that we will get our money back, then we will do it.
Mr. Joe: I think I have heard everything from both sides of the table. Enough is enough. I believe that Yukoners deserve to have good jobs and an honest chance to provide for their families. This keeps people healthy and happy. All the people in the Yukon have a right to jobs to make sure that we all get a chance to do things in a way that we want to. I believe that the government should do everything in their power to make sure that this happens not only in Faro, but in all communities.
Hon. Mr. Phillips: I am very pleased to rise to speak to this motion here today. Although I do not have any personal experience in a mine closure, I do have some close personal friends who were involved in the first mine closure in Faro. I know the agony that they went through in trying to decide what they would do. Finally, they left the Yukon. They are still today looking for a way to come back to the territory. Like the people from Faro and like myself, it is a very easy place to grow to love and enjoy. I know the people in Faro do really want to stay here. If there was anything we could do immediately to solve that problem, I know that we would be doing that.
The Government Leader spoke about the history of this issue and I do not want to go over the whole history again, but it is important to repeat some of the points and I would like to stress some of the areas the Government Leader talked about.
It is important to look at Curragh before and Curragh now, and I want all Members of this House and the people from Faro to look at this realistically. A year ago, the company said they only needed $5 million. They told us that if they had $5 million they could continue operating into the 21st century. The then-Government Leader, Mr. Penikett, said it would be a one-time infusion of cash and would be all we would need. When we interviewed the officers of Curragh in the House here, they told us they were financially sound, that there was no problem with the company and that this money would allow the investors out there to see that there was opportunity here, and that they could raise the money - $30 or $40 million to strip the Grum deposit at that particular time.
Every one of us in this House was somewhat optimistic. We were cautious and raised some concerns over the security for the $5 million, but we were optimistic that this would provide opportunities for the people of Faro far into the 21st century.
Zinc prices at that time were eight to 10 cents higher than they are today. The markets were better. I understand the costs of smelting have even gone up in some cases and that that has added to the problems. So, a lot of changes have happened during a year - unfortunately, all of them are on the negative side of the ledger.
As well, there is a glut of zinc on the market and that is one of the main problems we have today. Curragh, as I said earlier, did not tell us a year ago that they were rather debt-ridden. I think they probably did have some substantial debt at that time but, unfortunately, they were not very forthcoming with that information or it might have made us think twice about whether or not the $5 million would have been enough or whether or not we should have loaned the $5 million at that time.
The Opposition Leader said it put Curragh to work and put people to work for a year, and I think that is great. It did put people to work for a year. We also have to remember that there are millions of dollars right now owed to Yukon creditors that have not been paid, and probably will not get paid now. That is a shame. It did put people to work but, on the other hand, some people are going to have to pay for that.
Today, if we were to give Curragh all $129 million of our capital budget, it would not satisfy Curraghs debts; it would not help the company. The company is severely debt-ridden. That is a problem that the Government of Yukon cannot solve.
Last year, when we loaned Curragh the $5 million, the then-Government Leader, Mr. Penikett, stood in this House and assured us that we had lots of security; I think we had 35 percent of the ore that was stockpiled in Skagway. I think there were several million dollars worth of ore stored in that facility in Skagway at that time, and all of us thought that that security was enough. Well, our security is now sitting in a foreign port, and it is not Skagway.
The accountants and lawyers who are working on the case for us, tell us that - as the Leader of the Opposition said earlier - we will be lucky to recover $1 to $3 million of that $5 million. Probably, the $1 million figure is more likely.
About one month ago, several of us, including the Member for Faro, went over to Juneau. While we were in Juneau we had an opportunity to visit the Greens Creek Mine. It is a boat-in/boat-out operation outside of Juneau. All of the miners live in Juneau and they are taken by boat every day to the mining operation at Greens Creek.
The mine had just announced a shutdown - they are probably shutting down as we speak. One hundred or 150 people are being laid off in that particular operation.
The Greens Creek Mine is a lead-zinc mine. The manager of that mine told us it was fairly cost-effective, but the difficulty with that mine was not with the mine or the miners, it was the price of lead and zinc.
The manager of that mine told us that they had to have .52 to .54 per pound for zinc to make that mine viable. He said that their decision to shut down the mine is based strictly on the price they could get for lead and zinc. He said that he could not see a lead-zinc mine in North America, right now, existing on .45 zinc prices. That was the reason they made that decision, and he also pointed out at that there are many lead-zinc mines all over the world that are closing.
The main reason for the closing was due to the oversupply of zinc in the world marketplace, mainly as a result of Eastern Bloc countries that are producing cheaper zinc, because they have very little control over their markets; they are trying to get into the marketplace and trying to inject badly needed funds into their markets. With no controls in place, they are damaging the controlled marketplace that we have here in North America.
Yukoners, and especially people in Faro, are unfortunately paying that price.
I would be very surprised if there is one Member in this House, on either side, that would really believe that we in Yukon have any impact on world zinc prices and can change those prices at this time. We do not have the wherewithal to do that; the world is too big.
I do not think it would matter what party was on this side of the House. They could not have prevented the problems that this mine is currently experiencing. They could not, unfortunately, have prevented the closure of this mine.
The Leader of the Official Opposition rightly pointed out that Curraghs problems were not of the Yukon peoples making and I could not agree more. He pointed out their huge debt load, the terrible Westray disaster, world zinc prices crashing and Clifford Frames personal unpopularity. The Leader of the Official Opposition also told us that we should probably ignore all these major factors affecting the mine and we should jump in and subsidize the mine.
There are 500 to 600 workers unemployed in these two mines and the stripping of the Grum would put less than 10 percent of these people back to work.
The Leader of the Official Opposition knows full well that doing the Grum stripping will not open that mine. We could do the Grum stripping by moving in there with $5 million over the next four or five weeks. We could strip the Grum deposit but then where do we go? The announcement would not be made to reopen the mine, and I think the Member knows that.
Curragh has to do something on its own as well. They have to lower their debt load and bring in new investors. Something has to happen to the price of zinc - the bottom-line is the price of zinc.
Are the Members opposite asking us if the Yukon government should be prepared to subsidize this mine? I would like to know from those Members: at what level do they think we should stop subsidizing the mine? Should we invest $5 million, $10 million or $100 million?
There has to be some certainty somewhere that the mine is going to be viable. Unfortunately, because of the many problems brought on by Curragh itself, I do not think there is a lot of optimism in the future.
Five million is not going to open this mine; possibly $80 million or $100 million would. To do that, they are going to need other investors, unless the Members opposite feel that we should continue putting money into this as they did into the Watson Lake sawmill, until there is no hope.
The Leader of the Official Opposition wants us to make the first move. We did make the first move. We told Curragh that there is $5 million on the table for the stripping of Grum. It has been there for several weeks. We have not heard a peep from Curragh about this $5 million offer. What we have heard from the company are different signals. We heard, first of all, that they are extending the shutdown and the layoff notices of the people of Faro. We have heard that they have no money for severances, as were supposed to be provided for in their contract. We have also heard from the Government Leader today that in the last month, the month of April, Curragh spent $500,000 in their head office in Toronto. What about the severance packages for the people of Faro? Is that fair?
They set aside millions of dollars earlier this month for legal fees that they will need in the future to protect their backsides. Yet, there is no money for the people of Faro. Is that fair? I do not think so.
They have tossed the people of Faro to the wind. They have tossed everyone in the Yukon to the wind. They told us that they are one-third of the Yukon economy, so we should get in there and bail them out. That is what they said to the people of the Yukon. I think that is unfair to the people of Faro and it is unfair to the people of the Yukon.
Curragh owes millions of dollars to its creditors and its employees in the Yukon. What did it do last week in a short 24- or 36-hour period? It hauled 46 trailers to Skagway. It moved its assets out of the country. Is that a company that cares about people? Is it a company that cares about the people of the Yukon? I get angry when I am asked to help a company such as that when they are doing that to Yukon people. It is unfair.
Curragh has provided a lot of opportunities for the Yukon in the past. They seem to be cutting and running now, abandoning their workers and Yukon people. They are asking the taxpayers to pick up the tab. That is unfair, because Curragh knows, and the Members of the Opposition know, that the Yukon government does not have the $100 million it needs to get Curragh out of trouble.
I found it very interesting, earlier in the year when we were talking about the initial loan to Curragh, that the Members of the Opposition wanted us to offer a loan guarantee to Curragh before we had any of the reports, or studies done on the actual assets of Curragh and their financial status. It is an interesting kind of economics. I was especially surprised that the Member for Faro, who claims to be a commerce student, would suggest that we should give a company a loan guarantee before we actually find out what their assets and liabilities are. It was interesting to see that Member take that stand. If he was running a business where he was loaning money, and I came to him for money, he would certainly want to know whether I had any assets or liabilities, and whether I had the wherewithal to pay the loan back, before he gave me any money.
I want to talk a little bit about the financial position of the government today, versus the financial position of the government a year ago today. A year ago, the Government of the Yukon claimed to have more than a $30 million surplus. The Government Leader has informed us today that we are in to our line of credit for $10 million. That means that the $30 million is gone, and we have borrowed $10 million from a bank to pay for the day-to-day operations of the government. When you look at the projected deficit, it shows that the Government of the Yukon spent about $58 million more last year than it took in.
I would love to have that $58 million today. It would certainly make the decision to help Curragh a heck of a lot easier for every single one of us on this side of the House. Instead, we have grandiose buildings all over this territory, not providing any wealth for anybody. When the people from Faro walk out of this building and look across the river today, they can look at the new extended care facility, which is needed. It cost us $11 million. A similar facility in the Okanagan, designed by the same architects, cost less than $5 million, and it has one more bed than that one over there. It does not have a big rock side or big cedar shakes on the roof, a $150,000 light fixture or a big expensive fireplace. That is where our money went. It is going to cost us about $6 million or $7 million in operation and maintenance to carry on that building in the future. That is money that could be going to help Faro.
Unfortunately, the Government of the Yukon is left with very little, or no, money in the bank. It is unfortunate timing and circumstances that we have arrived at this point.
Most of the conditions that led to the closure of this mine, admitted by most Members of this House, and should be by all Members of this House, were totally out of the control of the Government of the Yukon. We had no control over lead-zinc prices; we had no control over the expenditures of Curragh or the millions of dollars they took every month for their head office in Toronto or the Westray accident - another very unfortunate circumstance, which took the lives of many miners.
We had no control over Curragh when they took the money out of the Faro mine and invested it in a smelter in Spain and the Stronsay deposit in B.C. That is all money that came out of the Curragh operation. That is all money that, if it were there today, would probably amount to well over $100 million, and this operation would still be viable.
We keep talking about reopening the mine and the Grum deposit being so important to the reopening of that mine. What about Sa Dena Hes? No one today has spoken very much about Sa Dena Hes. The Grum deposit has nothing to do with Sa Dena Hes. This mine could be open tomorrow if Curragh was interested in operating. They know that, with the price of zinc at 45 cents, that mine is not a viable operation, and they are not interested in doing that. They are interested in moving trailers, paying head office staff and laying off employees. That is what disappoints me about the actions of Curragh.
The Member for Riverdale South said, in an earlier debate, as quoted by the Member for Watson Lake, that it has to be a business decision and if we make an investment in this mine, it will last. We have to give that serious consideration when we make this kind of decision.
Some of the Members today, when they were talking about various issues, were concerned about the well-being of the people of Faro. I am also extremely concerned about that. As the Minister of Education, I have my officials working very hard on the contingency plan for Faro. In fact, we have had several of our officials in Faro on a regular basis for several days now, talking to people and counselling them. We have career counselling going on for individuals who are affected by the closure. We are helping people to write resumes for future jobs. We have a heavy duty equipment mechanic upgrading course, and I believe there are 10 individuals taking that course. It starts on April 28.
We are also arranging special sittings for individuals to write provincial journeyman-level exams so that if they go elsewhere they can still get their tickets and find gainful employment. We are also maintaining the programming and staffing for this current school term. We are going to be reassessing it in the spring, when we will have a better idea of what the people of Faro are doing and how many are going to stay in the community, and what the future of that mine will be.
The Department of Education is playing a lead role as well in dealing with the Employment and Immigration Canadas secure and industrial investment services contract for the community. This contract has now been signed between Employment and Immigration Canada and representatives of Curragh, the union and non-union employees and the Yukon government.
Mr. Harding: Point of order, Mr. Speaker.
Speaker: Order please. Point of order to the Member for Faro.
Mr. Harding: The government had ample opportunity to answer questions regarding contingency in Question Period. This motion is regarding the immediate stripping of the Grum deposit, not the contingency plan. I would be happy to debate that a further time or deal with it in Question Period at some other time.
Speaker: On the point of order, our Standing Orders do indicate that we should stick to the topic but this has become a very general debate and the motion is very general. I would just ask all Members and the Government House Leader to relate remarks to the motion.
Hon. Mr. Phillips: Thank you, Mr. Speaker. The whole motion talks about the future of Faro and the economy of the Yukon. The future of Faro is dependent upon the well-being of the residents of Faro and, in the meantime, in trying to arrange some funding for the Grum deposit, the Government of Yukon is doing whatever it can to help the people of Faro and I think it is important to point out what we are doing. Some of the spectators may not be totally aware of all the activities that are taking place and it is important that they know what exactly the Government of Yukon is doing for the people of Faro.
The mine in Faro is an extremely important component of the Yukon economy and I can remember years ago when the mine went down the first time the impact it had on the economy of the territory. I also remember, when it reopened, it reopened with the help of not just one government, but of several governments. In fact, it was helped by the federal government, I believe, to the tune of about $50 million.
I said this before and I will say it again. I am rather frustrated that the federal government is not here to help in the stripping of the Grum, as they did in pre-1985. I am frustrated that our Member of Parliament, Audrey McLaughlin, has not come out publicly to raise questions in the House of Commons on the Curragh issue. She is our only MP in Ottawa; our only voice in Ottawa. She said she has worked in the back rooms and is talking of having meetings with people, but sometimes it takes a bit of public pressure, as the people of Faro have shown, to bring some action or to raise the issue in the publics eye. Maybe the Yukon Member of Parliament should have raised the issue in the House of Commons, as she is our lone voice in there, speaking out for the people of the Yukon. This is, after all, about a third of the Yukon economy, which is suffering from the closure of this mine.
The Government Leader indicated when he spoke today - and had indicated previously, a week or two ago in Question Period - that the $5 million loan offer for the stripping of Grum is on the table. All we want is some security for the Government of the Yukon.
We have already seen our security for the previous loan disappear to a foreign country. We have already seen 46 trailers moved to Skagway. We have seen the company back out on the severance packages for the employees. They said there is no money for that or they have to stand in line, like all the other creditors, and wait. It is time for Curragh, the bankers and others involved, if they feel that this is an important issue, to step forward and come to some kind of an agreement on this $5 million.
This is extremely important for the people of Faro. They have waited far too long for Curragh to get to the table and come up with a reasonable counter offer. It is unfair for them to wait any longer.
I would urge all the people of Faro and all Members of this Legislature to urge Clifford Frame and Curragh Inc. to come to the table. We are prepared to deal on the $5 million. All we want is some security for the people of the Yukons money; that is all we are asking for.
Ms. Joe: I think that the people of Faro and other Yukoners can almost assume that the government has put another nail in the coffin for Faro.
We sat here and listened to nothing but negativism from the side opposite. I think we are sending a very bad message to all Yukoners, not just the people of Faro, about the leadership that is being provided by that party.
I sat here and listened to the previous speaker, the Member for Riverdale North, talk about what happened the last time the mine in Faro was shut down. It is almost like deja vu, because when that mine was closed down before, they never lifted a finger to open the mine and they are not doing it today.
I have been to Faro in the past; I have met people who live there; we have seen the town grow; we have seen it open; we have seen the commitment that the people living in Faro have. We have seen how they lobbied for a doctor; they have opened day cares; they have organized and they have taken the whole town to heart and they live there. By anybodys definition, they are real Yukoners.
After listening to the radio this morning, what I find horrifying about the whole situation is that, over and over again, Members on that side of the House talk about mines opening and closing and we are still here. Well, maybe they are still here, but what about the people who work in the mines - the people who have come here to make the Yukon their home and want to stay in the Yukon? If the mine is not opened, if the government does not show any leadership, that is not going to happen.
I really feel insecure knowing that we have a government that sits back with a nonchalant attitude talking about people coming and going - as if we were not talking about real people, because we are.
There was a lot of optimism when people of Faro came to town; they lobbied and demonstrated. They were jubilant when the government promised that they would guarantee $29 million but, as mentioned before, we knew that the governments heart and leadership was not in the right place, because we wondered what the hangup was going to be; we found out when they attached those impossible conditions to that guarantee.
I have a great deal of difficulty standing here and talking, because it is not only the people in Faro who are being affected. I have talked to people in my own riding, people in Whitehorse who have lost their jobs already because of what is happening in Faro.
I talked to a couple the other day who were putting their house up for sale, and this is not only one couple; there are a number of people who are putting their houses up for sale and leaving the Yukon.
Whatever this government does it is going to affect thousands of other people who live in the Yukon. I can see what is going to be happening to this community. I will not speak long but I just want to say that I have not seen this much doom and gloom in the Yukon since the mine in Faro closed last time. At least at that time there was a government in place that took the leadership to work toward getting that mine open again.
The Member for Faro, at that time, as the current Member for Faro is doing, took the lead and worked very hard with a government that supported the opening of the mine.
I also sat here and listened to the Member for Riverdale North talk about how they do not have any money left and that there is a $58 million deficit. Every day that we sit in this House and we go over the supplementaries we find padding in the supplementary budget. It goes on and on. It is no wonder they want us to get out of the supplementaries because every day we identify another amount of money that they have included in the supplementary budget to pad it so that they can say look at what the former government did. It should be look what this government has done since the election on October 19.
That $58 million is a mythical amount - they are trying to prove something that is not so. I have said all I want to say and I want to give other people a chance to speak. I think it is about time that the government should show some leadership in the economy of the Yukon. I will support this motion.
Hon. Mr. Fisher: I also would like to speak to Motion No. 38. I will be quite brief. No one in this House wants to see the residents of Faro unemployed. No one wanted to see the mine shut down, and no one wanted to see the trucks stop running. However, the Yukon government cannot control ore prices, and the Yukon government cannot afford to provide enough funding for Mr. Frame to continue to operate the mine at Faro and the mine in Watson Lake.
To service the debt alone and to pick up the loss in operating costs is far beyond the means of this government. The Members opposite have alluded to the stripping of the Grum ore deposit as a save-all for the people of Faro. I submit to you, Mr. Speaker, that if the government can find a way to provide funds to strip the Grum deposit, only a very few of the people in Faro will be able to work on the project. As everyone is aware, Pelly Construction has a contract for the stripping and is not required necessarily to hire anyone from Faro. I wonder why the Members opposite have not fully explained this to the people of Faro?
The Members opposite have deliberately wasted valuable time in this House, which in turn holds up capital projects that could employ many of the people from Faro and other Yukon communities.
I believe that the social problems in Faro referred to by the Leader of the Official Opposition are very real, and I sympathize with those people. In that regard, I plead with the Members opposite to get on with the business of this House, get those capital projects underway and get as many people back to work as we can.
The Government Leader has said that we will advance money to strip the Grum deposit, and we will, but this will only put a few people to work, not the 500 or 600 jobs in Faro, nor the 140 employed by Yukon Alaska Transport, nor the 150 employed in Watson Lake. Yes, we also have a Curragh mine in Watson Lake that is currently shut down.
It is quite apparent that the Members opposite have little sympathy for Watson Lake, just by their total lack of reference to Watson Lake and the problems facing that community. What about the 140 or so Yukon Alaska employees? How will stripping the Grum help all of those people when only a few will be employed?
I support some of the intent of this motion - to keep people employed, to help the private sector and stimulate the economy; however, without amendments to the motion, I cannot support it in its entirety.
Mr. Cable: I will be very brief. I had prepared a few remarks, but I will condense them, as I know everyone wants to get on with it.
Let me say, firstly, that it was a pleasure to go to Faro last night and see the positive faces. I know there has been a lot of emotional strain, and I hope that we can give the people of Faro some positive replies to take home with them tonight.
Both the Yukon Chamber of Mines and the Yukon Chamber of Commerce have issued press releases. I will not go into them, given the time constraints, but they have been in favour of advancing funds under the loan guarantee, under certain conditions. I do not think that either of these organizations could be termed bastions of left-wing thought, so there should be no philosophical problems, I would suggest, for the government in putting their heart into these negotiations.
I know we are all guilty of a lot of wordsmithing in this House - a lot of fancy exchanges of words - but I find nothing sinister in this motion. Unless I have been asleep for the last few weeks in the House, the government has gone on record as saying that we should get on with the Grum stripping. The question is not whether, but how.
As I understand the Leader of the Official Opposition, he is not suggesting that we load up a plane and send Clifford Frame a load of unmarked $1.00 bills - some free money - but is suggesting that we look at this investment - if we can call it that - as a piece of economic infrastructure. That does not mean - and should not mean, in my view - free money.
What it does mean is that there is a different risk analysis attached to the investment. We are not looking at loaning someone $10,000 for their car, where we are trying to make one or two percent on the interest differentials. We are looking at making an investment so we get a return for the people of the Yukon. If this investment is made - and it works - then the Yukon is kept working, the social assistance costs are kept down and people who are generally in a work-ethic society get to keep their jobs. They do not have to go around looking for pogey or social assistance handouts. They can keep their self-esteem.
I think we should be charitable on this motion. We should try to stay positive, we should try to give the people of Faro something positive to take home with them.
I would like to make this point in more detail but, in view of the time constraints, I will not take a lot of time. There is an understandable fear of making a mistake. There is a high risk involved with the operations in Faro. I have not had the pleasure of seeing the viability studies, or any of the other studies, for that matter, and I have not had the pleasure of having many questions answered; however, anybody would have to be a fool not to recognize the fact that this is a high-risk mine. If, in fact, there is relative political capital to be lost by making the decision and being accused, some time in the future, of being a bonehead, then we should share that political risk. All the political parties should get together and try to solve that problem. I hope the Government Leader would at least consider the proposition that we all get together, strike a committee, or whatever - some organization or structure that would permit the problem to be analyzed, with all the facts on the table - so we can make some half-decent attempt to get Faro back to work again.
Hon. Mr. Phelps: I have a fair amount to say. There are those who would insist that this is perhaps not a democratic place and that perhaps we do not all have a duty to speak to important issues such as this. The Member for Faro may be one of those people, but I am not. I know there are others who also have speeches to give.
I wanted to begin by discussing the motion itself, because I have grave concerns, as do all of us on this side, about the way in which that motion is worded.
I feel that the motion is a far cry from the urging of the Leader of the Opposition, with respect to some kind of immediate negotiation. That is not really what the motion before us states, and I have difficulty with its present wording.
The motion states that it is the opinion of this House that the Government of Yukon should show economic leadership - in our view, it has been showing that leadership - by actively supporting the immediate stripping - again, if negotiations are required then the word immediate is certainly misplaced in this motion.
It goes on to say, the immediate stripping of the Grum ore deposit in the vicinity of Faro as an infrastructure investment - I have difficulties with the word infrastructure - to stimulate economic activity, to keep thousands of Yukon people working. We know that simply carrying on with the stripping of the Grum ore deposit will not keep thousands of Yukon people working. It will not even bring the truckers back to work who haul concentrate to the coast. It will not bring back most of the people at the mine, and it will not get the mill operating - that is also erroneous in this motion.
For those reasons, I move the following amendment to Motion No. 38:
THAT Motion No. 38 be amended by deleting all words after the word Yukon in the second line and replacing them with the following:
is showing economic leadership by actively supporting the stripping of the Grum ore deposit in the vicinity of Faro as an investment to stimulate economic activity, to keep 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.
Speaker: It has been moved by the Minister of Justice
THAT Motion No. 38 be amended by deleting all words after the word Yukon in the second line and replacing them with the following:
is showing economic leadership by actively supporting the stripping of the Grum ore deposit in the vicinity of Faro as an investment to stimulate economic activity, to keep 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.
Hon. Mr. Phelps: Those modest changes are changes that we support. Of course if this amendment were to go forward, the amended motion would receive support from everyone in the House. However, I do not feel that I would be showing any sense of duty at all to my constituents and all Yukoners without putting my thoughts into the record regarding the issue before us here today. Despite the pressure, I think it is incredibly important that time be taken, and that the thoughts of each and every one of us be recorded, since there is no doubt that the issue is an important one. The fate of Faro is of concern to all Yukoners. I heard one of the Members on the side opposite talk about compassion, or lack thereof. That is not the issue here today.
The issue is what are the best steps that can be taken, in view of what is facing us as Yukoners. There is no question that people are concerned about the fate of the mine and the fate of Faro. There is no question that people are concerned about the plight of families in Faro.
Government is performing its duties with respect to the people in Faro. The policies being utilized are the same policies utilized by the previous government. To try and bring this in to a political debate, in a manner in which the Members opposite have attempted, is really somewhat damaging to the democratic process. I am not afraid to stand here and talk.
I want to begin my remarks with respect to the issue before us by referring to what has really happened in Faro, what has befallen Curragh, and what, in the circumstances, is the appropriate role for government to play.
I begin by suggesting that, in the course of the last three or four years, virtually every major mining company in Canada has pursued a conservative course with respect to its finances.
One might look, for example, today, at mining companies such as Placer Dome, which has about $400 million in the bank. Teck Corp has a huge war chest in the bank. Noranda has taken all kinds of steps to cut down its costs and reduce its debt load. All of this was to weather the problems of a severe downturn in the economy and the low prices of lead and zinc.
The largest mine on Vancouver Island, and a very successful mine over the years, had the same thing happen. Over the past three or four years, they have taken Draconian steps to reduce their debt load down to close to zero and their workforce so that they could weather the times. If one goes through the successful mining corporations, one will see that that has been the position each and every one of those corporations has taken.
Compare, on the other hand, some of these companies that have gone from being high fliers to losing money and going broke. Compare, for example, the Campeau group of companies, which took the other course. They went deeply into debt to expand and make investments. Bloomingdales is another. The Reichmanns is another - Olympia and York - who expanded, incurred too much debt and are now in a similar position to Curragh.
Let us talk about what Curragh did. While prudent mining companies were preparing themselves for the inevitable fluctuations that were coming in the marketplace, Curragh was the only company in Canada to develop mines in 1991. They developed two-
Disruption from the gallery
Speaker: Order please. I caution persons in the gallery to stop immediately and allow the Member to speak. You can say everything you want to say outside those doors. In this Chamber, each Member has a right to speak. There is a 40-minute time limit for each speaker.
Hon. Mr. Phelps: The sad situation is that these are things that have to be said. Each person here has the right to make his thoughts known. That is the way democracy works.
Mr. Harding: Point of order, please.
Speaker: Point of order to the Member for Faro.
Mr. Harding: I move for unanimous consent from all parties in the Legislature and all Members to continue to debate if we wish and to come to a vote on this motion.
Speaker: Is there unanimous consent for the Member for Faros request?
Some Hon. Members: No.
Speaker: There is not unanimous consent.
Disruption from the gallery
Speaker: If I hear another sound from the gallery, the House will simply adjourn. If you wish to stay, you may, but I would ask you to be silent and allow the Member to speak.
Hon. Mr. Phelps: I would hope that the people realize that the motion before us is not one that is going to make any difference in terms of what government must or must not do. I hope that has been made clear to people.
This is an important motion, the issues are important and the thoughts of people in this House with respect to possible solutions are important, but the idea that, somehow or other, voting on this motion is going to produce results is something that I hope has not been held out to the people from Faro.
The concern that I have with respect to the situation before us, simply put, is that, at a time when other mining companies, companies in manufacturing and otherwise in Canada, were taking steps to conserve their capital and to pay down debt, Curragh expanded.
Curragh expanded rapidly and by incurring all kinds of debt. Curragh made investments in all kinds of situations outside the Yukon and, suddenly, found itself in a situation that was similar, if not exactly the same, as the Campeau group of companies, as Olympia and York, and Curragh, today, is in the same quagmire as Olympia and York.
Yet we do not hear of governments rushing off to invest in the Canary Wharf in London. We did not find governments bailing money into Bloomingdales. The process that the Campeau companies found themselves in had to go through all the bankruptcy proceedings that the law allows. When that was done, and debts were restructured, the stores themselves, the ones in the United States at least, went on to be viable businesses once again and continue to be viable businesses to this day.
It is an important comparison, in my view. I have had the opportunity to go through the public record with respect to the history of Curragh since it went public about three years ago. We do know that it is a company that made all kinds of money as a private company and refused, during that period of time, to divulge what its profits were. Had Curragh taken a course similar to other major mining companies in Canada, it would have made sure that its debt was paid down, rather than get involved in a whole bunch of expansion activities, which have proved to be disastrous.
Speaker: Order please. The time being 5:30, this House will recess until 7:30.
Speaker: I call the House to order.
We will proceed with Government Bills.
Bill No. 8: Second Reading
Clerk: Second reading, Bill No. 8, standing in the name of the Hon. Mr. Ostashek.
Hon. Mr. Ostashek: I move that Bill No. 8, entitled Interim Supply Appropriation Act, 1993-94 (No. 2), be now read a second time.
Speaker: It has been moved by the Government Leader that Bill No. 8, entitled Interim Supply Appropriation Act, 1993-94 (No. 2), be now read a second time.
Hon. Mr. Ostashek: This bill will provide the government with spending authority for the month of May 1993.
The bill is necessitated by the fact that the new budget has not yet been approved by this House. Members will note that the expenditures shown in this bill are more than one-twelfth of total annual expenditures. This is partly due to the fact that our expenditures do not occur evenly throughout the year and is partly due to departments requiring appropriation authority for entering into contracts, despite the fact that the money may not all be spent in the month of May.
As with the previous interim supply bill, the sums requested here have been derived by a canvass of all the departments.
Mr. McDonald: As the Members on both sides of the House know, this is a fairly routine measure, traditionally undertaken when the estimates debate have not yet concluded in the Legislature.
This used to be a rather routine affair when the operations and maintenance budget was tabled in the spring of the year, budget debate had not yet concluded and there was still vote authority required to approve the operations of government.
One should not get the impression for one second that the fact that we have not yet concluded debate on the main estimates is anything particularly new or different. This interim supply bill provides the government with $37 million in operations funding and $28 million in capital funding, $19 million of which will be dedicated to Community and Transportation Services. This budget, as I understand it, is time-dated, like an operations budget, in that the money lapses at the end of the month should the government not spend it.
As I understand it, one of the reasons why the operations expenditure is as high as it is is that some of the commitments that were projected to be made in the first month of the fiscal year were not spent and consequently have to be, in a sense, revoted into this supplementary.
The capital program, with this very significant allocation, will, for all intents and purposes, be allowed to proceed. The government has requested, for example in Community and Transportation Services, fully $19 million. We should not hear from the government side that there has been any resistance from the Opposition to having the government carry out, in general terms, its capital program. I know that from time to time, in this Legislature and outside this Legislature, they have made the claim that the due process of scrutinizing projects is an onerous task and is preventing people from going to work.
We have no intention of forfeiting our right and obligation to scrutinize the main estimates budget or the supplementaries, but we are keenly aware that the governments operations must continue. That is the reason why we have committed once, and soon twice, to the quick passage of an interim supply appropriation bill, virtually without scrutiny and virtually without debate.
While I will have a few questions on some of the particulars of the bill - the grants contributions list - these will beminor. The Official Opposition will not be delving into departmental estimates. That is an enormous act of faith the Opposition has in the government. Whether or not that is well placed or not remains to be seen.
The message the Opposition is delivering to the government and the Legislature is that we do want to see government projects, initiatives proceed and at the same time we are interested in doing our duty with respect to scrutinizing budgets.
There was concern about the amount of time that the government has spent on supplementaries for last year. I can only indicate to Members that when the appropriations come forward for our scrutiny and we let them pass, the government opposite makes the claim that the Opposition was afraid to address the figures. When we address the figures in detail and expose some problems that we have already identified, the Opposition is accused of filibustering.
One cannot have it both ways. We have demonstrated that when there is close scrutiny of budgetary figures there are often questions raised that are very legitimate and take some time to pursue.
For our part, we do support interim supply. We do not believe that it is necessary to provide the public service or community groups with any anxious moments with respect to whether or not the government will have vote appropriation to continue on with the normal operations of the government.
With that, we, in the Official Opposition, will support the bill. We will have some questions to ask. I am certain there are a couple of concerns about capital expenditures that may be raised in very, very general terms in Committee debate as we want to put them on record, particularly in the timing of their delivery, but we will be more than satisfied to debate it in Committee briefly and leave the substance of the debate to either supplementaries or the main estimates.
Mrs. Firth: I rise to make just a couple of short comments. I, too, am prepared to support this bill and support its speedy passage but on one condition, and that condition is that the Government Leader makes a commitment and the Ministers who parrot his comments frequently in this House also make a commitment that, when we ask questions in the Legislature, they will not jump up at least three times in a Question Period and say that if we would get through the budget debate, they would have some money to spend on job creation and on capital projects.
I am really looking forward to receiving that commitment from the Government Leader, because I hear that this message is being given out of this Assembly and out of this building to people on the street - money cannot be spent, jobs cannot be created, the government cannot carry on with its daily business because the Members of the Opposition will not pass the supplementaries and will not get on to the main budget. That is just absolutely not true. The government is being given another substantial allotment of money here to spend - more than $60 million. They were given it last month and there is absolutely no reason why the government cannot carry on with its business, carry on with its capital projects and carry on with all these jobs they are going to create.
That is all I have to say. I am certainly hoping that the Government Leader will get up and give us a positive commitment that we will not be listening to any more of this kind of idle chatter.
Speaker: If the Hon. Government Leader now speaks, he will close debate. Does any other Member wish to be heard?
Hon. Mr. Ostashek: I want to thank the Members opposite for their cooperation in passing the interim supply bill. While I am new to the Legislature, I had hoped that we would at least have been into the budget debate by this time. We had called the Legislature back in on March 15. It is now almost the end of April, and we are still not into the budget.
We, on this side, realize these capital projects have to go ahead to put people to work in the Yukon. The Members opposite must also realize that, because they are supporting the interim supply bill. I would hope that we could get into debating the budget because, ultimately, it has to be passed through the budget. We can go ahead with the jobs, but these funds will all lapse at the end of May, and it will have to be revoted again in another interim supply bill, if we are not done.
I will give my commitment to do my best to get through this, if the Members opposite will give me the same commitment.
Motion for second reading of Bill No. 8 agreed to
Speaker: I declare that Bill No. 8 has passed this House.
Bill No. 83: Third Reading
Clerk: Third reading, Bill No. 83, standing in the name of the Hon. Mr. Phelps.
Hon. Mr. Phelps: I move that Bill No. 83, entitled An Act to Amend the Employment Standards Act (No. 2), 1992, be now read a third time and do pass.
Speaker: It has been moved by the Minister of Justice that Bill No. 83, entitled An Act to Amend the Employment Standards Act (No. 2), 1992, be now read a third time and do pass.
Hon. Mr. Phelps: I am pleased to rise very briefly in support of the motion. This is a rather short act, one clause in all. It deals with the issue of the timing during which clause 6 of the amendments to the Employment Standards Act, Bill No. 13, would become law. This act purports to put clause 6 on the same footing as the rest of Bill No. 13, so it would not come into force except on a date to be fixed by the Commissioner in Executive Council.
As has been said many times in debate, it is not the governments intention to pass Bill No. 13 in its present form. The mandate of this government is to consult on the principles of the amendments with all members of the public and stakeholders in the Yukon in the hope of coming forward with a bill that receives acceptance from a broader range of people in the Yukon, than did Bill No. 13.
Mr. McDonald: I will be brief; we oppose this bill. We opposed this bill in second reading, we opposed it in Committee of the Whole and we oppose the bill now. We will be asking for a standing count to ensure that everyone is on the record this time; it was a failure of ours the last time that we debated the bill that we did not ask for a standing count. We trusted the word of the representatives of Yukon Party that they supported the bill. It was our mistake, because it turned out not to be the case.
We will ask every individual Member who is present in the House to declare their position on this question and stand accountable for it.
We feel that the government should be bound by the provisions of this act and other acts that regulate the private sector, particularly those provisions that deal with the government as an employer.
We feel that it is an important principle to protect; we feel that it should not happen at this moment in Yukon history; we feel that it sends the wrong signal to the private sector: it proves that the government is not prepared to lead by example and we feel that the government is remiss in not proceeding with this amendment.
We feel that even though the government did not accept our amendments in Committee to proclaim the entire act - no Member in the Legislature, apart from the New Democrats, agreed that the act should be proclaimed - we feel that this provision can stand alone and that the government should be binding itself to the law.
The government has a role as policy-maker and regulator for the territory and the government also has a role as an employer.
In the past we have undertaken to bind ourselves to those acts that affect us as an employer, such as the Occupational Health and Safety Act, and the Workers Compensation Act; we do not believe there should be any question here.
If there is hardship realized by the government as an employer then that is a hardship that the government, as an employer, should bear, because they are obviously prepared to inflict that hardship on others.
Consequently, we cannot support the principle of the act and we will ask that all Members declare their intents here.
Mr. Harding: This evening I would much rather be discussing the motion that we were discussing this afternoon and voting on it, but it is obvious that the government caucus did not want to do that.
We are debating tonight a bill that I will strongly oppose and I will oppose it for the reasons that were identified in second reading debate. I believe that it is incumbent on the public sector employer to set an example for the private sector employer. If the private sector employers are going to be regulated, then those regulations should apply to public sector employers.
I believe that the recommendation made by the Yukon Council on the Economy and Environment - the recommendations that were touted so highly by the government when they were in Opposition, should have been accepted in this case and those recommendations should form part of their policy.
The reason that I do not support this bill is that it became obvious, under questioning, that there had been no attempts made by the government to address the problems that were identified as the reasons for the bill being introduced in the first place; therefore, I cannot support this bill and look forward to the standing vote where I can make that clear this House for all time for the record.
Ms. Joe: I will be standing again and voting against this bill. I think it is a shame that the government chose to bring this forward. I think that they have given up a lot of the responsibilities that they should have, and one of them is by not binding themselves to this bill. I would like to tell the Minister that there are people out there who are looking forward to that government bringing back the Employment Standards Act, reactivating Bill No. 13 or whatever it is. I would once again like to remind every single person on the other side of the House in the government that there are workers in their ridings who are depending on this government to bring about legislation that is going to be of benefit to them, not just the business people of the territory. The workers make up a large percentage of their constituencies. I think that they forget that every time that they talk about benefits for workers. I look forward to, whenever they choose to do it, legislation that will accommodate the worker.
Ms. Moorcroft: I, too, rise to speak against this bill. As I said in discussion of this bill during second reading and in Committee of the Whole, we should not be looking at the bill before us, but we should be proclaiming Bill No. 13, which was the Employment Standards Act in its entirety. The amendments in Bill No. 13 were important amendments that are required in the working environment. With respect to this Bill No. 83, the government does have a role as a policy maker and as a regulator to lead by example.
The Yukon Party has been quite vocal about the need to listen to boards and called the previous administration to task about not listening to the Yukon Council on the Economy and the Environment in one of their 53 recommendations. This bill flies in the face of the recommendation of the Yukon Council on the Economy and the Environment to make the Government of the Yukon come under the Employment Standards Act, the same as the private employers in the Yukon do. I am not supporting this bill.
Mrs. Firth: My support for this bill remains constant. I will be supporting the initiative and I have already indicated that my position is that Bill No. 13, the previous amendments, should all be repealed. The government has indicated that it will be looking at doing that and they are also looking forward to bringing further amendments; I will have to wait to see what the Minister presents and decide then whether or not I will support the amendments they propose.
Speaker: Are you prepared for the question?
Are you agreed?
Some Hon. Members: Agreed.
Some Hon. Members: Division.
Speaker: Division has been called. Mr Clerk, will you kindly poll the House.
Hon. Mr. Ostashek: Agree.
Hon. Mr. Phillips: Agree.
Hon. Mr. Brewster: Agree.
Hon. Mr. Phelps: Agree.
Hon. Mr. Fisher: Agree.
Hon. Mr. Devries: Agree.
Mr. Abel: Agree.
Mr. Millar: Agree.
Mr. McDonald: Disagree.
Ms. Joe: Disagree.
Mr. Joe: Disagree.
Ms. Moorcroft: Disagree.
Mr. Harding: Disagree.
Mr. Cable: Disagree.
Mrs. Firth: Agree.
Clerk: Mr. Speaker, the results are nine yea, six nay.
Speaker: I declare the motion carried and that Bill No. 83 has passed this House.
Motion No. 83 agreed to
Hon. Mr. Phillips: I move the Speaker do now leave the Chair and the House resolve into Committee of the Whole.
Speaker: It has been moved by the Hon. Government House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Motion agreed to
Speaker leaves the Chair
Chair: I will now call Committee of the Whole to order.
Bill No. 8 - Interim Supply Appropriation Act, 1993-94 (No. 2) - continued
Chair: Is there any debate?
Mr. McDonald: I did indicate that I have some questions and I will put them to the Minister. I was about to ask a question of the Minister and he almost left on me.
Chair: A five-minute recess has been requested. We will take a five-minute recess.
Chair: I will call Committee of the Whole to order.
Hon. Mr. Ostashek: I am sorry for the interruption. I was not following closely enough. Because the budget is not yet law we require spending authority to carry on government operations during the month of May. This bill will accomplish that purpose.
Our expenditure patterns are not equal throughout the year, hence the sum of this bill will not equal one-twelfth of our annual expenditures. Expenditures shown on the bill exceed that proportion because the spring is a very heavy spending period for government. Also, departments require appropriation authority to enter into contracts that may exceed the sum that will be spent on these contracts in the month of May.
All monies approved in interim supply bills lapse at the end of the month. If Members have any questions regarding these matters, I and my colleagues will be pleased to answer them.
Mr. McDonald: I have a quick question with respect to the capital appropriation, generally speaking. It is the governments intention, presumably, given that they are requesting $28.7 million in capital, to proceed with the tendering of capital works with this money, so that it allows them to commit funds toward capital projects. Is that not correct?
Hon. Mr. Ostashek: Yes, that is correct.
Mr. McDonald: The jobs flowing from those capital works will proceed and we will not hear any concerns from Members opposite about not having sufficient funds to carry on with the anticipated program. Is that correct?
Hon. Mr. Ostashek: I give the Member assurances of that, and we hope that will resolve everything and get the House moving.
Mr. McDonald: That is good.
I have a quick question with respect to two items that affect Education. I can ask the question generally and perhaps even make a representation. If the Member cannot respond, I will ask him to get back to me at some future time so as not to hold the bill up.
The first question has to do with the grants and contributions in Schedule B. First of all, I have a general question about grants and contributions. There are a number of grants and contributions that are listed twice in the schedule, both in the first interim supply appropriation bill and also in the second, for the same amounts. My understanding, newly acquired today from inquiries I have made, is that the reason for the listing of these grants and contributions twice is not that the government wants to double the contribution in a particular area, but because money lapsed before they had made the contribution. Is that correct?
Hon. Mr. Ostashek: Yes, that is correct. Any monies that have not been paid out prior to the end of April will lapse automatically. They have to be included in the second interim supply so that they can be distributed in May. It is not a double grant.
Mr. McDonald: That is fair enough. That clears up a misunderstanding I had. With respect to one of the particular contributions, there was some confusion in the Legislature about what this contribution constituted. It was in the Department of Education and it had to do with something that is listed as Education Review in the main estimates. It was not listed in the first interim supply appropriation act because it was not intended to be paid out in the month of April. It is listed in Mays interim supply. We know from comments made by the Minister of Education that there is no intention of expending the funds toward an education review, but rather to transfer these funds to the First Nations Education Committee.
If the intention is to transfer it to the First Nations Education Committee, and it is listed in the budget bill as Education Review, does the government feel they have the vote of authority to in fact release it to the First Nations Education Committee, without an amendment to the interim supply appropriation bill?
Hon. Mr. Phillips: I talked to the Deputy Minister of Finance a few moments ago about the issue.
I have to produce an amendment to interim supply; it seems rather bureaucratic to have to do that; we all know that it was a misprint and that it should read First Nations Education Committee instead of Education Review and my sense of it is that I said it very clearly in the House that it is a typographical error. The line should read First Nations Education Committee where the line says Education Review and that the money can be appropriated to FNEC for that purpose.
Mr. McDonald: I presume that the amendment will be introduced tomorrow during third reading of the interim supply bill.
I will keep talking and the Clerks Table will arrange this, because I think we should do the right thing. I would like to discuss some of the consequences of the confusion on this bill, as I have some other questions in that area, but we will deal with that in the main estimates.
I do not know whether or not we have to make any kind of an amendment to the main estimates, but we can deal with that when we come to it.
Another question that I had was with respect to Yukon College. In the Interim Supply Appropriation Act (No. 1), there was a projected grant to be given to Yukon College, in the month of April.
I understand, from discussions that I have had with relevant people associated with Yukon College, that the grant was late in coming.
In the past we had provided the grant within the first couple of days in the month of April, so that they could secure maximum interest on the funding that they were scheduled to receive.
The interest lost amounted to approximately $2,000-plus per day. This is a fairly significant event, if there is a delayed payment for a week or two. Can the Minister tell me whether or not the contribution has been made? I would appreciate knowing that. Because the Auditor General has objected to these up-front payments, has the government wavered, in any way, from the position the previous government took that we would make payouts to municipalities and the Yukon College up front, as a matter of principle, within the first day or two of the fiscal year?
Hon. Mr. Phillips: I will let the Finance Minister answer the question about the overall policy. I can tell the Member that, a few days ago, I signed a letter from the Department of Education for the $10 million. So, it is the old saying, The cheque is in the mail. I just received it from the department about a week ago; I signed it within a day or so and returned it to the department. It is in the works, and they should get it very shortly.
Mr. McDonald: I am happy to hear that. I want to make a general point. The Minister was probably not aware of this, and I am not going to make any accusations. I want to make the obvious point that, for every day they did not get it, it is $2,000 for them. That is 20 days beyond the beginning of the fiscal year, which is $40,000. In college terms, that is the position.
I am not making any accusations here. I think the department should have known better, and they should have advised the Minister better.
I would appreciate it if the Minister of Finance could answer the general question.
Hon. Mr. Ostashek: I am not aware of any policy change. If the money has not been paid, I will get back to the Member with the reasons why it has not and if there have been other grants that have not been paid. I know the intention was to pay them right out on April 1 - all the municipalities.
Schedule A agreed to
On Schedule B
Hon. Mr. Phillips: I would like to amend Schedule B at vote 03 - let me go through this: I move
THAT Bill No. 8, entitled Interim Supply Appropriation Act, 1993-94 (No. 2), be amended in Schedule B at vote 3, Department of Education, by deleting the phrase Education Review and substituting for it First Nations Education Commission.
Chair: It has been moved by the Hon. Mr. Phillips, Minister of Education
THAT Bill No. 8, entitled Interim Supply Appropriation Act, 1993-94 (No. 2), Schedule B at vote 03, Department of Education, be amended by deleting the phrase Education Review and substituting for it First Nations Education Commission.
Motion agreed to
Schedule B agreed to
On Clause 1
Clause 1 agreed to
On Clause 2
Clause 2 agreed to
Title agreed to
Hon. Mr. Ostashek: Mr. Chair, I move that you report Bill No. 8 as having passed with amendment.
Motion agreed to
Bill No. 4 - Second Appropriation Act, 1992-93 - continued
Community and Transportation Services - continued
On Weigh Scales - continued
Weigh Scales in the amount of $76,000 agreed to
On Maintenance Camp Facilities
Maintenance Camp Facilities in the amount of an underexpenditure of $93,000 agreed to
On Miscellaneous Branch Facilities
Miscellaneous Branch Facilities in the amount of an underexpenditure of $19,000 agreed to
Airstrips in the amount of an underexpenditure of $171,000 agreed to
Transportation Division in the amount of $13,286,000 agreed to
On Municipal and Community Affairs Division
On Land Development
Industrial in the amount of an underexpenditure of $700,000 agreed to
Ms. Moorcroft: I would just like to ask the Minister to explain the supplementary amount.
Hon. Mr. Fisher: There was $4,400,000 for Hamilton Boulevard. The Logan neighbourhood has been accelerated as demand exceeded expectations. The work schedule for 1993-94 is to be completed in 1992-93.
There has been $1,850,000 for the development of Hamilton Boulevard area D, which has been started because of strong demand in Logan. There has been $110,000 for the Arkell residential. Advance crushing was done, which resulted in long-term savings. There was a reduction of $500,000 for Hamilton Boulevard residential, which is being shown as two separate projects: the Logan neighbourhood and area D, in order to track development costs.
Ms. Moorcroft: I realize that we have just cleared the previous line. I did not stand up quickly enough. I would just like to ask the Minister if he could explain what projects were not completed on the $700,000 in Industrial?
Chair: Do we have unanimous consent to reopen the line that has just been cleared?
All Members: Agreed.
Hon. Mr. Fisher: I can read the reduction in the Industrial, if that is what the Member opposite wants. I do not have any problem with that. There is $250,000 for the Dawson Callison subdivision stage 3, which has been delayed due to placer claims in the expansion area. There is $350,000 for the MacRae industrial project, which is being delayed indefinitely because of concerns during the hazardous waste site consultations. There is $50,000 for the Ross River industrial project, which has been postponed pending completion of the community plan. The $35,000 for the Watson Lake industrial project is on hold, pending federal land transfer.
Industrial in the amount of an underexpenditure of $700,000 agreed to
Mr. Harding: That is a fairly large figure of $5,592,000. Is the Minister absolutely confident that that money will be needed for that development, and that the development has moved sufficiently along in 1992-1993 that that amount will indeed be spent in that fiscal year?
Hon. Mr. Fisher: We will be lapsing quite a lot of the $5,592,000 - I do not have the exact amount. The actual expenditures are $1,503,000. The outstanding commitments are $997,000. There was a move to complete the project in the winter, which would have been an additional $1,550,000, for a total of $4,040,000.
In area D, the actual expenditure was $154,000, with an outstanding commitment of $186,000. There were off-site levies, which were approximately $1,510,000.
Residential in the amount of $5,592,000 agreed to
On Rural Residential
Rural Residential in the amount of an underexpenditure of $150,000 agreed to
On Country Residential
Ms. Moorcroft: Could the Minister explain what the underexpenditure in this line is from?
Hon. Mr. Fisher: There was $450,000 for the Watson Lake country residential project, which has been deferred to 1993-94 due to ongoing discussions with the community. There was $250,000 for the Mayo country-residential project, which has been postponed due to a lack of demand. There was $150,000 for the Teslin country-residential project, which was delayed due to a lack of a suitable site and awaiting the land claim selections.
The remainder of $85,000 is because the Carmacks country-residential roadwork was not as extensive as anticipated.
Country Residential in the amount of an underexpenditure of $935,000 agreed to
Mr. McDonald: Could the Minister quickly tell us whether or not the million dollars even was expended in the last year?
Hon. Mr. Fisher: There was about $30,000 spent and the remainder of the funds were spent on the Kopper King commercial development, which has been postponed.
Commercial in the amount of an underexpenditure of $80,000 agreed to
Recreational in the amount of an underexpenditure of $260,000 agreed to
Ms. Moorcroft: Could the Minister please explain what the additional $125,000 is for in the supplementary?
Hon. Mr. Fisher: There was $50,000 revoted from 1992 to proceed with the development of Dawson agricultural small holdings that were delayed by the approval of the new agricultural policy. There was $75,000 revoted to proceed with the Watson Lake Liard Agricultural Extension, which was delayed by the approval of the new agricultural policy.
Agricultural in the amount of $125,000 agreed to
On Land Central Services
Quarries in the amount of $30,000 agreed to
On Miscellaneous Projects Non-Recoverable Central Services
Miscellaneous Projects Non-Recoverable Central Services in the amount of an underexpenditure of $30,000 agreed to
On Land Information System Upgrade
Land Information System Upgrade in the amount of an underexpenditure of $16,000 agreed to
On Community Planning
Community Planning in the amount of $20,000 agreed to
On Planning and Pre-Engineering
Planning and Pre-Engineering in the amount of an underexpenditure of $97,000 agreed to
On Abandoned Waste Metal Clean-up
Ms. Moorcroft: Can the Minister please explain to me if this is a new program and, if so, what this line is for?
Hon. Mr. Fisher: This is for clean up of a waste metal site but I do not have the information on exactly where it is.
Abandoned Waste Metal Clean-up in the amount of $10,000 agreed to
On GIS Department User Needs Study
GIS Department User Needs Study in the amount of $60,000 agreed to
On Public Health and Safety
On Planning and Pre-Engineering
Planning and Pre-Engineering in the amount of $49,000 agreed to
On Water Supply, Treatment and Storage
Water Supply, Treatment and Storage in the amount of $55,000 agreed to
On Water and Sewer Mains
Water and Sewer Mains in the amount of $378,000 agreed to
On Sewage Treatment and Disposal
Sewage Treatment and Disposal in the amount of an underexpenditure of $150,000 agreed to
On Solid Waste
Solid Waste in the amount of an underexpenditure of $162,000 agreed to
On Flood/Erosion Control
Flood/Erosion Control in the amount of an underexpenditure of $150,000 agreed to
On Fire Protection
Fire Protection in the amount of $170,000 agreed to
On Equipment Purchase
Equipment Purchase in the amount of $10,000 agreed to
On Hazardous Waste Storage
Hazardous Waste Storage in the amount of $503,000 agreed to
On Mechanical Safety
Mechanical Safety in the amount of $77,000 agreed to
On Roads and Streets
On Pre-Engineering Roads and Streets
Pre-Engineering Roads and Streets in the amount of $20,000 agreed to
On Roads/Streets Upgrade
Roads/Streets Upgrade in the amount of an underexpenditure of $728,000 agreed to
On Recreation and Community Facilities/Services
On Recreation Facilities
Recreation Facilities in the amount of $12,000 agreed to
On Rural Electrification and Telephone
Rural Electrification and Telephone in the amount of $92,000 agreed to
Municipal and Community Affairs Division in the amount of $3,745,000 agreed to
Capital Expenditures in the amount of $18,675,000 agreed to
Department of Community and Transportation Services agreed to
Department of Economic Development
Chair: We will move on to Economic Development. Is there any debate?
Hon. Mr. Devries: I am pleased to introduce the 1992-93 supplementary budget for the Department of Economic Development. As you can see, this supplementary for O&M expenses reflects this governments commitment to fiscal restraint.
The 1992-93 mains for O&M was estimated at $3.17 million. The actual expenditures were just under $3 million.
Looking at this closely, you can see that there is a significant reduction in O&M expenditures by the economic, policy, planning and research branch. This includes decreases in expenditures of the Northern Accord, Energy Strategy and the Yukon Council on the Economy and the Environment.
The total expenditures were reduced by $178,000. The capital expenditures have been significantly decreased in economic programs. Spending by the business development fund has dropped from an estimated $4 million to $2.22 million. The uptake was not high.
As well, expenditures by the Economic Development Agreement decreased from $6.25 million to $5.02 million. This agreement contributed to the opening of a new geoscience office.
Many new enterprises began under each of the EDA sub-agreements. However, some larger projects, such as the proposed abattoir did not proceed.
There has been a reduction in expenditure by the community development fund as a result of approved projects not proceeding as fast as anticipated. However, some of these should be carried over into the coming year.
In total, capital expenditures for the 1992-93 fiscal year for Economic Development were estimated to be $15.22 million. As a result of the factors mentioned, this has been reduced to $12.52 million.
Mr. McDonald: The period of November 1992 to March 1993 was an exciting period for the Department of Economic Development. A number of issues were raised and dealt with during that period. One of the biggest, of course, was the waste stripping of the Grum ore body. Consequently, what I would like to do is ask a few questions of the Minister about Curragh and the stripping plans and about the contingency plans the Minister indicated were all developed in January when he met with a few folks in Faro.
To begin with, I noticed in the document entitled, Toward Self-Sufficiency by the 21st Century, under table 2, the government indicated that one of the short-term requirements was to deal with the Faro program and waste stripping the Grum ore body. The proposed measure was to provide a contribution through the EDA mining recovery agreement.
Given the Minister and the government have delivered this particular document to the Deputy Prime Minister and that we were given to believe that there was at least some favourable response, can the Minister indicate what progress with the Deputy Prime Minister or the federal government has been made with respect to the development of a new EDA mining recovery agreement and how those discussions relate to the Ministers recent announcement about EDA agreements in his latest budget?
Hon. Mr. Devries: As the Member knows, the Ministers recent announcement in the EDA would pertain to the main estimates and not the supplementaries, although the beginning of his question definitely pertains to the supplementaries, so I will answer it to the best of my knowledge.
The Member mentioned the Grum stripping and the way it fit into the EDA mining recovery program and the self-sufficiency strategy. I wanted to make sure I had that clear.
As the Member knows, the federal government was entirely opposed to being involved in any way with the Grum stripping. We never received approval of any type to use any federal monies toward the Grum stripping, as such. Basically, we have been on our own, as far as the Grum stripping program goes.
As the Member knows, that money is not in the budget; it would be under a special warrant, and would come through this House and would have to be approved by all Members. This would be dependent upon whether Curragh Inc. is willing to accept the conditions, whether it is for the $5 million or the $29 million. There are certain conditions they have to agree to.
Mr. Harding: The Minister identified some interesting issues regarding the discussions around the Grum stripping and the Toward Self-Sufficiency by the 21st Century document that the government brought to the Deputy Prime Minister of Canada as their vision for the future, identifying certain projects, such as railroads to Carmacks, pipelines to Watson Lake, and other supposedly visionary undertakings that the government would like to be involved with in some capacity.
When did they learn that the federal government wanted nothing to do with their proposal regarding the Grum stripping and involvement through the EDA?
Hon. Mr. Devries: There was still hope that the federal government would participate in the stripping of the Grum right up until the middle of March, when the Burns Fry report came out. It was around that time that we were informed that the federal government wanted nothing to do with it.
Mr. Harding: It is my understanding that the Burns Fry report came out some time around the week of March 6, so the Minister would have known around the 6th or the 10th that the federal government was not going to participate in the proposal that was given by the Government Leader to the Deputy Prime Minister of Canada, Mr. Don Mazankowski, regarding funding through the EDA of the infrastructure development of the Grum stripping. Is that correct?
Hon. Mr. Devries: Our understanding at that time was that the Grum stripping offer was declined and they were open to other suggestions, depending upon the priorities we placed on them.
Mr. Harding: I find it an interesting contradiction. On Thursday, March 25, 1993, in the Watson Lake News, there is an article written by the Minister working on behalf of the people in Watson Lake, entitled Government of Yukon Self-Sufficiency Strategy. On March 25, the Member for the Legislative Assembly for Watson Lake, the Minister of Economic Development says in his article, We have identified no fewer than 30 different projects, ranging from mining, oil and gas projects to tourism initiatives, which have the potential of going forward once the appropriate infrastructure is in place. These projects will mean jobs and self-sufficiency for Yukoners.
I would like to ask the Minister why he would write this article for the newspaper in Watson Lake when he knew full well, about March 6 to March 10, that one of the 30 projects identified was already blown out of the water by the federal government?
Hon. Mr. Devries: The only thing I can say is perhaps I should have written 29, because I was not aware that the Grum was still included at that time.
Originally, when I submitted the article, the Grum was still included in those projects, but it was eventually declined by the federal government.
Mr. Harding: So the Minister is telling this House that the Government Leader submitted a proposal to the Deputy Prime Minister of Canada, representing the Government of Yukon, and yet the Minister of Economic Development was not aware that the proposal for infrastructure development in conjunction with the federal government was not in the document?
Is that what the Minister is telling me?
Hon. Mr. Devries: As I said, the project was still included in the document at the time, but the federal government basically said that they would not consider the Grum stripping as a project in the infrastructure program.
Mr. Harding: The point is that the Minister has conceded this evening that he realized, as of March 6 to March 10, that the federal government was not going to participate. Yet, he identified to his constituents that there were over 30 projects that still had the potential to go ahead, knowing full well that, in the proposal that was submitted, they were not going to go ahead. Is that not what happened here?
Hon. Mr. Devries: No, the Member is not correct. These were our projects. We were asking for infrastructure money for our projects. One of those was stripping the Grum deposit. It was after that, that the feds said that they would not consider it one of the projects. Also, the Member must recognize that, normally, these newspaper articles are submitted a week or two in advance, so it normally takes a week or two to publish them. It is usually a week.
Mr. Harding: I do not mind the government having a vision, but when they present that vision to their constituents, you would hope that it would at least have some hope of coming to fruition. To provide promises of going forward and jobs for Yukoners can be quite offensive. The Member for McIntyre-Takhini has pointed out that, in the election, he lost votes because people told him they could not vote for him because they were looking for jobs with this pipeline that was proposed by the Yukon Party. We all know that pipeline is probably not going to go ahead in the 21st or the 22nd century. Yet, people bought it, and that is unfortunate.
I see right here on the document that it says, project: Faro; infrastructure required: waste stripping of Grum ore body. Is it or is it not infrastructure?
Hon. Mr. Devries: It depends on the interpretation of what infrastructure is. I personally feel that it is a mining project. When you look at the various elements of the Toward Self-Sufficiency by the 21st Century document, you have pipelines, you have roads, you have all things. A pipeline is not infrastructure; it is a pipeline. There is a whole broad range of different things in there.
Mr. Harding: Thank you for the guide through the document. Now let us get back to the question I just asked the Minister. I asked him if, in this document, that the Members opposite tabled in this House and gave to the Deputy Prime Minister of Canada, they said Project: Faro; infrastructure required: waste stripping of Grum ore body; Proposed measure: contribution through new EDA mining recovery agreement. My question is: is the waste stripping of the Grum ore body infrastructure, or is it not?
Hon. Mr. Devries: Again, it was taken out of there. What is the difference? The feds said it could not be considered as one of the projects. What is the Member trying to do? Is he trying to make a political issue about this or is he concerned about seeing the Grum ore body at Faro stripped?
Mr. Harding: I can assure the Minister that I am very concerned about seeing the ore body stripped. By my actions, I think I have demonstrated that I am much more concerned than the Minister is.
If the Minister wants to talk about political points, let us talk about putting it in a newspaper article that there were no fewer than 30 projects identified, when the Minister admitted that at least one, and others we have talked about in this Legislature, do not have the hope of going forward even in the 22nd century. That is playing politics. That is creating false hopes.
Chair: Order please. I would ask that the people in the public gallery to please be quiet and let the Members continue the debate.
Mr. Harding: The difference is very simple. I will explain it to the Minister. Today, we had some debate in the Legislature regarding a motion put forward by the Opposition as to whether or not our motion, and the request we made in the motion, constituted infrastructure. On the Grum stripping, the contention of the Members opposite was that it was not; however, with this document that they tabled to the Deputy Prime Minister - the Government of the Yukon are now saying that it does not matter because he threw it in the garbage. They said that waste stripping of the Grum ore body is infrastructure. Now I ask: is the Grum stripping infrastructure or not?
Hon. Mr. Devries: Again, I feel that is entirely irrelevant, in that the federal government, as a result of that document, has committed itself to $10 million. Obviously, they were impressed with the document, although they were not willing to consider the Grum stripping. I do not know what the relevancy of this questioning is.
Mr. Harding: This document was presented to the Deputy Prime Minister of Canada in the 1992-93 fiscal year. Decisions were made regarding the Grum stripping in the 1992-93 fiscal year. We are presently in general debate regarding the 1992-93 fiscal year. Now, today, in the Legislature, the Minister of Economic Development said he would vote against the motion presented because he did not think it was infrastructure. As a matter of fact, the government amended the motion we put forward and took out infrastructure, because their contention was that it was not infrastructure. Yet, in a document that, I must say embarrassingly, was tabled with the Deputy Prime Minister of Canada as a document produced by the Government of the Yukon, it said that the infrastructure required for the Grum ore body was the waste stripping of the Grum ore body under the infrastructure column.
I ask once again, will the Minister concede that the Grum waste stripping is, indeed, infrastructure?
Hon. Mr. Devries: Again, I am not embarrassed about presenting that document to anyone, because we got $10 million as a result of that document. It has to be matched, but we got $10 million. What is the Member saying - that we should, all of a sudden, send the $10 million back because he does not like the way the document is?
Mr. Harding: First of all, we have not received the $10 million yet. Secondly, the government is claiming that they are broke, so I do not know how they are going to match this $10 million. Thirdly, the relevance and the importance of this questioning is: will the Minister concede that, as identified by themselves, the infrastructure required for the Grum ore body is waste stripping and does, in fact, constitute infrastructure?
Hon. Mr. Devries: I personally feel that just taking overburden off something would possibly constitute infrastructure, but waste stripping, to me, is mining.
Mr. Harding: What the Minister is saying, then, is that he never approved or saw this document prior to the Government Leader tabling it, or giving it to the Deputy Prime Minister of Canada. Is that what he is saying?
Hon. Mr. Devries: All I can say is, yes, at the time, I was aware that it was written up as infrastructure but, subsequently, someone pointed out to me that they did not feel that was the appropriate term to put toward the Grum stripping.
Mr. Harding: I have to continue with this line of questioning, because it is very serious. We had a very important motion discussed today in this Legislature and the Members opposite - the government - filibustered to avoid a vote, because they knew that I believed the majority of this House felt that they had mishandled the situation regarding the Grum stripping.
When I ask serious questions, I get wishy-washy answers from the Minister. He said that he personally believes - now he believes, after he conceded that he had seen a document prior to the document going to the Deputy Prime Minister - it is mining; it is not really infrastructure.
I am not really interested in his personal opinion right now. I want to know if it is the position of the Government of the Yukon that the waste stripping of the Grum ore body, as presented in the document that was paid for and produced with taxpayer money, indeed constitutes infrastructure as defined by the government?
Hon. Mr. Devries: Again, I am going to stick to my original submission when that document was submitted. I basically felt that it fell within the overall parameters of infrastructure, like a pipeline, and that mining would fit in.
Basically, the Grum stripping is mining.
Mr. Harding: Finally, the Minister has conceded that he feels that it does fit into the overall infrastructure, as presented in the document to the Deputy Prime Minister of Canada.
I want to move on with some other questions.
Some Hon. Member: (Inaudible)
Mr. Harding: Well, let us ask him once again, then.
Let me clarify: did the Minister of Economic Development just tell this House that the Government of the Yukon feels that the waste stripping of the Grum ore body constitutes infrastructure development?
Hon. Mr. Devries: Mining, pipelines and other items of this nature would fit into the broad context of infrastructure, to a certain extent. Naturally, mining and pipelines create jobs and self-sufficiency; it all fits into the big picture.
Mr. McDonald: I am going to ask a couple of questions about this matter, too.
The seriousness of the matter is basically this: a very important document - not matter how flawed - was presented to the Deputy Prime Minister of Canada as Yukons vision for the future. The Members opposite have called the document their vision. The difference between mining the Grum ore body as infrastructure and Grum stripping as mining is that, by the Ministers definition, one is a public responsibility and one is a private responsibility.
Now, the Members opposite characterized Grum stripping in the document as being infrastructure. Does he believe that the Grum stripping project is infrastructure?
Hon. Mr. Devries: As the Member knows, we are open to assisting in the Grum stripping. In that context, a person could say infrastructure but, overall, we do not want to get caught in a dilemma where every mining company would presume that the stripping of waste rock becomes infrastructure. We are committed to assist them in infrastructure development - for example, roads and power lines - but we do not want to be involved in the actual stripping of the various projects.
In the instance of Curragh, it could be in the form of a loan. We are willing to make an exception in that case. Whether it is infrastructure or mining is irrelevant to me.
Mr. McDonald: It is not irrelevant at all. We spent the final hour of the debate this afternoon on the question of infrastructure. It prevented us from taking a vote. It is obviously important.
I do not know why the Members opposite get hung up on the subject of whether or not their support for the Grum stripping would constitute a precedent for all other mining operations.
The government is in the business of building roads. It does not mean that every road that is considered appropriate for building should be the governments responsibility to fund. For right now at least, despite what the Member for Dawson seems to believe, the government is in the business of supporting some businesses with business development loan funding. It does not mean that every business has to be supported through business development loan funding.
I do not know why the Members are getting hung up on that distinction. I will ask the question once again, because I think it is important to get a direct answer. Is the Grum stripping project, in the Ministers mind, an infrastructure project?
Hon. Mr. Ostashek: I thought I should enter into this debate and see if we cannot clear the air a little bit.
The Toward Self-Sufficiency by the 21st Century document was put together in late November, early December last year. It was first presented to the Minister of the Department of Indian and Northern Affairs in December in Vancouver. That was my first meeting with Mr. Siddon when we were trying to get support from the federal government to help with the Grum stripping.
Knowing the unpopularity of Curragh in Ottawa at the time, we felt that we may be able to slip this Grum stripping into an infrastructure package, without flagging it. As Members will notice in the document, we do not mention Faro, and we do not mention Curragh, for a very specific reason. We were trying to get some support from the federal government to help the Faro operation, to help with the Grum stripping. That is why that was included in that document.
Mr. McDonald: I do not know if we are looking at the same document. The document, Toward Self-Sufficiency by the 21st Century, does refer to Faro and does refer to the Grum ore body definitely in table number 2.
That is the reason why we are engaged in this discussion right now, but we are a little bit beyond the Government Leader right now, because we already had some of those discussions earlier on. What we are trying to focus in on now is the concept of what constitutes infrastructure. The issue here is whether or not the waste stripping of the Grum ore body constitutes infrastructure.
The document, Toward Self-Sufficiency by the 21st Century, indicates that the infrastructure required for the Faro project is waste stripping of the Grum ore body. That is what the document, placed before the Deputy Prime Minister, says.
We spent a portion of this afternoon discussing waste stripping of the Grum ore body. It appeared that the theme among the speeches of the Members opposite was that they could not vote for the motion because they did not believe that the waste stripping of the Grum ore body was infrastructure. On this side, we are caught in a dilemma. We designed a motion that we felt the government, by its own definitions, could accept. We have been talking about this futuristic document, Toward Self-Sufficiency by the 21st Century, for some time now. This was the governments vision. We thought the government would accept the concept of this being infrastructure, because they had told the Deputy Prime Minister that it was infrastructure. We were surprised to learn in the debate - and there was a reason why we carried on and the government seemed to be so negative - that they took issue with the concept of the Grum stripping being infrastructure.
If one were cynical, one would believe that they were simply grasping at straws, trying to find some negative element of the debate on which to hang their hats, so that it would not come to a vote at all. We were awe struck by the levels of imagination put forward by the Members opposite on how negative they could be on this particular subject, given that it was the wish of most Members of the House, at least on this side, that we would try to be as optimistic as possible despite what appeared to be bleak circumstances.
We felt that in presenting the motion this afternoon, it would be an opportunity in which all Members could find a common cause and that, ultimately, because we were using the governments own words, we could accommodate the governments interests and proceed with a joint resolution that would show some success. We were not prepared for the negativism in that debate. We were not prepared for this argument about infrastructure, or, what is not infrastructure.
I would like to ask the Minister who just spoke or the Minister of Economic Development whether or not he believes - not whether or not he believes; he is too free with what he believes - I want to know what the governments position is. Does the government stand by their toward self-sufficiency document and support the waste stripping of the Grum ore body as an infrastructure project?
Hon. Mr. Ostashek: That was a very interesting speech by the Member opposite. The Member opposite accuses us of being very, very negative but, if they were looking for a joint resolution this afternoon, they should have worded their motion in a more positive manner. Infrastructure was only one word in the motion that we had difficulty with. We would gladly support a positive resolution, and that is why we amended it. With the amendments, we could very well support it.
The infrastructure put in that package was to try to get some help from the federal government. That is why infrastructure for Grum stripping was put in that package. If I am asked if I consider the stripping of Grum or any other ore body as infrastructure, it is not infrastructure that government should be involved in.
Mr. McDonald: If the government was expecting that it would get a pat on the back for its actions to date on trying to get the Faro mine revitalized, then it is certainly barking up a wrong tree with this side of the Legislature.
Given that the-
Chair: Order please. May I remind those in the gallery to please be quiet so that the Members can continue debate on this matter.
Mr. McDonald: The Members in the Official Opposition have expressed serious concern about the governments commitment to this project in the first place. Instead of being as defeatist and lethargic in its planning as it appeared to be, the government opposite could not possibly have expected us to amend a motion indicating that they we are proud that the government is showing economic leadership. Instead, we indicated, in a neutral way, that we wanted the government to show economic leadership and provide for the stripping of the Grum ore body as an infrastructure project.
We heard a long monologue from one of the Members as to why they could not support this, because it was not infrastructure, and that it was only infrastructure that the government would support.
Now we have two definitions of infrastructure from the Government Leader: infrastructure that they will support and infrastructure that they will not support. This afternoon, their claim was that they would support infrastructure, but they would not support what they called mining. This becomes very, very complicated, but the principles are important. Because we get so little information on this side of the Legislature, we essentially hang on every word of the Members opposite, and if they are inconsistent it disturbs us tremendously, because we do not know where to go next.
The document that the government presented to the Deputy Prime Minister talked about the stripping of the Grum ore body as constituting infrastructure, quite contrary to the comments made by the Ministers today in their responses to the motion. We have now been told, through Question Period and through questions in the Legislature, that perhaps Mr. Corbeil, from the federal government, has signed some kind of an arrangement. We do not have any details yet. We are still waiting for them. We are hearing things through the pipeline and the grapevine in Ottawa. People are talking about this and that.
We are trying to get some information on the $10 million infrastructure fund. We are told by the Economic Development Minister that it has to be matching dollars. We are not sure precisely what the conditions are, or whether or not the government can come up with their $10 million, if it is going to be a matching fund, or where that money is going to come from, or whether it is going to have to come from the main estimates budget, and whether or not we are going to have to show a reduction in other items in the budget in order to expend monies toward this new initiative by the Yukon government.
We also have to discover whether or not that $10 million for infrastructure - or $20 million, if it has to be matched funding - can be spent on infrastructure like waste stripping of the Grum ore body, which is the one opportunity this territory has for a real payback.
Constructing roads to potential mines shows that there may be some potential in the future for an economic payback to this territory but there is a mine now, workers on standby and infrastructure all there, with the exception of the waste stripping, waiting in Faro ready to go. This is the one real, clear, understandable, tangible opportunity that this territory has, in the face of rising unemployment and business bankruptcies, business failures and business layoffs. That is the reason why we are asking the questions about the definition of infrastructure; that is the reason why we are bringing up this document and the proposed measure to provide a contribution through some sort of EDA mining recovery agreement, and that is the reason why we are puzzled by the Members remarks this afternoon about the Grum stripping not being infrastructure.
If the Government Leader can clarify this maze of events and this jumble of definitions, I would certainly appreciate it because I think there are a lot of people in this territory - Faro, Watson Lake and Whitehorse - who depend on some positive statements from the government and we are doing everything we can to encourage them to issue them, either in this Legislature or outside it.
Hon. Mr. Ostashek: If the motion presented by the side opposite today was a neutral motion, I would hate to see a negative motion.
We amended the motion, actively supporting the stripping of the Grum ore deposit. We have no problem with the stripping, but we do not see it as infrastructure that you could say the government should be providing for all companies.
As I said earlier, it was put in the document to try to hide it from the federal government and to get money to help assist us with the Grum stripping.
Now, let us talk about the $10 million; this money originated from Mr. Mazankowskis economic statement in December. We were told that there would be $10 million available for the North and we were told this by the Minister of Northern Affairs, the Hon. Tom Siddon.
Mr. Siddon helped us move that money from the upgrading of airports to highways, but it has to go to highways or road building and, yes, it has to be matched, dollar for dollar, by the territorial government on the same formula that is offered to the provinces for highway construction, where it also has to be matched dollar for dollar.
The Member for McIntyre-Takhini asked where we were going to get the money from. Part of the money is already identified in the mains. The money for the Top of the World Highway and the Robert Campbell Highway can be used to match the federal monies that are coming.
The question the Member seems to be asking over there is whether the $10 million can be used for the Grum stripping. I am sorry to say that it cannot be used for the Grum stripping.
Mr. Chair, considering the time, I move that you report progress.
Motion agreed to
Hon. Mr. Phillips: I move that the Speaker do now resume the Chair.
Motion agreed to
Speaker resumes the Chair
Speaker: I will now call the House to order.
May the House have a report from the Chair of Committee of the Whole?
Mr. Abel: The Committee of the Whole has considered Bill No. 8, entitled Interim Supply Appropriation Act, 1993-94, (No. 2), and directed me to report it with amendment.
Further, the Committee has considered Bill No. 4, entitled Second Appropriation Act, 1992-93, and directed me to report progress on it.
Speaker: You have heard the report of the Chair of Committee of the Whole. Are you agreed?
Some Hon. Members: Agreed.
Speaker: I declare the report carried.
Hon. Mr. Phillips: I move that the House do now adjourn.
Speaker: It has been moved by the Hon. Government House Leader that the House do now adjourn.
Motion agreed to
Speaker: This House now stands adjourned until 1:30 p.m. tomorrow.
The House adjourned at 9:29 p.m.