Whitehorse, Yukon

Tuesday, May 11, 1993 - 1:30 p.m.

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



Speaker: We will proceed with the Order Paper.

Introduction of Visitors.

Are there any Returns or Documents for tabling?


Hon. Mr. Ostashek: I have a legislative return.

Hon. Mr. Devries: I have three legislative returns.

Speaker: Are there any Reports of Committees?


Introduction of Bills.

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

Are there any Notices of Motion?

Are there any Statements by Ministers?


Government Leader trip to Korea re Curragh Inc.

Hon. Mr. Ostashek: I rise today to inform this House that in our ongoing efforts to try and resolve the Faro and Watson Lake mine closures, I will be travelling to South Korea next week to meet with potential investors of Curragh Inc.

As Members of this House know, the Chairman of Curragh Inc., Clifford Frame, has been pursuing potential investors for Curragh’s Yukon operations.

In speaking to Mr. Frame last week, I offered on behalf of the Government of Yukon to meet with any potential investors to make them aware of our support for Curragh’s efforts. In light of his recent discussions with investors in South Korea, Mr. Frame welcomed the offer and asked me if I would be prepared to go to South Korea, and I have agreed.

My purpose in going is to make them aware of the fact that we in the Yukon are open for business and are supportive of Curragh in their efforts to seek investors that could have a positive effect on the efforts to re-open the Faro and Watson Lake operations.

Everyone in this House and most Yukoners know how important Curragh’s operations are to the Yukon. I have always made it clear that, while the Government of the Yukon was prepared to assist with the stripping of the Grum deposit, we do not have the resources to help the company out of its financial difficulties.

The solution there lies with other investors. If I can be of any help to the company in this regard by going to South Korea, I am prepared to go.

Mr. Penikett: I think I can speak for all Members in my party in saying that we are glad that the Government Leader is finally going to get personally involved in the Curragh negotiations.

I would also observe that the fact that the Government Leader asked to go to Korea must signal a change in the Yukon government’s position in the Curragh negotiations.

I say that for several reasons, not the least of which is that the government has, in this ministerial statement, now admitted, for the first time, the linkage between the assistance to the Grum stripping program being requested of this government and the continued viability of Curragh Inc. and its operations at Faro and Watson Lake.

I also believe that the government’s position must have changed because the position they have taken up to now - the hard and fast “no” negotiating position and first charge on security position - is not supportable. It would not make the Government Leader a welcome visitor in Asia.

Indeed, I think the credibility of this region as a mineral-producing area has been severely damaged by the position the government has taken in the last few months, so I am pleased to see that there is some movement by the government. However, having been to Asia with Mr. Frame in the past and having met with many potential customers of the mine, including the people who eventually bought our product, I know that those Asian investors will expect the territorial government to share in the risk of seeing those mines go back into production and our economy turn around. If the government is not prepared to give a signal about that risk sharing, then we may have a disappointing venture here. To that end, of course, at some point, before the Government Leader goes, we would like to hear what exactly is the government’s new position - the components of it - and the dimensions of flexibility of the YTG position.

I know that the Government Leader travelling with Mr. Frame for several days will prove to be quite an education for the Government Leader, because Mr. Frame is an extremely tough and effective negotiator. To watch Mr. Frame and Mr. Ostashek alone together for several days on airplanes and in hotels and meeting rooms is something that someone only a little wealthier than I might be prepared to pay the price to watch.

Let me just say that we welcome the fact that at last the government is taking some initiative. I know the Government Leader will miss Question Period terribly. We wish him well in the journey. I should warn him, having been to that country and met with the people I think he is going to meet, to be very careful about the kind of entertainment there. They will entertain him royally, the like of which will make the hospitality suite of his Minister of Economic Development look very much like lunch at a hot dog stand. We hope that the Government Leader will not be away too long. We will be here waiting for him when he gets back with questions about the effectiveness of his time in Asia.

Mr. Cable: Let me indicate my personal support of the Government Leader making time to go to South Korea. With the House in session, and his being part of the land claim lobby team, and with a government to run, the Government Leader must be wondering if there are enough hours in the day. I should say that the significance of the Government Leader rolling up his sleeves and becoming actively involved in the negotiations will not be lost on the potential investors. The time in Korea will have to be viewed as time well spent.

Hon. Mr. Ostashek: I thank the Members opposite for their mixed support of this endeavour by this government. First of all, I want to say that I have been personally involved in this issue all winter long, in fact within a week of taking office. It is not that I am just getting involved. As far as the Yukon government’s position changing, very little has changed in that respect. Two offers have been on the table, and they are still on the table. What I am going to do on this trip to Korea with the chief executive officer of Curragh is to impress the potential investors that Yukon is a good place to invest.

Their investments are safe in the Yukon and there are many opportunities here and I hope that Curragh and the Faro operation would be the start of many more investments.

I know that it is going to be a quick trip; we are going to be supporting Curragh in its efforts to obtain investments. As I said in the ministerial statement, this government has never taken the position that it could become further involved in the Faro operation and the Grum stripping and that position has not changed.

The Leader of the Official Opposition talked about the conditions that we required to secure the loan, saying that those conditions are not acceptable to the financial community, that at no time in history has anyone holding first priority relinquished that priority to give someone else first priority for new charges and security for new money.

I have a list here of many companies and investors that have done that, and I will name a few. There was new lender security provided over unsecured creditors in the British Columbia Economic Development re-structuring; Campeau Corporation; Pacific Western Airlines - the Government of Canada, British Columbia and Alberta provided loan guarantees to PWA in return for security senior to unsecured lenders; West Star Mining - new lending seniority over secured investors; Consumer Packaging; Olympia and York; Quintette Mining - we understand that the trade creditors provided new money subsequent to CCAA filing and received a first charge on cash, ahead of secured creditors.

The conditions that we requested for the $34 million loan guarantee were not unprecedented.

It is not unprecedented at all. It is a standard procedure in the restructuring of a company. I believe, at this point, with potential investors prepared to invest in the Yukon, that it is only right that I make myself available to discuss this with them in person and support Curragh Inc. in their efforts to restructure.

Speaker: This then brings us to the Question Period.


Question re: Budget impact on the economy

Mr. Penikett: The Government Leader has told this House a number of times that there are 700 summer jobs in his capital budget; however, given that we do not need the $20 million land development in the middle of the current recession, given that hospital construction has been postponed until next year, and given that even the road construction work will not start until mid-summer, is the Government Leader still seriously claiming there are 700 summer jobs in his capital budget?

Hon. Mr. Ostashek: The Member is right. The hospital is going to be delayed. Land development will take place, as much as needed. The Member opposite is, again, the doom-and-gloom party, projecting recession, yet all the businesses in the Yukon I talk to seem to be doing business as usual. There does not seem to be the doom and gloom in the business community that there is in this Legislature.

There are many jobs in our capital budget, and they will put many Yukoners to work.

Mr. Penikett: The Government Leader seems to have a blind spot, or a deaf ear, or he is only talking to some businesses. The land work, the roads work, the hospital work and much of the capital budget is in doubt, as far as summer projects go.

Given that we have a 16-percent umemployment rate - going on to 17-percent unemployment - which is of his creation, will the Government Leader table a list of summer projects, and the jobs associated with them, before he departs for Asia?

Hon. Mr. Ostashek: I will make an effort to do that for the Members opposite. Two construction projects are underway already - Golden Hill Ventures and Northland Kaska are both at work. Contracts are going out on a daily basis. There is much work in the capital budget that will employ many Yukoners.

Mr. Penikett: We have lost many months in non-negotiations with Curragh up to now. The hospital deal has been delayed. Taga Ku has been killed. The Grey Mountain school has been delayed. Chateau Jomini has been killed. The statistics put out by the Government Leader’s department - yes, they show that the territory has lost, over the same period last year, over 900 jobs. I ask the Government Leader - even if the inflated promise of 700 jobs comes through, does he not recognize that, even at the height of this year’s construction season, we will still have a deficit of several hundred jobs compared to last year?

Hon. Mr. Ostashek: As I said, we are not the doom-and-gloom party on this side; we are more optimistic, and time will tell how many jobs there are in total. The Member opposite makes a big issue out of high unemployment in April of every year. Go back and compare the years - any year. Historically, unemployment increases in the Yukon in the wintertime and decreases in summertime.

Question re: Budget impact on the economy

Mr. Penikett: When the NDP took office, unemployment was 16 percent; when we left office it was eight percent. After only six or seven months, the Government Leader has got it back up to 16 percent again.

I want to ask the Government Leader this: in an election advertisement, the MLA for Porter Creek South said he believed in “a negotiated government” and recently the Government Leader said the government had the votes to pass his new improved budget. To expedite debate and to satisfy the public’s right to know, will the Government Leader advise the House of the key points in his negotiated deal with the Member for Porter Creek South - a deal that apparently secured the critical ninth vote for the Government Leader’s tax-and-spend budget?

Hon. Mr. Ostashek: This seems to be an awfully touchy spot with the Members opposite. The budget will be debated in this House as usual.

Mr. Penikett: In another election advertisement, the Member for Porter Creek South said, “My commitment is not to new spending and new tax. It is to good government and fiscal responsibility.” Since the Government Leader is confident his budget will pass, can he tell the House exactly which of his proposed 45 amendments was designed to satisfy the other Porter Creek MLA’s opposition to new spending and new taxes?

Hon. Mr. Ostashek: The Member opposite answered his own question when he said the Member for Porter Creek South would support good government and a fiscally responsible government.

Mr. Penikett: I do not know when we are going to get that. I think most Members on this side would support that, too, at least as a general proposition.

Before the budget was even passed, we learned of private deals with Dawson City, Crossroads and perhaps other people. Can I ask the Government Leader, for the record, if there are any other secret backroom deals the House should know about before we give further consideration to the budget face-lift.

Hon. Mr. Ostashek: I guess I am a little bit amazed that the Opposition would waste Question Period this way when they have all the time in the world to ask questions during the budget debate. It appears to me that the session has gone on too long and the Members opposite have run out of questions.

Question re: Yukon Energy Corporation, power rates

Mr. Cable: There have been a number of questions bandied around with respect to the Yukon Energy Corporation and rates in the last couple of weeks. I would like to ask some questions of the Minister responsible for the Yukon Energy Corporation relating to the potential rate increases arising because of the potential Curragh shutdown.

Under the contract between the territorial and federal governments with respect to the turnover of the NCPC assets, there was a principal and interest deferral and a principal and interest forgiveness clause. Has the Minister reached any conclusions as to the amount of principal and interest deferral or forgiveness we can expect and, if so, how much?

Hon. Mr. Phelps: My officials have taken a first cut at estimating the relief that might emanate from that agreement. I tabled the relevant clauses in the House the other day. It will not provide much, if any at all.

Mr. Cable: I am informed that in the event that Curragh stays shut for some period of time, there will be significantly less diesel generation, which is high-cost power generation. Have the Minister and his officials reached any conclusion as to the amount of reduction in expenses that the corporation will experience as a result of this reduced diesel generation?

Hon. Mr. Phelps: Once again, it is a fairly preliminary conclusion, because we do not know exactly what will transpire. Those calculations were factored into a rough guesstimate, if Curragh was to stay down, of an additional one-time cost increase of 15 to 20 percent.

Mr. Cable: In the event that there are significant rate increases in the order just mentioned, and this relates to a question that has been asked previously, has the government, as a matter of energy policy, determined whether those rate increases will be absorbed by the ratepayers or by the taxpayers?

Hon. Mr. Phelps: There has been no determination made. We will be looking at that issue, should the need arise. It is hypothetical at this point.

Question re: Land claims, Kwanlin Dun

Ms. Joe: My question is for the Minister responsible for land claims regarding the breakdown on land claims negotiations with the Kwanlin Dun First Nation. Last week, the Government Leader said that a paper regarding land claims was going to cabinet on Friday. I would like to ask the Minister if he can tell me if that paper was approved and that negotiations will be going ahead with the Kwanlin Dun First Nation in a much more fair manner?

Hon. Mr. Ostashek: I guess it would all depend upon what the Member opposite calls a much more fair manner. I believe the Government of Yukon has been negotiating in good faith all along.

A paper went to Cabinet last week. The land claims negotiators were instructed to see if they can resolve the manner in which the land claims issue is going to get back on track. Basically they are talking about the procedure by which land selections would be made in the Whitehorse area by both the Kwanlin Dun and Ta’an Kwach’an. We have always been talking to the Kwanlin Dun. We have not walked away from the land claims table.

Ms. Joe: The question of fairness is something that the Kwanlin Dun First Nation and Ta’an Kwach’an First Nation are concerned about. The Kwanlin Dun First Nation has asked for a slowing down of land alienations in the Whitehorse area. What is the government’s response to the First Nation’s request?

Hon. Mr. Ostashek: We have already slowed down land transfers in the Whitehorse area and the process that we are trying to come to a three-party agreement on will address those issues.

Ms. Joe: The Government Leader will be travelling to Ottawa today to deal with land claims legislation. I would like to ask him if he will be back in time to meet with the Kwanlin Dun First Nation on Friday, as requested. If not, will he be sending another Cabinet Minister to represent him?

Hon. Mr. Ostashek: We have been in touch with the Kwanlin Dun and discussed with them the issue, as I will not be back from Ottawa on Friday. I expect to be back on Saturday and meet with them, possibly, on the Monday. It appears that they wish to meet with me personally and I will do everything in my power to see that the meeting does take place.

Question re: Newspaper advertising, cost of

Mr. Penikett: When in Committee we discussed the Executive Council Office estimates, and the problem of the cost of newspaper advertising was reviewed. The Government Leader said the problem had been identified and is being dealt with. He promised to make a ministerial statement to the House when the matter was concluded. Can he indicate when we will hear that ministerial statement?

Hon. Mr. Ostashek: I was just looking for my briefing note on that. The issue is being dealt with. There has been a tender issued. I am just not sure of the date of closure. I will get that information and bring it back in as a legislative return for the Member opposite.

Mr. Penikett: I appreciate the fact that the Government Leader did table the value-for-money audit in the House. That audit makes specific recommendations, one of which the government appears to have ignored in its new tender call, which is the government should produce and place more advertising in house. Can the government indicate why it has not accepted the recommendation of the auditor in this respect?

Hon. Mr. Ostashek: You are damned if you do and you are damned if you do not. We have private enterprise out there and we get condemned when we cut  back and do not help them out. I believe that by tendering we can come to an agreement that is going to save the government money and still support private enterprise in the Yukon.

Mr. Penikett: The Government Leader should not be so sensitive. I did not criticize the decision. I just asked him to explain it, and that is because the audit revealed, among other things, that the government was paying too much to use an agency for producing and placing newspaper advertising, and, indeed, that we were not getting value for money. I am forced to ask, does the Government Leader have an estimate of how much the government will save the taxpayer by proceeding in a way other than recommended by the auditor?

Hon. Mr. Ostashek: It is ironic to sit on this side of the House now and listen to the Member opposite who used to be here at one time and had all kinds of recommendations from the Auditor General, which he never saw fit to put into action.

Speaker: Order please. Would the Government Leader address the question?

Hon. Mr. Ostashek: I am doing that, Mr. Speaker. I am sure that that analysis has been done and I will see if I can get the information back to the Member.

Question re: Bison, Carcross First Nation request regarding

Mr. Harding: I have a question for the Minister of Renewable Resources. I have been made aware that the Carcross First Nation is very interested in the bison herd that was recently farmed out. They met with the Department of Renewable Resources and were led to believe that their bid and proposals regarding a free-roaming herd were being considered. I would like to ask the Minister what happened to the Carcross First Nation’s request to keep the herd free roaming in the Snafu/Tarfu area?

Hon. Mr. Brewster: The request is still there. We have three new babies this year, and we will have some more next year. We have offered to fly out with them to look at the habitat and see if it is right for the buffalo. There is no point in putting them there if the habitat is not right.

Mr. Harding: My impression was they were more concerned about it being done pro-actively rather than after they were farmed out. They seemed to be very much in support of free-roaming bison. I am told that the Carcross First Nation is against game farming the bison. They would like to know why, when there is a moratorium on game farming in place, and no regulations yet finalized for game farming, the government would not be more interested in exploring every free-roaming option before deciding to farm them out and create a new game farming licence?

Hon. Mr. Brewster: We explored every option we could think of to solve this problem, and the best way we could solve it was by putting the renegades under control.

Mr. Harding: If they explored every option, how come only now, after the fact, they are offering to fly around the area with the Carcross First Nation? That does not make any sense.

I will ask the Minister this: will the Minister please commit to giving the Carcross First Nation the bison to free roam if their proposal is workable and, if not, will they tell them exactly why it is not possible?

Hon. Mr. Brewster: I will not commit myself to anything until we see what the habitat is like and where they want to put them. If they are too close to the highway, they definitely will not be put there. We must know they are in an area where they will not come near the highways.

Question re: Whitehorse General Hospital, construction delay

Ms. Moorcroft: There has been $49.3 million allocated in the health transfer for construction of a new Whitehorse General Hospital. Although we heard in December from the Minister of Health and Social Services that the transfer had been okayed, and although we heard in February that the final hurdle had been cleared in securing the transfer, we heard last week that the Minister will be again delaying the start of construction on the hospital and hundreds of jobs for Yukoners.

Why is the Minister doing nothing to ensure that local trades people will be put back to work for this construction season?

Hon. Mr. Phelps: All I can say to the hon. Member is that, if it had been at all possible to proceed with the hospital prior to freeze-up, we would have. However, I have been convinced that, because of delays at getting the money voted on by Treasury Board, which took several months, and because of the ensuing gap in the contract with the architect, that there is no possible way, in an effective manner, to have a tender come out in time to break ground prior to freeze-up.

It is simply a situation of our being committed to ensuring this building go ahead as soon as possible, but that there not be costly overruns, and it be done in a manner that is appropriate and consistent with the recommendations made by the Public Accounts Committee back in 1988.

Ms. Moorcroft: Last week, the Minister agreed to provide me with a breakdown of the site preparation and design work that would be done on the hospital this year. Since the Minister seems to prefer erecting a wall of words to answering questions, or to building a hospital, would the Minister table a return, giving the schedule of site preparation work to be done in the current fiscal year, and telling the House how many jobs will be created by that work, and when?

Hon. Mr. Phelps: Certainly, Mr. Speaker.

Ms. Moorcroft: This delay in construction will send this territory further into this government-orchestrated recession. We know that unemployment has risen every month since the Yukon Party took office, to a high of 16.4 percent. This construction project could have created 285 local jobs. When will the Minister expedite these construction jobs that could put local tradespeople back to work?

Hon. Mr. Phelps: We are talking about a few jobs that have been delayed, not lost. The most optimistic forecast for starting foundation work was in the late fall, prior to freeze-up.

I would suggest to the hon. Member that she concern herself with the bad financial situation that this government is in, largely because of government-orchestrated cost overruns and because of contracts being tendered in an inappropriate manner, in a mad rush to meet the demands of people who had no stake in the outcome of the cost.

Question re: Health care, user fees

Mrs. Firth: I have a policy question for the Minister of Health and Social Services.

Health care systems are in a crisis in Canada and the provinces due to rapidly rising demands and costs to taxpayers. Questions are being raised regarding the principles of universal health care services and of user fees for those services.

I would like to ask the Minister what this government’s policy is regarding user fees for health care services?

Hon. Mr. Phelps: It is an interesting area for debate and for discussion. I did hear the Member on the CBC program the other morning discussing this issue with the president of the Yukon Medical Association.

This party, at this time, stands behind universality; however, we are watching developments in other parts of Canada and listening to the debate very carefully, because we are also concerned that something be done to rule out the abuse of the health care system. We all know that abuse occurs by some people who are resident in the Yukon and other parts of Canada.

Mrs. Firth: Cabinet has already supported the principle of user fees for the 911 number for emergency services.

I would like to ask the Minister when his department will be bringing forward user fees for health care services as well?

Hon. Mr. Phelps: In the first place, the concept of user fees for 911 services is not unique to the Yukon; it is something that is being initiated in other parts of Canada.

In the second place, I see no reason whatsoever why people in Carcross, Tagish or Teslin should be forced to carry the burden of the provision of 911 services to people in Whitehorse when we do not get anything from it.

I will stand by that position. With respect to the issue of user fees for health services, our policy is that the principle of universality shall apply.

Mrs. Firth: I would like to ask the Minister which other health care services, besides the 911, will this government be asking Yukoners to pay for? What is their policy regarding user fees? Are they establishing them or are they not? Is the department working and looking at them or are they not?

Hon. Mr. Phelps: I was not aware that 911 services came under health care. It is certainly not the definition we apply on this side of the House to 911 services, although I suppose some form of tenuous link could be made. We are currently satisfied with the policy of government with respect to universality in the provision of health care services. We are watching, with some interest, the debate that is taking place among the provinces and some of the leadership candidates at the federal level. I will be attending the provincial/territorial/federal meetings of health ministers and following the debate very closely there. If any policy initiatives come forth as a result of those meetings, I will bring them back to Cabinet and discuss them.

Question re: Taga Ku convention centre project loan write-off

Mr. McDonald: I have a question for the Minister of Finance. The Minister has indicated that the government is, or has, contemplated booking a $2 million write-off for the Taga Ku project in last year’s budget so that they could use their decision to collapse that project to increase the deficit. Does the government believe that it is ethical, in principle, to lay the cost of the Taga Ku project’s failure at the feet of others when the Yukon Party government bears total responsibility for their decision to collapse the project?

Hon. Mr. Ostashek: I can see this session has lasted too long - we are running out of questions; we are going back to December. The fact remains that it was through the instructions of the Members opposite that the loan was made by the Yukon Development Corporation to the Taga Ku project.

Mr. McDonald: The issue was raised yesterday. It is not as though there was anything to salvage of the Yukon Party’s reputation for ethical budgeting. What information does the Government Leader have that says that the security for the $2 million loan is insufficient - insufficient enough that they have to write off the loan?

Hon. Mr. Ostashek: It is a bookkeeping matter more than anything else. The Development Corporation wanted to get it off their books and transfer it over to the territorial government. At no point did we consider putting it into the previous year. At no point. I just said to the Member opposite in the heat of debate that that was a possibility we could have explored.

Mr. McDonald: The Members have said a lot in the heat of debate that they regret, but let me ask the Government Leader this question: is it the government’s intention to leave the decision about the recovery of the loan or its write-off exclusively to the board of the Yukon Development Corporation?

Hon. Mr. Phelps: The Member is asking a question about a liability that is not yet due and payable. We will see what transpires when that eventuality passes us by.

Question re: Unbudgeted government spending

Mr. Harding: I want to give the Government Leader some comfort that we still have lots of questions left for this government. They arise on a daily basis. We do not get any answers, so sometimes we have to ask them over and over.

The Yukon Party told the people of the Yukon that their proposed budget was so tight that they had no choice but to raise taxes to balance it. Now the public finds out that, in one department alone, the Department of Community and Transportation Services, they could find $400,000 and $1.8 million for Dawson’s water and sewer.

My question is: why did they tell the people of the Yukon that their budget was so tight that they had no choice but to raise taxes when, in fact, they just robbed the piggy bank and checked under the mattress to find $2.2 million?

Hon. Mr. Ostashek: We said in this House time and time again - I was hoping we would have some new questions, but we do not - if we had had the $58 million that the Members opposite blew, these decisions would have been a lot easier to make and we probably would not have had to raise taxes.

Mr. Harding: We know all about those padded supplementaries. We know all about those false claims and the $500 million budget they have this year.

I will ask the Minister of Community and Transportation Services this question: yesterday, on the radio, the Minister said that he had plans to find the money in projects he could cancel or ones that end up costing less than planned. I have checked the budget and I am very concerned about those statements. Perhaps the Minister could tell the people of the Yukon which specific projects he plans to cut or curtail so that they know before they pass judgment on this budget.

Hon. Mr. Fisher: I believe I answered this yesterday, but, because we have some time before the funding has to start flowing to Dawson for the water and sewer project, we are going to be looking first for any possible lapses. If that is not sufficient funds, we will be looking at projects that will be coming in under estimated costs. Then, we will be looking at projects that can be cancelled.

Mr. Harding: It is interesting that such a supposedly tight budget is going to have such big lapses. I would like to ask the Minister of Community and Transportation Services about the budget for which they had no choice but to raise taxes, which has become so loose, if he will be amending the budget to add the $1.8 million for the Dawson water and sewer expenditure this year, which was previously unbudgeted? It constitutes almost 20 percent of the tax increases.

Hon. Mr. Fisher: No, we will not be doing an actual amendment because, as I said before, we are not absolutely certain from which of the three areas that I mentioned before the funds will be coming.

Question re: Public Service Commissioner, appointment of

Ms. Moorcroft: My question is for the Minister responsible for the Public Service Commission in regard to The Sluice Box, the Yukon government employees’ newsletter. I read with interest the feature interview with the new commissioner in the May 1993 issue. Would the Government Leader be prepared to consult with the editor of The Sluice Box and inform this House as to exactly what the term of service is for the now tenured, according to this article in the May issue of The Sluice Box, Public Service Commissioner?

Hon. Mr. Ostashek: I have said in this House that prior to this House adjourning for the summer, I would be re-appointing the Public Service Commissioner for a long term.

Ms. Moorcroft: Tenure is a commonly used word in academia, or in the education field, but it is not unknown in the public service. In fact, the Public Service Act provides for up to a 10-year position of tenure for the Commissioner. Now that we know from The Sluice Box, although the Government Leader is certainly reticent about the matter, that the Public Service Commissioner has tenure, would the Government Leader inform this House what the tenure of the Public Service Commissioner is?

Hon. Mr. Ostashek: We are going back over the same ground again. She was appointed for a six-month term. That is her tenure until she is re-appointed.

Ms. Moorcroft: Perhaps I need to be more specific with the Government Leader. This government appointed the Public Service Commissioner for six months, effective January 1, 1993, and a 21-day appointment to July 1, 1993 does not even come close to the meaning of the term tenured. Will the Government Leader answer my question? What is the tenure of the Public Service Commissioner?

Hon. Mr. Ostashek: It is for certain now that they have run out of questions on the other side of the House. It must be time to adjourn for the summer because they have no more questions left. We have addressed that issue. I have told the Members opposite that I would be making a statement in this House, or tabling a press release in this House, before this session is over.

Question re: Capital block funding to municipalities

Mrs. Firth: The municipalities have been subject to budget cuts by this government without advance notice, the explanation being given that we were in a terrible restraint position. The City of Whitehorse has taken the biggest cut of almost $500,000.

Since the Minister responsible for Community and Transportation Services was able to find $1.8 million in his budget for one community - Dawson City - for its sewer, I would like to ask the Minister if he would look at restoring the capital block funding back to the 1992 level.

If the Government Leader wants to answer the question, he can get up and answer it, instead of shouting to the Minister of Community and Transportation Services what the answer should be.

I will repeat my question: will the Minister consider restoring the capital block funding back to the 1992 levels?

Hon. Mr. Fisher: We have discussed this with the Association of Yukon Communities and, no, we will not be reconsidering putting the capital block funding back to the 1992-93 levels.

Mrs. Firth: Why not?

Hon. Mr. Fisher: We have taken on some very major projects - the Dawson City water and sewer, which the previous government refused to look at as a project. We have made commitments for funding for the Whitehorse sewage lagoon. That is a much more lucrative amount than the previous government was willing to provide. I understand there is further sewer work needed in Carmacks.

For those reasons, because we are involved in some very heavy infrastructure projects with the municipalities, we have to look at reducing their capital block funding.

Mrs. Firth: The government claimed to be broke and established funding cuts to the municipalities. Then, they turned around and, for one community, found $1.8 million in their budget. I would like to ask the Minister why he cannot treat all the communities fairly and perhaps look at giving part of that $1.8 million back to the municipalities to restore their funding levels, so he is treating them equitably and fairly, instead of giving preferential treatment to one community.

Hon. Mr. Fisher: The Member opposite has her facts mixed up quite badly. In fact, one of the municipalities in their block funding got more this year than they did last year because of the formula. If we did not provide that amount to Dawson City, the cost of sewer and water in Dawson City would be three times what it is here in Whitehorse. If the Member opposite would like us to do that, why does she not make a motion that we do not fund Dawson for their sewer and water project?

Question re: Contract regulations

Mr. Harding: I have a question about another Yukon Party flip-flop. It has to do with contract regulations set out by the Minister of Economic Development, who told this House that he had no intention of changing the policy regarding contract regulations because he said it seems to be working relatively well. Yet during the election and in the past, his party said they wanted to “develop fair and realistic contract regulations to help Yukon bidders”. My question is: does the Yukon Party government want to keep the existing policy developed under the NDP or change it?

Hon. Mr. Devries: The Member very well knows, and this was discussed again in the supplementary debate the other night, that there were several projects referred to in the Yukon Party’s election paper. Since that time, there were new contract regulations put in September; they are substantially improved over what was there before, and we would like to give them a chance.

Mr. Harding: We are certainly getting confusing information, which is nothing new from this government. If they have indeed changed it - we are getting quite used to that from the government - I would like to ask the Minister what the new policy on contract regulations is and why was it not applied to the court reporters incident or the signing of a designated contract with an Edmonton publishing company - for $94 more than a local firm?

Hon. Mr. Devries: Again, those things were done within the regulations and there were some subsequent reviews due to those. We are looking at some of the problems that could be in the regulations. As a result of these consultations, through the contract review committee, there is potential for some changes to be made to the regulations to resolve these problems.

Mr. Harding: It sure sounds like the Minister has a firm handle on it.

I would also like to ask the Minister about the business incentive program. He said the other day in debate that he kind of liked the program. During the debate previously in this House, when he was in Opposition, the Yukon Party raised a lot of questions about the value of this program. Will he stand here today and tell us what his government’s policy is regarding this program?

Hon. Mr. Devries: I have always supported that program. There were some problems with it, but I support the program of Yukon purchase and Yukon labour.

Speaker: Time for Question Period has now elapsed.


Mr. Penikett: On a dubious question of privilege, I would like to call attention to the presence in the gallery of Clara Tizya, an elder of the Vuntut Gwich’in who is here with her daughter Lulu. She is here in Whitehorse visiting her family, from Vancouver. Welcome.


Notice of Opposition Private Members’ Business

Mr. McDonald: Pursuant to Standing Order 14.2(3), I would like to identify the order in which the item standing in the name of the Official Opposition is to be called on Wednesday, May 12. It is Motion No. 18, standing in the name of Ms. Moorcroft.

Speaker: We will now proceed to Orders of the Day.


Speaker: Government Bills.


Bill No. 20: Third Reading

Clerk: Third reading, Bill No. 20, standing in the name of the Hon. Mr. Ostashek.

Hon. Mr. Ostashek: I move that Bill No. 20, An Act to Amend the Income Tax Act, be now read for a third time and do pass.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 20, entitled An Act to Amend the Income Tax Act, be now read a third time and do pass.

Some Hon. Members: Agreed.

Some Hon. Members: Disagreed.


Speaker: Division has been called. Mr. Clerk, would 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. Penikett: Disagree.

Mr. McDonald: Disagree.

Ms. Joe: Disagree.

Mr. Joe: Disagree.

Ms. Moorcroft: Disagree.

Mr. Harding: Disagree.

Mr. Cable: Disagree.

Mrs. Firth: Disagree.

Clerk: Mr. Speaker, the results are eight yea, eight nay.

Speaker’s casting vote

Speaker: Our Standing Orders require that in the event of a tie vote the Speaker shall cast the deciding vote.

It has been generally accepted, and is set out in Beauchesne, that when a tie-breaking or casting vote is necessary, the Speaker is entitled to vote like any other Member: according to conscience.

Beauchesne goes on to say that the Speaker votes in such a manner as to leave the House another opportunity to decide the question.

Normally, a vote at third reading is a final decision and leaves the House no opportunity for further debate; however, the situation with Bill No. 20 is rather unique in that it is not, in a sense, a stand-alone bill; it is part of the government’s budget package, which also includes Bill No. 6, the main estimates.

The main estimates are presently in Committee of the Whole and the House has just begun to debate the capital and the operation and maintenance estimates for 1993-94. Bill No. 20 is simply part of the revenue side of that total budget package.

However, Bill No. 20 is also critical because it is a tax bill. As such it is a question of confidence; as a question of confidence, the government will stand or fall based on the passage or defeat of the bill.

This then puts the Speaker in somewhat of a dilemma. If I support this bill, I am offending the principle that significant decisions should not be taken except by a clear majority of the House.

However, if I vote against the bill, the government will fall and the House will not have the opportunity to further debate the more significant and more complete decision, which is the main budget itself.

My conscience tells me that the House should have the opportunity to fully debate and vote on the complete budget. On that basis, I will vote for the motion and declare that Bill No. 20 has passed this House.

Motion for third reading of Bill No. 20 agreed to

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

Speaker: It has been moved by the Government House Leader that the Speaker do now leave the Chair and 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.

Is it the wish of the Members to take a brief recess at this time?

Some Hon. Members: Agreed.

Chair: We will have a brief recess.


Chair: I will now call the Committee of the Whole to order. We are dealing with Bill No. 6, First Appropriation Act, 1993-94.

Bill No. 6 - First Appropriation Act, 1993-94 - continued

Chair: Is there any further general debate?

Ms. Joe: I was asking questions last night of the Minister in regard to information I want him to bring back. He had mentioned there was possibly going to be a review done by all his departments to decide whether or not they were going to be asking for increases in licences and permits. He said he would look at the possibility of bringing back information that would indicate whether or not that was going to take place. I am just wanting him to let me know if he has received any new information and, if he has not, if he will bring that information back so we can deal with it while we are in the main estimates.

Hon. Mr. Ostashek: Yes, for the Member opposite’s information, there is a canvass of all departments underway right now about what they intend to do, or what proposals are in front of them. As soon as I have that information, I will table it in the House.

Ms. Joe: I also asked the Minister of Justice a number of questions in debate during the supplementaries. He was able to give some of that information to me at that time. The information that he was not able to give me, he said that he would get back to me with. I would like to ask again if I could have the information that he was not able to provide to me that night. I would like to have it prior to the debate on the Justice budget. I would like it a few days before we deal with that department, if that is a possibility.

Hon. Mr. Ostashek: We have discussed the matter of getting the information back on the questions that were raised in the supplementaries. The Ministers are making every effort to get that information back, and to have it here when they get to their departments on the supplementaries. If the Member opposite wants it sooner, I will pass that on and see if we can get that for her in advance of getting into the Department of Justice budget.

Ms. Joe: I know that I did not ask for a lot of information, but if it is going to be very difficult, the day before would be okay.

Mrs. Firth: I have some general policy questions for the Minister of Finance and specifically one policy question that I presented to the Minister of Health and Social Services this afternoon.

I would like to ask the Minister of Finance what his government’s position is regarding user fees for health care services. What is his government’s position or policy?

Hon. Mr. Ostashek: When this government was in the process of putting the budget together and identifying sources of revenue, the issue of user fees or health care premiums was discussed. I believe I have stated in this House, and probably during the budget speech that, because of the inequity of the health care premiums, we decided to go the route of the increase in personal income tax, so that each and every Yukoner would be bearing a fair share of the cost. I am sure that the Member is aware that anyone in a unionized job has 75 percent to 90 percent of their health care premiums picked up by their employer, but Yukoners who are employed by small business or are self-employed are responsible for their own health care premiums, as is the case of people employed in non-unionized shops or jobs.

We addressed the issue by raising the tax rate. The Minister said, in Question Period, that this government, at this present time, believes in universality.

I do not believe that the Minister gave anything to indicate that if we deemed it to be necessary in the future that we would not discuss or take into consideration the possibility of user fees. It is not something that we are exploring at this time.

Mrs. Firth: The Minister of Health did make reference to abuses within the system, though. Governments across the country usually try to deal with abuses by establishing user fees. I am asking what this government’s policy is regarding user fees. Are they going to be looking at various options of user fees and examining that direction?

Hon. Mr. Ostashek: Maybe I could put it this way for the Member: if we get a strong representation from the people, or from the medical community that by instituting some regime of user fees it would help to curtail abuse in the system, then I would be prepared to look at it. That representation has not been made at this point, but we are not looking at it as of today.

Mrs. Firth: I do not want to know what the medical community’s position is regarding user fees. I want to know what the government’s position is. Does the government believe in user fees or not, is the question. I have to draw the conclusion that they do because they have already set the precedent by establishing user fees for the 911 number. I want to know what the government’s position is. All they have to do is stand up and say whether they want user fees or they do not. That is all I am asking.

Hon. Mr. Ostashek: This government is a government that prides itself on listening to the people. If the people tell us that they feel that user fees are required, we will certainly look at it.

I want to go on record, when we are talking about policy, that the Member opposite is confusing apples and oranges when she talks about user fees for medical services and 911, when 911 only pertains to the City of Whitehorse and the immediate surrounding area, and not all of Yukon.


Mr. Penikett: Perhaps I can provide a pleasant interlude in this round of questioning by calling Members’ attention to the gallery and the presence of Mr. Parrish, Mr. Leonard and Mr. Watling of Westmark Hotels.


Bill No. 6 - First Appropriation Act, 1993-94 - continued

Mrs. Firth: When people from the communities come to Whitehorse they are going to take advantage of the 911 service. It is not exclusively for Whitehorse as the government implies.

I am talking about a principle that has been annunciated; the principle is that the Minister of Community and Transportation Services stood up in this House and said that Cabinet had made the decision that users should pay.

The Minister of Health and Social Services stood up in this House this afternoon and talked about abuses in the medical system.

I am simply trying to get a clear position on the record about the government and what its policy or position is respecting user fees. The Government Leader, the Minister of Finance, is indicating that if some people - who, I do not know - come along and request this, that they might look at it.

I want to know whether the Cabinet is going to support the principle of user fees and if they are going to apply that principle to the delivery of health care services here in the Yukon. They obviously feel there are abuses of the health care system and that they support the principle of user fees.

Hon. Mr. Ostashek: We will deal with that issue when it comes forward. It is not something that has come forward at this point. If there is any solid evidence that they will work to alleviate some abuses that are in the system at the time, we will certainly be prepared to look at them.

Mrs. Firth: So what the Minister is really saying is that they have no policy or position; they are just going to make one up when the time comes and if the opportunity presents itself. That is essentially what he is saying.

I would like to go on to another outstanding question I have regarding government operations and commitments that have been made by the Minister of Finance. It concerns the question about boards and committees. The Minister of Finance has indicated that they were going to be looking at some $1 million-plus that is spent annually for honoraria for boards and committees, with the objective in mind of reducing that expenditure; also, that he is going to be looking at the numbers of boards and committees and which ones the government would be considering removing. I would like to ask the Minister of Finance for an update on this project. Could he tell us how many boards and committees the government has decided are not necessary any more, and whether they have taken any steps to reduce the honoraria that are paid out?

Hon. Mr. Ostashek: As I told the Member, that issue is under review; it is still under review. When recommendations come to Cabinet, we will deal with that issue. In the meantime, we have taken some steps to try to curtail the costs of boards and committees and have limited the meetings of some boards that we felt were excessive - and to try to get as much done at a meeting as we can without having to call a numerous amount of meetings to accomplish something. So, we are taking some meagre steps in that direction but there will be, before we come back in the fall, a complete reorganization of the boards and committees.

Mrs. Firth: Could the Minister of Finance tell us when the recommendations will be ready?

Hon. Mr. Ostashek: I do not have any idea at this time.

Mrs. Firth: When those recommendations are presented to the Minister of Finance, will he make them available to Members of the Opposition?

Hon. Mr. Ostashek: I will certainly take that under consideration.

Ms. Joe: I have one quick question that I meant to ask earlier.

A number of individuals have contracted beaver fever, and it appears to be a concern among some people that possibly they might be getting it from the drinking water. I have actually been told by one medical professional person that that is a good possibility, because people who have not been out camping and drinking possibly contaminated water have come down with giardia.

I was wondering whether or not the government could provide this House with information about the number of cases in the last year and whether or not the health department of the federal government has any information regarding tests that might have been done on the drinking water that might have had the giardia cyst in it.

There was some concern that if that was the case, why did the public not know about it. So, I am asking the Government Leader if he could have that information provided to us by the Department of Health and Social Services; other questions could be asked when we come to that department.

Hon. Mr. Ostashek: I believe that, when we get to the Department of Health and Social Services, the Minister may have some information for the Member on that. In the meantime, I will see what statistics I can gather from the health department.

Ms. Joe: I would also like to have the results of any tests that have been done with the drinking water. In the past, I have tried to secure that kind of information, and I was able to successfully get some of it, but that was quite a number of months ago. Right now, I am looking for up-to-date information that might be available on the number of people who have come down with beaver fever and, if tests have been done on the drinking water, could we have those results? The Minister has indicated that he would try to get that information. I know it is not that hard to get, and it is not confidential. I would like to have that before we get to the debate on Health and Social Services.

Hon. Mr. Ostashek: I will see what I can do to accommodate the Member’s wishes.

Mr. Cable: I would like to continue my education on this perversity factor. I wonder if the Government Leader could definitively indicate something. For these tax increases that we have just passed - will the calculation we have been calling the perversity factor attach, in any way, to these tax revenues?

Hon. Mr. Ostashek: As we have explained to the Members opposite, and I see the Member for McIntyre-Takhini looking, I do not want to get into a big debate about the perversity factor again, because I think he and I both have the same feelings about it.

The perversity factor is to adjust the average tax rate, where we are on the scale compared to the average tax rate across Canada. By increasing the rate, it should have some effect on the perversity factor, but the Member opposite has to remember that the rates have gone up in many jurisdictions across Canada at the same time we are raising ours. So, how much of an adjustment there will be, I cannot say at this point.

Mr. Cable: That was the next question I was going to ask. In view of the various tax increases that are going on across the country, can we be assured that these tax increases, which total $8.8 million over two years, will yield a dollar-for-dollar revenue? Will we capture all of that $8.8 million, or will part of it be lost?

Hon. Mr. Ostashek: No, we will capture all of the $8.8 million.

Mr. Cable: The Leader of the Official Opposition has indicated a qualifier. Let me ask a general question. Are there any qualifiers to the statement that the Government Leader just made?

Hon. Mr. Ostashek: My information tells me that no, there are no qualifiers to this statement.

Mr. Penikett: I am sure the Deputy Minister of Finance would concede that there have to be. If the economy continues its present slide, you will not have the tax volumes, either from income tax or from corporation taxes that the government is projecting. It cannot possibly be the case. There is no possible taxing scenario where the amount of taxation is flat, or entirely predictable, without taking into account the health of the local economy.

Hon. Mr. Ostashek: The volume charges are subject to the perversity factor, but the price changes are not.

Mr. Penikett: The point is that only the increases in rates can be recovered; the increases in volume cannot be recovered. In fact, as we have been explaining with the perversity factor, we lose money on that. The Liberal Leader asked the Government Leader if the revenue from the taxes was perfectly predictable. I do not think it is. We all know that if the economy goes up or down, that will have an effect on the amount of taxes generated by employees and businesses alike.

Hon. Mr. Ostashek: I agree with the Leader of the Official Opposition on that. That is not the question that was asked. He was asking if the perversity factor had any effect on the $8.8 million that we are going to get.

Mr. Cable: Does the Government Leader have a copy of that letter of May 5, 1993, which he was kind enough to give me, on the worst case, best case scenarios?

Hon. Mr. Ostashek: Perhaps if the Member has another question, we will look for it. We should have it here somewhere.

Mr. Cable: I would like to go through the contents of that letter if it is handy. There were a number of paragraphs in the letter. If the Government Leader would look to the last paragraph at the bottom of the first page, it says that the best case scenario, in the attachment, shows a budgetary income of $536 million. It says, “The best case assumes that we get virtually everything that we have requested in the third-year formula review, and that the census under count methodology finally adopted by Statistics Canada, is a methodology most favourable to the Yukon.” The paragraph goes on to say, “It also assumes that we receive all the technical adjustments to the formula we have requested, and that the Canadian GDP grows by one-quarter, or one percent more than the current consensus forecast.” It is, to say the least, quite unlikely all of this will come to pass. I wonder if, for my benefit and perhaps for some of the other Members’ benefit, we could get that translated into everyday English?

Mr. Penikett: While we are at it, according to the rules of this House, the document that has been quoted from has not been made available to all Members of the House, but according to the rules, once a document has been quoted from, it must be tabled in this House. I would ask that the document be tabled immediately.

Hon. Mr. Ostashek: I certainly did not quote from it.

Mr. Cable: I think a copy has been provided to the Finance critic.

Mr. Penikett: Not the letter.

Mr. Cable: I certainly have no problem with that. There is nothing confidential in the letter.

Hon. Mr. Phillips: It is not a secret document.

Ms. Joe: No one said it was; we just do not have a copy.

Hon. Mr. Ostashek: We certainly do not have any problem with the document being tabled.

I was under the assumption that the Finance critic had received a copy of it. If he did not receive a copy of the letter, he did get a copy of the calculations of the best case, worst case and middle-of-the-road analyses.

Chair: Mr. Cable, would you send the document to the table, please.

Mr. Cable: Yes, providing Mr. Chair will give me a photocopy.

Chair: Right away, Mr. Cable.

Hon. Mr. Ostashek: I believe the Member was asking for an explanation of the last paragraph of the first page. Is that correct?

My interpretation is that, basically, if one looks at the chart that is attached to it, there are the three scenarios. It is all laid out there. There is the worst case scenario - what we have in the main estimates as of March 1993, which we tabled in this House - and the best case scenario, if, as that paragraph says, we get everything that we feel we should. That would be an explanation of that paragraph unless there is something else the Member wants.

Mr. Cable: Yes, I would like the factors explained in common, everyday English, so that our appreciation level can be raised a little bit. That agreement is like a labyrinth; it requires a fair amount of background knowledge. In view of the fact that the Deputy Minister of Finance is here, it is a golden opportunity to have this agreement explained.

Hon. Mr. Ostashek: I think that we are going to have to do for the Member for Riverside is to give him a copy of the document that the Finance critic was waving around the other day, with all the symbols, dashes and dots on it to explain it. There are many different scenarios that go into the calculations. To explain it on my feet would be very difficult.

Mr. Cable: If this is the document, I shudder to think that it gives you any answers. It does in fact look like something out of a first-year calculus class. Perhaps the Minister could release his deputy minister to provide me with a little further education while I am waiting for this photocopy. If I could get that commitment, it would be helpful.

Hon. Mr. Ostashek: I was just going to suggest to the Member opposite that he may want to sit down with the deputy minister at some point and see if he can get clarification for his questions.

Mr. Cable: Maybe in a more generic sense, the Government Leader has indicated that the best and worst case scenarios, as indicated in this letter, which will be will be circulated, are most unlikely. I wonder if the Government Leader could indicate, in a general sense, why he sees those scenarios as most unlikely?

Hon. Mr. Ostashek: I guess the way to sum it up would be to say that if we were to get the best case scenario, which we feel we are entitled to - we have the documentation and everything; we are just trying to get the federal bureaucracy to agree with our officials here - then it would be very costly for the Government of Canada, because it would also apply to the Northwest Territories. As in any type of negotiations, there are some trade-offs and some hard bargaining. As I have stated to this House before, in the negotiations in April we were very disappointed that an agreement was not reached; as a result of that there are meetings coming up on May 17 and 18 to address the issue again. In planning the budget, we sort of took a middle-of-the-road approach so that we would not be too far out either way.

Mr. Cable: If I could refer the Government Leader to the second page of the letter dated May 5, in the second to last paragraph - just for the record - it says, “Our reasonable forecast of budgetary income based on intuition is that the final outcome for 1993-94 will be within $10 million, either way, of the main estimate figures, insofar as impact on the annual surplus/deficit is concerned.” Just for the record, could the Government Leader confirm that there is a $10 million leeway, either way, on the revenue side?

Hon. Mr. Ostashek: Yes, I will confirm that, from the best calculations  we were able to make, there would be a leeway and the $10 million - when we are talking about the amount of money - is not a lot. There is going to be that range and we hope that we will fall somewhere within that range.

Mr. Cable: The Government Leader was good enough to answer some questions yesterday about when we could receive some definition on this leeway. My recollection is that he indicated that it would take five years before any definitive determination could be made.

When could we have a reasonably accurate - I know those are kind of fudgy words - estimate of when the deficit or the surplus would be determined?

Hon. Mr. Ostashek: The earliest, accurate calculations will be contained in the supplementaries, which will be tabled in the fall.

Mr. Cable: Prior to that time, there will be a number of calculations made by the government officials, leading to the production of the supplementary documents.

When, prior to the tabling of the supplementaries in the fall, would those initial drafts be completed by the government officials?

Hon. Mr. Ostashek: I believe that I stated in this House, and I read from a paper, the dates of when the printouts would be done and when the rough figures would be coming out.

It will probably be late July or early August before the figures are down on paper and complete.

Mr. McDonald: I would not mind affording myself the opportunity to speak to the Deputy Minister of Finance about the table. Although I think that I understand some of the issues, I do not understand all of them - certainly, the main estimate figures and the numbers in the columns are not numbers that are between the best and the worst case scenario. For me this is puzzling and I would like to hear an explanation.

For example, the worst case scenario for income tax revenue is $30,500,000 and the best case scenario is $26 million, but the main estimates is $31,900,000. I am certain there is a reason for that, but I would like an opportunity to hear a thorough explanation for that.

I think that it is truly ironic that we show - maybe this is a letter that should be leaked to somebody - the best case scenario with our revenues very low, because that has the most optimistic impact on government revenues overall, when the grant calculations are taken into account.

Unless the Government Leader has an objection to my talking to the deputy, I will take it that his offer to the Liberal Leader is good for me, as well.

I have some general questions about the budget itself - particularly about some of the changes that appear to be made or are being made and announced as we go through the process of debating the budget. Quite frankly, our concern - and I do not mean to be argumentative - is that we are trying to debate something of a fixed target, and we are having difficulty understanding what the issues are and what the cost of a balanced budget is. We are having a difficult time doing that when things like $1.8 million expenditures for a water and sewer system, and money for Crossroads and other things, are happening at the same time - items that are not found in the budget.

I would like to ask the Government Leader if they contemplate further changes while we debate this budget and, if so, what are they?

Hon. Mr. Ostashek: The first question the Member for McIntyre-Takhini had, as to making the deputy minister available to him to explain the perversity factor - I have no difficulty with that. As each Member in this House realizes how badly penalized the Yukon is because of that perversity factory, maybe we can put enough pressure on the federal government to address the issue and come up with something that is more favourable.

I have no difficulty with the Member for McIntyre-Takhini being briefed by the Deputy Minister of Finance. I find it sort of comforting that - the Member for McIntyre-Takhini being the Minister of Finance for several years - he and I are still in the dark in some areas of the perversity factory, after I have only been here for six months. I do not feel so bad. For a while, I thought I was having a terrible time grasping the numbers, and I consider myself to be very good at numbers. I do know it is a very complex procedure, and if our officials can make Members of this House familiar with it, I will make my officials available to give any Member a more thorough  explanation.

On the line-by-line changes to the budget as we are debating it, and the concerns raised by the Member opposite - at this point, I am not contemplating any other changes. I would just like to go on the record now as saying to the Members opposite that we have tried to put forward as accurate a picture as we possibly could of what the actual expenditures of this government are going to be over the next fiscal year.

I think we would have been totally within our rights to take the tax decreases as we did and not bother to make the amendments to the main estimates. We could have just done this, department by department, and instructed the departments not to spend the amount of money we are now bringing forward to the House, so they can see where those reductions are going to be and what our goal is. Our target is for a balanced budget, and that is a very difficult target to hit. I, for one, do not expect we are going to be right on.

I do not, for one minute, profess to stand here and say that we are smart enough to be able to come out totally accurate on our estimate, but it is a goal we are striving for and asking our departments to strive for. If we can have the cooperation of this House to reduce those line items to the amount we have put forward in the amendments, then it gives the departments a solid goal to shoot for, rather than having additional monies there and asking them to voluntarily cut back.

I know, and the Member opposite knows, that departments do move money from place to place at different times, and the Minister of Community and Transportation Services has indicated that that was the situation with Dawson sewer and water where we had a $1.00 line item in the budget for it, not knowing what the actual figure was going to be. That was one of the reasons we did not throw a figure of some sort in there, other than a $1.00 item, because we just did not have any idea what it was going to cost in the first year. It would have been far more wrong to put a figure in than to have put a $1.00 line item in there to identify for the Members opposite that it was a situation we were going to have to deal with.

I do not contemplate any other changes. If there are going to be some, we will do our best to forewarn the Members opposite well in advance.

Mr. McDonald: To begin with, I do regret that when the issue with respect to the perversity factor was first raised I did not anticipate that the leader of the government now was going to be the leader of the government in the future when the issue was raised. For all the protests I raised in the Legislature, I did not hear many sympathetic voices from the Opposition side of the Legislature; in fact, to put it bluntly, Opposition Members at the time told me to stop whining, that we were already getting too much money from the federal government and that we should just put up and shut up, basically.

The fact that there are now new converts to people’s concerns about the perversity factor is comforting for me as well, and I am happy that the Government Leader, as Minister of Finance, has been persuasive enough with a reluctant caucus to make them all aware of the concerns.

With respect to the budget estimates, I know full well that there are often situations where departments do not know how much a certain project will cost, but they do put dollar votes in the budget. I know very well that quite often those items that are put in the budget are simply that: estimates. They are not done with as much precision as they could be. They are put in because that is simply what is done. There may be time pressures that cause them to make those estimates less that thoroughly; it may be that there are other reasons why the estimates are not perfectly accurate.

I am also aware that conditions in the communities do change, that the priorities of the public do change, and that the government must react to those priorities that the public give them. So, the estimates that we put on the table are not a perfect mirror of what will happen in the future year. I am aware of that and I accept that in principle. What I object to is that, as we are discussing this budget, significant changes are being made. There is an obligation while the Legislature is sitting, I believe, that when a change is made the balance sheet is adjusted. I think that the government was correct; if it was going to reduce their revenue by $1.7 million and they wanted to maintain the claim of a balanced budget, they would be obligated to say where they were going to find that $1.7 million, because we are in the Legislature and we are debating this budget. To do otherwise would have meant that the government itself would have been stating to the non-executive Members of the Legislature that they are going to be asking for money for a particular project when they have absolutely no intention of going ahead with that project.

There is a deception involved. I think the Government Leader was correct to seek the change in the expenditure side of the $1.7 million, but I do not think that the argument put forward by the Minister for Community and Transportation Services that this is something that we will simply live with - we will find some lapses, we will cancel some projects - is a legitimate argument for that Minister to make. What that Minister is going to have to do is go through the budget and tell us that he is committed to a particular project, project X. He will have to tell us that he thinks that it should be done and that is the reason we should be giving him vote authority to carry ahead with that project, knowing here that he is not going to do it.

With that in mind, I think there is something wrong with that approach. While I do recognize that life does mean that changes must be made to the best laid plans of government planners, while the budget is under debate, it is important that when Ministers make an argument to convince others to spend money in a particular area, they should be, at least at the time, committed to the truthfulness of that estimate. They should have the desire to want to go ahead with that estimate.

To do otherwise basically makes a mockery of the process. We would simply have a budget that the government would table in the House that would basically be comprised of pages 2 and 3 of the main estimates. There would be a request for $483 million and we would just be told that they will come back when it is spent - the Minister of Education seems to like this idea - and we will be told how it was spent, then we could complain or make comments later.

There has to be some sense that what is being defended in the Legislature is going to be pursued, unless conditions change after we leave the Legislature. It would be the obligation of the Minister to tell us after they leave the Legislature about those changing conditions and, consequently, why they wanted to change the budget. They would do that during the supplementary process.

I accept the Minister’s arguments about what they have done with respect to the $1.7 million reduction in revenues and, consequently, expenditures, but I think to state that we are going to wait for lapses, because we all know there are lapses-

Some Hon. Member: (Inaudible)

Mr. McDonald: Yes, we do know there are lapses. We do not budget lapses. We never have.

My concern is that if we are going to do it on the one hand, there should be an effort when the spending priorities change and there has to be some accounting for that. I would not mind hearing the Minister’s comments.

Hon. Mr. Ostashek: I cannot entirely agree with the Member opposite on this issue, because if we are going to talk about known deception, the Member opposite only has to look back to when they were on this side of the House and the main estimates that they presented. They presented main estimates 18 months ahead of time saying that it was very hard to estimate and that is why they needed huge supplementaries.

I accept that it is hard to budget 18 months in advance, but the Member opposite had the experience of being a Minister on this side of the House and he knows that under the Financial Administration Act, it is illegal for departments to overspend.

As a result of that, most departments tend to over budget rather than under budget, and that is an issue that I want to discuss with the Member at some other time, to see if it cannot be corrected. The Member opposite is fully aware of that.

The Minister is saying that he does not need the money right now. When the budget was put together we did not know the figure.

Yes, the budget is in the House now, but the Minister still does not know when the money is going to start flowing so he has some latitude to try to find that money in his department. He is not being misleading in saying so; he has told the Member opposite what he intends to do. It is something that happens all of the time and that is why we do have lapses in the departments, because it is illegal for the departments to spend money that has not been voted through this House. To compensate for this they tend to over budget on items and the Minister of Community and Transportation Services, having had the experience of working in the system for many, many years, is fully aware of that.

I am sure that the Member opposite would probably agree with me that most departments do tend to put a cushion on each one of these projects so that they do not overspend.

If we want to get into deception, I can remember - and I believe it was last year’s main estimates or the year before - the Members opposite having $1.00 for legal aid in the budget. They had previous budgets to know approximately what they spent on legal aid and they were in a position to assign a figure in the main estimates.

We have done that in our estimates, based on previous experience. With the Dawson water and sewer, the Minister did not have that information and that is why there is the $1.00 line item.

I for one - and I have stood in this House before and said it - despise $1.00 line items, but there is in some instances a legitimate use for them and I think that is one.

We have tried to get departments away from using $1.00 line items as much as possible. I am sure that the Member opposite will be coming back to the House in the supplementaries and identifying where money was not spent and where the money came from to go to the Dawson City water and sewer.

I do not believe the Minister would be able to give the Member opposite that information now, because he does not known from which projects that money will be coming.

He does not need that money right now. That money will not flow for several months yet and he will have time to identify those areas where some project may not go ahead, for whatever reason, not necessarily because the Minister has decided to cancel it. I do not believe that is his intention. When you look at a department as large as Community and Transportation Services, a budget of $1.8 million is not a great amount of money. The Member opposite is fully aware of the lapses that are created in most of those departments. I believe that we have tried to be honest with this budget.

I am listening to the concerns raised by the Member opposite and I can assure him that if we have the opportunity to present another budget we will work far more diligently to make it more accurate.

The other thing that I would like to put on the record now is that because of the fall election and no budget tabled in the fall, we had a very short time to put a budget together. Also, the Member has to appreciate that we are all new Ministers on this side of the House. We did give it our best shot.

Mr. McDonald: I am not passing judgment on the competence of the Ministers at all. I am not passing judgment on the ability of a department to make estimates, well in advance of the time of the year in which the money is to be spent. I recognize absolutely that it is hard to estimate what a department will spend 18 months in advance - sometimes longer.

I am the first to admit that the public’s priorities, as determined not only by the public, but ultimately by the Cabinet, will change. We are not talking about voting for a fixed picture that will never change.

There is an important principle here, and I have to disagree with the Minister on this point. The important principle is simply this: when the Ministers come into the House they have to, in their hearts, feel that at the moment that they debate the budget they feel confident that this is their understanding of the world and their understanding of the needs for the departmental expenditures.

They may not know legitimately how much the Dawson water and sewer, legal aid or anything else will cost. If they cannot make a realistic estimate and if they still need a vote of authority, a $1.00 vote is the alternative. If that is their honest belief, that is fine. What I am concerned about though is that, when we are debating the budget, I want to be certain that the Minister of Community and Transportation Services is behind his estimates - that he means what he says when he wants money for a community works project to go ahead; that he wants the money to ensure that grader operators will continue to plow the roads; that to his best understanding those departments are the best that they can be. For him to say that he is going to cancel projects, but yet defend those same projects now, makes it very awkward for us on this side.

I do not doubt for one second that his life will change. His life will change in the month of June and it will change again in July and in August as things happen. The world is flexible, but when he is in this House, talking to us, and saying, “I need $70 million,” or, “I need $100 million, and this is what it is for,” I want to feel that that Minister is telling us precisely the truth as he understands it. When the Finance Minister said, “We were going to reduce our revenues by $1.7 million now, while we are debating the budget, and I consequently feel obligated to show right now where we are going to cut expenditures,” my reaction was bravo to the Minister of Finance because, while we are debating the estimates, that is the method they should be using.

Two weeks after this budget is passed, if conditions change and the Minister of Community and Transportation Services gets a more precise picture of Dawson water and sewer or the Minister of Renewable Resources gets a better picture of the abattoir and decides to make a decision at that point, that is fair game. If they decide in Cabinet that they are going to have to rearrange their budget priorities in order to accommodate that, I understand that absolutely. That is life - real life. But for the Minister to stand up now and say, “I need money for these things and I am going to tell you that I need money and you have to give us your support,” knowing already that they are not going to go ahead with the projects or that there are low-priority projects that they are not going to proceed with, then I have a real problem with that.

I find the actions of the government puzzling because, on the one hand, they do one thing for $1.7 million and then $1.8 million lapses. If the Members were going to be consistent, they would have said, “There is a $1.7 million decline in revenue and you will just have to wait for the lapses and for changes in priorities that we will tell you about in September or October before you will know where the money is going to come from.” Then, of course, naturally we would stand up and say that that is not exactly legitimate. What I am saying is that what the Government Leader has done, as Minister of Finance, for the whole budget is a legitimate process and an understandable one while we are debating the budget. What another Minister has done is not legitimate. They have handled the same situation differently.

I have been a Minister in the past, and when Ministers stand in their place to defend an estimate, they should feel at least reasonably comfortable that, generally speaking, they are committed to it.

Hon. Mr. Ostashek: I do not want to dwell on this issue, unless the Member opposite persists on it. I just want to say, on the record, that I believe the Minister of Community and Transportation Services is committed to each and every line in that budget. He is not about to just cancel something. He knows full well that all the money will not be spent on all those line items, just as the Member opposite did when he was a Minister. To the best of his ability, that is what the department said it needed; however, as the Member opposite is fully aware, there are reasons, especially in a department as large as Community and Transportation Services, where, for some reason, a project does not go ahead, or it has been overbudgeted, and money can be found.

The Minister does not need that money today, next month or the month after. It is several months down the road before he needs that money.

The Member is making a point that I believe is valid, to a certain extent. I also do not think the Minister is intentionally misleading this House by saying he is going to find money from lapsed funds, or perhaps he will come in with a supplementary for the Dawson City sewer and water, if the projects all go ahead. He has a $1.00 line item there to identify it. That is a legal manoeuver he can use. We are trying to come in with a balanced budget. We do not know exactly what the revenues are going to be. We are making a best case estimate of them, knowing full well that they are going to be adjusted, one way or the other. There are a lot of guesses in the budget.

Had we known at the time the budget was being put together that the Dawson sewer and water was going to cost X number of dollars for this fiscal year, then we would have identified it and re-jigged the budget to adjust for that. However, the fact is that this came up a couple of days ago, when the decision was made. The financial arrangements are still not agreed to. They have not yet been passed by the Dawson City Council. They could be rejected. Therefore, the Minister could not be making adjustments at this point as he could not be 100 percent sure that that would be the amount of money needed.

There is give and take on both sides. I am listening to what the Member opposite is saying.

Mr. McDonald: I am not going to belabour this, either. I think the Ministers, if they are afforded the opportunity, which they appear to be, to continue on and budget again, it is pretty important not to be making what constitutes budget announcements while we are still debating the budget.

Next spring, Ministers may want to bear that in mind; otherwise, we are going to have to deal with this question again and again and again.

Mr. Cable: I wonder if I could ask a few more questions od the Government Leader about the revenue side.

The O&M estimates on page 3 spell out the various sources of revenue. We have what has been euphemistically called own-source revenues - territorial revenue - in the amount of $63 million. When would that figure have been struck?

Hon. Mr. Ostashek: That figure would have been struck in January or early February.

Mr. Cable: I gather from comments I have heard previously in this House that that figure of $63 million contemplated the two Curragh mines being down for three months in the calendar year of 1993. Is that correct?

Hon. Mr. Ostashek: That is correct.

Mr. Cable: What have been the actual own-source revenues for the first four months of the present calendar year in relation to expected own-source revenues?

Hon. Mr. Ostashek: We would have to get back to the Member on that.

While I am on my feet, I would like to give a bit more of an in-depth explanation to the Member opposite to help clarify the revenue side for him. He is right that the revenues are based on Curragh being down for the first three months of the year; that has been taken into consideration. I know, or I am assuming, from the type of question I am getting here, where the Member is going with this. I just want to perhaps cut him off at the pass.

While Curragh is going to be down for more than three months - we all know that now - the Member has to remember that gold prices are up this year. There could be more revenues from placer mining. There is far more exploration work in the territory this year than there was one year ago already, so there is going to be more tax revenues from people working on those jobs. These sorts of things always tend to balance out, so to say that our figures are wrong, just because one operation is down and we are going to lose that revenue, cannot be verified at this point. There are other areas that are going to be up, which may employ more people and perhaps we will collect more taxes in those areas. Things will balance out somewhere.

Where they level off and how much of a reduction there will be in the estimates remains to be seen.

Mr. Cable: I think though, to be fair, we have taken something like 1,000 people and their income tax out of the system. I do not know if a few extra ounces of gold are going to make up for that. Do we have some idea as to whether the April revenues, which is the first month in the present fiscal year, are down from what was expected?

Hon. Mr. Ostashek: We will have to get back to the Member opposite on those kinds of figures. If the Member would put those figures on the record, we will get a return to him so that we can answer  him in detail.

Mr. Cable: I just want some general estimation. I refer the Government Leader to this letter of May 5, 1993. There is no secret where I am coming from. If the perversity factor is going to operate because of reduced own-source revenues, then we should have some rough idea as to what the anticipated reduction is. The Government Leader has provided me with the schedule attached to that letter. It would indicate that the best case, because of the perversity factor, happens when the own-source revenues drop off. It is a natural assumption, with a major private employer out of the system for at least one month and quite likely several months, that there will be significant drops in the own-source revenue? Is this not a fair assumption, or am I off in the trees somewhere?

Hon. Mr. Ostashek: The Member opposite can make that assumption, but as I say, exploration this year is up about $8 million to $10 million over what it was last year already, and employing a substantial number of people, more fuel and supplies are being bought, from which we are going to get revenues; it is going to offset some of the loss from the Faro operation. While this is not going to add to what we had because the Faro operation is down, there is going to be some balancing out there. What that is going to be is hard to estimate at this point. We can get the Member total revenues at this point. We certainly cannot give a breakdown on the income taxes at this point, but we can give a total breakdown of the total revenues that are in for the month of April and the first four months of the year.

Mr. Cable: That would be helpful, and then I could perhaps ask some questions when we get back from Ottawa. Is there any indication whatsoever from the deputy minister’s data as to whether the April revenues are down from what was expected?

Hon. Mr. Ostashek: That question is like asking for an audited balance sheet immediately after year-end. It is too close after the end of the month to have those figures, but we will get them to Member as quickly as possible.

Mr. Cable: Of course, all of us have to fly in the dark to some extent, including Members on the side opposite.

Is there any indication whatsoever for the first three months as to whether the revenues are on target, or if they are higher or lower than what was expected?

Hon. Mr. Ostashek: I have to draw the Member’s attention to the fact that - and we addressed this previously - for the first three months, the trend was already there, and the downgrading of the revenue was already built into the supplementary estimates.

Mr. Cable: So, there was something built into the estimates. Were the revenues less than what was built into the estimates, or were they what was expected?

Hon. Mr. Ostashek: Based on the information that we have available, we figure that we are fairly close on them.

Ms. Joe: I would like to clarify if I heard the Government Leader correctly when he said there was a $1.00 item for legal aid in last year’s budget.

Hon. Mr. Ostashek: I thought that there was a $1.00 item last year or the year before. I am sure I saw it somewhere.

Ms. Joe: I wanted to let the Minister know that, included in the budget for 1992-93, there was a figure of $902,000 and, in years prior to that, there was always an indication of the amount of money that we expected to spend in legal aid.

I wanted to make that correction, because I thought I heard the Member say that twice. I do not ever recall legal aid being included as a $1.00 item.

I have a couple of issues that I am a concerned about in regard to the manner in which this budget is going.

We have a budget in front of us that has been changed. We are also hearing, as I mentioned and other people mentioned, that different expenditures are being announced to the public. It is confusing to the voters out there, because they assume a budget that is tabled in the House is something that is going to be defended by the people who are responsible for it. We keep hearing about possible lapsed funds.

The Minister for Community and Transportation Services has just found hundreds of thousands of dollars that he says is going to be available. I find it very difficult to try and understand how we are going to be debating each and every one of those separate expenditures when they are broken down, because I have heard the Minister responsible for Finance say that the Minister for Community and Transportation Services knows exactly what is in his budget and how it is going to be spent, but he has also announced an expenditure of $1.00-some for Dawson. Is that going to be included in the Community and Transportation Services budget?

If it is not, I would like to know why not. They have already indicated that the money is going to come from that budget. My concern is in regard to other departments that may have promised the same kind of funding to other groups that we are not aware of. We keep hearing, daily, of other people who have had commitments from this government for expenditures. We wonder exactly which departments the monies are going to be coming out of. If there are any deep, hidden secrets about expenditures that are being promised but not included in this budget, I would like to know whether or not they are intending to take them out of funds already included in this budget.

Hon. Mr. Ostashek: I was incorrect in saying the $1.00 line item was for legal aid in Justice, but judicial recruitment was a $1.00 line item in 1991-92, as well as in 1992-93; cost of judgments was a $1.00 line item in both those fiscal years; correctional facility construction capital was a $1.00 line item in 1991-92; outside counsel O&M was a $1.00 line item in 1992-93. There were many line items. I was trying to make my case that they had some ideas, based on previous years’ costs, except for the capital cost of the correctional institute, that they could well have put a figure on.

The Member says that the Minister knows exactly where the money is going to be spent. That is not what the Minister said in this House. I said that I believed the Minister was honest in saying that he fully intends to do each one of the items in his budget. Being as familiar as he is with government, and knowing there are lapsed funds, he knows he will be able to find the money.

The other thing I want to say one more time for the record is that the offer has been made to Dawson City, but it has not yet been accepted by the council of Dawson. He would be just as wrong by putting a figure on it now, when it has not been passed by the city council of Dawson at this point.

Ms. Joe: Whether or not it has been accepted by the village council or city council of Dawson has no bearing on the decision that has been made. He has already indicated to the public that he has hundreds of thousands of dollars in his budget that are going to lapse this year. The Minister responsible for Finance is saying that he does know how he is going to spend it, but if he already knows how he is going to spend it, how is he going to defend the budget when he has already indicated that he is going to give hundreds of thousands of dollars away - more than a million dollars. It just does not make sense.

Hon. Mr. Ostashek: I believe the critic and I have previously debated this issue quite extensively and I do not want to go on forever on it. I just want to say that the Member for Whitehorse Centre seems to be indicating now that lapsed funds are a new phenomenon that has never happened before.

Ms. Joe: What has never happened before is that money is being taken out of a budget that has not passed this House. We are sitting here with a budget in front of us and the Ministers are saying they are going to spend it in a certain way and are going to be defending it. But what is happening now is that money that has been budgeted for something else is being taken out of this budget and directed toward something that was not included. That is what is different about this. It just does not happen that way.

He is not going to answer because he knows I am right.

Mr. McDonald: Some of the things that the Minister said with respect to the costs of recruitment and costs of judgments in the Department of Justice I cannot really agree with in terms of being able to predict those expenditures, but I think the points we wanted to make have been made and I would like to pursue an item respecting rural banking.

There was an announcement made by CIBC that they are going to be instituting personal-touch banking in Dawson; in fact, they have instituted personal-touch banking in Dawson. Can the Government Leader indicate whether or not the Government of Yukon is paying for this service?

Hon. Mr. Ostashek: No, we are not. I believe that was done in conjunction with the Dawson Chamber of Commerce.

Mr. McDonald: I am very happy to hear that the CIBC is starting to provide services in Dawson without having to expect that every pencil and every paper clip is paid for by the Government of the Yukon - in a manner of speaking. Can the Government Leader indicate to us what other services the CIBC is contemplating in rural Yukon in terms of expansion or contraction of service?

Hon. Mr. Ostashek: We do not see any at present - certainly none that we would finance at this point.

Mr. McDonald: I think I raised an issue last night with respect to the way the budget has been crafted, particularly in the area of land development. I want to give the Minister notice that I certainly will be speaking about that next year, because I do not think that tying up a lot of cash in land development at this time is a wise move. Ultimately, it may mean that the cost of banking services may have to be spent through an appropriation. I think I will leave that for the time being.

What I would like to do is ask the Government Leader a couple of other general questions. The first is respecting infrastructure. In the budget debate he talked about wanting to develop infrastructure for economic development, and the government’s basic economic plan was that improving infrastructure would consequently get the economy back on track.

What I have detected in the budget so far is that the expenditures have been largely dedicated to improvement of existing infrastructure, and it is less clear how this particular measure is going to improve the economic performance of the territory.

The one budget item that Members typically look for, on both sides of the House in the past, was the development of true infrastructure insofar as infrastructure related to road development, which was the resource transportation access program, and that program no longer exists in this budget.

I wonder if the Minister could give us some general statement about how the budget itself is going to improve infrastructure and how that infrastructure will improve the economic performance of the territory?

Hon. Mr. Ostashek: The Member opposite raised a very interesting point, because this is one of the statements that I have made time and time again since tabling the budget. I am sure that the Members opposite have gone over it with a fine-toothed comb to see if there are any pet projects of the Yukon Party in this budget. The sad reality of it is that there are not. There just was not the funding available. When we have a drop of 41 percent in discretionary capital available to spend, we had to really cut and twist and turn and priorize what could be done. We are committed to infrastructure development as a policy of this government - infrastructure being power grids, the supply of reasonably priced power to commercial operations and Yukon in general and a good highway system - some of those issues are going to have to wait for another year to see if we can get the finances of the government under control so that most of the money is not going into O&M as it is now, and we will have more money for capital projects.

Along that vein, I am hoping that, if we are successful in our negotiations with Ottawa in getting some relief from the perversity factor, that money will be dedicated toward infrastructure, rather than to the O&M of government. While we have not abandoned that policy or that direction, we had to face the reality of the finances that we had to work with.

Chair: Is it the wish of the Members to take a brief recess at this time?

Some Hon. Members: Agreed.


Chair: I will call Committee back to order.

Is there any further general debate on Bill No. 6?

Mr. McDonald: I would like to pursue this line of questioning for just a few minutes. Because the government has made such a high priority of the development of infrastructure, one would expect that, in their first budget - which they took the trouble to develop themselves - there would be something in it that would reflect their interest, particularly as the budget speech itself dwelled so thoroughly on the subject of infrastructure.

The problem I have is that the one program that was in existence and would have been no trouble to retain was one of the programs that was cut. That was a program that responded to the needs of the Yukon Party government, in that it was the one area in which they announced that they would be expending some effort.

We have a budget that is approximately $480 million. We know that there is, despite the Government Leader’s protests to the contrary, some flexibility here to do certain things.

In the past, the NDP government tabled budget after budget that had road construction as a major feature, to the point even that a national transportation organization announced that the Yukon was one of the biggest spenders in road building in the country, as a percentage of its budget. We spent large amounts of money on water-sewer projects, including the water-sewer system in Dawson, so I am going to have to ask the Minister of Community and Transportation Services what he had in mind when he said that the Government of Yukon did nothing over the last seven years. However, that is a different issue.

The point is that fairly large amounts of money were spent on things like infrastructure, as defined by the Members in the Yukon Party and, at the same time, in the RTAP program alone for the first four years, $10 million was budgeted and spent to support the construction of roads, primarily for the mining industry. Even while there was limited flexibility then, there were still budgets tabled in the Legislature that promoted infrastructure, even as defined by the Yukon Party now.

At the end of this year, we will have spent $500 million, or close to it, and the government’s prime objective in this budget speech was the development of infrastructure that had an economic payback. Of course, one would want to judge the budget by the standards the government set for itself - that is, the construction of infrastructure that had an economic payback - and we have been going through the budget, as the Minister indicated, with a fine-tooth comb, but we are having some difficulty identifying those areas. We do have some evidence that many of the traditional expenditures are being promoted and, certainly, I admit that there is a large portion of the budget for which there is not a great deal of flexibility, unless one wants to cut back dramatically in the number of teachers, or something of that nature - or cut back on the number of public servants.

At the same time, that is not unlike the situation that occurred in 1985, 1986, 1987, 1988, 1989, 1990 and 1991. I am a little puzzled as to why there was not even a symbolic gesture made toward infrastructure development because that is the cornerstone of the budget speech. I really would be interested in knowing what the Government Leader has in mind.

The second and related issue is that I would like to ask the Government Leader a question about formula financing as it is related to this subject. One of the main justifications for formula financing - as I understood it - was that the Yukon would receive funding so that they could provide for its citizens a level of service that was equivalent to that found elsewhere in the country. The Yukon government has in the past done a lot to ensure that the level of services that are provided to Yukoners are maintained through the budget.

I would like to know whether the government feels that it is an important principle to defend in the Formula Financing Agreement or whether he feels that the direction should be changed, substantially to one where we should not care so much about the level of services we provide as a justification for what is admittedly a very large transfer from the federal government, but one for which we are trying to put forward funding for economic infrastructure - infrastructure with a payback. When the Government Leader speaks with the federal Ministers, what argument is he making with them about this matter?

Hon. Mr. Ostashek: This government is on record - and I believe that we demonstrated it through the manner in which we put the budget together - that we believe there has to be an acceptable level of service for the people of Yukon. The Member opposite and I could have different philosophical beliefs about how that service should be paid for.

I believe that we need some seed money from Ottawa for infrastructure. I would like to go on record saying that I wish I would have had the opportunity that was afforded the Members opposite in 1985, when they took office and had a substantial surplus and a very, very lucrative Formula Financing Agreement in place that gave them a tremendous amount of money. I would have loved to have been able to take over a government in that situation, but regrettably I did not take over in that situation.

Getting to the topic at hand, if we are able to come up with some kind of bulk payment from Ottawa for adjustments on the perversity factor - we do have a substantial level of service provided by government to the Yukon citizens - I would not want to see that extra money going into operation and maintenance of government. I would like to see that money directed into infrastructure to further broaden our tax base in Yukon. That would be the goal that I would be seeking.

As far as the RTAP program goes, the Member opposite said that millions of dollars has been spent on it. I would like to draw to the Member’s attention that, last year, there was a total of $405,000 in the RTAP program, with two person years attached to it. We just did not feel that we were getting value for service there, and we thought that we could help the mining community in other areas without having to have that line in there without an adequate amount of funds to put into the thing.

The Minister of Community and Transportation Services will be better able to answer questions, when we come to his department, on the justification as to why that particular issue was the one that was dropped. It was not because we are not committed to resource development in the Yukon, or to the broadening of our infrastructure. We felt that we could do it in other ways.

When we put infrastructure back in place, it does have a substantial payback to the Yukon and can do much to develop our own tax base and lessen our dependence on federal finances. Cutbacks to transfer payments to the territories and the provinces are inevitable. They are going to continue. I believe that we have to get off that treadmill.

There are going to be philosophical differences between us and the Members opposite as to how we do it. I do believe that we probably do have the same goal in mind, even though we do not agree with each other’s position. We are going to continue on that route, and I wish that we had had the money in this budget to be able to embark on it in a real manner. As the Member opposite is fully aware, the $10 million that we are negotiating with the federal government is going to go to infrastructure. I hope that we are going to get some relief from the perversity factor. I am going to make a very, very strong argument in Cabinet that that money go to infrastructure.

Mr. McDonald: There is a lot to respond to there. First of all, I would like to say that the now-government of the Yukon Party made a great deal out of the fact that they felt that the infrastructure was not being fully developed while the NDP was in office, and that we were not getting the economic payback from the resources that were being provided by the federal government.

The first $500 million installment in the Yukon Party’s new budget behaves very conventionally. There is no new infrastructure being developed; there are roads being resurfaced or reconstructed. There are, perhaps, some buildings being built. I am still having a hard time understanding the philosophical position of the government. I am prepared to accept that we have differences in philosophy, but I do not want to announce that fact until I know what the government’s philosophy is. I know where I stand. I have a number of years of record to demonstrate, through action, the direction we have taken.

I do not see a change in the way infrastructure is being developed, and I do not see new infrastructure being developed or any reserved funds for this year. I do not see a major difference. There are some particulars that we take issue with, but that is to be expected.

In general terms, I do not see the new change. We are going to have the first $500 million installment budgeted and spent without any change in direction. While I think we can all agree that we would like to lessen our dependence on the federal government and develop a larger tax base - though I think we have already agreed that we are not exactly excited about the concept of new tax revenue from that larger tax base, until the perversity factor is changed - I am still having a great deal of difficulty understanding what the government is up to.

In the supplementary estimates, we just went through the process of rolling into the base grant the capital for the Alaska Highway. There is certainly some flexibility there. If the government is committed to funding a certain amount for the Alaska Highway, as an example, that is fine. I have no particular objection to that, but they are making a choice. They are setting priorities.

They have made it clear that they do not want to do things like the NDP did. The NDP typically built schools and that type of thing. Even though we did not hear any objections to those projects in principle, when they were initiated, we heard concerns that we were building things like schools when we should have been building other things. I want to know what those other things are.

The past Leader of the Conservative Party indicated that infrastructure development meant power and roads. I had the opportunity, because I represented Mayo, to point out that Mayo has paved roads from downtown Mayo right through to downtown Whitehorse. It has surplus megawatts. There is still no economic activity there, and this year is as bad as it has ever been. One might argue that a good highway system and lots of available power are insufficient to lead to economic recovery. That situation has been true in Mayo for some considerable time. On top of that, there are loans programs that have been in existence for some considerable time, but they are still not a major economic activity there.

I know the reasons why there is not major economic activity there. The government has done a great deal - or what it could, in many respects - to incite some activity. The Minister will have to appreciate that I was on the butt end of a lot of criticism for not having done more. I am in a reasonable position, now that the government has tabled its spending plans, to ask what the government is planning to do that is new.

So, I appeal to the Government Leader to give us some sense of what they are talking about when they talk about the development of infrastructure with an economic payback, and demonstrate to us where it is showing up in the budget and what precisely it is that they are doing.

Hon. Mr. Ostashek: I just want to reiterate for the Member opposite that he has to appreciate that we had $40 million in discretionary capital to work with. That was all we had to work with. Even out of that discretionary capital, there were several projects that were already committed to by the previous administration that we were not able to cancel or change. They had to be carried out. So, we did not have a lot of discretionary capital to implement our plan.

Now, the Member opposite says power and roads do not necessarily mean economic development, and he uses Mayo as an example. I have to agree, and that probably points out one of the glaring reasons why we need a Yukon-wide power grid, so you can get power to the places where you need it. To have it in an isolated area that is not being developed is of no use to anyone, but if there was a grid that the power could be pumped into and moved to wherever it was needed, that would certainly help.

I want to go back to our capital budget for this year. While we do not have the discretionary funding to spend, I want to look and compare the Alaska Highway reconstruction of $13 million in 1992-93 to in excess of $27 million this year. That is infrastructure - upgrading highways will make it cheaper for everybody to operate in the Yukon. Next year, we hope we can get more discretionary capital to start some projects and direct that money to roads, to resources, or whatever is required - energy grids, whatever. However, because it is coming from other sources, that money has to be spent in those areas, but it is infrastructure.

The Members opposite and we disagree on what is and is not infrastructure. Now the Member opposite says that they built some schools when we were in Opposition and the Members on that side of the House did not really disagree with that, but I think what we disagreed with was the extravagance of some of the buildings that were put up in the Yukon. We also disagreed with the horrendous costs, such as Yukon College that ran in the neighbourhood of $50 million when it was complete. While it is a fantastic facility, and no one can knock for looks, it is a tremendous debt load on the taxpayers of the Yukon at this point. It is not wealth creation, it is debt creation.

It is the same for the extended care facility. How are we ever going to recoup enough money for the operation and maintenance of that fabulous building? Those are the kinds of construction initiatives taken by the former administration that this party had problems with. We believe that the money would be better spent on infrastructure that would create income that will help companies employ more people in the Yukon, extract resources from Yukon and power plays a major role in that.

We are now undertaking to restructure the Yukon Development Corporation to carry out the mandate, direction, philosophy and the policy of this government. We are starting to make the initial moves.

The Member opposite has to appreciate that we have been in office for less than six months. We had to put a budget together, we had to fulfill some commitments that were made by the previous administration, and I am hoping that the next budget that we table in this House - if we have that luxury - will be a clear direction of the way this government wants to go and what our priorities are. We will have a little more flexibility in putting the next budget together than what we had in the preparation of this budget.

I would ask the Members opposite to bear with us and we will show them what our true policy is, but we have already taken initial steps in that direction.

Mr. McDonald: I am afraid that there are some things about which I agree with the Minister and there are some things that I take serious exception to. First of all, when I was Minister of Economic Development, I was challenged to demonstrate how the communities of Ross River and Mayo could have their regional wealth creation situation improved - how they would be developed.

I can tell the Minister that exporting power from Mayo is not going to help the economy of Mayo. By simply building a grid is not, by itself, going to create power. The Mayo district is rich in mineral resources: coal, copper, silver, lead and zinc. There is surplus power, highway development, paved roads and even some mining infrastructure. The economy there is flatter than a pancake; there is no question about that.

All I am entreating the Minister to understand, now that they are in government, is the complexity associated with economic development in the regions. If the Members are lucky they will be here three years from now and we will be discussing their latest instalment of one-half a billion bucks.

If they have not reconstructed the economy of the Mayo district, for example, they, by their own standards, are going to be roasted in the Legislature, because there has been no analysis of the access to capital, no analysis of access to markets, no analysis of the ability of those areas to produce experienced entrepreneurs or trained personnel - all those factors which lead to economic activity.

All I am saying is that the time has come to stop talking about roads and power alone as creating economic activity and show some sophistication, because there are living examples in this territory of regions that are rich in mineral resources, roads and power and have no economic activity.

I do not take exception to funding for the Alaska Highway; for heaven’s sake, we negotiated the Alaska Highway agreement. We are not surprised that there are major increases in expenditures on the Alaska Highway.

I do say that there is some flexibility, even in the Alaska Highway reconstruction, in terms of determining how much money the Minister or the government may want to spend in that particular area. If they choose to spend $27,100,000 on the Alaska Highway, that is a reflection of the fact that they have decided to spend $27 million. If they wanted to spend $24 million on the Alaska Highway, they could spend $24 million. That is a reflection of their priority. They cannot say that they have no flexibility, because they have some flexibility.

The Government Leader took issue with the extravagance of our school projects. Having been Minister of Education for some time, I really do object to the characterization of building education facilities and supporting education programs as, somehow, debt creation. Clearly, education and training by themselves have to be characterized as developing the potential of the territory - educating our children for work. The Yukon College cost $39 million. It did not cost $50 million. Now that the Ministers have access to those departments and their figures, they will be able to determine that to be the case.

I believe that was a wise expenditure. The Ministers opposite thought that there was some sort of increase in budget simply because the Minister, Mr. Tracey, announced the intention of the PC government, in the spring of 1985, to proceed with the college without consultation with the department. The Members can check with the department for the answers. He announced that the college would cost $24 million. The press release came from his office. There was nothing to back that up. There were no schematic drawings. There was no technical analysis whatsoever to justify that figure. So, to come along and say that the $39 million construction figure represented an increased cost of construction is dishonest.

For the record, I do not believe for one second that education facilities are what the Minister would call an increased debt load. I think that frame of mind is not progressive in any sense of the word.

If we are going to be investing in the future of this territory - the economic future as well as the social future - we should be expending money in precisely that area and not be apologetic for it.

The Members opposite have taken exception to some of the costs of some of the schools. I invite them to look at the costs of Porter Creek Junior High School - a very expensive project. That was certainly a project that seemed to cost much more than was originally intended and it was a project that seemed to be a little out of control.

I am not saying for a moment that the intention to spend in that area was wrong. I think the expenditures in that area are a reflection not only of our civilized nature but also our faith in our children and our faith in the future economy of this territory, and the sooner this territory and Canada understand that, the better off we will be. To characterize resurfacing the Alaska Highway as infrastructure and schools as debt is a problem.

In any case, while I support the resurfacing and the realigning of the Alaska Highway, I do not believe the Minister can make a really credible argument that this constitutes a major investment in economic infrastructure that is going to have a large payback for the territory.

It will improve the safety standards, and we support that. It will improve the travelling time, and we support that.

There is not a lot in this budget, in this first $480 million instalment, that would suggest that the Ministers have made a change in direction toward the objectives that are so clearly and ostentatiously outlined in the budget speech. One would believe, based on the budget speech, that there had been major changes made to the direction of the territory’s budgeting practices, yet there is not a lot there.

I would like to ask the Minister if he would tell us a little more about the $10 million. It is not that I want to go on and on about it but we have not heard anything from the Minister for a number of weeks now, yet we understood that many weeks ago this announcement for the $10 million was imminent. I wonder if he could tell us whether or not the $10 million is, in fact, forthcoming and whether or not it is forthcoming in the near future and what the $10 million is going to be invested in. The Minister indicated that this would constitute part of their financial flexibility to invest in new infrastructure, yet others have already committed that it is going to be for resurfacing the Top of the World Highway and Campbell Highway and other projects and improvements of existing infrastructure.

These are laudable goals - as I understand it, at least, unless I have this wrong, and the Minister should correct me, because I do not want to leave under misinterpretations - but they do not constitute the construction of new infrastructure that has economic payback.

I would appreciate it if the Minister could share his thoughts on that with me.

Hon. Mr. Ostashek: First of all, before I share my comments on that, I want to set the record straight.

We have no opposition to building schools and educational facilities in the Yukon. They are required, and they will help to educate people for the future of the Yukon.

We do have problems with the elaborateness of some of the buildings constructed. We feel that more classrooms could have been put in, and we would still have been able to educate our children as well as in these elaborate buildings. We would have had fewer operation and maintenance problems in the future.

That is where we differ; the more elaborate the building, the more operation and maintenance there is on it. There is no doubt about that. The Member opposite may not agree with that, but we can choose to disagree on that issue.

The Member opposite seems to be indicating that we did not have to spend that money on the Alaska Highway. It is not my understanding that we could take that money and spend it somewhere else. I do not believe that is part of the agreement that was negotiated by the Members opposite. I could be wrong and, if I am, you better grab your soap, because I could have used it in other places that had a higher priority with me.

The fact remains that that money is going for infrastructure, and that will help in the future development of the Yukon.

As for the $10 million, I will check on the finale of that in Ottawa. I know the money is there. We have not heard from them for a few days, and we are trying to track down over exactly what time period the money is loaned. At one time, my understanding was that the money had to be used within two years. Now, I understand it can be used over four years. The priorities for that money have been somewhat addressed in this House, since we have to match it dollar for dollar. The Members opposite have said that they want to see the line items in the budget book for this year. We will be using it for matching funds on the Campbell Highway and on the Top of the World Highway and, if possible, we would like to take some of that money, if the Casino property decides to go ahead, and direct it into future years to upgrade the road into that area. Those are the areas that we are looking at.

The Member opposite is right. Not only power and roads will generate economic activity in Yukon. There is a regulatory regime that has to be addressed, especially for the mining community, and an environmental concern that has to be addressed. All of these groups have to learn to work together to address these issues.

We cannot have one group standing up and saying that we cannot do this here and we cannot do that there. We have to work together to protect the environment and, yet be able to endeavour to pursue what we are good at in the Yukon, and that is mining.

That is the basis of the economy of the Yukon and will be for many years to come. I truly believe that. We have to simplify the regulatory process so that the up-front costs of bringing the mine into production are not so horrendous that we discourage mining in the Yukon and in Canada, as we are doing now. These companies are choosing to go to other countries where they feel that they are more welcome, and they are taking a lot of jobs with them. Those are very critical and important issues that must be addressed. We are working to do that, and we will continue to work in that direction, to see if we cannot streamline the regulatory hearing process, so that the costs of bringing mines into production are not so horrendous that it discourages mining companies from exploring in the Yukon.

Mr. McDonald: I would like to begin by asking the Minister to check something out for me. I think I may be labouring under some misapprehensions here. I do not want to labour under them for very long.

My understanding of the Alaska Highway transfer agreement is that the 1992-93 transfer payment changes sheet - the supplementaries - showed the addition of the Alaska Highway transfer as $23,865,000. That was a combination of operation and capital funding. This operation funding, I think, was around $13 million and the balance was on the capital side. That was rolled into the base of the transfer itself.

We have an expenditure for the 1993-94 fiscal year of $27,100,000. The recovery is $21 million. There is a suggestion that, of the expenditure on the Alaska Highway, we have $27 million being expended and $21 million being shown as a recovery. Yet, there was some suggestion that at least a portion of the capital was transferred to the base grant of the government.

Perhaps before I respond to the other points that the Minister made, he could explain this problem to me.

Hon. Mr. Ostashek: If I am correct, anything that is rolled into the base could be used as discretionary funds and could be spent as we see fit. Whatever is recoverable has to be spent on that project. I draw the Members’ attention to the debate in this House last year when the Members on the other side said they were going to see that the government spent the money on the Alaska Highway.

Mr. McDonald: That is right. The Members of the Opposition at the time said that they wanted the government to spend every penny that was transferred to reconstruct the Alaska Highway on the Alaska Highway. The Minister just said - and I listened very carefully to what the Minister said - that if he thought he had some flexibility he might have had different priorities. This is an important point and I am not saying that I disagree with him, I am saying that the two positions are contrary. I want to be sure that we both understand the base information.

I am not certain that I understand the full situation. It seems that there is going to be $21 million in money that is going to be recovered for the Alaska Highway, so it is dedicated to the Alaska Highway project according to the main estimate capital budget, yet there seems to be also a major transfer of monies that have already been rolled into the base. I am not certain how those two jibe. If it is true that we are going to get a $21 million recovery and we have $10 million or more in the base already, the total expenditures on capital would be in the $30 million range, rather than in the $27 million range.

I would ask the Minister if he could reconcile these figures for me so that I can better understand what was committed, what was rolled into the base of the Alaska Highway transfer agreement and what funding is still contingent on the Alaska Highway construction going ahead. Could he give us that information at some point?

Hon. Mr. Ostashek: I will not be able to give the Member the information now. I will get it back to him in writing.

Mr. McDonald: That is an interesting subject. I thought of it just now. But it is an important one - I only realized that there may be a little bit of a difficulty just now.

Because the Minister cares so deeply about infrastructure, I know that he will get back to me right away with the information. I think the point is, no matter how you cut it, and no matter what you consider the situation to be, there is some flexibility. The recoveries are $21 million. The expenditures are $27 million. That is a reflection of priority.

There is the issue of road construction and I will get into that with the Minister of Community and Transportation Services. I will indicate right now that it is my understanding that construction in the order of $27 million is going to be a very attractive proposition to every road construction company anywhere, particularly when you are going to spend $27 million in one year. I note that when the Klondike Highway South was reconstructed at a total of about $30 million, over a period of four or five years, it was enormously attractive to large construction companies elsewhere. They came in and they bid very competitively. One might even characterize their bidding as being predatory, in order to secure the contracts. I am hoping that the Minister understands that the $27 million worth of bait, to put it in terms that he might understand, is going to attract some very big fish.

One can only hope that our relatively small road construction industry can compete. In any case, irrespective of the actual terms of the agreement, one might argue, as we did with the Yukon College construction, that even though we wanted to build this project, we spread the construction out so that local industry could take full advantage of it, rather than providing for the construction in one large contract or over a very short period of time. That would have meant that the total construction industry would have absorbed all the work they could handle and then there would have been surplus work for other companies outside the territory to take advantage of.

I think that the Minister better think carefully when he talks about the costs of some of the schools being substantially higher than they were before. With the exception of the Robert Service School in Dawson, which has never been under contention in the House - but maybe it is - it is a reflection of an increased cost from a school that had previously been in existence, if that is what he is referring to. The Members opposite certainly have taken issue with the building and the construction of some of the schools. I will take that up with the Minister of Education because I do disagree with him.

I think if we are going to build good facilities for anyone, it ought to be for children. I notice that the previous government built extremely good facilities for lawyers. When that project was first built, I though that building schools that look like Jack Hulland and Jeckell, when we were building monuments for lawyers, were priorities in reverse. If it was going to be an expenditure that was a reflection of our civilization and that was a reflection of our pride in our institutions, it ought to be in our schools, if not any place else.

The Minister indicated that the $10 million infrastructure grant would be dedicated to the Top of the World and Campbell Highways and, possibly, the Casino Trail. The only new infrastructure the Minister refers to is the Casino Trail. That is a project that has been funded in the past quite substantially by the RTAP program. How much of the budget of $10 million is going to be dedicated to new infrastructure - meaning new roads - and how much is going to be dedicated to existing roads? Is there any infrastructure that the Ministers are contemplating, aside from roads, that would constitute being new infrastructure?

Hon. Mr. Ostashek: I believe I missed the last part of the Member’s question on infrastructure, but the $10 million, as we told Members of this House, has to go to roads. That is one of the stipulations on it. We cannot use it for energy or anything like that. That is what we tried for to start with.

I cannot give the Member that breakdown right now because of the limited capacity we had within the budget we presented for discretionary spending. We are going to use some of that funding on the Top of the World and the Robert Campbell this year. This will free up some of our discretionary monies next year, which we can perhaps dedicate to some other project that is going to be required. We could then possibly help a mine come into production, provide access to it or even supply energy, if that be the case, out of discretionary funding. This would offset some of that money, so that we would be able to move our own money around in other areas.

Again, because of the lateness of the money coming this year and the budget being tabled, we are going to tap into it for as much as we can this year and make a concerted effort next year to disperse that money into other areas.

Mr. McDonald: We will wait to see what transpires there.

I have a question on a separate subject. I want to ask this question before the Minister gets on the plane to the world of big politics in Ottawa.

I have another question that could probably be answered fairly quickly, while I wait for the Minister to return.

The government has a leave accrual account for vacation leave and so on. It is fairly large right now and I would like to ask the Minister whether or not it is the policy of the government to ensure that the leave accrual account is fully funded, meaning that all leaves are accounted for in the account and that there is funding set aside for all leaves, or is he prepared to accept something less than a fully funded account?

Hon. Mr. Ostashek: I just discussed it with the deputy minister, and it is my understanding that we set aside all leave accruals that are payable to employees when they are terminated. However, I guess there is some discretionary and, if we are short of money, we could probably look at that, as long as we have a substantial balance there. I guess this relates in the same capacity as when one looks at the Workers’ Compensation Fund and the amount of money they have there. Do they require that much of a reserve? It is an area we will be addressing.

Mr. McDonald: They are similar funds, but I would argue that there is a difference. The chances of the Workers’ Compensation Fund having to cover the cost of a significant accident are real. The chances of the government closing its doors tomorrow and paying everyone off are virtually nil.

My own view - and the Members can take this into their own decision-making process, so they can anticipate they will not get a lot of criticism, at least from me - is that, despite what the Auditor General may wish, I do not believe that $19 million, $20 million, or whatever it happens to be in the leave accrual account is required.

I noticed in the budget that there is a 19-percent increase in this particular area. We want to move from $3.2 million to $3.8 million in expenditures here and make the fund larger and larger, exponentially. The growth of the fund will far outstrip the expenditures that are made on an annual basis. There has to be some time when this fund is brought under some semblance of control. I would be interested in knowing what policy statement the Minister could come up with to explain how large they feel the fund should be, so that we do not have to make a priority of putting money into a reserve account that is quite artificial. I would like to put the Minister on notice of that question.

Hon. Mr. Ostashek: I will answer quite quickly. The Member has made a very valid point. You certainly do not need all of the money there. It is not an issue that we have addressed and what we have done in this budget is to follow the policy of the previous administration as to how they were handling it.

I am not saying this is something that we have to continue to do, but it is one of the areas that we will be looking at.

Mr. Chairman, I move that you report progress on Bill No. 6.

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. 6, entitled First Appropriation Act, 1993-94 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.

Speaker:  We are now prepared to receive the Commissioner, acting in his capacity of Lieutenant Governor, to grant assent to the bill that has passed this House.

Commissioner enters the Chamber announced by the Sergeant-at-Arms


Commissioner: Please be seated.

Speaker: Sir, the Assembly has, at its present session, passed a certain bill, to which, in the name and on behalf of the Assembly, I respectfully request your assent.

Clerk: An Act to Amend the Income Tax Act.

Commissioner: I hereby assent to the bill as enumerated by the Clerk.

Commissioner leaves the Chamber

Speaker: I will now call the House to order.

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 5:22 p.m.

The following Sessional Paper was tabled May 11, 1993:


Government revenue streams for 1993-94: letter to Mr. Cable from Government Leader dated May 5, 1993, showing most recent calculation of best and worst case scenario (Cable)

The following Legislative Returns were tabled May 11, 1993:


Extended Care Facility: questions related to costing and financing (Ostashek)

Oral, Hansard, p. 851-52


Contract Review Committee: recommendations resulting from hearings held to date (Devries)

Oral, Hansard, p. 789


Department of Government Services: mandate review progress evaluation (Devries)

Oral, Hansard, p. 790


Department of Government Services: response to questions asked on renovations to public buildings and on energy conservation during debate on the Supplementary Estimates, 1992-93 (Devries)

Oral, Hansard, p. 791