Whitehorse, Yukon

Tuesday, May 25, 1993 - 1:30 p.m.

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

Speaker: Are there any Reports of Committees?


Introduction of Bills.


Bill No. 9: Introduction and First Reading

Hon. Mr. Ostashek: I move

THAT Bill No. 9, Interim Supply Appropriation Act, 1993-94 (No. 3), now be introduced and read for the first time.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 9, entitled Interim Supply Appropriation Act, 1993-94 (No. 3), be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 9 agreed to

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

Are there any Notices of Motion?

Are there any Statements by Ministers?


Report on meetings in Korea re Curragh Inc.

Hon. Mr. Ostashek: I rise today to provide Members of this Assembly with a report of my meetings held last week in South Korea regarding Curragh Inc.

Members of this Legislature will recall that when I announced two weeks ago that I would be going to South Korea I said that my purpose in going was to make potential investors aware of the fact that we in the Yukon are open for business, and that we are supportive of Curragh in their efforts to seek investors.

In my meetings in Seoul, that was a message that was delivered each time, on behalf of Yukoners. The meetings can best be described as productive, as evidenced by the announcement earlier today by Curragh Inc., which I want to address in a few moments.

My meetings included a private meeting between myself and the chief executive officer of Korea Zinc to discuss the opportunities to invest in the Yukon. I can report that I was assured, separately, by both the CEO of Korea Zinc Limited and the chairman of Curragh Inc. that the involvement of the Yukon government in these meetings was significant in achieving progress between Curragh, Korea Zinc and Samsung Corporation.

I also want to point out that I was extremely pleased by the positive approach of the Korean officials who are focused strongly on long-term supplies of zinc at competitive rates, with adequate security and protection for their investment.

Earlier today, Curragh announced the major elements of an agreement signed between Mr. Frame and representatives of Korean Zinc Limited and Samsung Corporation. The agreement involves the provision of $50 million of new equity to Curragh Inc. conditional upon Curragh meeting a number of significant terms and requirements, one of which is the company will be required to restructure.

Toward this end, the company will be attempting to raise an additional $25 million in new equity. At the same time, the company will be continuing to work with its creditors and note holders, with the federal government on issues related to royalty assessments and its mine closure plan, and with the Government of Yukon on support for Grum stripping along with a long-term contract for power at competitive rates.

Work on restructuring Curragh and on securing new equity will require the active support of a number of parties over the next few months, including the creditors, senior note holders, the Government of Yukon, the Government of Canada, and the Korean companies. A successful restructuring and reopening of the Faro package will require the agreement of all of these parties.

Curragh has set what some might describe as a very optimistic schedule that will require immediate and substantial cooperation on the part of all of the involved parties.

I can assure this House and all Yukoners that the Government of Yukon will do its part to ensure that there is no undue delay in meeting this schedule. I would expect that Curragh may now wish to return to the negotiating table to discuss a loan guarantee with appropriate security for the stripping of the Grum deposit.

There is much work still to be completed before Curragh will be able to reopen operations in Faro, but we have taken a major step toward a positive resolution of this issue, and toward the reopening of a mine employing Yukoners.

Mr. Harding: I would like to say before I begin my response that although we were glad to receive a ministerial statement regarding the events that took place with the Government Leader in Korea, we received the statement after 1:00 p.m., which does not allow us much opportunity to prepare a response for the Legislature.

We are certainly pleased to hear the announcement, both from the government and Curragh today regarding the efforts to successfully come to some sort of solution for the pressing problem that faces the Yukon today - that is the reopening of our mines here in the territory. The press release from Curragh, and the ministerial statement, are somewhat vague. We are certainly very anxious to hear more about government commitment to the Grum stripping project. We are also very anxious to hear more about the negotiations regarding power rates that we had asked about last week in the Legislature.

We think that it is probably quite critical, as outlined at this point, that some form of response from the government regarding their position on power rates comes to pass in the very near future. There is another very pressing issue that we think is important. The government has committed that Faro residents do, first and foremost, the stripping because they live in the area and they have a direct investment in the community of Faro and the Faro mine. The government has committed to this in the past, through the Minister of Economic Development. We are anxious to make sure that that commitment is upheld.

This is an opportunity for the government to seize the day and to burn the midnight oil to come to a solution. This is the opportunity and the window of hope. We would like to see the government give it their full attention and commitment. We want to see Yukoners involved. We do not want outside companies directing the show. We certainly do not disagree with the government using some advisors, but we want this to stay with the Yukon government in the hands of the political decision makers who are the people you can give the yea or the nay.

YTG knows what it is going to take. It is going to take some sharing of the risk. We have said that all along. This press release and the ministerial statement today confirm that potential investors want to see some commitment by YTG and some sharing of the risk. We are very interested in finding out what “appropriate security” refers to in the ministerial statement.

We will be exploring that in the future. The offers made by the government thus far have not been successful. While it is one thing to come up with wonderful proposals, it is another thing to get to “yes” in a negotiating deal and we certainly want to see that take place. We suggest to the Government Leader that there is full recognition now of the need to get all the players together. We have said that for a long time. We would suggest to the Government Leader that we get all the players together in Whitehorse where the government can get a direct handle on it, because their commitment is going to be called upon.

The people of the Yukon have been faced with higher taxes, higher phone bills, higher power rates and 16.4 percent unemployment. Yukoners need some hope and we hope that the government seizes the day and creates that hope for the reopening of the mines in Faro and Watson Lake in the very near future.

Hon. Mr. Ostashek: I thank the Member for his comments, and I apologize for the lateness of the statement but, as the Members are aware, I just returned this morning; we had a Cabinet meeting this morning, after which we had to get our ministerial statement ready. It was not by design that we got it to the Members as late as we did.

The government is committed to the Grum stripping. I have said that, but that is only one issue that has to be resolved. There are many, many more issues, and if the Members opposite thought that our terms and conditions were in a dream world, I would say that this one is going to be a nightmare for Curragh to resolve. There are a lot of terms and conditions here that the company has to abide by, and it needs the support not only of the Government of Yukon, but the support of their creditors, the support of their note holders, the support of the banks and quite possibly the support of the union for a new negotiated contract. The Korean people, in their discussions with me, were very, very concerned about the strikes that took place in the Yukon two years ago. That was one of the issues they brought up at the meeting with the chief executive officer and me at Korean Zinc. These people are very cautious investors, and my understanding is that they will be in the Yukon in the very near future to do a due-diligence study on the company.

We are going to work as diligently as we can, but the ball is really in the hands of the court at this point. June 2, Curragh will go back to court with their restructuring plan, which is another one of the conditions that Korean Zinc has put on this. The company has to be restructured and we could end up with a company in the Yukon that is going to be at least 50 percent owned by foreign investors and quite possibly 75 percent owned by foreign investors.

There is also the problem of it having to be approved by the federal government.

I am going to find it interesting. Along with that, Curragh is asking for some environmental concerns to be relaxed for a period of one more year. I am going to find it interesting how the Members opposite are going to reconcile those issues - environmental and foreign investment - when their party has come out very strongly about foreign investment in the political arena. Curragh has asked the environmental concerns to be delayed for at least one year. I am going to be very interested to see if I can get the support of the Members opposite when I come back to the House for that support.

Speaker: This then brings us to the Question Period.


Question re: Curragh Inc., Asian investors

Mr. Penikett: As always, if the Government Leader wants our support, or that of unions or anyone else, he will have to involve us in the discussions. We have not been involved thus far.

Let me ask the Government Leader, since it is clear from the statement today and the press release from Curragh this morning that Clifford Frame is moving heaven and earth to get his companies back in business, what exact commitments the Government Leader agreed to make in Korea toward the Grum stripping program and the reopening of the mines at Faro and Watson Lake?

Hon. Mr. Ostashek: I can inform the House that there have been no new commitments made.

As I said, the Korean people are very cautious people. They want security for everything they do. They sympathize with the Yukon government’s position of wanting some security, also.

Mr. Penikett: They may be sympathetic with the Yukon government’s position, but, no doubt, they are interested in finding out if the Yukon government is going to move on any of its conditions, just as they are presenting some of their own.

Curragh’s press release refers to conditions about the Grum stripping, competing power rates and deferral of the mine closure plan, as mentioned by the Government Leader. Did the Government Leader offer any commitments whatsoever with respect to Grum stripping or competitive power rates to help get these mines back into operation?

Hon. Mr. Ostashek: As I said in my first answer, I have not given any firm commitments. I have told all the players in this game that we are prepared to sit down and negotiate with them to see that the Grum stripping can be accomplished.

We are not only looking at power rates for Curragh Inc., but we are going to be looking at power rates for industry as a whole in the Yukon; it is part of a whole package.

Mr. Penikett: When we asked questions before the Government Leader left, his Minister of Economic Development told us that the Government Leader had a flexible mandate. The Government Leader now seems to be saying that he went to Korea, was involved in discussions and nothing changed at all with respect to his position.

Would the Government Leader tell us - since he did not give any firm commitments - if he gave any general commitments or expressed any general willingness to negotiate in earnest about Grum stripping or power rates?

Hon. Mr. Ostashek: I was not asked to give any firm commitments while I was in Korea. I did indicate that the Yukon government is prepared to become involved in the Grum stripping and we are prepared to look at the power issue; those are the two statements that I made when I was in Korea.

Question re: Curragh Inc., Asian investors

Mr. Penikett: Obviously, we are going to have to do more than look at these questions, because as I understand the situation the $50 million from the Asian investors is contingent on the government reaching some agreement on the Grum stripping and power rates.

Power rates were mentioned on the way to Korea and on the way back. Does the Government Leader want us to believe that there were no serious discussions while he was with Mr. Frame about what kind of power rate package might be acceptable to Mr. Frame and the Korean investors?

Hon. Mr. Ostashek: The Member opposite can believe whatever he likes. What I have said is that I did not make any firm commitments while I was in Korea. They indicated to me what they would like to see established for power rates. I could not commit to any rates while I was in Korea; that is something that I would have to discuss with my colleagues and how the matter is going to be handled.

The Member opposite should remember that if some of this zinc starts going to the United States, we could be accused of subsidizing industry under the Free Trade Agreement.

Mr. Penikett: The Government Leader’s last comment happens to be one of the reasons why I am opposed to the Free Trade Agreement, while the Member opposite is in favour of the agreement.

Let me ask the Minister this: with respect to power rates, who is in charge of the negotiations; is it the Public Utilities Board, the Minister or the Government Leader?

It is not clear to me, from what the Government Leader said, whether Cabinet or the Yukon Energy Corporation is going to be making these decisions. It is also not clear to me if general consumers are going to be affected as a result of some deal on power rates with Curragh Inc. and the Korean investors, or whether they are going to be consulted about the matter. Could the Government Leader explain that?

Hon. Mr. Ostashek: I think the Member opposite is fully aware that this party is taking a position that the ratepayers cannot be shouldering subsidies to industry in the Yukon. We feel that is a wrong way to go about it. I believe the Minister responsible for energy has made the statement in the House that it is an issue. When we get something hard and fast in front of us, we will have to deal with it in Cabinet and bring it back to this Legislature for approval. It is not an issue that can be dealt with, without knowing all the ramifications of it.

I do not feel that the ratepayers of the Yukon can shoulder that kind of a subsidy. First of all, to believe that 30,000 ratepayers in the Yukon can have a utility that is going to be cost-effective and competitive is a dream.

Mr. Penikett: We only have two choices then: the ratepayers and the taxpayers. If the taxpayers are going to contribute to lowering Curragh’s power rates, or industry’s power rates - we do not have much industry now - can the Government Leader indicate when he and his government are going to be expressing in financial or budgetary terms the millions of dollars it will take to either do the Grum stripping or lower industrial power rates, or both? When will we see some firm commitments from this government and when will they be going back to the negotiating table to reach those agreements?

Hon. Mr. Ostashek: In my discussions with Mr. Frame and Curragh Inc., the indication that I got from them is that they will be approaching the government after their June 2 court appearance. We will start negotiations on the Grum stripping once we see how the court accepts the restructuring plan that Curragh is going to put before the courts.

I want to reiterate for the Member opposite that we are talking about the possibility of $75 million in new equity, resulting in the company being 75 percent foreign-owned. Curragh, as it sits now, will play a very small role in a new restructured Curragh.

Question re: Curragh Inc., Asian investors

Mr. Cable: The Curragh press release states that the arrangement between Curragh and Samsung Corp. and Korea Zinc is conditional upon the Korean companies being satisfied with the fundamentals of Curragh’s business. Has the Government Leader discussed with Mr. Frame the releasing of the Burns Fry report or the Micon report to those companies in order to expedite matters?

Hon. Mr. Ostashek: No, that question never came up, and we did not discuss it.

Mr. Cable: The agreement that is referred to in the Curragh press release and the Minister’s statement - is the Government Leader aware of whether that is an agreement in principle, some sort of interim agreement requiring further negotiations, or is that a final, formal agreement that is now in place and requires no further formal negotiation?

Hon. Mr. Ostashek: It is an agreement that is due to close on August 31 of this year, providing Curragh can meet the terms and conditions of the agreement, as they are stipulated. If Curragh is able to reach them, then there would be no further negotiation. If they are unsuccessful in fulfilling some of them, I imagine there will be some ongoing negotiations.

Further to that, the Korean officials will be in the Yukon within 10 days, I understand, to do their own due-diligence study on the company.

Mr. Cable: I have to assume then that we have in place a final, formal agreement. Several weeks ago, the Government Leader put forward to Curragh a number of conditions, among which was condition number 14, relating to the injection of new capital into the corporation. Does the offer from the Korean companies meet that condition?

Hon. Mr. Ostashek: It is very hard to say at this point whether it does or not because, at the time the conditions were put out, Curragh was still an operating company and not under Companies’ Creditors Arrangement Act. Now that the extent of their debt is known, as the Member opposite is aware, there are players in the game who have far more control over what happens to Curragh than the Government of the Yukon.

Question re: Curragh Inc., Asian investors

Mr. Harding: Our party has said all along that the Yukon government is one player in this equation, but a very important player. We have also said that, no matter what press release or statement from the government or Curragh came, any equity injection would end up being contingent on some kind of government support, through some means, for the Grum stripping project.

Given the press release from Curragh this morning and the ministerial statement, will the Government Leader confirm for the House that the equity injection is, indeed, contingent to a large part on the government support in some fashion for the Grum stripping project?

Hon. Mr. Ostashek: No, I would not, because there are many other issues that have to be dealt with. That is one issue, and it is not a major one, unlike the $221 million worth of debt that has to be restructured. For us to try to get involved in the Grum stripping right now would be impossible without the sanction of the courts.

Mr. Harding: I was somewhat optimistic this morning, but I am becoming more and more pessimistic as I hear the responses from the Government Leader, because there is negativity surrounding it.

I want to ask the Government Leader about the ministerial statement and, in particular, the reference to appropriate security. Could the Government Leader tell this Legislature what, by definition of the Yukon territorial government, constitutes appropriate security; is it the same position they have taken all along?

Hon. Mr. Ostashek: I will not comment on that here. That is an issue that will be dealt with at the negotiating table with Curragh.

Mr. Harding: We are having difficulty trying to sort out what is going on here. The press release and ministerial statement have made it clear that the government support is one part of the puzzle, but it is a very important part. Everybody in the Yukon understands that.

The last time we tried this, we tried it with Burns Fry in Toronto. Will there be a change in the way that the Yukon government does its negotiating this time and will the negotiations take place with as many stakeholders as possible, with Yukoners at the table, who have the most at stake?

Hon. Mr. Ostashek: I wish that I had that much control. This thing is in the hands of the courts. We do not even know, to this day, who the note holders are. We know some of them, but we do not know all of them. Curragh has chosen to negotiate with each one of these people on an individual basis. That is the message that they have used to try to come up with a restructuring plan that is acceptable to the courts. We are prepared to go along with what Curragh wants.

Question re:  Curragh Inc., Asian investors

Mr. Harding: It seems very clear to me that the government, as a player in this, has some control. The Government Leader has stated that he feels that his control is very limited. I want to ask the Government Leader if he has even made an attempt to get all the players to the table together? Has he looked at changing the way that we negotiate and bringing all the players together in Whitehorse? After June 2, if the courts approve it, the government can ask for that to happen.

Hon. Mr. Ostashek: Quite possibly after June 2, we will do that. Mr. Frame is going to be coming to the Yukon sometime shortly after June 2 to start negotiating.

Question re: Social assistance recipients agreement

Ms. Moorcroft: The Minister of Health and Social Services announced on Thursday that he is nearing a final agreement for matching federal funds for a new training program to help people get off social assistance, overcome barriers to employment and increase their ability to enter the labour market. A year ago, the previous government was also on the verge of announcing an agreement to enhance the employability of social assistance recipients; however, the social assistance recipients agreement was not signed last year because agencies like the Canada Employment and Immigration Commission and the Department of Indian and Northern Affairs could not agree to include First Nations citizens under the program. Can the Minister tell me if this final agreement that they are almost ready to sign will apply to all Yukon residents?

Hon. Mr. Phelps: I will have to check on that. That is a detail that eludes me at this time.

Ms. Moorcroft: I found the ministerial statement lacking in substance, but it is certainly disappointing that the Minister would include an announcement in the ministerial statement and then not be able to answer questions about the program in the House.

In a small community, it is essential that the re-training needs of aboriginal and non-aboriginal people be met. A government-sponsored program, such as SARS, should apply to First Nations. Has the Minister talked to the Council for Yukon Indians, and the First Nations Education Council, to ensure the agreement is satisfactory to all members of the community?

Hon. Mr. Phelps: No, I have not. The agreement was negotiated between my officials and the Government of Canada.

Ms. Moorcroft: Could the Minister tell me when this agreement will be implemented and signed, and when training will start?

Hon. Mr. Phelps: I hope very soon. The delay thus far has been simply the French translation in Ottawa.

Question re: Annie Lake land development

Ms. Moorcroft: Last Monday, the Minister of Community and Transportation Services stated in the House that a better way of land use planning is a community-based approach where people define the issues, such as density, parks, recreation and various land uses, and that the concerns of the community are addressed before an area is developed. On the very same day, the Minister informed us that the Community and Transportation Services capital budget included money for site inspection and land development work for rural residential lots in the Annie Lake area in order to release approximately 30 lots in 1994 and another 20 lots in 1995.

How can the Minister say this land development is subject to the recommendations from the Mount Lorne hamlet local area plan work now taking place when that plan has not been completed and there is money in this year’s budget for site inspection and development of 30 lots?

Hon. Mr. Fisher: My understanding of the Mount Lorne planning committee is that they, in fact, are recommending that infill lots be developed in the hamlet area.

Ms. Moorcroft: I have to wonder about the government’s land development agenda when there are funds committed to site work for 30 rural-residential lots before the community land use plan is completed and announced. There is a difference between infill lots and this site development work.

I would like to ask the Minister, since he announced the Whitehorse residential rural homestead policy is to develop lots in the greater Whitehorse area but then said he does not believe there is any policy governing how these homestead-style lots will be developed, what, if any, is the policy governing how these 50 homestead-style lots will be developed over the next two years?

Hon. Mr. Fisher: I believe the Member opposite is correct. I do not have notes with me to indicate whether she is or not. The lands branch had put in something like 30 lots for site inspection. It may be that there are only four lots, or there may be 37 lots, and that is why we are doing a site inspection. We have to look and see what is available. We have to deal with the Mount Lorne hamlet to see what is acceptable to them. The 30 is a base, and it may be more but, more than likely, it will be less.

Ms. Moorcroft: Perhaps the Minister does not realize there are protected First Nation heritage sites in this area, as well as archaeological sites that have not yet been protected. Large R-block sites have been selected under land claims.

Did the Minister or his department consult with the Carcross/Tagish First Nation before preparing a budget including $200,000 for rural residential land development in the Annie Lake area?

Hon. Mr. Fisher: My understanding is that the branch has been consulting with the Carcross First Nation on an ongoing basis.

Question re: Annie Lake land development

Ms. Moorcroft: I have a question for the same Minister on the same matter. Does the Minister realize that Annie Lake is the nesting area for loons and is an ecologically sensitive area? Can the Minister tell me if his department has any plans to replace the unsafe Wheaton River bridge, to encourage infrastructure development for Mount Skukum gold exploration, and if the proposed release of 50 lots in the Annie Lake area is related to the Yukon Party’s plan to support Yukon mineral development?

Hon. Mr. Fisher: I do not believe the replacement of the Wheaton River bridge is in the short-term planning for the lands branch.

Ms. Moorcroft: I can find absolutely no evidence that the Minister has consulted with the First Nations, with the Hamlet of Mount Lorne or with area residents about his proposed rural- residential subdivision. Could the Minister table in this House the policy on consultation that he used to come up with the plan for this Annie Lake subdivision?

Hon. Mr. Fisher: I will have to get that from the branch. If they have a written policy on the consultation, I will be glad to table it.

Question re: Infrastructure funding from the federal government

Mrs. Firth: I have some questions for the Minister of Economic Development regarding a document entitled A Yukon Resource Infrastructure Initiative: Becoming Self-Sufficient Through Infrastructure-Driven Investment in the Yukon.

Last week, the Minister indicated to us that this document was a draft, confidential document; there were only four copies available; the document did not have Cabinet approval, and the Minister would not say if the document was a reflection of government policy, or simply was the best that the government had available.

Yukoners who attended the Northern Mine Ministers Conference on April 16 and have now had a chance to look at the document, said that the Minister stood up and enunciated the same principles that are contained in this document.

Could the Minister tell us why he did that at the Mine Ministers Conference if that document is not a statement of government policy?

Hon. Mr. Devries: As I mentioned to the Member last week, this was a draft document and the document had not received final Cabinet approval. At that time, as was mentioned, we had been requested by the federal government to come up with potential projects that the federal government could consider for infrastructure development.

Mrs. Firth: The Chamber of Mines was not consulted regarding this policy initiative, Members of the Legislature first set eyes on the document last week, and First Nations have not seen the document. The Minister stood up and said that this document was confidential; there were only four copies of the document in existence and the only person who had seen the document was the federal Minister.

I would like to know why the Minister would get up at a Mine Ministers Conference and enunciate these principles and then stand up in the House later and make all of those ridiculous statements?

Hon. Mr. Devries: That is the very reason that the document was not circulated - it was a draft document and part of the consultation process was to present the document to the federal government to see if they would be interested in participating in this infrastructure development. Once they approved of the document, the government would take it from there and go through the rest of the consultation process.

Mrs. Firth: Surely, the Minister can see how badly he looks with this issue. He stood up at a Mine Ministers Conference and enunciated these principles and he will not tell us, in the House, whether or not it is government policy.

Why would the Minister do that?

Hon. Mr. Devries: Again, that is the direction in which we would like to go. We have had many discussions with the Chamber of Mines regarding this. We have to start somewhere. We started with the federal government. We indicated, at the mines ministers meeting, that this was the direction in which we would like to go, that we are planning on going in this direction, and the consultation process will be followed, once we have some indication from the federal government that they are willing to participate in this venture.

Question re: Infrastructure funding from the federal government

Mrs. Firth: Are you finished, Mr. Penikett?

Some Hon. Member: Checking with the boss?

Mrs. Firth: I am not checking with the boss, I am being courteous. That is something the Members opposite know nothing about, particularly-

Speaker: Order please. Could we have the question?

Mrs. Firth: Thank you, Mr. Speaker. I should not do that, but sometimes we have to take advantage of the moment.

My question is to the same Minister, about the same document.

I provided the Chamber of Mines with a copy of the document. They had never seen it before. The Minister stood up this afternoon and said that he discussed it with the Chamber of Mines. That is absolutely incorrect. When they received a copy of the document, it was the first they had seen of it.

Can the Minister tell us why he did not consult with the Chamber of Mines on this particular initiative?

Hon. Mr. Devries: I have had many discussions with the Chamber of Mines regarding the principles of that document. I also had shown - I believe - I do not want to make any false statements.

There was definitely someone on the Chamber of Mines who had seen the document.

Mrs. Firth: Why is it, then, that the Chamber of Mines position paper, which has been made public, is at a 180 degree variance from the initiative in this paper that the Minister is bringing forward? He is either saying that he is completely disregarding what the Chamber of Mines wants or that they were not consulted. I think they were not consulted.

Hon. Mr. Devries: That is hogwash. The Chamber of Mines position paper was regarding flow-through shares, environmental concerns, and various other things in that area. So that we were not duplicating our efforts, ours was supposed to be geared toward infrastructure. That was an agreement we made with the Chamber of Mines as early as last November.

Mrs. Firth: The Minister is in no position to be making chippy comments. The chamber did not ask for a $10 million grant program anywhere in their proposal. I would like to ask the Minister when is he going to consult with the Chamber of Mines regarding this $10 million grant program for mining?

Hon. Mr. Devries: We have had many discussions with the Chamber of Mines regarding the $10 million for infrastructure, and I really do not know to whom the Member has been talking. We have had discussions with many people within the Chamber of Mines, and the $10 million infrastructure grant has been discussed with them.

Question re: Northern Accord, First Nation involvement

Mr. Penikett: In the mains debate on Thursday, the Government Leader’s close friend and advisor, the Minister of Economic Development, told us that discussions on the Northern Accord had been held with First Nations and, “These matters had been resolved.” In view of the concerns about the degree of consultation on the proposed changes to the Yukon Development Corporation Act, can the Government Leader confirm that there have been devolution discussions with First Nations on the subject of the Northern Accord and can he assure the House that First Nations are completely satisfied with their level of consultation on the Northern Accord devolution negotiations?

Hon. Mr. Ostashek: I certainly cannot stand here and say that the Council for Yukon Indians are completely satisfied with the level of consultation. I will say that there has been ongoing consultation, even under the previous administration - back to 1988.

Mr. Penikett:    That is true, but so what? Can the Government Leader advise the House whether or not consultation with the First Nations has conformed to the definition of “consultation” set out in the umbrella final agreement, which was recently ratified by his Cabinet, and passed by this Legislature?

Hon. Mr. Ostashek: We do believe that is does conform to the umbrella final agreement and so does the federal government.

Mr. Penikett: Since the Government Leader is so assertive on that point, can the Government Leader confirm that negotiations on the Northern Accord have met the consultation requirements of the Inuvialuit final agreement, to which the Yukon government is bound by constitutional obligation?

Hon. Mr. Ostashek: By my understanding from the federal government, it has.

Question re: Curragh Inc., Asian investors

Mr. Cable: I have further questions for the Government Leader on the Korean participation in Curragh and the conditions put forward on that participation.

Last week, the Minister responsible for Yukon Energy Corporation stated that the government’s policy on the pricing of electricity for industrial consumers was the cost of service. One of the conditions put forward by the Koreans for the new investment is long-term contracting at competitive power rates. Has the Government Leader determined whether cost-of-service pricing will meet the requirements of “long-term competitive power rates”?

Hon. Mr. Ostashek: From my own personal opinion, no, I do not believe it will, but I believe the Minister also said in the House that, when the issue arose, we would have to deal with it and make a policy decision. That is what we will be doing when we sit down with the company to negotiate the Grum stripping and electrical energy rate they would like to pursue.

Mr. Cable: Has Korea Zinc, Samsung Corporation or Curragh Inc. indicated what they mean by competitive power rates? If so, what are those desired rates?

Hon. Mr. Ostashek: They have, but I am not at liberty to say at this time.

Mr. Cable: The other condition that was put forward in the Curragh press release was the one-year deferral of Curragh’s processing of the mine closure plan. Is the government supportive of that one-year deferral?

Hon. Mr. Ostashek: As the Member opposite knows, mine abandonment is a federal responsibility. I believe, from my discussions with Curragh, that they have some very valid arguments to put forward.

Question re: Land claims, consultation process

Mr. Penikett: I want to go back to the matter I was pursuing with the Government Leader a minute ago. I want to ask the Government Leader a direct question of policy.

For the record, is he satisfied that the consultations his government has carried out with the Council for Yukon Indians on devolution agreements, such as the Northern Accord, forestry and the proposed legislation to restructure the Yukon Development Corporation, perfectly satisfies the consultation requirements of the umbrella final agreement, of which this government is a signatory?

Hon. Mr. Ostashek: First of all, there are still ongoing consultations on forestry. I understand the Minister is going to be talking again about the Yukon Development Corporation legislation with the First Nations. I want to say, for the Member opposite, at a meeting of principals in Vancouver, which was attended by the chair of CYI, myself and Mr. Siddon, it was made very clear what Mr. Siddon expected in the consultation process. I believe that the First Nations, especially for the Northern Accord, have been given opportunity for that consultation.

Mr. Penikett: I am afraid what Mr. Siddon agrees to and what the Government Leader agrees to, at this point, may not be enough, because there is a law describing what consultation is necessary on matters like forestry, the Northern Accord or the Yukon Development Corporation.

Can I ask the Government Leader if he is aware that the government’s manner of consultation and its recent rejection of wildlife board recommendations is causing some First Nations to have second thoughts about the co-management principles of the umbrella final agreement and, indeed, about the land claims agreement itself? Is he aware of that?

Hon. Mr. Ostashek: As I have just returned to the territory, I know some concerns were raised; I do not have the full details, but I will be briefed on them shortly. I just want to say for the Member opposite that, in the Northern Accord, there are clauses that state that land claims and self-government are paramount over the Northern Accord, that those issues have to be resolved. There is room there for joint management of the Northern Accord between CYI and the people of the Yukon. So, the Northern Accord signing is not the end, but only the first step.

Mr. Penikett: What the First Nations agreed to in the land claims was partnership, not paternalism. I want to ask the Government Leader, in light of the anger that has developed over the rejection of the wildlife board recommendations and the manner of this government’s consultation in respect to matters like the Yukon Development Corporation and the Northern Accord, what steps will the Government Leader be taking to prevent the reoccurrence of events similar to 1984 where, after reaching a land claims agreement, YTG’s behaviour and manner of conducting public business with First Nations caused some First Nations to reject the agreement?

Hon. Mr. Ostashek: I could say that it is more recent than 1984 that the First Nations of the Yukon have had concerns about consultation with the previous administration, especially in the area of the Northern Accord. This was an agreement that was already negotiated when we took over power. We were talking about a few thousand dollars, one way or the other. There is a memorandum of agreement, back to 1988, on how the Northern Accord would be negotiated, and we believe that both ourselves and the federal government have fulfilled those obligations.

Question re: Land claims, consultation process

Mr. Penikett: I know the agreements that were signed on the Northern Accord. Those agreements made it quite clear the First Nations were to have, in terms of their role in Northern Accord discussions, something more than participation as a consulting body but something less than third party status. Given the First Nations’ concern about the level of consultation, does the Government Leader intend to go ahead and sign this agreement with the Minister of Northern Affairs before he has satisfied the needs for consultation by the First Nations?

Hon. Mr. Ostashek: As I told the Member opposite, both we and the federal government believe that we have fulfilled our obligation under the umbrella final agreement and the Northern Accord. I just want to state for the Member opposite that, in my understanding, from September 1988, when the accord was signed, to February of 1993, when the on-shore agreement was finalized, CYI was given every opportunity to participate in developing and negotiating a position and were given all the necessary, relevant material, money and the experts to give them advice on the accord and the oil and gas industry.

We believe that this fulfills our obligation.

Mr. Penikett: The Government Leader has said that the Northern Accord provisions were subject to the land claims agreement. He may see the Northern Accord as a bilateral agreement between him and the federal government, and he and the federal Minister may have agreed about consultation for the First Nations. The land claims agreement is an agreement among three parties. The first party to those negotiations, the First Nations, are not satisfied with the consultations that have been carried out by this government in respect to that agreement. I ask the Government Leader again: does he intend to sign that agreement with the federal Minister in the face of resistance from the First Nations?

Hon. Mr. Ostashek: This is exactly why we are trying to get a devolution table set up - so that these kinds of situations would not arise. We want to be able to have meaningful consultation. We need a vehicle with which to do it.

Getting back to the Northern Accord, it is my understanding that it will be signed in Dawson City this week.

Mr. Penikett: I have one very brief question. Will the devolution table, where the Government Leader hopes these problems will be solved, be established before the Northern Accord is signed, or not?

Hon. Mr. Ostashek: I doubt it very much.

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


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 items standing in the name of the Official Opposition are to be called on Wednesday, April 14: there are none.

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 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: I will declare a brief recess.


Speaker: I will now call Committee of the Whole to order.

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

Economic Development - continued

Chair: We will be discussing Bill No. 6, entitled First Appropriate Act, 1993-94. Is there further general debate?

Mr. Harding: I have a question for the Minister about discussions that took place in Question Period today.

There was an admission from the Minister that there was an arrangement made with the Chamber of Mines some time ago, when the government was given its mandate in the election, to pursue a different avenue of approach in the Chamber of Mines.

I would like to ask the Minister if he could explain this different approach, in detail, that led to the Chamber of Mines document that the government produced for the federal Minister and the document entitled Toward Self-Sufficiency in the 21st Century, and the economic development infrastructure project that was also given to the Minister of Indian Affairs and Northern Development on April 16.

Hon. Mr. Devries: The Member misunderstood what I said. The agreement that was initially reached was that we wanted to work on a joint infrastructure initiative. An agreement was reached with the Chamber of Mines to research the avenues of flow-through shares and various other things pertaining to that. It was also understood that the Chamber of Mines would pursue the regulatory aspect of the initiative and the government would pursue the energy and transportation aspect of the infrastructure strategy.

Mr. Harding: I certainly did not misunderstand what the Minister said. Perhaps the Minister did not communicate what he wanted to say, but I know what the Minister said: that there were two avenues taken to approach the situation and that the government was taking a different line and that is why the two documents that were referred to earlier differed from one another.

The arrangement was that the Chamber of Mines, in the deal in November, would pursue flow-through share initiatives and also some streamlining of environmental review procedures, and the government would pursue specific infrastructure investment - is that correct?

Hon. Mr. Devries: That is correct. We have a regulatory regime to try to streamline that.

Mr. Harding: During the election campaign, the Yukon Party made the promise to work on streamlining the environmental review process. We asked about new policies in the supplementary debate. There were no new policies given, other than a couple that have been mentioned many times here in this Legislature. Now that this sort of avenue has been turned over to the Yukon Chamber of Mines, I would like to ask the government why, on the one hand, they did not tell us about this new policy, and, on the other hand, why they have specifically made the request to turn over that area to the Chamber of Mines and to have them work on it?

Hon. Mr. Devries: It was just for the development of the infrastructure initiative. It was not as if the Yukon government is going to step back from participating in any changes to environmental regulations. As the Member very well knows, on the Implementation Review Committee we took a much more aggressive approach to try to resolve the issue between the placer miners and the Department of Fisheries and Oceans. We have been very successful in that. The majority of the placer miners feel that they can live with the new regulations that are being forced upon them.

Mr. Harding: We are still trying to work out what this aggressive approach is. Could the Minister tell us specifically what constituted a more aggressive approach. Was it more meetings? Was it more discussion at the meetings? What was it?

Hon. Mr. Devries: We hired a consultant who had a very good understanding of hydrology and various aspects relating to fish and sedimentology - I believe that is the proper term. We feel that by having the consultant pursue this on a very knowledgeable basis - and also having a high degree of negotiating skills - many of the problems that had been experienced since that last gold show would disappear. Many of the placer miners felt that the regulations that the DFO was trying to push on them would have shut down three-quarters of the industry.

Mr. Harding: The change was the hiring of a consultant. Were the people who were previously on the committee inadequate?

Hon. Mr. Devries: I would not say they were inadequate. Our feeling has always been that it was the direction that they were given. My feeling has always been that the person who was previously on the board was not receiving direction from the government to pursue this aggressively.

Some Hon. Member: How do you know that?

Hon. Mr. Devries: I said it was my feeling.

Mr. Harding: Could the Minister of Economic Development tell us how he knows that the former member of the board under the previous administration was not being given instructions to aggressively promote the industry and protect it?

Hon. Mr. Devries: As I said, it was my personal feeling. Also, immediately upon coming into office, the KPMA made us very aware of the problems that were developing. Due to subsequent discussions with them, we felt that it was time to take a more aggressive approach and get someone else to represent government.

Mr. Harding: The Minister has said that the person was more experienced at negotiating. I guess he was more educated than the previous person on the board. That does not translate into aggressiveness. If my statements are incorrect, I hope the Minister will correct me.

Could the Minister define what this aggressive new direction is and what specific instructions this person on the board has been given?

Hon. Mr. Devries: Again, that is not what I said originally. Originally, I said that the consultant we hired had much better knowledge of hydrology, sedimentology and fisheries. He worked very closely with the person from Renewable Resources, who is a fish specialist.

By being able to argue a point and show DFO that a little bit of suspendable solids in the water is not going to kill fish, we were much more successful than we had been in the past in getting DFO to back off and come up with some standards that were totally acceptable. As the Member may be aware, there are several different standards being proposed for several different bodies of water in the final conclusions.

Mr. Harding: The Minister said that a consultant was hired who knew how to negotiate and had some knowledge of the industry, both of which was done in the past. The previous government did give direction on the industry and to the representatives on the board. I have spoken with the previous Minister at length about what was done. I do not understand what exactly has been done.

Is the Minister saying that the hiring of this consultant translated into a rapid and aggressive new approach, and that the hiring of a consultant has been the saviour of the placer mining industry?

Hon. Mr. Devries: I would say it was a major contributing factor to the results we have, as of this date. If we had kept the previous person in that position, I do not think we would have had the results we have today, plus the political direction to protect the placer mining industry, without compromising the fisheries.

Mr. Harding: The Minister has now identified what he feels is one major contributing factor in the result of a stronger placer mining industry. Could he tell us the other major contributing factors?

Hon. Mr. Devries: Obviously, the early spring and the price of gold going up are contributing factors in excess of what happened at the IRC hearings. From various discussions I have had with representatives of the KPMA - and there have been several meetings - they have been very pleased with the progress that was made by the person we hired, and very pleased with this government’s support of the placer mining industry.

Mr. Harding: I still have not identified it. The action that has been taken is to hire a consultant with some knowledge of sedimentology and someone who could argue a point - in the words of the Minister - and that has been a major contributing factor to the change in the placer mining industry. I do not know what more I could ask about that. I have been given these answers. Other members of my caucus have been given these answers. I still think this whole new direction sounds a little bit wishy washy and vague. The Minister has said that he does not know for a fact that the political direction was not given to the previous members on the board. He is assuming that for some reason - I guess maybe because gold prices were not that high. That is probably why he is assuming that.

I want to go back to the Chamber of Mines/Government of Yukon arrangement regarding the new direction they both took regarding presentations to the federal government. How did it work? Did the two bodies, the Chamber of Mines and the Government of Yukon, sit down and say, “We want to pursue different avenues on this. You, the Chamber of Mines, take the flow-through shares and the environmental reviews, and we will take specific projects on infrastructure and look at a grant program of $10 million a year.” Is that the way it happened?

Hon. Mr. Devries: The decision was made that the Chamber of Mines would, at these particular meetings, pursue the flow-through shares and the regulatory problems, and YTG would pursue the infrastructure, energy and roads concerns. This was geared toward stressing to the federal government the importance of the mining industry to the Yukon. As a result of this, we hope that somewhere down the road further assistance and cooperation from the federal government will be forthcoming. It is very important that the regulatory regime matters are addressed, because it is the federal government that is in charge of the environmental regime at this point. Likewise, the federal government is in charge of the taxation as far as flow-through shares go, so it is very important that we have full participation from the federal government to make the Yukon more attractive for investors; this would also help to attract  investors in further developments on some of the deposits in the Faro area or in the immediate vicinity.

I feel the Member will be very supportive of this initiative we have taken.

Mr. Harding: Attracting more competitive corporate investors from other areas is a goal of the government. We met with the Yukon Chamber of Mines on Friday. One of the complaints that was made, loud and clear, was in regard to the rising corporate tax rate and how that will be a damaging blow to potential investors from other areas. I just want to make the point that on that score they really had some major concerns with this government. Did the Yukon Chamber of Mines approve of the $10-million-grant-per-year policy directive that the government was going to be taking? Did they think that was the way to go?

Hon. Mr. Devries: Again, the $10-million-per-year suggestion is not necessarily government policy. It is for trying to establish a negotiating position with the federal government on ways that the Yukon can become more self-sufficient in the area of resource extraction.

Mr. Harding: Is it the view of the Yukon Chamber of Mines that the best way to develop Yukon mining activity is through an ongoing year-to-year grant program? Is that a shared approach toward improving the mining industry?

Hon. Mr. Devries: Again, the Member keeps talking about grants. It is not grants to the mining industry. It is basically initiatives by the government to encourage mining through infrastructure development. On the Freegold Road, it is not only Casino and Williams Creek that would benefit. There is a whole mineral belt that runs through there. This would basically be an incentive for exploration companies to take a further look at the mineral resource in that given area, as well as in other areas.

Mr. Harding: If you strip the Grum as an infrastructure investment, or you build a road into areas where you hope there will be mines - as an investment in infrastructure - it is still taxpayers’ money being spent on the mining sector. It is purely an ideological point of view to think one is going to be more productive over the other. Could the Minister please tell me, in a more succinct way, if the approach taken in the document referred to by the Member for Riverdale South in Question Period is the same view shared  by the Chamber of Mines to promote the mining industry?

Hon. Mr. Devries: Again, much of the preliminary discussions that led to the development of this document were upon suggestions from the Chamber of Mines, as well as others. They may not have perused the final document, but I do recall that I had discussed certain aspects of it with one of the individuals.

Mr. Harding: Is it correct that the leading parties within the Chamber of Mines support the government’s view that the best way to promote mining activity is as outlined in the document described by the Member for Riverdale South in Question Period?

Hon. Mr. Devries: I cannot speak for the Chamber of Mines. If the Member wants to discuss that with them, he should give them a call.

Mr. Harding: The Minister has said that he has had all kinds of meetings with the members of the Chamber of Mines. Is the Minister saying that they made no comment about whether or not they supported this approach at any of those meetings? They never mentioned it one way or the other; is that what the Minister is telling me?

Hon. Mr. Devries: The Member originally referred to the discussions that the Member for Riverdale South referred to. It seems to me that she had an entirely different interpretation of what it was all about.

Mr. Harding: The Minister talked about meetings with the Chamber of Mines surrounding the development of the document that was mentioned by the Member for Riverdale South in Question Period. The Minister said that the document included representations from whomever he talked to in the chamber. Did the chamber support the document, or did they not?

Hon. Mr. Devries: If the Member is asking me if we had the wholehearted endorsement of the Chamber of Mines on this particular document, then I would have to say no. I have not sat down and talked to the whole Chamber of Mines about this particular document. I have had discussions with one of the members, very briefly, about a few points in it. Other than that, this document, which is only a draft discussion paper, was geared toward trying to get a commitment from the federal government to participate with us. It may be only for flow-through shares. They may only participate with us on the regulatory regime, energy projects or transportation. That is basically what we are hoping to derive from these consultations with the federal government. We want to see what they will participate with us on. Once those decisions are made, we will go through the consultation process with the First Nations, the Chamber of Mines and the general public in the various communities that would be affected.

Mr. Harding: If I could capsulize it, the Minister is saying that they have had no formal consultative process with anybody, including First Nations; there was some discussion in a preliminary form with one or two members of the board of the chamber, but no discussions took place with the Chamber of Mines as a whole, and then the government submitted a draft document to the federal Minister. Is that correct?

Hon. Mr. Devries: The reason this document was prepared was to see if we could get the federal government to assist us in reaching various goals that would give the mining industry the opportunity to expand in the Yukon, benefiting all Yukoners. I do not know what more I can say.

This document was a starting point and if the federal government said phooey to the whole document, what would be the point of consulting with the chamber as a whole?

It seems as if the federal government is favourable to the ideas presented in this document and this is what would lead to consultation with other interest groups, such as the Chamber of Mines, the Yukon Conservation Society and First Nations, to name a few.

Mr. Harding: Let me ask the Minister the obvious question: why would the government submit a draft document that they did not consult with anyone about - the government just said that today - except one or two members of the Chamber of Commerce in an ad hoc forum, in the hope that the government would bite on some of it, and then negotiate and consult with the people of the Yukon?

How does the government know that their goals about this document - that the government has not talked to anyone about - are the goals of the people of the Yukon?

Hon. Mr. Devries: The majority of these goals are in the four-year plan and we were voted into office. The people of the Yukon showed their support for many of these initiatives.

Mr. Harding: The four-year plan has many elements that change. We talked with the Minister of Renewable Resources about the Yukon Fish and Wildlife Management Board, and the promise in the government’s four-year plan to implement the recommendations of the Yukon Fish and Wildlife Management Board. There are many things in the government’s four-year plan that may or may not be adhered to. Some things might be adhered to at some future date; some things may be modified - I think that the people of the Yukon are becoming rapidly accustomed to seeing that kind of change.

Thirty-seven percent of the population supported the party in power. Is the Minister now telling us, with regard to economic development, that because of the government’s policy and the government’s four-year plan that people voted them into office on, now they will no longer consult with the people because they feel they have the mandate of the people and know exactly what the people want?

Hon. Mr. Devries: I do not know what the Member wants from me, but basically you have to start somewhere and this is where the consultation process will start. I only have to look at the first year that the side opposite was in power and in the first six to eight months there was very little consultation - they were involved in the process of developing strategies within their own government. If you read their budget, even from a year after, the only initiative was something regarding Year 2000.

Mr. Penikett: Forgive me, but the Minister is completely and totally and absolutely out to lunch. In the first five months we were in office we got land claims negotiations re-started - which had fallen apart under the previous administration - and the Faro mine opened, a deal negotiated from scratch. From the first week we were in office we met with the proponents and spent the next months negotiating and had an agreement signed by October.

We had a jobs budget - a budget designed to create jobs - into the House and out in the first five or six months, and dozens of other initiatives. In comparison, the Minister has been sitting around twiddling his thumbs, while the people of Faro wandered down south and the economy fell into a tailspin - there is a difference between night and day.

Let me ask the Minister this: if we gave an indication that we would clear the department-

He is giggling and looking smug there. The Minister has nothing to be smug about, absolutely nothing. If the Minister had a clue what people on the street are saying about him, he would not be sitting here laughing.

Has the Minister any answers to the questions we asked last week, including the list of jobs under the capital plan - we asked originally two weeks ago and we asked again last week, three or four times. If he has that information, we may be prepared to clear the budget quickly because the rest of the debate is too painful. If he has not, we would probably want to stand it over.

Hon. Mr. Devries: Last week I indicated that I was willing to stand over one line item regarding policy planning. Our economist has been working on it all weekend even though he does not have the tools he normally has to work with, due to the computer being down. It is a time-consuming job to try to do it with a pencil.

Mr. Penikett: The Minister himself stood up in this House and said that there was 700 jobs. Was he making that number up? What was the basis for that assertion?

Hon. Mr. Devries: The original figures that I was given, which was a rough estimate, was 750 jobs; I still stand by those figures - and then some.

Mr. Penikett: Could he give us a breakdown of the $750,000 estimate?

Hon. Mr. Devries: I am not going to do that because, as we have seen time and time again, if the information is even slightly erroneous the side opposite says, “Wa, wa, wa, wa. You should not have said it.” If the information is erroneous, they keep coming back and saying we should never have said it. I want to make sure the information is accurate, and I am not going to stand up in this House and give information that is not accurate.

Mr. Penikett: The Minister himself is responsible for a small mountain of erroneous information already in this House. Since the Minister said, on April 13 - quite a few weeks ago - that there are 700 full-time positions in the budget, that if everyone would get to work and get this budget through, we could possibly have 1,400 to 1,500 jobs onstream this summer relating to capital projects. When does the Minister expect the economist will have his report on the number of jobs created by the capital budget?

Hon. Mr. Devries: I would say no later than Thursday.

Mr. Cable: I have a grab-bag of questions. I asked the Minister last week what he saw as the limits of government intervention in the economy. I believe the Minister misunderstood what I said and corrected some assertions he made later.

What does the government and the Minister see as legitimate areas for government intervention in the economy, in those situations where there are competitive players already existing in the economy?

Hon. Mr. Devries: I like to think of Crown corporations or the government getting into major investments as being intervention, whereas I like to think of loans to businesses as being more of a stimulus to improve some of the existing facilities, to encourage tourism and manufacturing, or whatever. That is where we seemed to have the confusion the other day.

For instance, if there are three hotels in a small community that only have a certain percentage of occupancy, and a fourth hotel comes to the government for assistance as last resort financing, it should be the government’s position not to participate in that, because it would cause undue hardship on the existing facilities, unless it could be proven it was not going to cause undue hardship.

Mr. Cable: I would like to explore that. I have friends in town, a couple who had a business a few years ago. There were two entrants in the market. The one entrant, not my friends, received a number of sequential grants and loans and eventually my friends found it necessary to sell out their business. What happened in the course of the events is that they really lost a part of their retirement package, and the subsequent winner in this race was the least vigorous of the competitors. So, the consumer lost in this escapade as well. Really, what the government was doing, unwittingly, not maliciously but very insensitively, was robbing these people of their investments.

What I would like to know is, does the government have a set of policy directives in any form that relates to government interference in the economy where there are competitive players already in existence?

Hon. Mr. Devries: I do not have the guidelines right at my fingertips, but I would be happy to give them to the Member at some point. Definitely, we are trying to get away from grants of any type to businesses. The only grants that would be acceptable would be ones to do a study to see if the business is feasible and the study would also have to confirm that the business is not going to create competition with an existing business and create problems in the community. If government is not involved, what the business does is their business as far as we are concerned; but when it comes to government assistance, they, first and foremost, have to prove that they are not going to create undue hardship for another business that operates in the same field in the general area.

Mr. Cable: I have heard on various occasions that that is actually what the government tries to do, but it appears to be more observed in the breach. Is there any firm policy directive emanating from any portion of the Minister’s department or any portion of government, indicating that government, through its various arms as programs or whatever, is not to be involved in situations where it will harm existing businesses?

Hon. Mr. Devries: In the guidelines, there is a section that is entitled adverse competition guidelines. That would be covered in that area of the guidelines for the economic development officer positions.

Mr. Cable: Would the Minister be good enough to table that document at some juncture and provide me with a copy of it?

Hon. Mr. Devries: Yes, I will see that it is on his desk when he gets to his office.

Mr. Cable: That is hard to beat.

Let me ask a few questions on the efficiency of government investment in the economy. The Minister was good enough to provide me with the answers to a number of questions that I asked relating to various economic programs, such as the business development fund, the community development fund and the Economic Development Agreement. I asked some questions during the supplementaries about the efficiency of these public investments. I think it is well known from other jurisdictions - Alberta is a prime one and perhaps Cape Breton - that government investment has been anything but successful in creating jobs. There is a very limited return on investment.

I refer to page 756 of Hansard. I had asked him the question about what he is prepared to do to review overall departmental expenditures and economic program expenditures, and to make the return of taxpayers’ money much greater. He indicated, “With regard to the business development fund, there are some changes in policy and the way that we are doing things being contemplated. I would prefer to talk about them in the mains because it is not really pertinent to the supplementaries to a great degree.”

This would be the opportunity to talk about those. I wonder if he would indicate to the House what changes in policy he is contemplating.

Hon. Mr. Devries: We have instituted a major review of many of the policies in those various programs the Member mentioned. For instance, with the business development fund, there used to be grants for people to go to trade shows et cetera. We have changed that now to where it would be loans. Any assistance whatsoever - whether it is a high interest-bearing loan, or a regular interest-bearing loan, or a reduced interest-bearing loan, or whatever - they must prove that they are up-to-date on payments. If it involves restructuring, they have to follow the recommendations of the various debt counsellors on the recommendations for restructuring. Hopefully there is no further assistance required. It is basically a restructuring of the existing loans.

We are trying to make people responsible. It is taxpayers’ money. I know that, in the past, I have heard many taxpayers really frown on it when they see governments just dishing out grants to various businesses. There are instances where those businesses have come and gone and been very irresponsible with taxpayers’ money.

Mr. Cable: The Minister indicated that there is a review underway, if I understood him. When will this review be completed? What is the target date?

Hon. Mr. Devries: I would say that by the end of this fiscal year the majority of that review will be completed. Some of the changes have already taken place. I would hope that, within six months, we will see many of these. If there are changes contemplated, I would hope that they will have taken place before the next mains budget.

Mr. Cable: The Minister, in his written response to the questions I put to him on those three funds, indicated that there were some 216 full-time jobs created by these funds. Even if they are simply allocated to the business development fund, which consumed $13 million over a period of years, that appears to me to be a very small return on public investment.

We have talked, in the budget while discussing the $8.8 million tax increase, about creating 200 jobs in the public service - that is a little more readily identifiable - but is that, in the Minister’s view, a reasonable return on the public investment?

Hon. Mr. Devries: I am not happy with the amount of jobs that have been created. I hope that, under this administration, we will see a considerable improvement in those areas.

The other area is in the EDP, the economic development planning, and the CDF, which is geared toward community projects. It is basically an employment-creating project. The spinoffs are healthier communities and things like that. It is very difficult to attach a concrete person year to. There are many benefits, such as there is in a CDF grant for a healing centre. As I mentioned before, the BDF gives no grants, but the CDF is still basically a grant program.

There are many benefits compared to the costs of one person spending their life on social assistance, which are astronomical.

A healing centre, which is a community development project, makes the community healthier and assists people in becoming independent from alcohol and in becoming contributing members to the economy, rather than a drain on the economy, is, I think, a giant step.

It is very hard to place judgment calls on those types of programs, but you are not going to know until you try it.

In the area of economic planning and other portions of the economic development agreement - for instance, forestry and the MDA office, through which the geo-science mapping is done - creates seven jobs. The spinoffs from the those jobs and the knowledge that mapping creates for prospectors is beneficial.

There may be years when nothing develops and then, all of a sudden, a mine may spring up as a result of some of this mapping work. It is very hard to assign a person-year component to those types of figures.

Under the Economic Development Agreement, as I mentioned earlier, much of the work in forestry is the reconnaissance of what is actually available for the industry and spinoffs down the road could really contribute toward the development of our economy.

For probably half of the money that is identified, it is difficult to pinpoint the person-year jobs that it creates, but 218 jobs would be created from the other half of the money identified.

Mr. Cable: I do not want to spend a lot of time on the programs, because I am sure they will be dealt with later, but I do have a couple more questions on that topic.

With respect to the business development fund, the statute very clearly sets out job creation or job preservation as the goal of the fund. When reviewing the legislative returns that were provided on the disbursement of funds from the business development fund, it would appear to be amorphous as to whether or not one could really track down jobs as a consequence of a grant to go on a lark somewhere.

Has the Minister, since assuming office, instructed his development officers or whoever it may be who prepares the presentations to the business development fund board, to take a more rigorous approach when processing applications so that job preservation and creation is the main function?

Hon. Mr. Devries: The business development fund committee approves or disapproves any applications coming in. The people in our department review them, I get copies of them and get to have a look at them. They very clearly indicate the number of people who would be employed in building the project, and clearly indicate the number of people who would be employed upon the conclusion of the project. For instance, if it is a rundown hotel, it also indicates how enhancing the appearance of the hotel and renovations would preserve the hotel and the jobs that exist in the hotel.

I really think that many of the concerns of the Member are being addressed. Once the session is over, if he has some more ideas, I would love to sit down and discuss them with him. I am open to ideas from anyone. I do not claim to be a know-it-all. I am open to consultation with anyone.

Mr. Cable: I have some more questions on the economic programs, but I will deal with those later when we get to them in the line items.

On the issue of energy policy development, I gather your department is charged with some role in this. Would you explain what you see as your role in that policy development?

Hon. Mr. Devries: We will be working very closely with the Yukon Development Corporation. This will be one of the top priorities, in that it is a real concern to the Members on this side when we see a six-percent power rate increase. It is a real concern in economic development. Our role would be to advise the Yukon Development Corporation in its policy planning on how various aspects of decisions they make would affect the economy. We would also throw suggestions at them as to how, with an energy policy, we could stimulate the economy.

It is wide open on what we can do, at this point. We are at the starting gate now. As we move along, we can bring all the players together to ensure we have an energy policy that is going to benefit all Yukoners.

Mr. Cable: I think the energy policy is conventionally generated by governments rather than utilities, of course, because utilities may have their own axes to grind. Let me ask the Minister, is it not fair to say that the prime mover behind energy policy development should, in fact, be the Minister’s department, in that he is responsible for making recommendations on regulations and, perhaps, statutory changes that will put out that policy?

Hon. Mr. Devries: I would agree with that, yes. Economic Development is basically the department that would direct government policy development on the energy policy, yes, but we will be working closely with the Yukon Development Corporation, naturally. Depending on which way this policy goes, we still have to work with the utility or the Crown corporation.

Mr. Cable: Let me suggest to the Minister that perhaps there should be a greater arm’s-length relationship. For example, the calculation of return on investment, or what is fair for return on investment, is set up in the regulations. I am sure the Minister will not find, from the Yukon Energy Corporation, or from its half-sister, the Yukon Electrical Company Ltd., a case for markedly reducing the returns on investment. If, in fact, that would be to the advantage of the consumers, it would have to come out of his department.

Let me suggest that the main, and perhaps sole, generator of energy policy should, in fact, be the Minister’s department. Is that a fair consideration?

Hon. Mr. Devries: I appreciate the Member’s comments, and I tend to agree with them to the greatest extent. I would say his comments are well taken, and I appreciate that little bit of advice or suggestion.

Mr. Cable: The only reason I ask is that, whenever I ask a question of energy policy, the Minister for the Yukon Energy Corporation rises, so I will point my head in the direction of the Minister for Economic Development next time I ask a question on energy policy.

Let me ask this question of the Minister: I have heard it said that the overall energy policy will be in place in approximately a year - this was when I asked a question in December. Is that a fair estimation of the time required to complete the overall energy policy?

Hon. Mr. Devries: Yes, to us it is a matter of urgency. We will try to get something in place within a year.

Mr. Cable: I take it that his department will be taking a lead role. The previous administration developed an energy policy report. Has the Minister had a chance to review the work that was done by the previous administration and, if so, is he in agreement with it?

Hon. Mr. Devries: I believe the Member is referring to the energy strategy that was developed during the last few years. I reviewed it when I was in Opposition. I have been going through it in the last little while again. There are several good things in there, but there are also some things with which I do not necessarily altogether agree.

Mr. Cable: As I recollect, in early 1992 there were a number of policy papers released to the public involving various aspects of energy policy - the pricing policy for independent power producers comes immediately to mind. At the time of release, it was indicated that, in September of last year the overall energy policy would be produced. Are we talking about the same thing? Is it the September 1992 overall policy that the Minister is referring to when he states that he agrees with some things but not everything?

Hon. Mr. Devries: It would be very difficult for me to answer that because I do not think I have ever been privileged to see the final energy strategy. I have seen the first and second drafts. Anything beyond that, I have not had a look at. In the second draft, there were several areas I had some concerns about. I will have to review that with my colleagues. We will be having many meetings and consultations on the development of the energy policy.

Mr. Cable: I assume this document was prepared by a public servant, so I would presume that the Minister has possession of everything that is relevant. Could he indicate to the House where the areas of disagreement lie with that energy strategy? Perhaps this is an unfair question. If anything comes to mind, could he advise us?

Hon. Mr. Devries: I will get back to the Member and indicate to him, at that time, what my specific concerns were. It would be kind of difficult to cover it here standing on my feet, since I do not have it at my fingertips.

Mr. Cable: That would be useful. Perhaps when we get to the policy and planning part of the budget, if I could have some indication as to what portion of the energy policy the Minister already accepts, that might eliminate some questions in the future. For example, is he accepting of whatever was suggested for pricing for independent power producers? That would be helpful. Let me move on to something else, and that is land claims.

Has the Minister’s department, the Department of Economic Development, begun preparing for implementation of the umbrella final agreement and the First Nations final agreements?

Hon. Mr. Devries: We have done some work on it, and we know what we need to know, as far as the implementation work goes, once the agreement is signed off in Ottawa - or wherever it gets signed.

Mr. Cable: Maybe I overlooked this, but is there anything specifically set aside in the Minister’s budget identified for this purpose? This is the administration of the land claims agreements and the economic development chores that his department will have.

Hon. Mr. Devries: We have nothing specifically, although much of it is covered off through the administration and the various people who would dedicate some of their time toward the land claims matters.

Mr. Cable: With a bit of luck, Mr. Mulroney and his cohorts will bring the land claims bills before the federal Parliament in the near future, in which case much of this work is going to click into gear.

The umbrella final agreement commits the Yukon government to participation in the preparation of a plan for each Yukon First Nation to take advantage of economic opportunities arising from the settlement agreements. Has this work started, and, if so, with what First Nations?

Hon. Mr. Devries: The work has not been started to any great extent; we would wait for the First Nations to approach us once Ottawa has ratified the final agreement and we would take the issue up from there. We would also have, as the Member is aware, the development assessment panel, which is also work that Economic Development would be working on with Renewable Resources and the federal government, depending on devolution.

Mr. Cable: Of course, the agreements may provide a number of jobs for both First Nations and, indirectly, non-First Nations persons. Would it not be appropriate for the government, and in particular the Department of Economic Development, to be talking with First Nations now to discuss job creation? If you agree with that concept, would you tell me what has been done?

Hon. Mr. Devries: All along we have been working very closely with First Nation economic development officers on various projects. When a First Nation, or someone within a First Nation, comes to us for a business development loan most of them have an economic development officer - we work hand in hand with them. It is not going to be a completely new process; there is already a process in place, and it means that we would be working closer together on economic development within the various First Nations.

Mr. Cable: Is it contemplated that the Minister will be instructing his officers to actually form some organizational structure to deal with what I would assume would be a very major part of your portfolio?

Hon. Mr. Devries: Basically, most of the First Nations have hired their own economic development officers. This person normally works very closely with our rural economic development officers on various projects geared toward making healthier communities or healthier First Nations, whatever way you want to put it. A lot of that is already in place.

Mr. Cable: Just to clarify it - maybe it slipped by - does the Minister have staff identified for that function who are working with the First Nations on the development of the economic opportunities under the umbrella final agreement?

Hon. Mr. Devries: Yes. The First Nations have a person hired, whom they pay for, and that is the First Nation’s economic development officer. Secondly, we have rural economic development officers who, when there is a project planned within the First Nation or whatever, have discussions with the First Nation’s EDO. So, our existing staff already handles much of that, and I do not think we necessarily have to hire another bunch of people to administer this once the land claims are settled. We basically have the infrastructure in place, to a great degree. If there is a substantial increase in workload due to the settling of land claims, we will then look at hiring additional personnel. I feel it is adequately covered at this point.

Mr. Cable: Have any of these staff been specifically trained in the contemplated obligations under the umbrella final agreement and the First Nation agreements?

Hon. Mr. Devries: Many of these people are now obligated to have ongoing meetings to address the various problems that they could run into. Their skills are upgraded on an ongoing basis, in terms of their dealings with First Nations, and things like that.

Mr. Cable: One of the sections of the umbrella final agreement commits the Yukon government, at the request of Yukon First Nations people, to provide information on access to Government Services supply contracts and how to register on lists and inventories the government may use from time to time. The UFA also contemplates seminars and workshops to accomplish this task. Is this, in your view, a Department of Economic Development responsibility? If not, whose responsibility is it?

Hon. Mr. Devries: As far as the procurement of goods and services, that would be more the responsibility of Government Services. There would definitely be economic development spinoffs, depending on how it was done. Economic Development would be watching it with a close eye.

Mr. Cable: I will have to try to remember to ask the same question of the Minister of Government Services at the appropriate time.

In the economic planning section of the umbrella final agreement, the Yukon government is committed to ensuring that Yukon Indian people are involved in economic planning by their participation in the Yukon Council on the Economy and the Environment and in the annual review of the Yukon economic strategy. Does the government intend to alter, amend or add to the mandate of the Yukon Council on the Economy and the Environment?

Hon. Mr. Devries: Yes. The Yukon Council on the Economy and the Environment is operated out of the Executive Council Office, inasmuch as there is a $20,000 line item in Economic Development. It is the Executive Council Office that controls the meetings and affairs of the Yukon Council on the Economy and the Environment. They supply the secretarial pool, and so on.

Mr. Cable: I have just a few more questions on the perennial goal of diversification of the economy. We have a population of 30,000. Does the Minister feel that the success, or lack of success, of any diversification moves would be dependent - to a large extent - upon population growth?

Hon. Mr. Devries: I feel that one of the problems that we have had in the past is, as much as the Yukon has been growing very quickly, it just seems like most of the jobs have been picked up by people moving in. We still have a very serious chronic unemployment problem in the communities. I feel that it is very important to try to get training programs going in conjunction with the Ministers of Health and Social Services, Economic Development and Education, to try to resolve some of these problems.

Even in the Watson Lake area, with the Sa Dena Hes mine starting to operate, many of the same people who were unemployed even prior to the sawmill, are still the same people who are unemployed. Both in human and financial terms, the costs are tremendous there. We have to do something to address that.

One of our priorities should be to try to train our existing population. For the very immediate highly skilled positions is where we should attempt to attract the outside people.

Mr. Cable: I was asking in a broader context as to what the Minister thought was feasible at our present population level. I do not think that there are any pretentions that we are going to start an automobile manufacturing plant here in the Yukon, simply because the population would not support it, along with various other factors, I suppose. What sectors would the Minister see us focusing on if, in fact, we wanted to beat the diversification drum fairly heavily? Things like agriculture, or food, or furniture manufacturing and that sort of thing? Is there a plan for diversification, or is it just sort of whatever walks in the door?

Hon. Mr. Devries: It boils down to developing an environment that would attract various proponents to the various industries that we have in the Yukon - for instance, if everything comes together and the abbatoir goes ahead, that will give a boost to the agriculture industry. I feel government’s role is to work in those areas rather than intervene directly.

For mining, it is the infrastructure; for tourism, it is through marketing, promotion and infrastructure - better roads, and such - as it contributes to tourism. The word is getting out that the Yukon is a beautiful place and that there are good roads, hospitality and services. We have to work with the private sector to get that message out. That is how I feel.

There is a diversification - manufacturing is another ball game - but by the same token, if there are enough products of a certain type utilized within the Yukon, then government should assist people in developing marketing plans and how they could get into manufacturing that certain product to meet the Yukon’s needs.

Mr. Cable: I was wondering whether the Minister or the Minister’s officers, at some juncture in the past, had actually reviewed the Yukon economy and our population of 30,000 and had reached some conclusion as to which sectors could be profitably and realistically emphasized, and if so, could the Minister identify those sectors?

Hon. Mr. Devries: At this point, I think our priorities lie in resource extraction and the development of tourism. Those would be the two top priorities at this time.

Chair: Is there further general debate on Economic Development?

We will move on to discussion line by line.

On Operation and Maintenance Expenditures

On Administration

Some Hon. Members: Division.


Chair: Division has been called.

All those in favour of the line item, Administration, please rise.

Members rise

Chair: All those opposed to the line item, Administration, please rise.

Members rise

Chair: Eight yeas, seven nays. The yeas have it. The line item carries.

Administration in the amount of $625,000 agreed to

On Energy and Mines

Chair: Is there any general debate?

On Policy and Administration

Mr. Penikett: Could you repeat what line you are calling there, Mr. Chair?

Chair: Policy and Administration, $393,000, page 76.

Mr. McDonald: The line item shows a decrease from the forecast. Of course, we all know about forecasts being inflated. Could the Minister give us an indication of what the reasons for the increases from the main estimates are?

Hon. Mr. Devries: There is a personnel increase of $45,000, due to the filling of an energy manager’s position, which was vacant in 1992-93. An IRC representation contract of $39,000 was not budgeted in 1992-93, but, rather, in the 1993-94 capital. There were also miscellaneous reductions of $7,000.

There were contributions of $35,000 in 1992-93 to the Chamber of Mines and the Klondike Placer Miners Association, not budgeted in the 1993-94 O&M. That is basically why there were some reductions.

Mr. McDonald: Does the government have any intention of providing income support to the Chamber of Mines in the coming year?

Hon. Mr. Devries: Support for the Chamber of Mines is in capital, not O&M.

Mr. McDonald: What was the amount that was not budgeted for that the Minister made reference to in his explanation that was dedicated to the Yukon Chamber of Mines?

Hon. Mr. Devries: I had said that it was not budgeted in O&M, but it is budgeted in the 1993-1994 capital budget. That is why the discrepancy is there.

Mr. McDonald: There is not a reduction in any way in this particular line item. The funds are being shown in capital, rather than in O&M. I do know that  does show an increase from the main estimates of last year to the main estimates of this year. I just note that it goes to show that one should be asking questions about the supposed reductions in the line items.

Policy and Administration in the amount of $393,000 agreed to

Energy and Mines in the amount of $393,000 agreed to

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

Some Hon. Members: Sure.

Chair: We will take a brief recess.


Chair: I will call the Committee to order. We are dealing with Economic Policy, Planning and Research. Is there any general debate?

On Economic Policy, Planning and Research

Mrs. Firth: I would like to ask the Minister if he is going to get any money from this particular area for the program we have been discussing this afternoon - the $10 million grant program for the mining industry?

Hon. Mr. Devries: No.

On Administration

Administration in the amount of $265,000 agreed to

On Research and Analysis

Research and Analysis in the amount of $202,000 agreed to

On Economic Policy and Planning

Mr. Penikett: I wanted to make sure that this was the line that we agreed to stand until we get the information we previously requested.

Hon. Mr. Devries: Yes, it is fine, Mr. Chair.

Economic Policy and Planning stood over

Economic Policy, Planning and Research stood over

On Economic Programs

Mr. Cable: I have a couple of questions for the Minister. These are all bugaboos from the past that may not be relevant any more but maybe the Minister can put my mind at rest.

Occasionally, the Minister’s department authorizes market research to be done, supported, in part, under some program or another, and then reports are prepared and filed away in some musty cabinet. What is the government’s policy on the release of these market research studies to third parties who walk in off the street with the same idea?

Hon. Mr. Devries: Basically, marketing research studies and things like that that are funded 100 percent by the YTG would be released to the public. If they are joint initiatives between the federal government and YTG through the Economic Development Agreement, it would depend on what was agreed to with the federal government before entering into them.

Mr. Cable: This could be one of the areas where the government could play, in my view anyway, a very useful role in determining market analysis.

Is the Minister prepared to consider a system whereby, if market research reports are prepared for one applicant and they are not used after some reasonable length of time, they will become public property?

Hon. Mr. Devries: That is the process now. If this is done by an applicant, it becomes public information once completed.

Mr. Cable: Is this immediately upon completion?

Hon. Mr. Devries: After a period of time, it becomes public information.

Mr. Cable: This is one question where I am actually seeking information. It is kind of a surprise here. What is that period of time?

Hon. Mr. Devries: It all depends on the initial agreement that was reached when the applicant put in the application. It would all depend on the situation.

Mr. Cable: Is that determined on an ad hoc basis, then, at the time of each application?

Hon. Mr. Devries: It is very hard to follow a rule of thumb. For instance, if someone is seeking a patent, it would be considerably longer than if it is just a feasibility study for a business decision.

Mr. Cable: There is one other area on which I would like to hear the Minister’s comments. Often government money has been loaned at very reasonable rates, or at less-than-market rates, or given in the form of grants to applicants, thereby increasing the value of their business or property. Very shortly afterwards, one becomes aware that this business or property is up for sale. Is there any protection for the taxpayer from that sort of government investment in the applicant’s business or property so that, if it is sold within a short period of time, the taxpayer recoups part of the investment?

Hon. Mr. Devries: If it is a loan, we would naturally get it back. If it is a contribution, we do not have the avenues in place to get it back. As I mentioned earlier, we are trying to get rid of the majority of the contribution loans. There will still be some contributions under the EDA, because that is something we agreed to in the negotiations on the EDA with the federal government. To change anything in the EDA, we have to talk to the federal government and renegotiate how that is set up.

Mr. Cable: Is there no power in the government to set, as a term of the receipt of the contribution, that the money be returned if the business or property is rolled over in a very short period of time?

Hon. Mr. Devries: I will have to take that under advisement. There may be some way that we can do that and, if so, I am certain that we would be willing to look at something like that.

Chair: We are ready to proceed with line items.

On Administration

Administration in the amount of $625,000 agreed to

Mr. McDonald: Before we leave the operation and maintenance budget, on page 82, there is a reference to transfer payments and 1992-93 contributions. There was $35,000 for the 1992-93 forecast, and zero in 1993-94. Can the Minister indicate why it is zero for 1993-94?

Hon. Mr. Devries: The 1992-93 contributions consisted of $20,000 to the Yukon Chamber of Mines and $15,000 to the Klondike Placer Miners Association, which totals $35,000. That would be transferred to capital expenditures this time.

Chair: We will move into capital expenditures at page 32.

On Capital Expenditures

On Administration

Chair: Is there any general debate?

Mr. McDonald: I have a couple of policy questions with respect to support for various organizations, the subject that we touched on at the end of the operation and maintenance estimates.

The Minister indicated that the Chamber of Mines and the Klondike Placer Miners Association have both received some income support over the last year, and that they would be receiving some through the capital budget in the coming year. Could the Minister indicate what level of income support the two organizations are to receive, and whether or not the Yukon or Whitehorse Chamber of Commerce is expected to receive any ongoing support?

Hon. Mr. Devries: The Yukon Chamber of Mines would be $15,000; the KPMA would be $15,000, and the Yukon Chamber of Commerce would be $36,000.

Mr. McDonald: Is the Minister going to be providing any support to the Yukon Federation of Labour?

Hon. Mr. Devries: We never had a request from them, and I do not believe they have ever received a contribution in the past, either.

Mr. Penikett: That is dead wrong. When we were doing consultations on Yukon 2000, and at other times, we gave all economic interests - the Chamber of Commerce, the Chamber of Mines, the Federation of Labour, the women’s movement and the Yukon Conservation Society - contributions to enable them to participate effectively. I would be very upset if the government opposite were only going to be making contributions to the Chamber of Commerce and the Chamber of Mines. They are not special interest groups; they are interest groups, and the Member for Faro will have to be corrected on that. Special interest groups are the ones they do not agree with; interest groups are the ones they do.

Mr. McDonald: Can I ask the Minister whether or not he would be prepared to entertain an application by the Yukon Federation of Labour for the same kind of support that is provided to the Chamber of Mines, the KPMA, and the Yukon Chamber of Commerce?

Hon. Mr. Devries: In the past, several of these groups have made application through the CDF. Under the BDF, we have never funded the Yukon Federation of Labour. If there were consultations taking place, I am not certain where that money was drawn from, for example, in the preparation of the Year 2000 process.

Mr. McDonald: The question I was asking was whether or not the government would fund the Yukon Federation of Labour in the same manner as they are funding the Chamber of Mines, the KPMA, and the Chamber of Commerce, if they received an application. Would they be entitled to funding?

Hon. Mr. Devries: Many of these decisions are made by a board, and it would be up to the various boards that make the decisions.

Mr. McDonald: Is it true that the Yukon Chamber of Commerce, the Klondike Placer Miners Association and the Yukon Chamber of Mines are funded under the business development fund?

Hon. Mr. Devries: Only the Chamber of Commerce is funded under the BDF. The others are funded through the Yukon mining incentive program.

Mr. McDonald: I will ask the question again. If the Yukon Federation of Labour came to the Minister responsible for Economic Development and asked the government whether or not they would be entitled to funding in the same manner that the Yukon Chamber of Mines, KPMA, and the Yukon Chamber of Commerce receive funding for core operations, would the government entertain such an application? Would they give it favourable consideration?

Hon. Mr. Devries: If that matter arose, we would make the decision when it came up. There are probably a lot of organizations out there that would be in an identical situation. If they can show that it is for something that leads to the economic betterment of the Yukon, I am sure that it would be considered.

Mr. McDonald: The Yukon Federation of Labour has expressed some concern in the last number of months that there appears to be a very one-sided standard of consultation, meaning that the government appears to want to approach the Yukon Chamber of Mines, the KPMA, and the Yukon Chamber of Commerce. The Yukon Federation of Labour is somewhat concerned that their organization, which represents working people, is not given the same treatment. I would like to ask the Minister if, as a matter of policy, the Government of the Yukon would give favourable consideration to core funding support to the Yukon Federation of Labour, as they do already to those organizations that represent at least some business interests in the territory?

Hon. Mr. Devries: I just find it an interesting question. My understanding is that they have never asked for anything in the last five or six years. What would change the situation? I know that, in the Year 2000 process, which was six years ago, they may have received some funding. Until we actually get a request from them, I am not going to comment on it one way or the other.

Mr. Penikett: The Minister is, again, getting his facts wrong. The fact of the matter is that, during Yukon 2000 and afterwards, there was a core funding program in the Department of Economic Development that provided funding support to all economic organizations that were involved in consultations with the government and all the bodies represented on the Yukon Council on the Economy and the Environment, if they wished it, including the CYI, the Conservation Society, the labour movement and women’s movement and so on, so that they could do some research and participate effectively in consultations on any economic policy matter, whether it was energy policy or whatever.

The Minister said there was no funding in the last five or six years. I know for a fact that that is not true. I also know that if, of course, the department does not let these organizations know that there is money available, often the only people who will get it are the most sophisticated organizations, such as the Yukon Chamber of Commerce.

The question is, as a matter of policy, since the government has, in the past, from Economic Development Agreement funds, made money available to business, labour, environmental groups and aboriginal organizations, why is the Minister now, as we see in this budget, only making money available to business organizations?

Hon. Mr. Devries: Basically, as of last year, those were the organizations that received funding. That is why we have done it this way. We have had no requests from these other people. We are not in the process of going around and asking organizations if they want money. The organizations should be approaching us. If we went around and asked every organization if they want money, I am sure that every one would say yes.

Mr. Penikett: It is a very interesting answer, because, in the past, I have certainly had people from the business community say to me that the organizations who need the money the least, given their operating budgets, were the chambers.

Given the Minister’s attitude, is he then saying that, since he is not taking any action to make it available, democratically, to a wide range of opinions, but only to a narrow body, is he of the view that, if these organizations do not need the money, he will continue to provide it to them anyway?

Hon. Mr. Devries: If they did not need the money, we would not give it to them. Basically, the Chamber of Commerce sets a fee-for-service contract. They do a lot of things for the government for this $36,000. The Chamber of Mines also acts as an advisory body in many areas, and the KPMA is very similar. It is not as if we were giving them the money for doing nothing. If they wanted to do it on a voluntary basis, more power to them, but these organizations do have directors and various people they have to pay.

Mr. Penikett: I fear the Minister does not understand the point at all. The point is that chambers are not the only people who have an interest in the economy, and they are not the only people who have an interest in economic policy. The fact that the Minister has blinded himself to that reality by only consulting with the Chamber of Mines and the Chamber of Commerce is a real problem, but it is his problem.

There are a lot of other people in the community who have an interest in these matters, and they are not given the money for nothing. The reason these groups participate, and have participated in the past, on bodies like the Council on the Economy and the Environment and other consultations, is because they have a say or a stake in economic policy making and economic decision making. The reason the government assisted in the past is that, just like the Chamber of Commerce - even more than the Chamber of Commerce - many of the organizations, whether they were aboriginal, labour, women’s or environmental organizations, also wanted to make quality representations to the government, give quality advice, and they were able to do that if some little bit of money was provided to them to assist them in doing research.

I do not understand the logic at all of only providing such support to the chambers and not providing it to other people, unless it is purely an ideologically blinkered view of the world.

Hon. Mr. Devries: It is the Member opposite who is making that assumption. I said that, if they asked for some money and wished to do some consultation with the government, we would be open to that suggestion. They have not made the suggestion. We are not in the business of running around to see which organizations want money and which do not. That does not make sense. Personally, I prefer to see people volunteer as much as possible, because then they are - no, I am not going to get into that.

I do not know what we are arguing about here. It does not make sense to me. To me, it is the Member who is not making sense.

Mr. Penikett: I know it does not make any sense to the Minister, so I am going to try and explain it. He wants to talk about volunteers. The point about volunteers is that, at one time in parliaments, in the British parliamentary tradition, people who served, volunteered, because they did not get paid. The Government Leader is expressing great support for that tradition. When that happened, only extremely wealthy, narrow-mined and very unrepresentative elite served the legislatures, and they were not very democratic. They ruled entirely for the benefit of people of their kind. It took a thousand years of parliamentary history to change that. The last hundred years of that history were the best and, had I more time, I would be happy to talk about that further, but I will not.

The question I want to ask the Minister of Economic Development, because he seems to have turned it around and got it backward, is a very simple question on policy. The Minister has indicated, throughout the last several days of discussion of his budget, his intention to change direction on economic policy in a number of areas. This is a two-part question: does he intend to consult with aboriginal people, conservation interests, women, and the labour movement, as well as the business community, on any of those questions? The second part of the question is, if he does intend to consult with them, will he be open to providing support for organizations representing those interests to do good research, with the view to providing the government with good quality advice?

Hon. Mr. Devries: One of the problems is that our budget is fairly tight. The answer to the first question is yes, and the other would be subject to negotiation.

Mr. McDonald: Every time I hear this claim that the budget is fairly tight, and we are dealing with almost $500 million, I want to scream. Here is a Minister who is presiding over a capital vote that is going to show a nine percent increase to $16.8 million, and he says that we cannot spend some money on that particular thing, because the budget is very tight, but boy, do we have money to spend on so many other things.

I would like to ask the Minister a policy question. To whom do they give normal financial support of this nature, and for what reasons do they give the support?

The Minister has indicated there is one criteria that must be met, and that is that the organization must come and ask for the money. I point out to him that the Yukon Federation of Labour, when I was with Economic Development, did come and ask for the money, but did not collect it later on - but they did come and ask for it.

Irrespective of that restriction, what are the reasons for the government wanting to give money to organizations? Are they prepared to give money to organizations that have an interest in the economy? Do they think the Federation of Labour has an interest in the economy?

Hon. Mr. Devries: If there was a particular project undertaken that the Yukon Federation of Labour was involved in to a great degree, that decision would be made at that time. Off the cuff, my answer would be “no”. There are countless organizations across the territory that are involved in economic issues, and we do not have the funding available to fund them all to the degree that they would like to be funded. By the same token, many of these organizations do survive. I am not aware of how they raise their funds, but I say more power to them if they do not need the government.

Mr. McDonald: The Minister has indicated that the organization must have a particular or specific activity that they wish to carry out for which they will then request funding; it has to be an identifiable, specific activity.

They will not core fund anyone’s operations; it is only specific activities that the government will fund, is that correct?

Hon. Mr. Devries: Yes.

Mr. McDonald: I wonder if the Minister could indicate to us if the policies have changed from last year to this year with respect to the question of core funding, no core funding and only funding for specific projects.

Hon. Mr. Devries: No.

Mr. McDonald: Could the Minister indicate - if the government does not core fund any organization and only funds for very specific projects, and if the policy has not changed from last year to this year - why the Yukon Chamber of Commerce received a $12,000 core grant last year and why they are budgeting $36,000 this year?

Hon. Mr. Devries: Over and above their core funding last year, they undertook several projects. My understanding is that they are undertaking several projects this year. One is the Yukon business directory. Last year, they undertook two initiatives.

Mr. McDonald: I understand that they did undertake a number of specific activities, for which they were funded last year. The Yukon Chamber of Commerce received $1,300 to attend the Prospects North Conference. They received $1,600 to produce a resource manual. They went on a trade mission to Russia and received $3,500. They attended the Canadian Chamber of Commerce meeting and received almost $4,000. They attended the Alaskan Chamber Convention and received $838. They had a guest speaker come in and they received $5,500 for that. The Whitehorse Chamber of Commerce attended a convention and they received $1,300. They also had a workshop and they received $2,300.

I understand that they do receive fairly extensive amounts of funding here and there for specific projects. I am wanting to ask a question about core funding. The Minister has indicated that it is not the policy of the government to provide core funding to the Yukon Chamber of Commerce. That policy has not changed from last year. Last year, they received core funding. This year, they are projected to receive $36,000 from the government. What is the policy? Is there core funding or no core funding?

Hon. Mr. Devries: The core funding was for the Canadian Opportunities Identification Network, which I believe was also the case last year. In that respect, nothing has changed to a great extent. Are the Members suggesting that we not fund the chamber? I am not sure what this line of question is leading to here.

Mr. McDonald: If I were to speak as an ideologically consistent conservative, I would say yes, do not fund them. They say they do not want the money; do not fund them. I leave it to the ideologically consistent conservatives to speak for themselves. I am broaching this question from the perspective of one where if you accept the principle of core funding, and project funding, how is one to be fair to the significant organizations in the territory that have an interest in the economy, should those organizations come forward and request funding for various works?

I was in fact the Minister of Economic Development when the fee-for-service agreement was struck with the Chamber of Commerce. I know for absolute fact that that funding was not contingent on specific projects. I know that it was proposed that there be justification for the funding, but it was, in every sense, core funding to the Yukon Chamber of Commerce. I know that is absolutely the case.

I am only asking the Minister how he would respond to other organizations, particularly significant organizations that have an interest in the economy, represent large memberships, are significant players out there in the private sector and who may want to make applications for funding under this program.

We have the Yukon Chamber of Commerce, alone, attending a whole variety of conventions here - all over. They are going to Russia on a trade mission. Without passing judgment on the particular question as to whether or not the trade mission should have been undertaken or if anyone should get any funding at all, I am asking a question about core funding. Core funding is non-contingent funding. I am asking if the Minister is prepared to consider an application from the Yukon Federation of Labour for either core funding or project-specific funding, and what are the criteria for acceptance of these applications?

We have established that when the Chamber of Commerce wants to go to a meeting in this country or overseas, they apply for funding and received it. What are the criteria for considering and accepting applications?

Hon. Mr. Devries: I am not certain of the circumstances surrounding some of the trips the chamber went on but the feeling I would have is that quite often representatives from the chamber, whether they went alone or whether government people went along too - I think there are many instances when it is just the chamber representatives - basically the chamber is also at that time operating as an ambassador for the Government of Yukon and possibly indicating in those various countries the economic opportunities that would be available in the Yukon. As for the criteria for these groups, I do not have it at my fingertips. I would have to see if there are particular criteria that are established and get back to the Member.

Mr. McDonald: I wonder if he might just ask the department right now, quickly, if he could give us some sense of what the criteria are? Is he indicating to us that so long as these organizations claim or can make a reasonable claim that they want to be an ambassador for the Yukon in any particular manner of business that that is a sufficient condition to receive the funds? What does it take to become an ambassador for the Yukon? Are there any criteria? If the Chamber of Commerce goes to Alaska, are they speaking on behalf of the Yukon government and the Department of Economic Development? If the Chamber of Commerce went to Russia on a trade mission, are they speaking on behalf of the Government of Yukon? What are the limitations to this policy?

Hon. Mr. Devries: Lots of people are funded under the Economic Development Agreement and my understanding is that the criteria in the Economic Development Agreement establishes the criteria so I would have to get back to the Member on that. I do not have it available.

Mr. McDonald: They are not funded under the Economic Development Agreement at all, unless the business development fund is now funded under the Economic Development Agreement. I know from last year that was not the case. These are cited from a list of projects funded under the business development fund. This is a handout that the Minister gave us as a legislative return, and these are all funded by the business development fund, exclusively the jurisdiction of the Yukon government. The funding involves trips all over, and it includes core funding to the Yukon Chamber of Commerce. The description here is quite appropriate, descriptive and true. It says to assist with operating costs. That is the reason that the Yukon Chamber of Commerce received $12,000. That is core funding, non-contingent funding, funding that allows them to continue undertaking the business for which they have a general mandate and not a fee for service with the government, not a particular project or anything like that. It is simply core funding.

I am not passing judgment one way or another on whether or not these were wise expenditures, or whether we should be involved to this degree in core funding at all. All I am asking is about fairness and other organizations that have a significant stake in the economy. These organizations have a legitimate perspective, representing a large membership, and they comment regularly on the economy.

I am asking, as a question of policy under the business development fund if organizations, such as the Yukon Federation of Labour, be considered for core funding the way the Yukon Chamber of Commerce has been considered for core funding in the past and is going to be considered for core funding quite substantially in the budget we have just tabled. The Minister has said there is $36,000 for the Yukon Chamber of Commerce, I believe.

Would the Yukon Federation of Labour be considered for project-specific funding? They go to conventions of their own, as well. I do not know if they have any conventions in Russia, but I do know that they have some in Canada. Will it be considered appropriate for them to attend those conventions and expect to see some favourable consideration if they are to apply under the business development fund, especially if those conferences have a strong theme respecting the economy of the country and, more specifically, of they Yukon?

Hon. Mr. Devries: Contributions under the BDF fund are very restricted, but if they wish to apply they can do so. Once the application has been made, it will be taken into consideration.

Mr. McDonald: I do not what to make of that answer. The question was about criteria. What does the Minister consider to be important criteria for accepting any application, including the Yukon Chamber of Commerce, or the Yukon Chamber of Mines? Let us stick to the business development fund for the moment. There are actually a number of chambers of commerce here that are affected. Even the Whitehorse Racquet Club gets funding under the BDF. We have established that the Yukon Chamber of Commerce does receive core funding. It did last year and it will this year. What is the criteria for receiving core funding?

Hon. Mr. Devries: I would have to get back to the Member on the exact criteria. I do not have that information handy right now.

Mr. McDonald: The Minister indicated that these funds were approved by a board. Is he saying that the business development fund advisory board makes decisions with respect to such things as core funding?

Hon. Mr. Devries: The core funding decisions are made by the department. With regard to the loan applications, they are dealt with by the business development board.

Mr. McDonald: Ultimately, the responsibility for core funding applications does rest with the Minister. Ultimately, the Minister will be able to provide us with his own criteria for approving core funding in the future. He will be able to come back with that information. Correct?

Hon. Mr. Devries: My understanding is that the department does have a criteria. I would like to take a close look at that before I decided whether or  not that was my criteria. I do not anticipate any major changes. I would like to have a look at it before I make that commitment.

Mrs. Firth: I find that answer quite interesting. I just have one question for the Minister. Since he has been Minister, has he approved any funding under this program, without knowing what the criteria is?

Hon. Mr. Devries: The only core funding approvals were the ones that had been done last year. Those are geared toward those organizations that also act as a tool for government to get some direction and an overall economic feel for the climate.

Mrs. Firth: The point is that this Minister has approved funding - that would have had to be authorized by him, and it has come across his desk - yet he cannot stand and enunciate the criteria for approving that funding. That is the case, is it not?

Hon. Mr. Devries: These are line items in the budget, at this point; I have not given the money out yet. It is not like I have given the money out already.

Mr. McDonald: There has been no money released under the business development fund so far, is that correct?

Hon. Mr. Devries: Yes.

Mr. McDonald: Could the Minister indicate whether or not they are intending to core fund any other organizations, besides the Yukon Chamber of Commerce, the Yukon Chamber of Mines and the Klondike Placer Miners Association?

Hon. Mr. Devries: We have no other applications at this time. Basically, these are the ones that we know we will be funding.

Mr. McDonald: Would the Minister also return with information regarding the criteria for approval of core funding for the Chamber of Mines and the Klondike Placer Miners Association, if he would not mind, under other programs? We have been focusing on the business development fund at this stage but, as the Minister quite correctly pointed out, the chamber and KPMA are funded within the context of other programs.

Would he be prepared to give us the criteria for the approval of core funding for other organizations that may want to come forward and seek money from other department budgets, which may be related in some way, associated with or dealing in the same field as the Klondike Placer Miners Association and the Yukon Chamber of Mines?

Hon. Mr. Devries: It is very difficult to give a blanket yes to that. The way it works now is that, if there is a particular project that the government has approved for them to work on, whether it is they who applied for it or it was a suggestion from government, that is the way some of this funding is arrived at. It is very difficult to just give blanket approval to anything like that.

Mr. McDonald: Can the Minister indicate to us, first of all, who approves the core funding for the KPMA and the Yukon Chamber of Mines, and how the approval is done?

Could the Minister also provide to us the information about the criteria under which they give approval and the reasons for giving the money to the Yukon Chamber of Mines and the Klondike Placer Miners Association. I would also like the Minister to indicate to us the approval process for the funds.

I would like to point out to the Minister that the Yukon Chamber of Mines received funding not for specific projects, but received funding a couple of years ago from the Yukon government on the condition that the federal government would raise a certain amount of money, the Chamber of Mines membership would raise a certain amount of money allowing them to hire an executive director. That is now core funding; that is not contingent funding related to a specific project.

The Minister made it seem as if the funding for the Yukon Chamber of Mines and Klondike Placer Miners Association were for specific projects. Can he confirm that the funding he is proposing to give to those organizations is in fact core funding and not contingent funding?

Hon. Mr. Devries: From my experience, funding is given to the chamber so that they can participate in things like YMAC.

Mr. Chair, I move that you report progress.

Motion agreed to

Hon. Mr. Phillips: I move that the Speaker do now resume the Chair.

Motion agreed to

Speaker resumes the Chair

Speaker: I now call the House to order.

May the House have a report from the Chair of the Committee of the Whole?

Mr. Abel: 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.

Hon. Mr. Phillips: I move the House do now adjourn.

Speaker: It has been moved by the Government House Leader that the House do now adjourn.

Motion agreed to

Speaker: This House stands adjourned until 1:30 p.m. tomorrow.

The House adjourned at 5:28 p.m.

The following Legislative Return was tables May 25, 1993:


Executive Council Office: response to questions asked May 17, 1993, during discussions on ECO Main Estimates, 1993-94 (Ostashek)

Discussion, Hansard, p. 957-959